Kuhn Knight, Inc. v. Vmc Enterprises, Inc.
| Decision Date | 07 December 2006 |
| Docket Number | No. 06-C-549 C.,06-C-549 C. |
| Citation | 464 F.Supp.2d 806 |
| Parties | KUHN KNIGHT, INC., Plaintiff, v. VMC ENTERPRISES, INC., Defendant. |
| Court | U.S. District Court — Western District of Wisconsin |
Mark J. Steichen, Boardman, Suhr, Curry & Field, Madison, WI, for Defendant.
In this civil action governed by the Arizona's "fair dealership" law, Ariz. Stat. § 44-6701, plaintiff Kuhn Knight, Inc. seeks judgment declaring that it may terminate its dealership agreement with defendant VMC Enterprises, Inc. because defendant made late payments on goods it purchased from plaintiff. (Although Wisconsin has a fair dealership law of its own, Wis. Stat. § 135.02(2), the parties agree that it does not govern their business relationship.) Jurisdiction is present under 28 U.S.C. § 1332.
Now before the court is defendant's motion to dismiss plaintiff's case for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2) or, in the alternative, to transfer venue to the United States District Court for the District of Arizona. Defendant contends that its contacts with plaintiff have occurred almost exclusively through plaintiff's regional offices and that its contacts with Wisconsin have been too limited to support this court's exercise of personal jurisdiction over it. Although the case is a close one, defendant has not purposely availed itself of the benefits of Wisconsin law and its contacts with this forum are limited at best. I find that defendant's contacts do not support the exercise of personal jurisdiction; consequently, the motion to dismiss will be granted.
From the facts alleged in the complaint, the exhibits attached to defendant's brief in support of its motion to dismiss and the facts averred in the affidavits submitted by the parties, I find for the sole purpose of deciding this motion that the following facts are undisputed and material. Purdue Research Foundation v. Sanofi-Synthelabo, S.A, 338 F.3d 773, 782 (7th Cir. 2003) ().
Plaintiff Kuhn Knight, Inc. is a Delaware corporation with its principal place of business in Brodhead, Wisconsin. Plaintiff has territorial offices throughout the United States, Mexico and Canada. At its Brodhead plant, plaintiff manufactures farm machinery equipment, which it sells to independent agricultural dealers and distributors.
Defendant VMC Enterprises, Inc. is an Arizona corporation with its principal place of business in Buckeye, Arizona. Defendant is a multi-line farm equipment retailer. It sells products manufactured by plaintiff and other manufacturers. Defendant has never been registered to do business in Wisconsin.
In February 2002, one of plaintiff's employees participated in a trade show in Louisville, Kentucky. While there, he met defendant's president, Richard Hammond, who expressed interest in becoming one of plaintiffs dealers. On February 18, 2002, Hammond sent plaintiff a follow-up letter at its Brodhead, Wisconsin headquarters, reiterating his request.
On October 4, 2002, defendant became an authorized dealer. The relationship between plaintiff and its dealers is governed by specific terms and conditions. One of these terms is contained in Provision 5.4 of the dealer terms, which states:
All units are due and payable immediately upon delivery to a retail customer. Any unit not paid within 10 days of delivery to a retail customer will be considered sold out-of-trust. No volume bonus will be paid on units sold out-of-trust.
.... Any time a KUHN KNIGHT machine is sold out-of-trust, KUHN KNIGHT will have the right to: (1) refuse further credit or shipment, or (2) terminate the DEALER.
If a unit is sold out-of-trust and KUHN KNIGHT initiates legal action, the DEALER agrees to pay KUHN KNIGHT'S cost of collection, before and after judgment, including actual attorney's fees.
During the spring and summer of 2006, disputes arose between plaintiff and defendant regarding defendant's alleged failure to pay for products in a timely manner. (These disputes were later resolved.) During this time, plaintiff sent defendant a letter reminding it of its obligations under the dealer terms and of plaintiff's right to terminate defendant as a dealer if defendant made untimely payments. In the same letter, defendant reiterated to defendant its expectation that all communication be directed to plaintiff's territorial representative in Colorado:
As you know, our dealers' primary point of contact is the Kuhn Knight Territory Manager. It is important that our dealers communicate with their Territory Managers so that they are kept apprised of problems and other issues concerning their territories. Dealers who ignore Territory Managers cause problems not only for themselves, but for Kuhn Knight personnel and ultimately for the customers. That is why it is not acceptable for VMC to ignore or circumvent [its] Territory Manager....
On August 11, 2006, defendant accepted delivery of a model 5185 mixer in Brodhead, Wisconsin. On or before August 23, 2006, the mixer was delivered to one of defendant's retail customers. As of September 14, 2006, plaintiff had not received payment for the mixer from defendant. Plaintiff sent defendant a letter informing it that defendant was "out of trust" under the dealer terms and that plaintiff was opting to terminate its relationship with defendant.
Defendant objected to plaintiff's proposed cancellation of the dealer agreement, and asserted that the check for the mixer had been mailed (an allegation plaintiff believes to be false). Plaintiff received defendant's allegedly backdated check on September 21, 2006.
From October 2002 to the present, defendant purchased 26 pieces of farm equipment from plaintiff. Twenty-three of these products were manufactured at plaintiff's Brodhead plant. At times defendant would make arrangements with a third party transportation company or through plaintiff's regional office in Greeley, Colorado, to transport products from Wisconsin to Arizona.
When defendant ordered products from plaintiff, the orders were processed in plaintiff's Wisconsin office. Although plaintiff has directed defendant to mail payments and to direct communication to plaintiff's Colorado office, rather than to its Wisconsin office, defendant has not always done so. On many occasions, defendant's employees would contact plaintiff's Wisconsin employees to inquire about the status of pending orders, discuss billing and collection and request technical assistance. However, all of defendant's contacts with plaintiff regarding the billing disputes that led up to the filing of this lawsuit were directed to plaintiff's representatives in Colorado.
Defendant does not sell products or service equipment in Wisconsin. Defendant's president traveled to Wisconsin once in 2005 for a dealer convention. That is the only time any employee of defendant has traveled to Wisconsin for business.
OPINIONPersonal jurisdiction is "an essential element of the jurisdiction without which the court is `powerless to proceed to an adjudication' of the merits of a lawsuit." Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584, 119 S.Ct. 1563, 143 L.Ed.2d 763 (1999) (citing Employers Reinsurance Corp. v. Bryant, 299 U.S. 374, 382, 57 S.Ct. 273, 81 L.Ed. 289 (1937)). When a court is confronted with a motion to dismiss for lack of personal jurisdiction, it has several options. The court may hold an evidentiary hearing at which the plaintiff is required to prove the existence of personal jurisdiction by a preponderance of the evidence or it may rule on the motion "based on the submission of written materials, without the benefit of an evidentiary hearing." Purdue Research Foundation v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.2003). If no evidentiary hearing is held, the plaintiff "need only make out a prima facie case of personal jurisdiction." Id. In evaluating whether the prima facie standard has been satisfied, the plaintiff "is entitled to the resolution in its favor of all disputes concerning relevant facts presented in the record." Id. In this case, an evidentiary hearing is unnecessary because the facts relevant to the question of personal jurisdiction are largely undisputed.
A federal court has personal jurisdiction over a non-consenting, nonresident defendant if a court of the state in which that court sits would have jurisdiction over the lawsuit. Giotis v. Apollo of the Ozarks, Inc., 800 F.2d 660, 664 (7th Cir.1986). Under Wisconsin law, determining whether personal jurisdiction may be exercised requires a two-step inquiry. First, the court must determine whether defendants are subject to jurisdiction under Wis. Stat. § 801.05, Wisconsin's longarm statute. Kopke v. A. Hartrodt S.R.L., 2001 WI 99, ¶ 8, 245 Wis.2d 396, 629 N.W.2d 662 (2001). Then, if the statutory requirements are satisfied, the court must consider whether the exercise of jurisdiction comports with due process requirements. Id. Plaintiff bears the minimal burden of making a prima facie showing that constitutional and statutory requirements for the assumption of personal jurisdiction are satisfied. Id.
Wisconsin's jurisdictional statute, Wis. Stat. § 801.05, authorizes courts in the state to exercise jurisdiction over nonresident defendants in certain specified circumstances. When a defendant requests goods to be shipped to it from Wisconsin, Wis. Stat. § 801.05(5)(d) gives a court personal jurisdiction over any action relating to those goods. In this case, it is undisputed that defendants ordered a mixer from plaintiff in August 2006, and that the parties' present dispute arises out of defendant's alleged failure to pay for the...
To continue reading
Request your trial
-
Shared Med. Equip. Grp., LLC v. Simi Valley Hosp. & Healthcare Servs.
...Virginia, even though personal jurisdiction under the Fourteenth Amendment was ultimately inappropriate); Kuhn Knight, Inc. v. VMC Enters., Inc., 464 F.Supp.2d 806, 811 (W.D.Wis.2006) (holding that “it is undisputed that defendants ordered a mixer from plaintiff in August 2006, and that the......
-
Legacy Hemp LLC v. Terramax Holdings Corp.
...the Fourteenth Amendment's due process clause. Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012); Kuhn Knight, Inc. v. VMC Enterprises, Inc., 464 F. Supp. 2d 806, 811 (W.D. Wis. 2006); Kopke v. A. Hartrodt S.R.L., 245 Wis. 2d 396, 408-10, 629 N.W.2d 662, 667-68 (Wis. 2001). Legacy conte......