Jerome-Duncan Inc. V. Auto-By-Tel

Jerome-Duncan, Inc. ("JDI"), a Ford dealership in Michigan, sued Auto-By-Tel Marketing Corporation ("ABT"), a Delaware corporation that refers potential car buyers to dealerships through its internet web site, for breach of contract in the Circuit Court of Macomb County, Michigan. It also sought a declaratory judgment that the contract was a franchise agreement covered by the Michigan Franchise Investment Law. JDI subsequently filed an amended complaint that added North Brothers Ford, Inc., a Michigan dealership not a party to the contract, as a defendant. The very next day, ABT filed a notice of removal to federal court based upon diversity of citizenship, not knowing that JDI had added North Brothers as an additional defendant. JDI then moved for remand to state court based upon the lack of complete diversity. Shortly thereafter, ABT moved for summary judgment on the basis that its contract with JDI was not a franchise agreement, and was therefore properly terminable without cause as set forth in the contract.