Ameritel Corp. v. Isoetec Communications, Inc., Civ. No. 88-1074-FR.

• Decision Date: 18 January 1990
• Docket Number: Civ. No. 88-1074-FR.
• Citation: 109 BR 965
• Parties: AMERITEL CORPORATION, an Oregon corporation, Plaintiff and Counterclaim Defendant, v. ISOETEC COMMUNICATIONS, INC., a Virginia corporation, and Executone, Inc., a New York corporation, and Executone Information Systems, Inc., a Delaware 966*966 corporation, Defendants, Counterclaim Plaintiffs and Third-Party Plaintiffs, v. Scott C. DENNEY, Counterclaim Defendant and Third-Party Defendant.
• Court: U.S. District Court — District of Arizona

109 B.R. 965 (1990)

AMERITEL CORPORATION, an Oregon corporation, Plaintiff and Counterclaim Defendant, v. ISOETEC COMMUNICATIONS, INC., a Virginia corporation, and Executone, Inc., a New York corporation, and Executone Information Systems, Inc., a Delaware

corporation, Defendants, Counterclaim Plaintiffs and Third-Party Plaintiffs, v. Scott C. DENNEY, Counterclaim Defendant and Third-Party Defendant.

Civ. No. 88-1074-FR.

United States District Court, D. Oregon.

January 18, 1990.

John M. Berman, Beaverton, Or., for plaintiff.

Milo Petranovich, Tilman Hasche, Spears, Lubersky, Bledsoe, Anderson, Young & Hilliard, Portland, Or., Michael J. Lockerby, Hunton & Williams, Richmond, Va., for defendants.

FRYE, District Judge:

The matter before the court is the motion (#40) of defendant Executone Information Systems, Inc. (Executone) to dismiss the first and third counterclaims of plaintiff/counterclaimant Ameritel Corporation (Ameritel).

BACKGROUND

Defendant Executone is a Delaware corporation which is the successor-in-interest to defendants Isoetec Communications, Inc. (Isoetec), a Virginia corporation, and Executone, Inc., a New York corporation. Executone is the survivor of a series of mergers and liquidations involving Isoetec, Executone, Inc., and Vodavi Technology Corp. which took place in July, 1988. Executone manufactures and sells "Isoetec" telephone systems.

Plaintiff Ameritel is an Oregon corporation which was incorporated in 1986. Scott Denney is the president, chief executive officer, and principal stockholder of Ameritel. On May 26, 1987, Ameritel and Isoetec entered into a dealer agreement under which Ameritel was authorized to sell and service Isoetec's telecommunications equipment in the Portland, Oregon metropolitan area.

This litigation arises from Ameritel's subsequent financial difficulties and its attempts to sell its business to Isoetec. Ameritel alleges that it was experiencing financial difficulties in early 1988; that it entered into negotiations for Isoetec to provide working capital or otherwise invest in Ameritel; that Isoetec refused to ship equipment to Ameritel, thereby weakening Ameritel's position; that Isoetec offered to purchase Ameritel's business and that Ameritel accepted; that Isoetec took possession of Ameritel's business, inventory and equipment; and that Isoetec subsequently refused to conclude the purchase of Ameritel's business. The complaint alleges claims for conversion and unjust enrichment against Isoetec and its successor, Executone.

On July 18, 1988, Ameritel filed a petition in bankruptcy pursuant to Chapter 11. On July 22, 1988, Ameritel filed this action against Isoetec and Executone, Inc. in the Circuit Court of the State of Oregon for the County of Multnomah. On September 19, 1988, this action was removed to federal court on the basis of diversity jurisdiction. On March 21, 1989, the bankruptcy court granted Executone relief from the automatic stay in order to assert compulsory counterclaims against Ameritel.

This court subsequently granted Executone's motion for leave to amend its answer in order to assert counterclaims against Ameritel and Denney, and third party claims against Denney. In its counterclaims and third party claims, Executone alleges that Ameritel breached the dealer agreement; that Denney is liable for Ameritel's breach of contract on an alter ego theory; that during the negotiations for the purchase, Ameritel and Denney made misrepresentations to Executone; that Ameritel and Denney violated the Virginia Conspiracy Statute during the negotiations for the purchase; and that Executone is entitled to indemnity from Denney for any damage found to have been suffered by Ameritel.

Ameritel subsequently filed a reply to Executone's answer and counterclaims, in which Ameritel alleges three counterclaims against Executone. Ameritel's counterclaims are based upon the same facts as the complaint and Executone's counterclaims and third party complaint. Executone now moves to dismiss Ameritel's first and third counterclaims.

ANALYSIS AND RULING

Executone contends that Ameritel's first and third counterclaims must be dismissed because they are "core proceedings" which have been referred to the bankruptcy court pursuant to 28 U.S.C. § 157(a) and Local Rule 2101-1. Ameritel responds that even though the first and third counterclaims are core proceedings which would normally be resolved in the bankruptcy court, dismissal is not appropriate because this court may withdraw reference in order to try all issues in a single proceeding.

Under 28 U.S.C. § 157(a), certain matters may be referred to the bankruptcy courts for decision: "Each district...