Lawler v. Schumacher Filters America, Inc.

832 F. Supp. 1044, 1993 U.S. Dist. LEXIS 17534, 1993 WL 344491
CourtDistrict Court, E.D. Virginia
DecidedJuly 12, 1993
DocketCiv. A. 3:93CV264
StatusPublished
Cited by6 cases

This text of 832 F. Supp. 1044 (Lawler v. Schumacher Filters America, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lawler v. Schumacher Filters America, Inc., 832 F. Supp. 1044, 1993 U.S. Dist. LEXIS 17534, 1993 WL 344491 (E.D. Va. 1993).

Opinion

*1046 MEMORANDUM OPINION

SPENCER, District Judge.

This matter is before the Court on defendants’ four motions to dismiss. For the reasons discussed below, defendants’ First Motion to Dismiss (for Improper Venue) will be GRANTED, thus making it unnecessary to rule on defendants’ remaining motions.

Plaintiff is a Virginia citizen. Defendants are North Carolina and U.K. corporations and individual foreign nationals. The matter in controversy exceeds $50,000. This Court may exercise jurisdiction pursuant to 28 U.S.C. § 1332, but jurisdiction and venue are both disputed.

I.

Some of the facts of this case are in dispute; some are not.

UNCONTROVERTED FACTS

Plaintiff, Robert W. Lawler, is a Fredericksburg business consultant dealing in the manufacture and distribution of filtration products. Defendants are two corporations and two individual German nationals. Sehumacher’sehe Fabrik GmbH & Co. K.G. (“Schumacher” or “Schumacher Germany”) (not a named defendant) is a multinational corporation headquartered in Crailsheim, Germany, and which has subsidiaries in a number of other countries. Schumacher Filters, Ltd. (“Filters” or “Limited” or “SFL”) is the U.K. subsidiary. On July 1, 1988, Schumacher Filters, Inc. (“SFI”) was incorporated in Fredericksburg, Virginia as the U.S. subsidiary. On January 26, 1990, Schumacher Germany entered into a joint venture with Selee Corporation of Hendersonville, North Carolina to form Selee-Schumacher, Inc. (“S-S”), with headquarters in Asheville, N.C. SFI was then dissolved and its assets were transferred to S-S. In October 1992, the joint venture between Schumacher Germany and Selee Corporation was dissolved. The successor corporation, Schumacher Filters America, Inc. (“America” or “SFA”), became the U.S. subsidiary of Schumacher Germany alone.

Plaintiff Lawler and Schumacher Germany executed a consultancy agreement on October 12, 1988 (see Oldfield affidavit at 047— the date is shown in the European style as 12.10.88). The agreement, drafted in German, was signed in Rothenburg, Germany. The agreement was effective July 1,1988 and was terminated effective June 30, 1991.

PLAINTIFF’S VERSION OF THE FACTS

Plaintiff Lawler, in his Complaint and in a lengthy affidavit, alleges that defendants’ are liable to him for a number of counts sounding in contract and tort. Lawler asserts that defendants Kreuser and von Fersen initiated contact with him in late 1987. In January 1988, Lawler travelled to Crailsheim, Germany and met with Kreuser and von Fersen and discussed, among other things, Lawler’s terms and conditions. Von Fersen assented to Lawler’s terms and stated that he would have a contract drawn up.

According to Lawler, the months between January and October 1988 represent a prolonged version of the classic “bait and switch” tactic. Lawler insisted on payment terms equivalent to those he enjoyed under a previous consultancy agreement with the Seitz company, also a German firm. He even furnished copies of his Seitz contracts in order for Schumacher to use them as a “template” in drafting the new agreement.

Among other things, Lawler insisted on a choice of law/forum selection clause specifying that U.S. law and U.S. courts would be used in the event of a dispute. Kreuser and von Fersen verbally agreed to Lawler’s demands, but never produced a written agreement, repeatedly assuring him that they were busy, overburdened and that the Schumacher “lawyers were taking care of matters.” This theme was reiterated at meetings in January, April, August, September and finally, in October 1988.

During this period, Lawler had, at Kreuser’s and von Fersen’s behest, performed various startup duties including setting up meetings with U.S. suppliers and working with a Fredericksburg attorney and a Richmond bank on the details of incorporation and initial financing. Since the consultancy agreement was not due to take effect until July 1, 1988, Lawler, prior to that date, charged his expenses but not his time, to *1047 Schumacher. Among other things, von Fer-sen promised Lawler that he, Lawler, would be the president of SFI. In September 1988, Lawler received a copy of the agreement, written in German. Kreuser, at Lawler’s insistence, faxed Lawler a translation, with the understanding that Lawler would not reveal this (Kreuser’s translation) to von Fersen. Lawler’s demands had still not been incorporated into the agreement. Kreuser told Lawler that it would all be straightened out when Lawler came to Germany in October for his previously scheduled German language training. At the meeting in Rothenburg, von Fersen once again produced an agreement written in German. When Lawler asked about his payment terms and the governing law/forum selection clause, both Kreuser and von Fersen described internal disagreements between themselves and Henning Vollmer, Schumacher Germany Managing Director, and asserted that the agreement could not be formally changed due to “political reasons.”

However, they assured Lawler that all of his demands would be honored and that any shortfall in the payment terms would be made up by payments from SFI. They further assured Lawler that U.S. law and U.S. courts would be used if disputes should arise. At this point Lawler was owed some $20,000 in salary and another $10,000 in unreimbursed expenses. Von Fersen’s ultimatum was “Take our word and sign; further negotiation is foreclosed.” Accepting their verbal assurances and acting in the belief that he would not otherwise recover the $30,000 due him, Lawler signed.

Schumacher’s real goal, according to Lawler, was to exploit Lawler’s expertise and network of supplier contacts in order to breathe new life into a firm (SFL) which was stumbling along on antiquated technology. With Lawler’s aid, SFL was able to arrange contracts with such firms as PTI (division of Textron) and Gelman Sciences. Lawler asserts that these relationships saved SFL more than one million dollars.

Lawler makes other assertions against von Fersen, Kreuser and Schumacher. He alleges that even though SFI was incorporated, it was never made operational, due to the deliberately dilatory tactics of von Fersen, who hoped thereby to deprive Lawler of the bonus he had been promised when SFI became functional. Lawler asserts that even though von Fersen had promised him the presidency of SFI, with “commensurate authority and additional compensation,” von Fersen never intended to fulfill this promise and instead negotiated secretly with Selee Corporation to form the joint venture (S-S) which would absorb SFI and thus reap the rewards of Lawler’s efforts on SFI’s behalf.

A key allegation by Lawler, denied by all defendants, is that in April 1990, Schumacher Germany assigned its interests in the consultancy agreement (both the written and alleged oral agreement) with Lawler to S-S and SFL, effective May 1, 1990. There is some documentary evidence to support this assertion, but no formal paper of assignment/delegation appears in the materials thus far submitted. This allegation is critical since defendants assert that the real party in interest is Schumacher Germany, a party not joined by Lawler.

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Bluebook (online)
832 F. Supp. 1044, 1993 U.S. Dist. LEXIS 17534, 1993 WL 344491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lawler-v-schumacher-filters-america-inc-vaed-1993.