Aquatherm GMBH v. Renaissance Assocs. I Ltd.

• Decision Date: 21 January 2020
• Docket Number: Court of Appeals Case No. 19A-PL-981
• Citation: 140 N.E.3d 349
• Parties: AQUATHERM GMBH, Appellant-Defendant, v. RENAISSANCE ASSOCIATES I LIMITED PARTNERSHIP, Appellee-Plaintiff.
• Court: Indiana Appellate Court

140 N.E.3d 349

AQUATHERM GMBH, Appellant-Defendant,

v.RENAISSANCE ASSOCIATES I LIMITED PARTNERSHIP, Appellee-Plaintiff.

Court of Appeals Case No. 19A-PL-981

Court of Appeals of Indiana.

FILED January 21, 2020

Attorneys for Appellant: William E. Kelley, Jr., Marc A.W. Stearns, Carmel, Indiana

Attorneys for Appellee: Michael J. Jasaitis, Ryan A. Deutmeyer, Crown Point, Indiana

Altice, Judge.

Case Summary

[1] This is an interlocutory appeal addressing the question of personal jurisdiction over Aquatherm GmbH(GmbH), a German company that manufactures polypropylene water pipes.Its pipes were installed in two ten-story apartment buildings called Renaissance Towers (the Towers) located in Hammond, Indiana and owned by Renaissance Associates I Limited Partnership(Renaissance).After experiencing problems with the pipes, Renaissance filed a lawsuit against multiple entities, including GmbH.GmbH filed a motion to dismiss for lack of personal jurisdiction, which the trial court denied.GmbH now appeals, asserting that neither general personal jurisdiction nor specific personal jurisdiction exists.

[2]We affirm.

Facts & Procedural History

[3] GmbH's principal place of business is in Attendorn, Germany, and it manufactures the Aquatherm pipe only in Germany.GmbH does not own or lease any offices or any other real property in Indiana and is not registered to do business in Indiana.GmbH does not have a warehouse anywhere in the United States.

[4] In addition to GmbH, there are several other Aquatherm entities involved in this lawsuit, including: Aquatherm, Inc., Aquatherm NA, L.C. (Aquatherm NA), and Aquatherm, L.P.(Aquatherm, LP).Initially, GmbH sold all of its Aquatherm pipe used for projects in the United States to Aquatherm, Inc.In January 2011, Aquatherm Inc. became known as Aquatherm NA, and from January 2011 to December 2015, GmbH sold its pipe used for projects in the United States to Aquatherm NA.Pursuant to a December 1, 2015 asset purchase agreement, Aquatherm NA's assets were sold to Aquatherm, LP., and GmbH sold all Aquatherm pipe used for projects in the United States to Aquatherm, LP.When Aquatherm NA ceased operations, it had three warehouses, which were in Lindon, Utah, Virginia, and Toronto, Canada.Aquatherm, LP has one warehouse, and it is in Lindon, Utah.

[5] The Aquatherm pipe at issue was delivered by GmbH under either or both of the following two delivery methods: (1)"FOB any European port" or (2)"Cost Insurance Freight."Appellant's Briefat 10-11.Under FOB any European port, title to the pipe transferred from GmbH to Aquatherm NA upon the pipe's arrival at a European port.Aquatherm NA sold the Aquatherm Pipe to approved distributors, including Columbia Pipe & Supply.Co. (Columbia Pipe), a defendant in this action.When the Aquatherm pipe was shipped from an Aquatherm NA warehouse to a distributor, title to the product transferred from Aquatherm NA to the distributor upon shipment.Appellant's Appendix Vol. IIat 105.Under Cost of Insurance Freight delivery method, GmbH delivered pipe to Aquatherm, LP's Lindon, Utah warehouse where it was held "as consignment stock" and title transferred from GmbH to Aquatherm, LP when Aquatherm, LP took the product out of stock at the Utah warehouse.Appellant's Briefat 10-11.Aquatherm, LP sold Aquatherm pipe to distributors "under [the] same conditions" as Aquatherm NA sold to distributors.Id. at 12.

[6] In 2012, Renaissance began a construction project to replace the galvanized steel hot water supply lines in the Towers.After meetings and discussions with personnel from Aquatherm entities and contractor Circle R Mechanical, Inc.(Circle R), Renaissance chose GmbH's polypropylene pipes for the Tower project.Renaissance entered into written contracts with Circle R, in which Circle R agreed to provide all necessary labor and materials, including boilers and pipe, for the Towers project.Circle R purchased the pipe from Columbia Pipe, which held a distributor agreement with Aquatherm NA.Columbia Pipe also was the "authorized Aquatherm trainer" that trained Circle R employees regarding installation of the pipe.Appellant's Appendix Vol. IIat 61.The project began in 2012 and was completed in March 2013, with over 5000 linear feet of GmbH's pipe having been installed in the Towers.

[7] According to Renaissance, it began experiencing ruptures, failures, and extensive leaking with the hot water piping system at the Towers in 2014.The problems continued, and, on August 31, 2017, Renaissance filed its Complaint against defendants Circle R, Columbia Pipe, and Aquatherm, LP¹ , asserting claims pertaining to alleged issues with the installation and performance of the hot water piping system at the Towers, including breach of contract, various breaches of warranty, negligence, and negligent misrepresentation.On or about February 27, 2018, Renaissance filed its First Amended Complaint asserting similar and additional claims against those defendants and adding defendantsAquatherm NA, Aetna NA, L.C., Aquatherm, Inc., Clark Family Holdings, L.C., and GmbH.²As to jurisdiction, the First Amended Complaint stated:

13.This Court has personal jurisdiction over DefendantsAquatherm LP, Aquatherm NA, Aetna NA, Aquatherm, INC and CF Holdings (collectively: "Aquatherm") under long arm jurisdiction for actions targeted to and occurring in Indiana because Aquatherm, including relevant predecessors and/or successors regularly conducts business in Indiana with respect to the marketing, sales and supplying of Aquatherm pipes that are the focus of the underlying dispute in this matter.Aquatherm representatives also traveled to Indiana to consult and/or advise with respect to the Aquatherm pipes at the Towers.

14.This Court has personal jurisdiction over DefendantAquatherm GmbH under long arm jurisdiction for actions targeted to and occurring in Indiana because this entity regularly conducts business in Indiana with respect to the manufacture, marketing, sales and/or supplying of Aquatherm pipes that are the focus of the underlying dispute in this matter.

Id. at 60.The Amended Complaint stated that "Aquatherm claims to back its products with a 10-year manufacturer's warranty that covers replacement parts, replacement labor, incidental damages, medical costs, and financial loss."³Id. at 61.The only count against GmbH alleged negligence arising out of alleged defective design and manufacture of the pipes and failure to warn and/or instruct Renaissance about the defects and the proper and/or safe use of the pipes.Renaissance alleged that it was damaged in an amount of at least $413,300 as a proximate result of GmbH's negligence.

[8] On October 24, 2018, GmbH filed a Motion to Dismiss for Lack of Personal Jurisdiction, arguing that GmbH lacked sufficient minimum contacts with Indiana such that the exercise of jurisdiction would violate the Due Process Clause of the Fourteenth Amendment.It maintained that GmbH's "involvement with the [ ] piping transaction was completed upon the pipe's delivery to Aquatherm NA's or Columbia Pipe's storage or warehouse locations," that the distributors handled the redelivery to project sites, and "GmbH had no direct involvement with the [ ] Towers project."Id. at 83.GmbH argued that general personal jurisdiction did not exist as it did not have continuous and systematic contacts with Indiana, nor did specific personal jurisdiction exist because "GmbH did nothing more than place its product into the stream of commerce, which is not enough for it to be haled into this Court."Id. at 94.In support of its motion to dismiss, GmbH attached the affidavits of (1)Dirk Rosenberg, a Director of GmbH, and (2)Jordan Handy, CEO of Aquatherm L.P.(and formerly CFO of Aquatherm, Inc. and Aquatherm NA).

[9] Rosenberg's affidavit averred that GmbH does not own or lease property in Indiana, "does not have any sales or marketing representatives or distribution networks in Indiana[,]""does not market Aquatherm pipe in [ ] Indiana[,]""had no involvement with the [Towers] project[,]" and had "no knowledge that some of Aquatherm's pipe ... would eventually be redelivered to Indiana ... and used for the [Towers] project[.]"Id. at 98, 100.Hardy's affidavit stated, among other things, that GmbH did not have any involvement after the distributor took title to the pipe and that GmbH did not track the destination of the pipe.

[10] Renaissance filed its opposition to the motion for summary judgment, asserting that Indiana has both general and specific personal jurisdiction over GmbH.Renaissance argued that GmbH "has purposefully availed itself of conducting business in Indiana" through its "substantial national distribution network in the United States."Id. at 109, 111.Renaissance argued that GmbH did not merely place its product in the stream of commerce; it knew and in fact encouraged that its product would be sold in the United States, including in Indiana, and that GmbH's activities made it reasonable that it would anticipate being haled into court in Indiana.

[11] In support of its opposition, Renaissance submitted the affidavit of Daniel Medve, Secretary for Renaissance.Medve attached to his affidavit Exhibits A through S, which consist of printed pages from Aquatherm websites, including pages from GmbH and Aquatherm, LP's respective sites, answers to discovery requests, and warranty documentation.GmbH's website (www.aquatherm.de) includes a link, represented by a United States flag, for United States customers to click.Medve explained that when a user clicks the flag, a pop-up window appears which states, "Aquatherm LP is the exclusive sales representative of acquatherm GmbH for the USA and Canada" and, to proceed, the interested user is to click "Enter site" link.Id. at 126, 134.Once a user clicks "Enter site,"he/she enters the www.aquatherm.com website, which welcomes users to Aquatherm and, among other things, provides tabs for one to "Read about...