United States District Court, N.D. Ohio, Eastern Division
TARKETT USA, INC. Plaintiff,
HARNIX CORP., et al., Defendant.
OPINION AND ORDER
CHRISTOPHER A. BOYKO, JUDGE
matter is before the Court on Defendants' Harnix Corp.
d/b/a Linron, J. Ron Harris and Linda Krienke
(“Defendants”) Motion to Dismiss for Lack of
Personal Jurisdiction and, in the Alternative, Motion to
Transfer Venue. (ECF # 9). For the following reasons, the
Court denies Defendants' Motion.
Tarkett USA, Inc. (“Tarkett”) is located in
Solon, Ohio and is a manufacturer, marketer and distributor
of commercial and residential flooring products. Harnix Corp.
d/b/a Linron (“Linron”) is a Texas based company
that distributes, resells and acts as installation project
manager of flooring materials, including products
manufactured by Tarkett.
to Tarkett's Complaint, in 1996, Tarkett, through its
predecessors Azrock Industries, Inc. and National Floor
Products Company, Inc., entered into an Agreement with
Defendants that involved the reselling of Tarkett products to
Walmart. Under the Agreement, Defendants would manage the
installation process of the Tarkett products. The Agreement
contained a non-compete clause wherein Defendants agreed not
to sell competing products to Walmart.
also managed the removal of Tarkett products at Walmart
stores wherein the old flooring was removed and returned to
Tarkett for recycling and use in new Tarkett products. These
include vinyl composite tile (“VCT”), which
consists of approximately 30% recycled materials, reduce
Tarkett costs and support Tarkett's sustainability
relationship continued for nearly twenty years with an
average of $14, 500, 000 of Tarkett products sold to Walmart
through 2013. During this time the VCT product sold to
Walmart was manufactured in Texas. In 2014, Tarkett moved its
VCT production operation to Alabama. Initially, the VCT
product produced at the Alabama facility did not meet Tarkett
quality standards. In 2015, Defendants represented to Tarkett
that Walmart refused to accept Tarkett VCT due to its poor
quality. Tarkett later learned these representations were not
true. In light of these representations, Tarkett, per
amendment to the Agreement, allowed Defendants to source
other products to Walmart until Tarkett resolved its Alabama
production issues. After a few months the production issues
were resolved, however, Defendants continued without
explanation to complain about the VCT quality.
refused to work with Tarkett. Thereafter, Tarkett established
a set a performance metrics for its product which mirrored
the product quality standards of its Texas produced VCT.
Defendants agreed that if the Alabama-produced VCT met these
metrics Defendants would resume sales of Tarkett products to
Walmart. Despite meeting the performance metrics, Defendants
refused to resume sales to Walmart of Tarkett products and
instead sold competitor products to Walmart.
2015, Tarkett and Defendants attempted to negotiate a new
agreement to replace the 1996 Agreement. Defendants
represented to Tarkett that Walmart now insisted on having
more than one source of flooring products. Tarkett
subsequently learned this was not true.
August 7, 2015, Defendants gave notice of termination of the
1996 Agreement. Tarkett acknowledged receipt of the notice
and reminded Defendants of the prohibited activities clause,
including the non-compete provision, that would remain in
effect for one year. In spite of the contractual non-compete
clause, Defendants have competed with Tarkett in violation of
their obligations under the 1996 Agreement.
alleges Breach of Contract, Breach of Implied Contract and
Intentional Misrepresentation against Defendants. Tarkett
further alleges Tortious Interference with Business
Relationships and Breach of Contract claims against a former
Motion to Dismiss
to Defendants, the Court lacks Personal Jurisdiction over
them because: they did not personally avail themselves of the
privilege of doing business in the State of Ohio. The only
contact with the State of Ohio is Tarkett's location
there. For the first fifteen years of the parties'
relationship Tarkett's predecessors were located in Texas
until acquired by Tarkett. The only contacts with Ohio were
due to Tarkett's relocating its headquarters there
fifteen years into the relationship.
none of conduct of which Tarkett complains occurred in the
State of Ohio. Negotiations between Defendants and Walmart
took place in Texas and Arkansas, therefore, any activity in
violation of the non-compete clause occurred outside Ohio.
Any violation of an implied contract to return old flooring
for recycling occurred outside Ohio as returned product was
sent to Alabama, not Ohio. Also, any alleged
misrepresentations to Tarkett about Walmart occurred in
Texas, not Ohio.
the Court find it may exercise personal jurisdiction over
Defendants, Defendants request that the Court transfer venue
for the convenience of the parties. According to Defendants,
the Southern District of Texas is the proper venue because
the operative facts of Tarkett's claims occurred in
Texas. All Defendants reside in Texas and Defendants'
business is located in Texas. Any alleged improper
solicitation of competing business occurred in Texas and all
Defendants' sales information and communications are
located in Texas. Walmart further returned defective product
to Defendants in Texas. Costs of ...