United States District Court, M.D. Tennessee, Columbia Division
TCF EQUIPMENT FINANCE, a division of TCF NATIONAL BANK, Plaintiff,
KMH SYSTEMS, INC., VALLEY PACKAGING CORP., and AMUR EQUIPMENT FINANCE, INC. Defendants.
WILLIAM L. CAMPBELL, JR. UNITED STATES DISTRICT JUDGE.
the Court is Plaintiff TCF Equipment Finance's Motion to
Dismiss Counterclaim of Amur Equipment Finance, Inc. (Doc.
No. 16.) Amur responded to the motion (Doc. No. 23) and TCF
submitted a reply (Doc. No. 24). For the reasons set forth
below, the motion to dismiss is GRANTED.
following facts are as alleged in the Counterclaim (Doc. No.
16). Amur and TCF are parties to a Purchase and Sale
Agreement (“PSA”). (Id. at ¶ 7.)
Section 7.1 of the PSA contains the following indemnification
Without limiting any other rights which Seller [Amur] may
have hereunder or under applicable law, [TCF] shall indemnify
Seller [Amur] and its officers, directors, agents and
employees (each, an “Indemnified Party”) from and
against any and all damages, losses, claims, taxes,
liabilities, costs, expenses and other amounts payable,
including reasonable attorneys' fees and disbursements
(all of the foregoing being collectively referred to as
“Indemnified Amounts”) awarded against or
incurred by any Indemnified Party arising out of or as a
result of (i) any breach by [TCF] of any representation or
warranty made by [TCF] (or any of its officers or employees)
in this Agreement or any other Transaction Document, (ii) any
breach by [TCF] of any covenant made by [TCF] in this
Agreement or any other Transaction Document, or (iii) any
action, proceeding or claim (actual or threatened) related to
this Agreement or any other Transaction Document or to any
Purchased Asset arising from the negligence or willful
misconduct of [TCF], including, without limitation, any
judgment, award, settlement, reasonable attorneys' fees
and other costs or expenses incurred in connection with any
such action, proceeding or claim. (PSA, Section 7.1(b), Doc.
September 13, 2018, TCF filed a complaint against Amur,
asserting claims that relate to the PSA. (Id. at
¶¶ 10-11.) Amur filed a counterclaim, asserting
that it has incurred legal expenses “as a result of an
action, proceeding, or claim related to the PSA” and is
entitled to indemnification of these expenses under the
indemnification provision of the PSA. (Id. at ¶
moved to dismiss the counterclaim pursuant to Federal Rule of
Civil Procedure 12(b)(6), arguing the contract language
provides for indemnification only for claims arising from the
negligence or willful misconduct of TCF and Amur did not
allege any such conduct.
STANDARD OF REVIEW
deciding a motion to dismiss under Rule 12(b)(6), a court
must take all the factual allegations in the complaint as
true. Ashcroft v. Iqbal, 556 U.S. 662 (2009). To
survive a motion to dismiss, a complaint must contain
sufficient factual allegations, accepted as true, to state a
claim for relief that is plausible on its face. Id.
A claim has facial plausibility when the plaintiff pleads
facts that allow the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.
Id. In reviewing a motion to dismiss, the Court
construes the complaint in the light most favorable to the
plaintiff, accepts its allegations as true, and draws all
reasonable inferences in favor of the plaintiff. Directv,
Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007).
considering a Rule 12(b)(6) motion, the Court may consider
the complaint and any exhibits attached thereto, public
records, items appearing in the record of the case and
exhibits attached to Defendant's motion to dismiss so
long as they are referred to in the Complaint and are central
to the claims. Bassett v. National Collegiate Athletic
Assn., 528 F.3d 426, 430 (6th Cir. 2008).
argues the relevant portion of the indemnification provision
is limited to “claims arising from the negligence or
willful misconduct of TCF”, and the counterclaim is
devoid of any allegations that could constitute negligence or
willful misconduct. Amur counters that its right to
indemnification is not limited to claims arising out of
negligence or willful misconduct because, applying the rule
of the last antecedent, the limitation modifies only
has a choice of law provision specifying the application of
New York law to the agreement. (See PSA, Doc. No.
1-6 at § 8.6.). Accordingly, the Court will construe the
agreement in accordance with New York law. See Boswell v.
RFD-TV The Theater, LLC, 498 S.W.3d 550, 555-56 (Tenn.