E/M Lubricants, Inc. v. Microfral, S. A. R. L.

91 F.R.D. 235, 1981 U.S. Dist. LEXIS 14304
CourtDistrict Court, N.D. Illinois
DecidedAugust 20, 1981
DocketNo. 80 C 3239
StatusPublished
Cited by13 cases

This text of 91 F.R.D. 235 (E/M Lubricants, Inc. v. Microfral, S. A. R. L.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E/M Lubricants, Inc. v. Microfral, S. A. R. L., 91 F.R.D. 235, 1981 U.S. Dist. LEXIS 14304 (N.D. Ill. 1981).

Opinion

[236]*236MEMORANDUM OPINION

GRADY, District Judge.

This is an action for breach of a license agreement. Before the court is defendant’s motion to dismiss for lack of personal jurisdiction on the ground that plaintiff fraudulently enticed its representative into the jurisdiction to serve him with process.1 Fed.R.Civ.P. 12(b)(2). The motion is granted.

Plaintiff E/M Lubricants, Inc. (“E/M”) is a Delaware corporation with its principal place of business in Lafayette, Indiana, and is engaged in the sale and licensing of patented processes for the treatment of metals. In May of 1979, plaintiff entered into a license agreement with Microfral, S.A.R.L. (“Microfral”), a French corporation, under which Microfral obtained the right to use and market plaintiff’s processes in exchange for its promise to make monthly royalty payments. In February of 1980, a dispute arose with respect to Microfral’s obligation to meet the minimum royalty payments. For reasons not relevant to this motion, Microfral refused to make the payments and the instant action was commenced.

We are concerned in this motion with the way in which process was served on the French corporation. Between February 1980 and June 1980, the parties exchanged letters in an effort to resolve the dispute. On April 17, 1980, defendant’s president, Jean-Claude Malouvier, sent a telex to plaintiff’s president, Lowell Horwedel, for the purpose of arranging a meeting to discuss the dispute. The telex stated, “Wish to meet you about the Abex question during one of my trips ... at West Lafayette or Chicago, as you like. Telex your reply please.” Horwedel Affid. Ex. A. The following day, Horwedel replied, “Available June 2 and 3 only to discuss Abex in West Lafayette . . . Please advise so I can keep date open.” Id. Ex. B. Malouvier countered, “Would like to meet you Chicago by reason of the little time at my disposal and having covered most of the ground feel sure you will understand.” Id. Ex. D. In a letter of May 22, 1980, Malouvier further explained to Horwedel that “the grievances which are set out in the aforementioned letters are extremely serious and have grave consequences for the Microfral Company. That is the reason why we should like to arrive at a solution at our next meeting of June 25 in Chicago, in order to refrain us from taking other steps because, once more, of the enormous detriment you have caused us.” Malouvier Affid. Ex. D. In a subsequent exchange of telexes, the final one having been sent on June 11, the parties decided to meet in Chicago on the evening of June 24.

By affidavit, Malouvier states that although he did intend to transact other business in the United States in June, he traveled to Illinois solely for the purpose of conducting settlement negotiations with Horwedel. On the evening of June 23, the evening prior to the scheduled meeting, Malouvier received a call in his Chicago hotel room that a package had arrived for him in the lobby. Upon reporting to the lobby, Malouvier was served with a summons in the instant case.

In this motion, defendant seeks to quash service of process on the ground that he was fraudulently enticed into the jurisdiction for the purpose of serving him with process.2 Plaintiff counters with two arguments. First, it contends that Malouvier’s telex of April 21, 1980, established that the idea of coming to Chicago was entirely Mal-[237]*237ouvier’s. Plaintiff therefore concludes that Malouvier’s entry into the forum state was voluntary and not the result of any enticement offered by plaintiff. Second, plaintiff points out that it did not decide to sue Microfral until June 17, 1980, six days after the last telex between the parties. Plaintiff thus argues that at the time Horwedel arranged the meeting, he did not misrepresent his intention to reach an amicable resolution.

Plaintiff’s first argument is unpersuasive. To say that the meeting in Chicago was Malouvier’s idea tells only half the story, and the less important half at that. Defendant’s president offered to come to Chicago for one purpose — to resolve the dispute regarding its obligations under the license agreement. Plaintiff’s president encouraged Malouvier to make the trip for this purpose. See telex of 4/18/80, Horwedel Affid. Ex. D. Thus, Malouvier came into this jurisdiction voluntarily only because Horwedel had agreed to discuss the matter with him. Moreover, whether or not the idea to meet in Chicago originated with defendant seems largely irrelevant to the issue of fraudulent enticement. It is not necessary that the defendant’s conduct be the sole cause of the defrauded party’s reliance on a misrepresentation. Tcherepnin v. Franz, 393 F.Supp. 1197, 1217 (N.D.Ill.1975); Mitchell v. McDougall, 62 Ill. 498 (1872); Endsley v. Johns, 120 Ill. 469, 12 N.E. 247 (1887); Restatement 2d of Torts, § 546, comment b (stating that liability will attach if the fraudulent representation has “played a substantial part, and so has been a substantial factor, in influencing [the] decision.”). Here, inasmuch as plaintiff’s agreement to discuss a settlement contributed to defendant’s decision to enter the jurisdiction, the causal connection is sufficient.

This is not to say, however, that where a potential defendant enters a jurisdiction to discuss settlement and to transact other business, he will be immune from process. Thus, in Schwarz v. Artcraft Silk Hosiery Mills, Inc., 110 F.2d 465 (2d Cir. 1940), defendant agreed to come to New York to discuss a pre-lawsuit settlement. A few days prior to the negotiations, the defendant visited his summer house in Long Island. Well rested, defendant appeared for the negotiations and was served with process. The court denied defendant’s motion to quash since “[i]t was shown that [defendant] voluntarily came into the jurisdiction when he went to Westhampton to spend the weekend at his summer house.... Insofar as he was in any way the victim of deceit which brought about service of process, the enticement did not bring him into the jurisdiction or keep him there.” 110 F.2d at 467. Schwarz is distinguishable from our case. Here, as Malouvier’s affidavit attests, Mal-ouvier entered the jurisdiction only to discuss settlement. In circumstances such as these, where plaintiff contributes to defendant’s decision to enter the jurisdiction to negotiate a settlement and defendant enters the jurisdiction for that purpose only, the fraudulent enticement doctrine should apply.

Nor are we convinced by plaintiff’s second argument. That plaintiff did not decide to file suit until after the parties had agreed to discuss settlement indicates only that plaintiff did not intend to entice defendant into Illinois at the time the arrangements were made. Nonetheless, enticement may be inferred from plaintiff’s failure to notify defendant after June 17 that it had decided that pre-lawsuit negotiations were no longer feasible. Although silence is deceitful only where circumstances give rise to a duty to speak, the duty has been imposed where the defrauding party has made statements which are subsequently found to be inaccurate and where he knows or should know that the other party is relying on the inaccurate statements. Butler Aviation Int’l. Inc. v. Comprehensive Designers, Inc., 425 F.2d 842 (2d Cir. 1970); Loewer v. Harris, 57 F. 368 (2d Cir. 1893); Fischer v. Kletz, 266 F.Supp.

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Cite This Page — Counsel Stack

Bluebook (online)
91 F.R.D. 235, 1981 U.S. Dist. LEXIS 14304, Counsel Stack Legal Research, https://law.counselstack.com/opinion/em-lubricants-inc-v-microfral-s-a-r-l-ilnd-1981.