Krauss-Maffei Corp. v. ABC Techs.

• Decision Date: 25 March 2022
• Docket Number: Civil Action 20-168-DLB-EBA
• Parties: KRAUSS-MAFFEI CORPORATION PLAINTIFF v. ABC TECHNOLOGIES, INC. DEFENDANT ABC TECHNOLOGIES, INC. THIRD-PARTY PLAINTIFF v. CUTTING EDGE PRECISION SERVICES, et al THIRD-PARTY DEFENDANTS
• Court: U.S. District Court — Eastern District of Kentucky

KRAUSS-MAFFEI CORPORATION PLAINTIFF
v.
ABC TECHNOLOGIES, INC. DEFENDANT

ABC TECHNOLOGIES, INC. THIRD-PARTY PLAINTIFF
v.
CUTTING EDGE PRECISION SERVICES, et al THIRD-PARTY DEFENDANTS

Civil Action No. 20-168-DLB-EBA

United States District Court, E.D. Kentucky, Northern Division, Covington

March 25, 2022

MEMORANDUM OPINION AND ORDER

David L. Bunning United States District Judge.

I. INTRODUCTION

This matter comes before the Court on Third-Party Defendants Proper Group International and Cutting Edge Precision Services' Joint Motion to Dismiss (Doc. # 23) Third-Party Plaintiff ABC Technologies Inc.'s Third-Party Complaint under Federal Rule of Civil Procedure 12(b)(6), or in the Alternative, the Doctrine of Forum Non Conveniens. The Motion has been fully briefed (Docs. # 24, 30 and 32) and is now ripe for review. For the reasons below, Third-Party Defendants' Motion to Dismiss is granted.

II. FACTUAL AND PROCEDURAL BACKGROUND

ABC Technologies, Inc. (“ABC”), a Canadian company based out of Ontario, was

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the original defendant in this suit, initiated by the original plaintiff, Krauss-Maffei Corporation (“KMC”). (Docs. # 1 and 12 ¶ 1). KMC alleged that ABC breached their contract when it ordered machinery from KMC for injection molds to manufacture plastic products and then failed to pay. (Doc. # 1 ¶¶ 2-6, 23-27). In response, ABC alleged several counterclaims against KMC.^[1] (Doc. # 12 ¶¶ 1-56). ABC and KMC eventually settled their claims but not before ABC, under Federal Rule of Civil Procedure 14 (“Rule 14”), impleaded both Proper Group International (“Proper”) and Cutting Edge Precision Services (“CEPS”) as Third-Party Defendants. (Id. ¶¶ 3-4); (Doc. # 39). Proper is a Michigan corporation while CEPS, like ABC, is an Ontario company.^[2] (Doc. # 12 ¶¶ 3-4).

ABC alleges that KMC recommended Proper's services to help create the injection molds needed for its project. (Id. ¶ 21). Subsequently, ABC executed a Purchase Order (“PO”) with both KMC and CEPS for the molds.^[3] (Id. ¶ 24). This dispute revolves around the “Governing Law” section of ABC's PO with CEPS that reads in relevant part: “The Purchase Order . . . shall be governed by and construed in accordance with the laws of Ontario and the laws of Canada, ” and “[a]ny legal proceeding related in any way to the Purchase Order shall be commenced in a court in Ontario.” (Doc. # 24-1 ¶ 37).

ABC further alleges that KMC, Proper, and CEPS failed to timely provide the injection molds after representing they would do so before ABC's August 13, 2020

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deadline. (Doc. # 12 ¶¶ 26-31). As a result, ABC allegedly had to cancel its order and expend substantial sums of money to revert to an older technology approved for their project. (Id. ¶¶ 32-33). ABC settled its claims against KMC but also brought third-party claims against Proper and CEPS for promissory estoppel, breach of contract, breach of the implied covenant of good faith and fair dealing, and for declaratory judgment. (Id. ¶¶ 35-40, 57-72); (Doc. # 39).

Based on the forum-selection clause in ABC's PO, Third-Party Defendants filed a Joint Motion to Dismiss ABC's Third-Party Complaint. (Docs. # 24 and 25). Third- Party Defendants argue that ABC's claims should be adjudicated in Ontario courts while ABC insists that this Court is a proper forum. (See generally Docs. # 25, 30, and 32).

III. ANALYSIS

A. Standard of Review

To survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

The Sixth Circuit has recognized that a Rule 12(b)(6) motion is a proper procedural vehicle to enforce a forum-selection clause. See Smith v. Aegon Cos. Pension Plan, 769 F.3d 922, 933-34 (upholding dismissal of an action under Rule 12(b)(6) based on a valid forum-selection clause); Kelly v. Liberty Life Assurance Co. of Bos., No. 17-139-DLB, 2018 WL 558643, at *4 (E.D. Ky. Jan. 25, 2018) (“Without committing to a hard-and-fast rule, the Sixth Circuit's more recent case Smith v. Aegon confirms that dismissal under Rule 12(b)(6) is a permitted mechanism when a court is presented with an action brought in contradiction to the litigating parties' forum-selection agreement.”); Scepter, Inc. v. Nolan Transportation Grp., LLC,

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352 F.Supp.3d 825, 830 (M.D. Tenn. 2018) (noting that when “a case is improperly filed in contravention of a forum selection clause, the Court has the discretion to . . . dismiss the action pursuant to [Rule 12(b)(6)].”).

Where a motion under Rule 12(b)(6) asks the court to consider “matters outside the pleadings, ” the motion “must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d). However, because under Rule 10(c), “[a] copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes, ” documents attached to a Rule 12(b)(6)...