Dakota Foundry, Inc. v. Tromley Industrial Holdings, Inc.

891 F. Supp. 2d 1088, 2012 U.S. Dist. LEXIS 122731, 2012 WL 3777027
CourtDistrict Court, D. South Dakota
DecidedAugust 29, 2012
DocketNo. CIV 11-1026-RAL
StatusPublished
Cited by10 cases

This text of 891 F. Supp. 2d 1088 (Dakota Foundry, Inc. v. Tromley Industrial Holdings, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. South Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dakota Foundry, Inc. v. Tromley Industrial Holdings, Inc., 891 F. Supp. 2d 1088, 2012 U.S. Dist. LEXIS 122731, 2012 WL 3777027 (D.S.D. 2012).

Opinion

OPINION AND ORDER DENYING MOTION TO COMPEL ARBITRATION

ROBERTO A. LANGE, District Judge.

Plaintiff Dakota Foundry, Inc., sued Defendant Tromley Industrial Holdings, Inc. (“Tromley”), claiming breach of contract, breach of express and implied warranties, and negligence related to equipment that Tromley delivered for Dakota Foundry. Tromley filed a motion to compel arbitration or, in the alternative, to dismiss. Doc. 9. In an Order and Opinion, Judge Charles B. Kornmann, to whom the case was assigned at the time, denied Tromley’s motion and determined there to be questions of fact concerning whether arbitration should be compelled. Doc. 19. Judge Kornmann later reassigned the case to the undersigned judge. Doc. 29.

On May 25, 2012, this Court held an evidentiary hearing on the fact questions concerning Tromley’s Motion to Compel Arbitration. At the hearing, the parties jointly submitted the testimony of Warren Wilson by deposition, presented testimony from Doug Valsvig, Dale Oakvik, and Terry Sampson, and introduced certain exhibits. Each party was allowed to supplement the record thereafter and both parties did so. Doc. 43; Doc. 45. For the reasons explained in this Opinion and Order, this Court now denies Tromley’s Motion to Compel Arbitration and concludes that no arbitration provision governs the dispute between these parties.

1. Findings of Fact Relevant to Arbitration Provision

Dakota Foundry is an iron foundry located in Webster, South Dakota. Doc. 37. Dakota Foundry, among other things, melts scrap iron into molten iron, pours the molten iron into sand molds, and sells the resulting cast iron parts. Ct. Trial Tr. 11-12, May 25, 2012 (hereinafter “Ct. Trial Tr.”).1 Dakota Foundry has forty-three employees, sells its products primarily in the Upper Midwest and in Canada, and has been in operation since December of 2004. Ct. Trial Tr. 11-12.

Tromley is an Oregon business, that among other things, is the parent company of Kloster Foundry Products (“Kloster”). Doc. 11-1. Kloster, during the time relevant to this matter, was based in the Twin Cities area and sold foundry equipment.

The dispute in this case centers on certain equipment purchased by Dakota Foundry from the Kloster division of Tromley. Doug Valsvig, the vice president and controller of Dakota Foundry, contacted Warren Wilson, a sales representative of the Kloster division of Tromley, in the Fall of 2009 about Dakota Foundry’s interest in replacing a sand mixer and related equipment. Ct. Trial Tr. 113, 15-17; Wilson Dep. 6-8, May 8, 2012 (hereinafter “Wilson Dep.”).2 The practice at the [1092]*1092Kloster division of Tromley at the time was for Wilson to collect information from potential customers and to provide that information to Wilson’s co-employee Dale Oakvik, the operations manager for Kloster. Ct. Trial Tr. 86, 89; Wilson Dep. 9. Oakvik had as his practice to prepare an original quote “on cream-colored stationery of Kloster, the reverse side of which had the standard terms and conditions.” Ct. Trial Tr. 92. The Standard Terms and Conditions of Sale used by Kloster had a binding arbitration clause. Ct. Trial Tr. 92. Oakvik then would make additional “working copies” of the quote, copying just the face of the cream-colored stationery. Ct. Trial Tr. 92. These working copies would not have the Standard Terms and Conditions of Sale because only the face of the cream-colored stationery would be copied. Ct. Trial Tr. 92. Oakvik would provide both the original quote to Wilson— sometimes in a plastic binder with the original quote having the Standard Terms and Conditions of Sale on the reverse side of the cream-colored stationery — as well as the additional working copies. Ct. Trial Tr. 90-95. Oakvik would not handle the delivery of the quote package to the potential customer; Wilson would. Ct. Trial Tr. 95.

In December of 2009, Wilson delivered to Valsvig two quotations. First, he delivered quotation number KFP-01228-1 for phase one of a proposed sale and installation of Kloster equipment to Dakota Foundry. Ct. Trial Tr. 18, 55-56; Ex. 32. Second, Wilson provided quotation number KFP-01248 for phase two involving the sale and installation of other equipment. Ct. Trial Tr. 55-56; Ex. 33. Valsvig, whom this Court heard testify live and found to be credible regarding issues concerning the existence of an arbitration provision, retained the quotations that he received from Wilson in December of 2009. Ex. 32; Ex. 33; Ct. Trial Tr. 55-56, 80-81. Valsvig made personal notes on his copy of the quotes during his discussion with Wilson in December of 2009 regarding the equipment. Ex. 32; Ex. 33; Ct. Trial Tr. 55-56, 80-81. Those quotes that Valsvig received from Wilson in December of 2009, and on which Valsvig made his notes, were not on cream-colored stationery and did not contain on the reverse side of the quotation the Standard Terms and Conditions of Sale. Ex. 32; Ex. 33; Ct. Trial Tr. 55-56, 80-81. Both quotation KFP-01228-1 and quotation KFP-01248 contained “NOTES,” which stated in part:

Standard Terms and Conditions of Sale
Please pay particular attention to the attached copy of our Standard Terms and Conditions of Sale which are an integral part of this quotation.

Ex. 32; Ex. 33. There were no Standard Terms and Conditions of Sale attached to the quotes received by Valsvig and Dakota Foundry in December of 2009. Ex. 32; Ex. 33. There were, however, “STANDARD PAYMENT TERMS ” contained in each of the sets of quotations from December of 2009. Ex. 32; Ex. 33. Valsvig testified that he thought the “NOTES” referring to Standard Terms and Conditions of Sale meant the “STANDARD PAYMENT TERMS” Ct. Trial Tr. 83.

Wilson testified that he was unsure whether he ever received from Oakvik an original of the quotations that he delivered to Dakota Foundry in December of 2009. Wilson Dep. 12-14. Tromley presented no evidence that Wilson actually delivered original quotations on cream-colored paper in December of 2009 to Dakota Foundry, [1093]*1093and thus provided no evidence that Dakota Foundry received the Standard Terms and Conditions of Sale, containing the arbitration provision, in December of 2009.

On February 24, 2010, Dakota Foundry issued a single purchase order to Tromley in a total amount of $564,500, to cover both the phase one quote KFP-01228-1 and the phase two quote KFP-01248. Ex. 3. The purchase order did not reference any terms and conditions of the sale. Ex. 3.

Tromley, through its Kloster division, issued an invoice dated February 24, 2010, to cover the sale and installation of equipment in both phase one and phase two in the amount of $564,500. Ex. 4. This invoice did not contain terms and conditions of the sale. Ex. 4. On March 18, 2010, the Kloster division of Tromley issued an invoice to Dakota Foundry for a forty percent down payment in the amount of $225,800. Ex. 5. The invoice did not contain any terms and conditions of sale. Ex. 4. Dakota Foundry paid $225,815 by wire transfer on March 19, 2010. Ex. 35; Ex. 36.

On April 19, 2010, Tromley issued another quotation, KFP-01228-2, which stated that it was a “revised quotation” and had “combined quotes KFP-01228-1 [and] KFP-01248-1 and all subsequent changes made during our meetings into one, cohesive system quote.” Ex. 6.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Stahl v. Subway of Huron, Inc.
D. South Dakota, 2021
Jackson v. Royal Caribbean Cruises, Ltd.
389 F. Supp. 3d 431 (N.D. Texas, 2019)
Ward v. Hilliard
2018 IL App (5th) 180214 (Appellate Court of Illinois, 2019)
Erickson v. Thrivent Insurance Agency Inc.
231 F. Supp. 3d 324 (D. South Dakota, 2017)
Coffey v. Coffey
2016 SD 96 (South Dakota Supreme Court, 2016)
Midland Farms, LLC v. United States Department of Agriculture
35 F. Supp. 3d 1056 (D. South Dakota, 2014)
Heldt v. Payday Financial, LLC
12 F. Supp. 3d 1170 (D. South Dakota, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
891 F. Supp. 2d 1088, 2012 U.S. Dist. LEXIS 122731, 2012 WL 3777027, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dakota-foundry-inc-v-tromley-industrial-holdings-inc-sdd-2012.