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WCR, Inc. v. Western Canada Plate Exchange, Ltd.

United States District Court, S.D. Ohio, Western Division, Dayton

August 22, 2019

WCR, Incorporated, Plaintiff,
v.
Western Canada Plate Exchanger, Ltd., Defendant.

          ENTRY AND ORDER DENYING DEFENDANT WESTERN CANADA PLATE EXCHANGER, LTD.'S MOTION TO DISMISS. (DOC. 14) THE PARTIES ARE ORDERED TO SUBMIT A RULE 26(F) REPORT.

          THOMAS M. ROSE UNITED STATES DISTRICT JUDGE.

         Before the Court is a Motion to Dismiss filed by Defendant Western Canada Plate Exchanger, Ltd. (Doc. 14). Defendant asserts that Plaintiff WCR Incorporated's Complaint (Doc. 10) should be dismissed for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). (Doc. 14, PageID 85). Additionally, Defendant contends that venue is improper pursuant to Federal Rule of Civil Procedure 12(b)(3). (Id. at PageID 85, 98). Finally, the Defendant claims that the Complaint should be dismissed under the doctrine of forum non conveniens since alternate forums are available and both private and public interest factors favor such a dismissal. Because the parties agreed to a forum selection clause stipulating that they would forgo their private interests as to where any dispute would be heard, and because no public interests overcome that agreement, the motion will be denied.

         I. Background

         Plaintiff WCR, Incorporated, hereinafter referred to as “WCR, ” designs and manufactures plate heat exchangers, which are used in a wide variety of industries to heat and cool liquids. (Doc. 10, PageID 58). Though the company maintains several branch offices throughout the United States and distributes their product worldwide, their headquarters and principal place of business are located in Fairborn, Ohio. (Id. at PageID 57-58). WCR allegedly employs approximately 130 Ohioans. (Doc. 15, PageID 109). Defendant, Western Canada Plate Exchanger, Ltd., hereinafter referred to as “Western Canada, ” is a Canadian company whose principal place of business is located in Alberta, Canada. (Doc. 10, PageID 57). According to the Complaint, WCR enters into service and distribution agreements with local distributors in other regions of the world to sell WCR's goods and services in that region. (Id. at PageID 58). In those instances, WCR does not enter the territory itself, instead relying upon the local distributor to provide their goods and services. Id.

         On July 1, 2010, WCR and Western Canada entered into such a service and distribution agreement, which was renewed on a regular basis up through the agreement at issue in this case, hereinafter referred to as “the Agreement, ” which began on January 1, 2017 and ran through December 31, 2018. Id. WCR allegedly initiated the negotiation of the original service and distribution agreement in 2010 with Western Canada, and all the negotiations allegedly took place while the representatives of Western Canada were in Canada. (Doc. 14, PageID 91-92). Pursuant to the Agreement, Western Canada purchased products that were allegedly designed and manufactured at the WCR facility in Washington Court House, Ohio and were then shipped from that same location to Western Canada. (Doc. 10, PageID 59). Invoices sent to Western Canada detailing the orders and shipment information were printed on WCR letterhead and required payment to the Ohio address. Id. Western Canada employees allegedly communicated with WCR employees located in Ohio regarding the Agreement and traveled “on one or more occasions” to WCR's headquarters in Ohio to promote sales of WCR products and undergo training. Id.

         The Agreement governs the business relationship between WCR and Western Canada and includes a choice of law provision. Section 19 of the Agreement states that it will be “enforced in accordance with, the laws of the State of Ohio.” (Id. at PageID 58). Section 9F of the Agreement imposes WCR's “Terms and Conditions, ” which are allegedly attached to every invoice. (Doc. 15, PageID 111-12). The Terms and Conditions to which Western Canada are bound include an express forum selection clause submitting Western Canada to jurisdiction in Ohio. (Id. at 112).

         WCR claims Western Canada breached Articles 9D and 12 of the Agreement, which state that Western Canada will only “sell, use, and install” WCR products or products approved by WCR and that Western Canada and its shareholders will not be involved in any business which provides goods or services similar to those provided by WCR without their written consent. (Doc. 10, PageID 59-60). Western Canada's Director and sole Voting Shareholder was allegedly the director of Salarix, a Canadian company that provides goods and services similar to those provided by WCR, at the same time he was serving in his positions with Western Canada. (Id. at PageID 60-61). WCR argues that since an agent of Western Canada was associated with a business similar to WCR without their consent, Western Canada breached the Agreement. (Id. at PageID 61). For each of those breach of contract claims, WCR alleges damages in excess of $75, 000 plus interest in lost profits. (Id. at PageID 62-63).

         WCR's Complaint also alleges that Western Canada breached Section 9F of the Agreement and Section 5 of the Terms and Conditions by failing to pay for a custom order that they cancelled. (Id. at PageID 63). Section 5 of the Terms and Conditions states that “custom manufactured goods must be paid for in full even if the order is cancelled.” Id. WCR claims they are entitled to compensatory damages from this alleged breach of the Agreement. (Id. at PageID 64).

         On August 17, 2018, WCR filed their original complaint against Western Canada. (Doc. 1). On October 11, 2018, Western Canada filed a motion to dismiss for lack of personal jurisdiction, improper venue, and/or forum non conveniens. (Doc. 9). In response, WCR filed their amended complaint on October 24, 2018, herein referred to as “the Complaint.” (Doc. 10). On November 7, 2018, Western Canada filed the motion to dismiss for lack of jurisdiction, improper venue, and/or forum non conveniens which is currently before the Court. (Doc. 14). WCR filed a response in opposition to Western Canada's motion to dismiss on November 28, 2018. Finally, Western Canada filed a reply brief in support of their motion to dismiss on December 12, 2018. Currently, the motion to dismiss is ripe for decision.

         II. Jurisdiction

         WCR asserts in the Complaint that the Court has diversity jurisdiction over the case pursuant to 28 U.S.C. §1332 because WCR is a citizen of the state of Ohio and Western Canada is a citizen of a foreign state, specifically Canada, and the amount in controversy exceeds $75, 000, exclusive of interest and costs.

         III. Standard of Review

         Western Canada seeks dismissal of WCR's claims under Federal Rule of Civil Procedure 12(b)(2), which challenges the court's personal jurisdiction of a case. In order to survive a motion to dismiss for lack of personal jurisdiction purely on the motions, a plaintiff must make a prima facie case that the court has personal jurisdiction. Kroger Co. v. Malease Foods Corp., 437 F.3d 506, 510 (6th Cir. 2006)). In motions to dismiss decided purely upon the pleadings, the court must consider the pleadings and affidavits in a light most favorable to the plaintiff and cannot take into consideration the controverting assertions of the party seeking dismissal. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996). However, courts may consider the defendant's undisputed assertions. Kerry Steel, Inc. v. Paragon Indus., 106 F.3d 147, 153 (6th Cir. 1997). When the court holds an evidentiary hearing, the plaintiff must establish by a preponderance of the evidence specific facts that the court has personal jurisdiction over the non-resident defendant. Kroger at 510. As the Court held no evidentiary hearing in this case, WCR need only make a prima facie case that the Court has personal jurisdiction over Western Canada.

         Although Plaintiff s prima facie burden is relatively slight, the Court must still find that A'[P]laintiff has set forth specific facts that support a finding of jurisdiction in order to deny the motion to dismiss.'" Palnik v. Westlake Entm't, Inc.,344 Fed.Appx. 249, 251 (6th Cir. 2009) (quoting Kroger Co. v. Malease Foods Corp.,437 F.3d 506, 510 (6th Cir. 2006)). Thus, Ait remains the plaintiffs burden and the complaint must have 'established with reasonable particularity' those specific facts that support jurisdiction." Id. (quoting Neogen Corp. v. Neo Gen Screening, Inc.,282 F.3d 883, 887 (6th Cir. 2002). Consequently, the rules are designed in part to protect ...


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