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Auto USA, Inc. v. DHL Express (USA), Inc.

United States District Court, D. Maryland

February 26, 2018




         The plaintiff, Auto USA, Inc., has filed suit claiming that the defendant, DHL Express (USA), Inc. (“DHL”) fraudulently or negligently misrepresented the terms of their shipping agreement, violated the Maryland Consumer Protection Act, committed constructive fraud, and intentionally concealed a material fact. DHL has moved to dismiss these claims as insufficiently pleaded. For the reasons stated below, DHL's motion will be granted.


         The agreement at the heart of this complaint had its start on September 11, 2015, when David Shaulis, on behalf of DHL, made an offer to win Auto USA's international shipping business. (Compl. ¶¶ 9-10). Auto USA was not an easy sell; the company rejected DHL's initial offer and countered by requesting a 20% rebate on its shipping costs. (Id. at ¶ 11). This request was repeated on September 29, 2015, when Auto USA submitted a counter-offer requesting, among other things, a 20% rebate during a three month trial period with DHL. (Id. at ¶ 12). Shaulis was excited by Auto USA's counter-offer claiming it “was the best news” he “heard all day” and that his manager would review the terms which he felt DHL would “be able to accommodate.” (Id. at ¶ 13). A little over a month later, the parties entered into a Shipping Service Agreement, (“Agreement”), a contract that outlined the terms of the shipping arrangement, and included a rebate but not the 20% rebate Auto USA had requested during the negotiation. (Id. at ¶ 14; Id. at Ex. A (“Agreement”)).[1]

         Believing that it was entitled to a 20% rebate despite the contract's conflicting terms, Auto USA sent an email to DHL asking if the rebate could be included on their online invoice to simplify their accounting. (Id. at ¶ 15). Shaulis responded on behalf of DHL a month later saying that he would ask his boss about Auto USA's accounting inquiry. (Id. at ¶ 16). He did not, however, say that Auto USA's presumption that it was entitled to a 20% rebate was mistaken. A formal correction did not come until February 26, 2016, after Auto USA demanded the 20% rebate, when DHL disavowed the existence of any promise to provide a 20% rebate. (Id. at 17). DHL asserted that it never agreed to the 20% rebate, and the contract between the parties, which contains a different rebate, is the exclusive source of their respective obligations. (Id.). Auto USA sent one more letter concerning the 20% rebate to no avail. (Id. at ¶ 18).

         Auto USA filed suit against DHL on May 12, 2017, claiming that the company fraudulently or negligently misrepresented the terms of the Agreement before and after it was signed. (ECF No. 1). DHL moved to dismiss the case for failure to state a claim. (ECF No. 6). For the reasons stated below, the court will grant the defendant's motion.

         Standard of Review

         To survive a motion to dismiss, the factual allegations of a complaint “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “To satisfy this standard, a plaintiff need not ‘forecast' evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements.” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citation omitted). “Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is ‘probable, ' the complaint must advance the plaintiff's claim ‘across the line from conceivable to plausible.'” Id. (quoting Twombly, 550 U.S. at 570). And the plaintiff typically must do so by relying solely on facts asserted within the four corners of his complaint. Zak v. Chelsea Therapeutics Intern., Ltd., 780 F.3d 597, 606-07 (4th Cir. 2015). When alleging fraud, however, “a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b).


         DHL argues that this court should dismiss Auto USA's claims because the plaintiff has not identified a false representation, DHL did not have a duty to disclose, nor did it, in any case, conceal anything from Auto USA, the Maryland Consumer Protection Act does not apply to commercial transactions, and the parties were not in a confidential relationship and therefore DHL cannot be liable for constructive fraud. For substantially these reasons, the court will grant DHL's motion to dismiss.

         I. Choice of Law

         In its motion to dismiss DHL claimed that the choice-of-law provision in the shipping agreement controls this case and therefore Florida law applies. In supplemental briefing on the choice of law question, however, DHL chose not to argue that Florida law applies, instead asserting that Auto USA's suit should be dismissed even if Maryland law applies. (ECF No. 16). Because Auto USA asserts causes of actions sounding in tort rather than contract law, Maryland law applies.

         A court sitting in diversity applies the choice of law principles of the state in which it sits. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941). This court must apply Maryland's choice of law rules which adopt the principle of lex loci delicti: “the law of the place where the tort or wrong was committed.” Laboratory Corp. of America v. Hood, 911 A.2d 841, 844-45 (Md. 2006). The “place of wrong” is the place of injury. See Erie Ins. Exchange v. Heffernan, 925 A.2d 636, 648-49 (Md. 2007); see also Philip Morris Inc. v. Angeletti, 752 A.2d 200, 231 (Md. 2000) (endorsing the view that “[t]he place of injury is the place where the injury was suffered, not where the wrongful act took place.”).

         Here, there is no question that the law of the place of injury applies. See Wedeman v. City Chevrolet Co., 366 A.2d 7, 11 (Md. 1976) (“When one may be induced by fraud to enter into a contract, the tort in that instance cannot be said to arise out of the contractual relationship” but “the tortious conduct.”) (abrogated by Owens-Illinois, Inc. v. Zenobia, 601 A.2d 633 (Md. 1992) on different grounds). Because the place of Auto USA's alleged injury is Maryland, the company is incorporated and has ...

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