In re Tirex Intern., Inc.

• Decision Date: 29 September 2008
• Docket Number: Bankruptcy No. 08-14264-BKC-AJC.,Adversary No. 08-01395-AJC.
• Citation: 395 B.R. 182
• Parties: In re TIREX INTERNATIONAL, INC., Debtor. Joel L. Tabas, in his capacity as Trustee of the Bankruptcy Estate of Tirex International, Inc., Plaintiff, v. Fordberry PLC, f/k/a Fordberry (UK) Ltd., Defendant.
• Court: U.S. Bankruptcy Court — Southern District of Florida

395 B.R. 182

In re TIREX INTERNATIONAL, INC., Debtor Joel L. Tabas, in his capacity as Trustee of the Bankruptcy Estate of Tirex International, Inc., Plaintiff, v. Fordberry PLC, f/k/a Fordberry (UK) Ltd., Defendant.

Bankruptcy No. 08-14264-BKC-AJC.

Adversary No. 08-01395-AJC.

United States Bankruptcy Court, S.D. Florida, Miami Division.

September 29, 2008.

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Alan R. Poppe, Foley & Lardner, Miami, FL, Kevin A. Reck, Orlando, FL, for Plaintiff.

Stephen J. Kolski, Jr., Coral Gables, FL, for Defendant.

MEMORANDUM ORDER DENYING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND GRANTING MOTION TO COMPEL ARBITRATION

A. JAY CRISTOL, Chief Judge.

Plaintiff, Joel Tabas ("the Trustee"), in his capacity as Chapter 7 Trustee in Bankruptcy for Debtor, Tirex International, Inc. ("Tirex"), initiated an adversary proceeding against Defendant, Fordberry Plc, f/k/a Fordberry (UK) Ltd. ("Fordberry"), a public limited company registered in the United Kingdom with its principal place of business in South Wales, UK, to recover a deposit in excess of $1 million for certain off-road tires that were never delivered to Tirex as promised. Fordberry has moved to dismiss for lack of in personam jurisdiction or, alternatively, to compel arbitration of the claims asserted against it and to abate the instant adversary proceeding.

I. FACTUAL BACKGROUND

The parties have submitted declarations in support of their respective positions. The factual circumstances surrounding the subject transaction are as follows:

1. The Debtor, Tirex, is a Florida corporation with its principal place of business located in Coral Gables, Florida. Tirex is engaged in the business of, among other things, buying and selling commercial tires including, but not limited to, certain specialized tires for off-road vehicles ("OTR Tires"). OTR Tires are used with heavy equipment operating primarily off of paved roadways, such as construction machinery, bulldozers, cranes, and over-sized trucks.

2. On or about June 16, 2006, Fordberry sent an e-mail to Tirex offering OTR tires and truck tires for sale, asking, "[a]re you looking for tyres." The e-mail was of the type of unsolicited "spam," "bulk," or "junk" e-mail that involves an identical message to numerous recipients. The email solicitation contained a PDF attachment offering for sale specific sizes of OTR and other tires and provided Fordberry's e-mail address, telephone and facsimile numbers for potential customer inquiries.

3. Soon thereafter, Tirex was contacted by another dealer of OTR tires, Advantage Tire, Inc., which indicated that it had a customer who was looking to purchase 24 new Michelin size 40.00R57 OTR Tires ("the Michelin OTR Tires") and was willing to work through Tirex. Advantage Tire is located in Moses Lake, Washington.

4. Based on Fordberry's initial e-mail offering, Tirex contacted Fordberry in or about late July 2006, to purchase the Michelin OTR Tires requested by Advantage Tire.

5. On or about August 21, 2006, Fordberry delivered by e-mail to Tirex, at its offices in Coral Gables, Florida, a "Pro Forma Invoice" providing for the sale of the Michelin OTR Tires at a cost of $99,000.00 each, for a total purchase price of $2,376,000.00.

6. The proposal called for transmission of a 50% advance deposit (the "Deposit"), and identified the month of October 2006 as the "[e]xpected date of shipment." In two separate installments, Tirex wire-transferred the Deposit contemplated by the "Pro-Forma Invoice."

7. The "General Conditions of [Acceptance" included the following:

All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said Rules.

8. A Tirex representative signed the Pro Forma Invoice and returned it to Fordberry.

9. It is undisputed that Fordberry failed to ship the Michelin OTR Tires by the end of October 2006 as agreed. Despite repeated assurances that it could perform, by February 2007, both Tirex and Fordberry recognized that Fordberry could not deliver the tires.

10. Thereafter, Tirex demanded return of the Deposit and the parties entered into a new round of negotiations in an effort to agree, not on delivery of the tires or any other substitute performance, but on a resolution of Tirex's demand for refund of the Deposit.

11. On or about October 18, 2007, Fordberry forwarded to Tirex by e-mail attachment a "Reimbursement Agreement and Promissory Note," pursuant to which Fordberry was to refund to Tirex the Deposit in monthly installment payments of $50,000.00 beginning on November 22, 2007, and continuing until the Deposit was returned in full. The agreement was signed by Tirex, but not by Fordberry.

12. Tirex claims that Fordberry reneged on this agreement, while Fordberry denies that an ultimate agreement was reached between the parties. No separate arbitration clause is included in the Reimbursement Agreement and Promissory Note.

13. Since its initial e-mail solicitation on or about June 16, 2006, Fordberry has sent similar e-mail offerings to Tirex at its offices in Coral Gables, Florida.

14. To date, Fordberry has never returned any of the monies from the Deposit it received for the Michelin OTR Tires it failed to deliver.

15. On or about February 14, 2008, Tire Distribution Systems, Inc., the ultimate source of the funds for the Deposit, sued Tirex to recover that money by filing suit in the United States District Court for the Southern District of Florida. On or about April 16, 2008, Tirex filed a Chapter 7 petition for bankruptcy.

16. On June 16, 2008, the Trustee, on behalf of the bankruptcy estate of Tirex, filed the instant adversary proceeding against Fordberry seeking to recover the Deposit and alleging claims for breach of contract (Count I), breach of the Reimbursement Agreement and Promissory Note (Count II), and unjust enrichment (Count III).

17. Plaintiff opposes Defendant's motion to dismiss and motion to compel arbitration, claiming that:

A. Defendant's specific and general contacts with Florida and the United States are sufficient for the Court to exercise jurisdiction over the Defendant in this proceeding; and

B. Plaintiffs Count I claim for breach of the contract evidenced by the purchase order signed by the Debtor is not covered by the arbitration agreement because that agreement was terminated by the Debtor for Defendant's non-performance, that Plaintiffs Count II claim for breach of an alleged subsequent settlement agreement between the parties is not covered by the contract evidenced by the purchase order signed by the Debtor, and that Plaintiffs Count III claim for quantum meruit is also not covered by the contract evidenced by the purchase order signed by the Debtor.

II. ANALYSIS

A. Motion to Dismiss for Lack of Personal Jurisdiction

1. Minimum contacts

Typically, the Court's initial inquiry into personal jurisdiction would address whether there is a basis for jurisdiction under the forum state's long-arm statute. In an adversary proceeding pending before a bankruptcy court, Federal Bankruptcy Rule 7004(f) authorizes personal jurisdiction over defendants to the extent allowed under the Due Process Clause of the Fifth Amendment. See Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 942 (11th Cir.1997); In re Banco Latino Int'l, 176 B.R. 278, 281 (Bankr. S.D.Fla.1994); see also In re Teknek, L.L.C., 354 B.R. 181, 191 (Bankr.N.D.Ill. 2006).¹

The familiar and long-established principles of International Shoe v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny guide the determination of whether jurisdiction over a defendant comports with due process. The basic inquiry is whether the defendant has established sufficient minimum contacts or some presence in the forum so that maintenance of the suit does not offend traditional notions of fair play and substantial justice. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). A defendant's contacts with the forum must be such that it would reasonably anticipate being haled into court there. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Among other things, the "minimum contacts" doctrine examines whether the defendant's contacts with the forum are attributable to its own actions or are solely the actions of the plaintiff. See Asahi Metal Industries v. Superior Court of California, Solano County, 480 U.S. 102, 109, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987).

A bankruptcy court may look beyond a non-resident defendant's "minimum contacts" with a particular forum state to the defendant's aggregate contacts with the United States as a whole. See In re Teknek, 354 B.R. at 192; In re North, 279 B.R. 845, 851 (Bankr.D.Ariz.2002). A single purposeful contact directed toward the forum has been held sufficient to meet the "minimum contacts" standard necessary to exercise personal jurisdiction. See Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829, 858 (11th Cir.1990) (citing Rudzewicz, 471 U.S. at 475, 105 S.Ct. 2174); Williams Elec. Co., Inc. v. Honeywell, Inc., 854 F.2d 389, 392-93 (11th Cir.1988); In re Banco Latino, 176 B.R. at 283; see also In re Application to Enforce Admin. Subpoenas Duces Tecum of the S.E.C., 87 F.3d 413, 419 (10th Cir.1996) (citation omitted).

In the instant case, the jurisdictional issue is one of "specific," not "general" jurisdiction. A court may exercise "specific" jurisdiction over a non-resident defendant if that defendant has purposefully directed its activities at forum residents and the underlying litigation arises from, or is directly related to, the defendant's contacts with the forum. See Cable/Home, 902 F.2d at 857. In cases...