Mercer Tool Corp. v. Friedr. Dick GmbH

179 F.R.D. 391, 1998 U.S. Dist. LEXIS 9793, 1998 WL 352658
District Court, E.D. New York·Decided June 29, 1998·No. No. CV 96-2152(ADS)·Published·Cited by 7 cases

Opinion

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

This diversity-breach of contract action arises from the claims of the plaintiff, Mercer Tool Corporation (“Mercer” or the “plaintiff’), against the defendant, Friedr. Dick GmbH (“Friedr. Dick” or the “defendant”), for the alleged failure to pay commissions and damages suffered in reliance on the defendant’s representations, and as a result of violations of the New York Labor Law. In a Decision and Order dated September 16, 1997, the Court granted the plaintiff’s motion to voluntarily dismiss the case, without prejudice, pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure, for the purpose of adding a non-diverse party defendant and refiling the lawsuit in New York State court. See Mercer Tool Corp. v. Friedr. Dick GmbH, 175 F.R.D. 173, 176 (E.D.N.Y.1997). In the same Order, the Court denied the defendant’s cross-motion to condition dismissal of this case on an award of costs, including attorneys’ fees, without prejudice and with leave to resubmit in a separately-briefed motion. Mercer Tool Corp. v. Friedr. Dick GmbH, 175 F.R.D. at 176-77. Presently before the Court is the defendant’s renewed motion for costs and attorneys’ fees.

I. BACKGROUND

The pertinent facts of this ease are set forth in the Court’s earlier decision, Mercer Tool Corp. v. Friedr. Dick GmbH, 175 F.R.D. at 174-75, familiarity with which is presumed. Briefly reiterated here, the plaintiff is a New York corporation in the business of selling high quality cutlery and industrial products, with its principal place of business in Deer Park, New York. The defendant is a German corporation which manufactures high quality cutlery with a place of business also in Deer Park.

From June 1983 through 1995, the parties maintained a business relationship pursuant to a written “Agency Contract and Warehousing Agreement.” According to the Complaint, the terms of this agreement entitled Mercer to certain commissions at rates agreed upon by the parties for services rendered, namely warehousing and sales. These rates were modified periodically by the parties. Mercer alleges that during negotiations in 1994 relating to the commission rates, the defendant’s president, William Leuze and its Director of Marketing and Sales, Ronald Muller, represented to the plaintiff that Friedr. Dick intended to sign an agreement continuing the parties’ relationship for another five years.

According to the plaintiff, in reliance on this representation, Mercer spent more than $50,000 installing a new computer system to handle Friedr. Dick’s business. In addition, [393] the plaintiff encouraged the defendant to hire one of Mercer’s key employees, William E. Colwin. Finally, in reliance on the expectation of a continuing business relationship between the parties, the plaintiff secured sales contracts with the Culinary Institute of American (“CIA”) and Johnson & Wales Uni: versity (“Johnson & Wales”). The Complaint alleges that Friedr. Dick agreed in writing that Mercer would receive a ten percent commission on all sales made to CIA and a four percent commission on all sales to Johnson & Wales.

On June 30, 1995, the defendant sent written notice to the plaintiff of its intention to terminate the parties’ contracts. Since August 1995, the parties have not conducted any business together and the defendant repeatedly has refused to pay the plaintiff the money it allegedly is owed.

Based on these allegations, on May 14, 1996, Mercer filed its Complaint alleging four causes of action for: (1) breach of contract; (2) promissory estoppel; (3) declaratory judgment; and (4) violation of New York Labor Law § 191. On or about October 31, 1996, less than six months after commencing this action, the plaintiff notified the defendant that it intended to move for voluntary dismissal under Rule 41(a)(2). That same day, the defendant requested an adjournment of the initial case management conference while it considered whether it would oppose Mercer’s proposed Rule 41(a)(2) motion. At that time, neither party had filed any motions, and discovery had not commenced. Although the defendant served written interrogatories and document requests on its adversary, the defendant withdrew these requests, apparently after the plaintiff advised that Rule 26 restricts discovery pending the initial case management conference.

Thereafter, the plaintiff filed a motion for voluntary dismissal, without prejudice, pursuant to Fed.R.Civ.P. 41(a)(2), for the purpose of adding a non-diverse party defendant. The defendant filed with its reply papers a cross motion to condition voluntary dismissal upon the plaintiff’s payment of attorneys’ fees and costs.

In a Memorandum of Decision and Order dated September 16, 1997, the Court granted the plaintiff’s motion, emphasizing that “the plaintiff has been diligent in bringing this motion [and] fil[ed] it at the early stages of this litigation. Further, there appears to be no ‘undue vexatiousness’ on the plaintiffs part. Mercer brings this motion in order to add a non-diverse party defendant, a permissible objective____In addition, ... this lawsuit is in its initial stages, and involves state law claims which [ ] no doubt will be the basis of any state court litigation.” Mercer Tool Corp., 175 F.R.D. at 176 (citing Der v. E.I. DuPont de Nemours & Co., 142 F.R.D. 344, 345-46 [M.D.Fla.1992]; O’Reilly v. R.W. Harmon & Sons, Inc., 124 F.R.D. 639, 641 [W.D. Mo.1989]).

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Mercer Tool Corp. v. Friedr. Dick GmbH, 179 F.R.D. 391, 1998 U.S. Dist. LEXIS 9793, 1998 WL 352658 (E.D.N.Y. 1998).

179 F.R.D. 391 (Mercer Tool Corp. v. Friedr. Dick GmbH) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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