Bruckner Truck Sales, Inc. v. Hoist Liftruck Mfg., LLC
| Decision Date | 20 November 2020 |
| Docket Number | Civil Action No. 2:20-CV-180-M-BQ |
| Citation | 501 F.Supp.3d 409 |
| Parties | BRUCKNER TRUCK SALES, INC., Bruckner Leasing Co., Inc., and American Radio Corporation, Plaintiffs, v. HOIST LIFTRUCK MFG., LLC and Hoist Material Handling, Inc., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
ORDER ACCEPTING THE FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Before the Court is Defendants Hoist Liftruck Mfg., LLC's and Hoist Material Handling, Inc.’s Joint Motion to Transfer Venue and Compel Arbitration, or, Alternatively, to Dismiss Plaintiffs’ Original Petition, along with their brief and appendix in support. ECF Nos. 9, 10, 11. The United States Magistrate Judge made Findings, Conclusions, and a Recommendation regarding the motion. ECF No. 24. Neither party filed objections, and the Magistrate Judge's recommendation is now ripe for review. The District Court reviewed the proposed Findings, Conclusions, and Recommendation for plain error. Finding none, the Court ACCEPTS the Findings, Conclusions, and Recommendation of the United States Magistrate Judge (ECF No. 24), and GRANTS in part Defendants’ motion. ECF No. 9.
It is therefore ORDERED that Defendants’ request to transfer the case to the Northern District of Illinois, Eastern Division is GRANTED , Defendants’ request to compel arbitration is DENIED without prejudice , and Defendants’ alternative request to dismiss the case with prejudice is DENIED .
SO ORDERED , this 20th day of November, 2020.
Before the Court is Defendants Hoist Liftruck Mfg., LLC's (Hoist)1 and Hoist Material Handling, Inc.’s (Hoist Material) Joint Motion to Transfer Venue and Compel Arbitration, or, Alternatively, to Dismiss Plaintiffs’ Original Petition, along with their brief and appendix in support. ECF Nos. 9, 10, 11. Plaintiffs Bruckner Truck Sales, Inc. (Bruckner), Bruckner Leasing Co., Inc. (Bruckner Leasing), and American Radio Corporation (ARC) filed their response and appendix in support (ECF Nos. 18, 19), to which Defendants filed a reply. ECF No. 23. The motion is now ripe for decision. After reviewing the parties’ briefing and applicable law, the undersigned recommends that the United States District Judge GRANT in part Defendants’ Joint Motion to Transfer Venue and Compel Arbitration, or, Alternatively, to Dismiss Plaintiffs’ Original Petition, and transfer this action to federal district court in the Northern District of Illinois, Eastern Division. ECF No. 9.
Bruckner and Hoist executed a Non-Exclusive T-Series Dealer Sales and Service Agreement (Agreement) in November 2017. App. in Supp. of Defs.’ Joint Mot. to Transfer Venue and Compel Arbitration, or, Alternatively, to Dismiss Pls.’ Original Pet. 5–18, ECF No. 11 [hereinafter Defs.’ App.]. Bruckner Leasing and ARC are not parties to the Agreement. Id. Under the Agreement, Bruckner purchased ten Hoist T-Series tractors (id. ) and subsequently sold eight of the ten to its customers, including Bruckner Leasing and ARC. Pls.’ Resp. and Br. to Defs.’ Joint Mot. to Transfer Venue and Compel Arbitration, or, Alternatively, to Dismiss Pls.’ Original Pet. 2, ECF No. 18 . The Agreement includes a warranty provision stating that "[Hoist] warrants to [Bruckner] and through [Bruckner] to the first purchaser from [Bruckner] for use that ... [Hoist] will discharge its warranty obligations in accordance with the terms, conditions and limitations of the [Hoist] warranty applicable to the product." Defs.’ App. 12. "Bruckner notified its customers of a warranty on the Hoist Tractors, but did not provide its customers with a copy of the Dealer Agreement between Bruckner and [Hoist]." Pls.’ App. in Supp. of their Resp. and Br. to Defs.’ Joint Mot. to Transfer Venue and Compel Arbitration, or, Alternatively, to Dismiss Pls.’ Original Pet. 2, ECF No. 19 .
According to Plaintiffs, the tractors "experienced significant problems and contained many manufacturing defects, which led the tractors to break down numerous times." Pls.’ Resp. 2. Plaintiffs assert that Bruckner Leasing and ARC "would rely on Bruckner ... to perform the service and repairs" and "[p]ursuant to the Dealer Agreement, Bruckner submitted warranty work and services to Defendants for reimbursement." Id. at 3. Plaintiffs allege that "Bruckner was in contact with Hoist regarding the deficiencies and grossly defective nature of the Hoist Tractors on a regular basis." Id. Subsequent to the parties’ execution of the Agreement, Hoist entered into an Asset Purchase Agreement with Hoist Material, and Bruckner consented to assignment of the Agreement. Defs.’ App. 20–21. After Hoist Material assumed the Agreement, according to Plaintiffs, Hoist Material proposed "re-working" the tractors but never did so. Pls.’ Resp. 3.
Plaintiffs filed suit against Defendants in the 47th District Court, Randall County, Texas, on June 19, 2020. Pls.’ Original Pet. 4–11, ECF 1-3 [hereinafter Pet.].2 Plaintiffs served Defendant Hoist Material on June 22, 2020. ECF No. 1, at 1. Shortly thereafter, Defendants removed this case from state court to the United States District Court for the Northern District of Texas, Amarillo Division. Id. Defendants then filed their Joint Motion to Transfer Venue and Compel Arbitration, or, Alternatively, to Dismiss Plaintiffs’ Original Petition. ECF No. 9.
Under the Original Petition, Plaintiffs collectively bring two claims against Defendants: breach of contract and a request for attorneys’ fees. Pet. 10. Plaintiffs allege that Defendants provided a warranty to Bruckner, Bruckner Leasing, and ARC, and subsequently breached the warranty thereby violating the contract. Id. The claims asserted in Plaintiffs’ Original Petition rely exclusively on warranties contained in the Agreement. Id. at 6.
In the motion now before the Court, Defendants primarily argue that Plaintiffs’ claims "arise out of, or otherwise relate to, the Dealer Agreement" itself, and the Agreement's forum-selection clause therefore mandates transfer to the Northern District of Illinois, Eastern Division. Br. in Supp. of Defs. Hoist Liftruck Mfg., LLC and Hoist Material Handling, Inc.’s Joint Mot. to Transfer Venue and Compel Arbitration, or Alternatively, to Dismiss Pls.’ Original Pet. 1–2, ECF No. 10 [hereinafter Defs.’ Br.]. Defendants further allege that the Agreement's arbitration clause likewise requires claims arising from or relating to the Agreement to be arbitrated in Illinois. Id. As a result, Defendants ask the Court to enforce the forum-selection clause and transfer this suit to Illinois under 28 U.S.C. § 1404(a), and concurrently compel the parties to arbitrate, or alternatively, compel arbitration and dismiss this case with prejudice for "improper venue" under Federal Rule of Civil Procedure 12(b)(3). Id. at 7–21.
Plaintiffs principally argue in response that the Court should deny Defendants’ motion because the non-signatory Plaintiffs—Bruckner Leasing and ARC—are not parties to the Agreement and do not seek to enforce the Agreement. Pls.’ Resp. 1. Plaintiffs allege that Bruckner, the signatory plaintiff, is not bound by the arbitration clause because it is unconscionable. Id. at 9. Defendants’ request to transfer this case to the Northern District of Illinois, Plaintiffs contend, is improper because the Agreement "itself does not contemplate the Northern District of Illinois as an allowable and agreed upon venue within the [forum-selection] clause." Id. at 16. Plaintiffs assert that "[e]ven if some, but not all, Plaintiffs are subject to arbitration, the Court should adjudicate all Plaintiffs’ claims collectively in this Court" because "[i]t would serve judicial efficiency to hear Plaintiffs’ claims collectively." Id. at 10. In addition, Plaintiffs argue that the Court should not dismiss this case under Federal Rule of Civil Procedure 12(b)(3) because the United States Supreme Court has held that the rule "may not be used as a mechanism to enforce a forum selection clause," and "a motion under 28 U.S.C. § 1404(a) is the proper mechanism for analyzing whether to transfer a case based on a valid forum selection clause." Id. at 17. In the event that "Plaintiffs’ Original Petition does not make clear that the Non-Signatory Plaintiffs’ claims against Defendants are based in breach of warranty and do not rely on the Dealer Agreement, Plaintiffs seek leave to amend their Original Petition." Id. at 10–11.
In reply, Defendants maintain that the issue is simple and the analysis straightforward. They aver that "Plaintiffs’ Response re-confirms that the breach of contract claim is based on the Dealer Agreement" and that Plaintiffs "simply cannot reap the benefits (the warranties) of the Dealer Agreement and avoid what they now see as burdens (the Illinois forum-selection, Illinois choice-of-law, and Illinois arbitration provisions)." Defs.’ Reply Br. in Supp. of Defs.’ Joint Mot. to Transfer Venue and Compel Arbitration, or, Alternatively, to Dismiss Pls.’ Original Pet. 2, ECF No. 23 [hereinafter Defs.’ Reply Br.]. Defendants further ask the Court to deny Plaintiffs’ request to amend their petition. Id. at 8–9. According to Defendants, Plaintiffs "indicate they want to to [sic] ‘make clear’—contrary to the express assertions of their [Petition]—that the first purchasers’ claims are not based on the Dealer Agreement." Id. Plaintiffs’ request to amend their petition, Defendants argue, is an "undeveloped, last-gasp request" that "fails for lack of any argument or authority." Id. at 9. Accordingly, Defendants re-urge the Court to "enforce the parties’ forum-selection clause and transfer this case to the U.S. District Court for the Northern District of Illinois, as well as order that Plaintiffs arbitrate their claims in...
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