Turfworthy, LLC v. Dr. Karl Wetekam & Co. KG

26 F. Supp. 3d 496, 2014 WL 2739280, 2014 U.S. Dist. LEXIS 81930
CourtDistrict Court, M.D. North Carolina
DecidedJune 17, 2014
DocketNo. 1:13CV390
StatusPublished
Cited by14 cases

This text of 26 F. Supp. 3d 496 (Turfworthy, LLC v. Dr. Karl Wetekam & Co. KG) is published on Counsel Stack Legal Research, covering District Court, M.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Turfworthy, LLC v. Dr. Karl Wetekam & Co. KG, 26 F. Supp. 3d 496, 2014 WL 2739280, 2014 U.S. Dist. LEXIS 81930 (M.D.N.C. 2014).

Opinion

MEMORANDUM OPINION AND ORDER

BEATY, District Judge.

This matter is currently before the Court on a Motion to Dismiss [Doc. # 14] for lack’ of personal jurisdiction and improper venue, pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3). For the reasons discussed below, the Court will grant Defendant’s Motion to Dismiss.

I.' FACTUAL BACKGROUND

The factual allegations of Plaintiffs Complaint [Doc. #4], taken as true for purposes of. Defendant’s ■ Motion to Dismiss, allege that Plaintiff Turfworthy LLC (“Plaintiff’) is a North Carolina limited liability company with its principal office and place of business in Greensboro, North Carolina, and Defendant Karl Wetekam & Co. KG (“Defendant”) is a business association with its principal office and place of business in Germany. Defendant manufactures monofilament yarn for use in the manufacture of artificial turf and began supplying Plaintiff with various types of monofilament yarn in 2010. Plaintiff used the yarn as the principal raw material for the manufacture of artificial turf, which Plaintiff then sold to its customers. In addition to providing yarn used to make general landscaping artificial turf, Defendant also provided yarn for the specific purpose of a project commissioned by the Pittsburgh Pirates. Through a series of purchase orders, confirmations, and email correspondence, Plaintiff and Defendant agreed upon various specifications for the yarn Defendant sold to Plaintiff. Furthermore, Defendant expressly warranted to [500]*500Plaintiff that the yarn it supplied would be of good quality and would meet the agreed upon specifications.

Beginning in April 2012, Plaintiff discovered that much of the yarn supplied by Defendant was defective. These defects were latent in nature, and therefore, could not be discovered until the yarn was manufactured into artificial turf. Because of the defects in the yarn, Plaintiff is at risk for claims of breach of warranty and/or breach of contract from Plaintiffs customers who bought artificial turf products that were made using the defective yarn from Defendant. Furthermore, Plaintiff is unable to use any of the yarn provided by Defendant which remains in Plaintiffs inventory.

When Plaintiff discovered the defects, it notified Defendant in writing of the problems, and provided several additional notices in the months thereafter. However, Defendant took no action to provide a remedy for the defects. Finally, on November 30, 2012, Plaintiff notified Defendant that Plaintiff was entitled to return all yarn that Plaintiff still possessed and receive either the price of the yarn or a credit against sums for which the Defendant had invoiced Plaintiff. Defendant refused to correct the defects in the yarn, replace the yarn, take back the yarn, give refunds, or give Plaintiff any credit against outstanding invoices.

On March 21, 2013, Plaintiff commenced this action in state court by filing and issuing a “civil summons to be served with order extending time to file complaint and application and order extending time to file complaint,” which allowed Plaintiff through April 10, 2013 to file its Complaint. (Resp. to Mot. to Dismiss [Doc. # 20], at 1.) Plaintiff then filed the Complaint in this lawsuit in state court on April 9, 2013, alleging a variety of state law claims, including breach of contract and breach of express warranties. Defendant removed the action to this Court. Defendant contends1 that it filed suit in Germany against Plaintiff on March 21, 2013, seeking recovery of the outstanding invoices (Mot. to Dismiss Br. [Doc. # 15], at 3; Nodoushani Deck [Doc. # 17-2], ¶ 5; Nodoushani Supp. Deck [Doc. #25-2], ¶¶ 3-4), although Plaintiff had not been served with this lawsuit as late as October 8, 2013. (Resp. to Mot. to Dismiss [Doc. # 20], at 5.)

Defendant now moves to dismiss this action for improper venue, as an improper anticipatory filing, and for lack of personal jurisdiction. _ Specifically, Defendant alleges that venue is improper because forum-selection clauses apply which make Germany the exclusive jurisdiction for disputes [501]*501related to the transactions at issue. (Mot. to Dismiss Br. [Doc. # 15], at 2.) This Motion to Dismiss is now ripe for review, and the Court will consider first the question of venue based on the forum-selection clauses, followed by the questions of improper anticipatory filing and personal jurisdiction, if necessary. See Sucampo Pharm., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 550 n. 3 (4th Cir.2006) (“[A] district court has the discretion to dismiss on the basis of improper venue before reaching the issue of personal jurisdiction.” (citing Ruhrgas AG v. Marathon Oil, 526 U.S. 574, 584-85, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999); Leroy v. Great W. United Corp., 443 U.S. 173, 180, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979))).

II. MOTION TO DISMISS FOR IMPROPER VENUE

Defendant contends in its Motion to Dismiss that when Plaintiff purchased Defendant’s yarn, it entered into an agreement with Defendant, which governs the transactions at issue in Plaintiffs Complaint. (Mot. to Dismiss Br. [Doc. # 15], at 2 (citing Compl. [Doc. # 4], ¶ 17).) Specifically, Defendant contends that this agreement includes “Terms and Conditions” (Ex. 1 — Wetekam Decl. [Doc. # 17-1], at 5; Supp. Wetekam Decl. [Doc. # 25 — 1], ¶ 3), which were incorporated by reference into the order confirmations, invoices, and purchase orders for the sale of yam to Plaintiff for its “landscaping” projects. (Mot. to Dismiss Br. [Doc. # 15], at 2.) Defendant also contends that the sale of yarn for the Plaintiffs Pittsburgh Pirates project is subject to a Limited Warranty (Ex. 2 — Wetekam Decl. [Doc. # 17-1], at 6-9; Supp. Wetekam Decl. [Doc. # 25-1], ¶ 3), signed by principals of Defendant and Plaintiff, which also contains a forum-selection clause. (Mot. to Dismiss Br. [Doc. # 15], at 2; Wetekam Decl. [Doc. # 17-1], ¶¶ 5, 6; Supp. Wetekam Decl. [Doc. # 25-1].)

The relevant language in the Terms and Conditions states:

The place of performance for all obligations arising from this contractual relationship, i.e. also for delivery and payment, shall be our registered place of business (Melsungen). If the purchaser is a trader, our registered place of business shall be the place of jurisdiction; however, we shall also be entitled to institute legal proceedings against the purchaser at its domicile. For the rest, the statutory place of jurisdiction shall apply.

(Ex. 1 — Wetekam Decl. [Doc. # 17-1], ¶¶ 11.3, 11.4, at 5; Supp. Wetekam Decl. [Doc. # 25-1], ¶¶ 3, 4.) The relevant language in the Limited Warranty reads:

This limited warranty and the rights and obligations of the parties under this warranty-are governed only by laws of the Federal Republic of Germany, without regard to its conflicts of laws principles. Sales of the Products by Dr. Karl Wet-ekam & Co. KG to the Purchaser are not subject to the United Nations Convention on the International Sale of Goods. The Purchaser agrees that exclusive jurisdiction and venue for any claims arising out of this limited warranty shall be the [sic] with the judicial authorities in Kassel, Germany and will be held in the German language.

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26 F. Supp. 3d 496, 2014 WL 2739280, 2014 U.S. Dist. LEXIS 81930, Counsel Stack Legal Research, https://law.counselstack.com/opinion/turfworthy-llc-v-dr-karl-wetekam-co-kg-ncmd-2014.