Civil practice – Discovery rule – Limitations

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Where a defendant auto manufacturer has moved for summary judgment in a suit brought by a plaintiff dealership, that motion should be denied as to Count II because a dispute exists regarding whether that claim is time-barred under Chapter 93B‘s four-year statute of limitations.

“Plaintiff W.N. Motors, Inc. d/b/a Coastal Nissan (‘Coastal’) alleges that Defendant Nissan North America, Inc. (‘NNA’) violated various provisions of the Massachusetts statute governing car distributors and dealers. … Currently before the Court is NNA’s motion for summary judgment. … For the reasons set forth below, NNA’s motion is denied as to Count II and granted as to Count III. …

“Coastal alleges that NNA’s use of the [State Sales Effectiveness Represented (SSER)] as a sales performance metric from at least July 2017 through January 1, 2021, its 2018 audit of Coastal’s [Primary Market Area (PMA)], and its use of volume-based sales incentives programs from October 2019 until March 2021 were arbitrary, unfair, and unobjective, and, consequently, in violation of M.G.L.c. 93B, §§3-4. …

“In response, NNA contends that Coastal’s claims accrued as ‘early as April 2012 and no later than 2015′ and are therefore time-barred under Chapter 93B’s four-year statute of limitations. … Specifically, NNA claims that it told Coastal in January 2015 that it ‘did not intend to change’ Coastal’s PMA and, consequently, any Chapter 93B claims ‘relating to [Coastal’s] PMA assignment were time-barred no later than January 2019.’ …

“Coastal replies that pursuant to the discovery rule, the statute of limitations did not accrue until late 2018 and 2019 because, as a result of NNA’s unwillingness to share pertinent information, it did not ‘have a full understanding of how NNA was using [the SSER] metric to Coastal’s detriment’ until then. … In addition, Coastal accuses NNA of concealing material information, such as the impact of open points on the SSER, until 2017 or 2018 and claims that, accordingly, NNA’s conduct tolled the statute of limitations. …

“In order to survive NNA’s motion for summary judgment based on the statute of limitations, Coastal ‘must show a genuine issue of material fact as to whether it knew or should have known of its claims’ before July 2017. Cambridge Plating Co. v. Napco, Inc., 991 F.2d 21, 29 (1st Cir. 1993). The Court finds that such a dispute exists.

“On the one hand, a fact finder could find that Coastal had sufficient notice that it was being harmed by NNA’s PMA allocation and performance metrics sometime between late 2014 and early 2016. …

“That said, a reasonable jury might alternatively determine that Coastal’s understanding of the SSER was ‘inherently unknowable’ prior to 2017 because, despite Coastal’s reasonable diligence in flagging its concerns to NNA between 2014 and 2016, NNA did not clarify the definition of ‘represented’ in the SSER calculation. As such, Coastal only knew that there was a problem, but did not know the cause. … As such, a jury could conclude that Coastal, despite acting diligently, could not have reasonably known of the injury caused by the SSER prior to the release of the audit in 2018-19.

“As to Coastal’s assertion that NNA ‘fraudulently conceal[ed] material pieces of information necessary for Coastal to fully comprehend the cause of its harm,’ … the Court finds no evidence in the record to support Coastal’s argument. …

“Accordingly, summary judgment is denied on Count II. …

“Under Count III, Coastal ‘seek[s] to permanently enjoin NNA from using improper ‘stair-step’ volume-based sales incentive programs … if such programs are derived from vehicle registration data drawn from a dealer’s unilaterally assigned PMA.’ …

“Here, the Court grants summary judgment on Count III because the harm is reparable. Coastal has made no showing that the purported harm resulting from NNA’s conduct cannot be remedied by money damages, making an injunction inappropriate. … Accordingly, summary judgment is granted on Count III.”

W.N. Motors, Inc. v. Nissan North America, Inc. (Lawyers Weekly No. 02-419-24) (23 pages) (Burroughs, J.) (Civil Action No. 21-cv-11266-ADB) (Sept. 4, 2024).

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