Lyon Financial Services v. Biomerieux, Inc.

• Decision Date: 20 July 2007
• Docket Number: Civil No. 07-724 (DWF/SRN).
• Parties: LYON FINANCIAL SERVICES, INC., a Minnesota corporation d/b/a U.S. Bancorp Business Equipment Finance Group, Plaintiff, v. BIOMÉRIEUX, INC. and PST Consultants, jointly and severally, Defendants, and bioMérieux, Inc., Third-Party Plaintiff, v. Scott Waddell, Third-Party Defendant, and bioMérieux, Inc., jointly and severally, Cross-Claimant, v. PST Consultants, Inc., jointly and severally, Cross-Defendant.
• Court: U.S. District Court — District of Minnesota

636 F.Supp.2d 843

LYON FINANCIAL SERVICES, INC., a Minnesota corporation d/b/a U.S. Bancorp Business Equipment Finance Group, Plaintiff, v. BIOMÉRIEUX, INC. and PST Consultants, jointly and severally, Defendants, and bioMérieux, Inc., Third-Party Plaintiff, v. Scott Waddell, Third-Party Defendant, and bioMérieux, Inc., jointly and severally, Cross-Claimant, v. PST Consultants, Inc., jointly and severally, Cross-Defendant.

Civil No. 07-724 (DWF/SRN).

United States District Court, D. Minnesota.

July 20, 2007.

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John D. Docken, Esq., and Troy C. Kepler, Esq., U.S. Bancorp Business Equipment Finance Group, counsel for Plaintiff.

Anne W. Awsumb, Esq., and Glen E. Purdue, Esq., Purdue & Awsumb, PA; Joshua M. Krasner, Esq., and Marcus C. Hewitt, Esq., Maupin Taylor, PA; and Kimberly D. Bartman, Esq., Williams Muller Maupin Taylor, counsel for Defendant and Third-Party Plaintiff bioMérieux, Inc.

Barbara P. Berens, Esq., Erin K. Fogarty Lisle, Esq., and Jennifer S. Pirozzi, Esq., Kelly & Berens, PA, counsel for Defendant PST Consultants, Inc. and Third-Party Defendant Scott Waddell.

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, District Judge.

INTRODUCTION

The above-entitled matter is before the Court pursuant to a Motion to Transfer Venue to the United States District Court for the Middle District of North Carolina brought by Defendant bioMérieux, Inc. ("bioMérieux"), a Motion to Dismiss or, in the Alternative, Transfer Venue brought by Defendant PST Consultants, Inc. ("PST") and Third-Party Defendant Scott Waddell, and a Motion to Dismiss Cross-Claim brought by PST. For the reasons set forth below, the Court denies the motions.

BACKGROUND

Lyon Financial Services, Inc. ("Lyon") is a Minnesota corporation with its principal offices in Marshall, Minnesota. Lyon is a commercial lease financing company. BioMérieux is a Missouri corporation with its principal place of business in Durham, North Carolina. BioMérieux designs, develops, manufactures, and markets diagnostic systems used in medical and industrial applications. PST, a North Carolina corporation, supplies and services office equipment. PST's principal place of business is in Raleigh, North Carolina. Scott Waddell, the president of PST, resides in Raleigh, North Carolina.

As a commercial lease financing company, Lyon maintains relationships with vendors of office equipment. These vendors may offer their customers equipment to be financed by Lyon through an equipment lease if the customers do not wish to purchase the equipment outright. The financing process begins when a customer completes an application for financing, which a vendor forwards to Lyon at its principal place of business in Minnesota. Lyon then reviews the application and the customer's credit and determines whether or not to approve the application. If Lyon approves the application, Lyon prepares the necessary documentation and sends it to the vendor to be completed. Once the documentation is executed, Lyon pays the vendor for the equipment either in one payment or in installments.

Lyon has financed such equipment leases for PST's customers since 2001. During the course of their relationship, PST has sent Lyon at its Minnesota office approximately 142 leases for approval and funding. Lyon has approved and funded approximately seventy-six of these leases for a total amount funded of approximately $3,226,544. In furtherance of their relationship, Lyon and PST entered into a Vendor Agreement in February 2005, which provides Lyon with the first right to review all of the transactions where a customer approaches PST for lease financing of copiers and other related office equipment. As part of the Vendor Agreement, PST consented to the jurisdiction of any court selected by Lyon, including State and Federal Courts in Minnesota to resolve disputes regarding the Vendor Agreement.

During the course of Lyon and PST's business relationship, Waddell has visited Minnesota once. Specifically, in 2003 or 2004, Waddell traveled to Minnesota to visit one of Lyon's sales representatives. Waddell played in a golf tournament with the sales representative and visited the Lyon offices in Marshall during his visit, but contends that he did not conduct any business while in Minnesota.

This case arises out of four equipment lease agreements ("the Lease Agreements") between Lyon and bioMérieux. PST acted as the vendor on the Lease Agreements, and, as such, arranged the Lease Agreements and supplied certain equipment pursuant to the Lease Agreements.¹ BioMérieux signed the four Lease Agreements on October 21, 2004, December 15, 2004, November 30, 2005, and January 26, 2006, respectively. Lyon signed each Lease Agreement either on the same day or within a few days after bioMérieux signed each one: October 25, 2004, December 17, 2004, November 30, 2005, and January 30, 2006, respectively. In addition to the Lease Agreements at issue in this case, Lyon and bioMérieux had entered into nine other previous lease agreements dating back to December 2002.

Each Lease Agreement contains the same forum-selection clause providing that the parties consent to jurisdiction and venue in any state or federal court in the State of Minnesota. Specifically, the forum-selection clauses provide:

This agreement will be deemed fully executed and performed in the State of Minnesota upon signing by the Lessor [Lyon] and will be governed by and construed in accordance with Minnesota law. You expressly consent to jurisdiction and venue of any state or federal court in the State of Minnesota and waive right to trial by jury for any claim or action arising out of or relating to this Agreement or the Equipment. You waive right of defense of inconvenient forum.

(Compl., Exs.A-D.)

On January 30, 2007, Lyon filed this lawsuit asserting claims for replevin and unjust enrichment against bioMérieux.² In addition, Lyon asserts claims for misrepresentation and negligent misrepresentation against PST. In particular, Lyon alleges that PST misrepresented that "all the required and requested equipment had been delivered and that all of the equipment delivered was compliant." (Compl. ¶ 27.) Further, Lyon contends that when PST made these alleged misrepresentations, PST "knew that certain of the equipment described in the leases was not delivered or non conforming equipment delivered, that some of the equipment was exchanged without notice to [Lyon] and that [PST] would be making or had made payments on said Leases all of which violates the representations as made by PST to [Lyon]." (Id. ¶ 28.)

In its Answer, Cross-Claims, and Third-Party Complaint ("Third-Party Complaint"), bioMérieux alleges that since 1995, it has used photocopiers and related services and equipment supplied by various vendors under agreements negotiated by Waddell. Moreover, bioMérieux contends that Waddell personally negotiated each of the purported Lease Agreements at issue. BioMérieux contends that in negotiating the purported Lease Agreements, Waddell represented to bioMérieux that the leases were for Minolta controller boxes that called for payments of $75 per month and specified lease terms of either six or eight months. BioMérieux contends that it executed the purported Lease Agreements based on its long-standing business relationship with PST and Waddell's assurance that PST would complete the Lease Agreements consistent with the terms that Waddell had represented.

However, bioMérieux alleges that after its representatives signed the purported Lease Agreements, but before Waddell faxed these agreements to Lyon, Waddell altered the purported Lease Agreements by increasing the lease term and/or the amount of each payment and by adding equipment that bioMérieux had not agreed to lease. For example, bioMérieux's Exhibit 4 is a lease agreement signed by bioMérieux on October 21, 2004, which calls for six payments of $75 per month. The lease agreement does not contain any items in the field reserved for the description of the leased equipment because, according to bioMérieux, it relied on Waddell's alleged verbal representation that he would complete the description of the leased equipment consistent with the parties' negotiations. BioMérieux alleges that Exhibit 4 is the earlier version of the purported Lease Agreement found at Exhibit A to Lyon's Complaint and reflects how Exhibit A appeared before Waddell allegedly altered it. Specifically, bioMérieux alleges that Waddell changed the lease term on Exhibit 4 from "6" to "60" months and changed the amount of each payment from "$75" to "$8175" per month. Additionally, bioMérieux alleges that Waddell added fifty Minolta products to the description of the leased equipment as reflected in Exhibit A.

Notwithstanding the provision in the Lease Agreements that directed bioMérieux to make payments directly to Lyon, bioMérieux contends that it made payments to Durham Laundry Company ("DLC"), a company for which Waddell has been employed and which was initially part of the same corporate structure as PST. BioMérieux alleges that DLC, in turn, made payments to PST, and that PST or DLC made payments to Lyon on behalf of bioMérieux. BioMérieux alleges that it made payments to DLC according to the terms of the unaltered lease agreements until May 2006, when Waddell informed bioMérieux that DLC had stopped paying him for his services at bioMérieux. BioMérieux alleges that PST made payments to Lyon according to the purported Lease Agreements until approximately August 2006. BioMérieux asserts crossclaims of common-law fraud, unfair trade practices under North Carolina law, and unjust enrichment against PST and Waddell.

BioMérieux now moves the Court for an order transferring venue to the United States District Court for the Middle District of North Carolina. PST and Waddell move the Court to dismiss all claims against them for lack of personal jurisdiction and, alternatively, to transfer...