Allen Group, Inc. v. Allen Deutschland GMBH
| Decision Date | 02 December 1994 |
| Docket Number | No. 4:93-CV-2.,4:93-CV-2. |
| Citation | 877 F. Supp. 395 |
| Parties | ALLEN GROUP, INC., The Testproducts Division, a Delaware corporation; Allen Group International, a Delaware corporation, Plaintiffs, v. ALLEN DEUTSCHLAND GMBH, jointly and severally; VLT/Werkstatt Technik AG, jointly and severally; Allen Test, Ges.m.b.H., jointly and severally; Erwin Bertschi, individually and as officer, director and/or shareholder of Allen Deutschland GMBH, VLT/Werkstatt Technik AG, and Allen Test Ges.m.b.H., jointly and severally, Defendants. |
| Court | U.S. District Court — Western District of Michigan |
Scott Graham, Alfred J. Gemrich, Gemrich, Moser, Bowser & Lohrmann, Kalamazoo, MI, for plaintiffs.
Louise B. Wright, Miller, Canfield, Paddock & Stone, Curtis E. Hall, Stryker Corp., Kalamazoo, MI, for defendants.
Plaintiff, The Allen Group, Inc., Testproducts Division (Allen Group) is seeking an order pursuant to 9 U.S.C. §§ 201, 202, 203, 207 and 208, confirming the arbitration awards dated May 2, 1994, rendered in the matter between The Allen Group, Inc., Test-products Division, as claimant, and VLT Werkstatt-Technik AG (VLT) and Erwin Bertschi (Bertschi), as Respondents, American Arbitration Association (AAA) Case No. 54-T181 0157 93. Plaintiff is also requesting that this Court enter judgment against VLT and Bertschi based upon the AAA award.
The plaintiff, Allen Group is a Delaware corporation with its principal place of business in Kalamazoo, Michigan. The Defendant, VLT, is a Swiss corporation with its principal place of business in Bern, Switzerland. Defendant Bertschi is an individual residing in Switzerland. On March 25, 1985, plaintiff entered into a Distribution Agreement with VLT for the distribution of Allen products in Germany, Austria and Switzerland. Bertschi, the majority owner and Director of VLT, signed the Distribution Agreement on behalf of defendants. The Distribution Agreement provides, among other things, as follows:
This Agreement shall be construed and interpreted according to the laws of the State of Michigan-U.S.A. Any controversy or claim regarding the application, interpretation, or breach of this Agreement shall at the request of either party, be settled by arbitration in accordance with the rules then obtaining of the American Arbitration Association. This Agreement shall be enforceable and judgment upon any award rendered by the arbitrator, or by all or a majority of arbitrators, may be entered in any court having jurisdiction. The arbitration shall be held in Michigan, or wherever jurisdiction may be obtained over the parties.
Disputes arose between the parties, and in December 1992, plaintiff initiated this action in the Kalamazoo County Circuit Court. On January 12, 1993, the defendants had the case removed to this Court pursuant to Fed. R.Civ.P. 81(c). At the time the action was removed from state court to this Court, lawyer Curtis Hall and the law firm of Miller, Canfield, Paddock and Stone (Miller, Canfield) represented all defendants. After removing the case to this Court, defendant VLT filed a motion to dismiss plaintiff's complaint for lack of personal jurisdiction, and all defendants filed a motion to dismiss the complaint or to stay proceedings and compel arbitration. Plaintiff filed responses to defendants' motions and a motion to remand the action back to state court. On June 23, 1993, all of the parties requested this Court to enter a "Consent Judgment" which was approved as to form and content by all parties. The Court signed the "Consent Judgment."
Although the document submitted by the parties was entitled "Consent Judgment," it did not fully dispose of the case. The Consent Judgment resolved several issues raised by the parties in their motions, and ordered arbitration between plaintiff and defendants.1 Pursuant to the Consent Judgment, all claims raised by plaintiff against Allen Deutschland GMBH were submitted to arbitration before the Zurich Chamber of Commerce in Zurich, Switzerland; those proceedings are still pending. All claims raised by plaintiff against VLT and Erwin Bertschi were submitted to arbitration before the American Arbitration Association.
On March 24, 1994, the AAA conducted a hearing in Kalamazoo, Michigan in the Western District of Michigan. On May 2, 1994, the arbitrators rendered arbitral awards in favor of Allen and against VLT and Bertschi. Plaintiff is seeking an order from this Court confirming the AAA arbitration awards and for entry and enforcement of judgment.
Plaintiff filed a motion and supporting documents to confirm the arbitration awards. On September 13, 1994, this Court struck those documents from the record and returned them to plaintiff because the record did not disclose that the pleadings had been served upon defendants. Plaintiff refiled the motion to confirm the arbitration awards together with supporting documents. The proof of service indicates that the motion and supporting documents were served upon Curtis Hall at his Miller, Canfield address and upon William Potter, Jr., a lawyer in Detroit, Michigan.2 The proof of service also shows service upon Joachim Winter, Brand Kestler Lappat Schutt & Partner, Bockenheiver Lanstrasse 98-100, 8000 Frankfurt AM Main 1, Germany, Richard K. Stauffer, Gerbergasse 20, CH-4001 Basel, Switzerland, VLT Werkstatt Technik AG, Mattenhof, Schulhausstrasse 5, CH-3073, Gumligen/Bern, Switzerland, Erwin Bertschi, Kirchgaessli 7, 3322 Urtenen/Schoenbuehl, Switzerland. This Court received copies of letters to plaintiff's counsel from Miller, Canfield in which Miller, Canfield explained that it no longer represented defendants. This Court also received a copy of a letter from attorney William Potter, Jr., wherein Mr. Potter stated that he no longer represented VLT and further communications should be sent directly to VLT.
On October 26, 1994, this Court ordered the attorneys and defendants to appear at a Show Cause hearing to be held on November 18, 1994. The purpose of the Show Cause hearing was to show why Curtis Hall and Miller, Canfield were no longer representing defendants in this matter;3 why this case was not totally dismissed by the Consent Judgment dated June 23, 1993, and why a judgment and order confirming the arbitration awards in favor of Allen and against VLT and Bertschi should not be entered as requested by Allen. At the Show Cause hearing Charles Ritter, an attorney from Miller, Canfield, and Curtis Hall asserted that the Consent Judgment which ordered the parties to arbitrate was a final order and terminated Miller, Canfield's obligation to represent the defendants. Mr. Ritter and Mr. Hall also stated that they had not represented any of the defendants at the arbitration. Miller, Canfield took no position on the request for confirmation and enforcement of the arbitration awards. Neither William Potter, Jr., nor the defendants appeared at the Show Cause hearing. No one claiming to represent any defendant appeared at the Show Cause hearing.
The parties agreed in the Consent Judgment that the Court has jurisdiction and that The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (The Convention) applies to this case. The Convention provides in relevant part:
9 U.S.C. § 208 (1970).
The Federal Arbitration Act (FAA) provides:
If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and there upon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title 9 U.S.C. §§ 10, 11. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made. Notice of the application shall be served upon the adverse party, and thereupon the court shall have jurisdiction of such party as though he had appeared generally in the proceeding. If the adverse party is a resident of the district within which the award was made, such service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse party shall be a nonresident, then the notice of the application shall be served by the marshal of any district within which the adverse party may be found in like manner as other process of the court.
9 U.S.C. § 9 (1970).
A party initiates proceedings to confirm an arbitration award by filing either a petition or motion to confirm the award. Booth v. Hume Pub., Inc., 902 F.2d 925, 932 (11th Cir.1990); also see 9 U.S.C. § 9 and 9 U.S.C. § 207. The district court need not conduct a full hearing on a motion to confirm an arbitration award; such motions may be decided on the papers without oral testimony. Id. (citations omitted). In Booth the court also noted that the Federal Arbitration Act expresses a presumption that arbitration awards will be confirmed. Id. Section...
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