Bowman v. Grolsche Bierbrouwerij BV

• Decision Date: 09 July 1979
• Docket Number: Civ. No. B-76-344.
• Citation: 474 F. Supp. 725
• Court: U.S. District Court — District of Connecticut
• Parties: A. Hunter BOWMAN d/b/a American Sales Company, Grolsch-Michigan, Inc., and Groenlo Marketing, Inc., Plaintiffs, v. GROLSCHE BIERBROUWERIJ B.V., and Frans de Groen, Defendants.

474 F. Supp. 725

A. Hunter BOWMAN d/b/a American Sales Company, Grolsch-Michigan, Inc., and Groenlo Marketing, Inc., Plaintiffs, v. GROLSCHE BIERBROUWERIJ B.V., and Frans de Groen, Defendants.

Civ. No. B-76-344.

United States District Court, D. Connecticut.

July 9, 1979.

COPYRIGHT MATERIAL OMITTED

Arthur Rogers Ivey, Ivey, Barnum & O'Mara, Greenwich, Conn., for plaintiffs.

Kenneth D. Wallace, Stamford, Conn., Philip E. Silberberg, pro hac vice, New York City, for defendants.

RULING ON DEFENDANTS' MOTIONS TO DISMISS

DALY, District Judge.

This diversity action arises out of an alleged 1973 contract by which defendant Grolsche Bierbrouwerij B.V. (Grolsche), a Netherlands corporation, is alleged to have granted to plaintiff A. Hunter Bowman d/b/a American Sales Company (American) the exclusive right to develop and supply the United States market for Grolsche's "Grolsch" beer products. Plaintiffs Grolsch-Michigan, Inc. (Grolsch-Michigan) and Groenlo Marketing, Inc. (Groenlo) are corporations formed by American to act as importer and promoter, respectively, of Grolsch beer in the United States. Defendant Frans de Groen (de Groen), is an officer of Grolsche.¹ The four-count complaint contains allegations that Grolsche breached the alleged contract and committed common-law fraud, that de Groen wrongfully interfered with the contractual relations between Grolsche and American and conspired to destroy the business of all plaintiffs, and that both Grolsche and de Groen wrongfully interfered with the contractual relations between American and the other plaintiffs.

Defendants have moved to dismiss the complaint on two grounds. First, they maintain that this Court lacks in personam jurisdiction because, under the facts of this case, none of the provisions of Connecticut's long-arm statutes authorize service upon them, see Conn.Gen.Stat. §§ 33-411 & 52-59b, and because their contacts with this forum have been insufficient to satisfy the "minimum contacts" test required by due process. See International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Second, they contend that each count except the first (relating to breach of contract) fails to state a claim. In the interests of clarity, the different standards that apply in determining motions to dismiss for failure to state a claim and for lack of in personam jurisdiction will be discussed at the outset.

For the purposes of a motion to dismiss for failure to state a claim, see Fed.R.Civ.Pro. 12(b)(6), the allegations of the complaint must be construed in the light most favorable to plaintiff and must be taken as true. Jones-Bey v. Caso, 535 F.2d 1360, 1362 (2d Cir. 1976). The Court should not consider matters outside the pleadings, but should examine the complaint in isolation to determine whether it states a claim. Doherty v. Federal Stevedoring Co., 198 F.Supp. 191, 195 (S.D.N.Y. 1961). "A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

A motion to dismiss for lack of in personam jurisdiction, on the other hand, often is a test of plaintiff's actual proof. See Fed.R.Civ.Pro. 12(b)(2). The Court must determine whether the appropriate state statute reaches the foreign defendant and, if so, whether such statutory reach meets the constitutional "minimum contacts" test required by due process. Schreiber v. Blankfort, 76 F.R.D. 474, 477 (D.Conn.1977); McFaddin v. National Executive Search, Inc., 354 F.Supp. 1166, 1168 (D.Conn.1973). Cf. Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977) (applying "minimum contacts" test to quasi in rem jurisdiction). In ruling on such a motion to dismiss, it is appropriate for the Court to consider affidavits submitted by the parties, Ghazoul v. International Management Services, Inc., 398 F.Supp. 307, 309 (S.D.N.Y.1975), and the motion will be denied only where plaintiff can establish prima facie conduct by defendant sufficient to justify the exercise of in personam jurisdiction. United States v. Montreal Trust Co., 358 F.2d 239, 242 (2d Cir.), cert. denied 384 U.S. 919, 86 S.Ct. 1366, 16 L.Ed.2d 440 (1966). If the motion is denied, defendant will not be barred from challenging jurisdictional facts at trial.² Id.

With these general considerations in mind, the Court turns to a determination of the motions. It is not disputed that, if in personam jurisdiction exists with respect to the first count, it states a claim for breach of contract. Each of the remaining three counts will be examined separately to determine, first, whether the facts provide a jurisdictional basis for the claim put forth in that count, and if so, whether the count states a claim.

FIRST COUNT

The first count contains allegations that in 1976, defendant Grolsche breached its agreement with plaintiff American. American argues that its strongest jurisdictional basis for this count is Conn.Gen.Stat. § 33-411(c)(1), which provides, in pertinent part, that "every foreign corporation shall be subject to suit in this state . . . on any cause of action arising . . . out of any contract . . . to be performed in this state . . .." To establish in personam jurisdiction under this provision, American initially must establish prima facie that a contract existed and that it was to be performed in Connecticut within the meaning of § 33-411(c)(1).

American's primary evidence of the existence of a contract is a letter sent on September 13, 1973 from Grolsche to American. The original is written in Dutch. American has submitted the original together with a translation certified as accurate on July 27, 1978. The translation reads, inter alia, as follows:

. . . Therefore, we suggest the following:

1. Beginning today, we will not respond to any offer-requests from the U.S.A.

2. This agreement will remain valid within one year after the arrival of the first shipment of Grolsch in Connect. (sic).

3. Within this year you, and we will gain experience, and the possibility of other markets in the U.S.A. (e. g. via colleges (sic) in Ohio) can also be explored.

4. If business in Connecticut should prove to be unsatisfactory, you, and we, will consider the opening of another market in the U.S.A. Should you, and we, decide against this, we both will be free. If we decide for this, the agreements under 1 and 2 will be valid for the new market.

5. If business in Connecticut should prove to be satisfactory, you, and we, will prepare for this market a year-and (sic) sales plan, as a condition for the sales monopoly during a number of years to be agreed upon.

6. In the same way as sub 4 and 5 will be acted with regard to new markets in the U.S.A. In the events sub 5 and 6 you will have the first sales rights in the entire U.S.A., provided you work constantly to open new markets. The above mentioned will show you, that you hold all the possibilities for the sale of Grolsch in the U.S.A., under the condition that the possibilities are there, and that you will remain commercially active . ..

Defendants have filed an appropriate notice that they rely on the law of the Kingdom of the Netherlands in this case, see Fed.R.Civ.Pro. 44.1, and now argue that American has failed to establish the existence of a contract that would be valid and enforceable under the law of the Netherlands. Neither party, however, has briefed or produced evidence of the substance or effect on this case of the Netherlands law. Under such circumstances, the Court will assume that the law of the Netherlands is the same as the law of Connecticut.³ Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150, 155 n. 3 (2d Cir.) cert. den. 393 U.S. 826, 89 S.Ct. 86, 21 L.Ed.2d 96 (1968). See also Union & New Haven Trust Co. v. Watrous, 109 Conn. 268, 285, 146 A. 727 (1929); McGloughlin v. Shaw, 95 Conn. 102, 106, 111 A. 62 (1920).

The evidence presented, construed in the light most favorable to American, establishes prima facie that a contract existed. There is no dispute that Grolsche did ship beer to American and that there was an extensive course of dealing between the parties. The letter offered by American as evidence of the alleged agreement is but one in an extensive series of correspondence between American and Grolsche relating to the terms of their business relationship.⁴ There is also evidence that for several years Grolsche did ship exclusively to American in this country. This combination of evidence, construed in the light most favorable to American, leads the Court to conclude that American has satisfied its present burden of demonstrating the existence of the alleged agreement. Cf. R. F. Baker Co., Inc. v. P. Ballantine & Sons, 127 Conn. 680, 20 A.2d 82 (1941).

The Court now considers whether American sufficiently has established that the contract was "to be performed in this state . . ." within the meaning of § 33-411(c)(1). It is clear from the evidence presented that American was to perform the alleged agreement in Connecticut, as the agreement contemplated that Connecticut would be the initial test market for Grolsch beer in this country. It does not appear, however, that Grolsche was to perform any part of its agreement in Connecticut. American relies primarily on its own performance in this state to establish jurisdiction over Grolsche, while Grolsche argues that the "performance" language of § 33-411(c)(1) is satisfied only by performance in this state by the party over whom jurisdiction is sought. The Court, therefore, is faced with deciding whether the language of § 33-411(c)(1) covering contracts "to be performed in this state . . ." is satisfied where the contract requires performance in this state by plaintiff only.

This appears to be a question of first impression. The Connecticut Supreme Court apparently never has addressed any...