S+ L+ H S.p.A. v. Miller-St. Nazianz, Inc.

Decision Date19 March 1993
Docket NumberNo. 92-1199,MILLER-ST,92-1199
Citation988 F.2d 1518
PartiesPage 1518 988 F.2d 1518 S+L+H S.p.A., Viale F. Cassani 15 24047 Treviglio, Italy, a foreign corporation, Plaintiff-Appellee, v.NAZIANZ, INCORPORATED, Defendant-Appellant. United States Court of Appeals, Seventh Circuit
CourtU.S. Court of Appeals — Seventh Circuit

Michael Bowen, Michael G. McCarty (argued), Brian P. Akers, Foley & Lardner, Milwaukee, WI, Reese Harrison, Tim Tuggey, Kathryn M. Kase, Oppenheimer, Rosenberg, Kelleher & Wheatley, San Antonio, TX, for S+L+H S.P.A., Viale F. Cassani 15 24047 Treviglio, Italy, a foreign corporation.

Ross A. Anderson (argued), Mary C. Flanner-Strack, Michael J. Klinker, Jeffrey P. Aiken, Frisch Dudek, Ltd., Milwaukee, WI, for Miller-St. Nazianz, Inc.

Before CUDAHY and COFFEY, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

COFFEY, Circuit Judge.

S+L+H S.p.A. ("SLH"), an Italian tractor manufacturer, filed an action in the district court seeking an order compelling Miller-St. Nazianz, Inc. ("Miller"), a Wisconsin corporation which distributes agricultural parts and equipment, to arbitrate Miller's challenge to SLH's termination of their dealership agreement. The district court granted summary judgment in favor of SLH, and ordered Miller to proceed to arbitration. Miller appeals, and we affirm.

I.

SLH is incorporated in Italy and is a subsidiary of SAME, S.p.A., which is also incorporated in Italy. SLH has an American subsidiary, SAME & Lamborghini, Inc. ("S & L"), incorporated in New York. 1 Beginning in 1976, Miller distributed tractors and parts manufactured by SLH or by its subsidiary, S & L, pursuant to a series of written agreements. Miller acted as a wholesaler for SAME products in the upper Midwest and as a retailer in Wisconsin. From about 1976 to 1986, Miller operated, on a commission basis and on behalf of S & L, the only North American warehouse sales and delivery facility for SAME tractor spare parts. During the 1980s, Miller made several multi-million dollar purchases of SAME tractors to carry as inventory and established two retail dealerships in Wisconsin.

In 1986, the SAME group restructured its North American business activities and Miller acquired several new responsibilities. S & L sold all of its tractor parts inventory to Miller, and Miller sold the spare parts directly to dealers while also handling warranty service and parts. As part of the new arrangement, the SAME group required that Miller hire two servicemen for SAME. Although the SAME group engaged its own sales agent, the agent worked out of and received support services from Miller's offices.

On July 20, 1989, Miller and the SAME group executed three agreements reshaping their business relationship: an agency agreement, which granted Miller an exclusive sales territory covering the United States and Canada; a similarly exclusive spare parts distribution agreement; and a service and warranty agreement, which allowed Miller to hire its own servicing staff. The agency agreement and the service and warranty agreement were between Miller and SLH; the spare parts distribution agreement was between Miller and SAME, S.p.A. All three contracts contained a provision stating that "any controversy or claim arising out of or relating to this Agreement, its execution or breach, shall be settled by arbitration in Rome under the Rules of the Italian Arbitration Association...." Because this crucial arbitration language is the same for all three contracts, we will refer to these three agreements collectively as "the Agreement."

The Agreement bound the parties from September 1, 1989 to December 31, 1990, with automatic annual renewal unless notice of revision or cancellation was given by either party no later than October 1 of the given year. Automatic renewal occurred for 1991.

In late 1990, the Deutz-Allis Corporation, a Delaware corporation with its principal place of business in the state of Georgia, began searching for a supplier of mid-size tractors for its own private label. On April 4, 1991, Deutz-Allis signed an agreement with SLH providing that the SAME group would manufacture tractors tailored to meet the specifications of AGCO, Deutz-Allis' parent company. The tractors were to be sold under the AGCO-Allis name. A second agreement states that spare and service parts would be sold by S & L under the private label agreement. Miller was notified soon after the private label agreement was signed, and apparently failed to object to it at the time.

Miller claims that it began hearing rumors around mid-1991 that SAME intended to terminate its Agreement with Miller, but claims that SAME officials repeatedly assured Miller that no termination decision had been made. On August 18, 1991, John Miller, Miller's president, wrote SAME stating that he did not believe that SAME could legally terminate the Agreement without complying with the Wisconsin Fair Dealership Law, Wis.Stat. ch. 135. Mr. Miller also informed Deutz-Allis that any further activity on its part to solicit a transfer of the SAME brand business to Deutz-Allis would be considered tortious interference with Miller's contract. Miller threatened litigation. Officials at Deutz-Allis responded that they had the legal right to negotiate with SAME.

At a September 2, 1991 meeting, SAME representatives informed Miller that they would not renew the Agreement for 1992. According to Mr. Miller, the SAME officials stated that they intended to deal with Deutz-Allis as of January 1, 1992. SAME officials explained to Mr. Miller that they were dissatisfied with the low volume of sales. On September 19, 1991, Miller received written confirmation of the non-renewal of the Agreement with SAME. Miller was not afforded an opportunity to cure the claimed performance deficiency. On September 12, 1991, SLH, S & L, and AGCO, Deutz-Allis' parent company, had signed a distribution agreement under which Deutz-Allis would replace Miller as exclusive SAME brand name sales agent and distributor commencing January 1, 1992.

Miller responded by filing suit in a Wisconsin state court against SLH, S & L, and Deutz-Allis. The defendants, citing diversity jurisdiction, removed the action to the federal district court, in the Eastern District of Wisconsin. 28 U.S.C. §§ 1332 and 1441. The complaint charged that SLH's failure to renew the Agreement was 1) a violation of the Wisconsin Fair Dealership Law, 2) a breach of contract, and 3) the result of a conspiracy between SLH, S & L and Deutz-Allis to injure Miller's business. The complaint also charged S & L and Deutz-Allis with intentional interference with Miller's contractual relations with SLH and intentional interference with Miller's economic expectations relating to the renewal of the Agreement with SLH. Miller requested that the court award damages for the losses suffered. Miller also asked the court to enter an injunction prohibiting SLH from terminating the Agreement with Miller and from granting a dealership contract to Deutz-Allis, and prohibiting S & L and Deutz-Allis from interfering with the Miller/SLH relationship. SLH and S & L moved, pursuant to a provision of the Federal Arbitration Act, 9 U.S.C. § 3, to stay all proceedings in this matter pending arbitration between the parties.

Thereafter, SLH filed suit in the federal district court requesting that the court compel Miller to arbitrate the dispute arising out of the nonrenewal of the Agreement upon which both suits were founded. Both parties moved for summary judgment. The district court held a joint hearing regarding the issues raised in Miller's lawsuit requesting an injunction and in SLH's lawsuit requesting that the court compel arbitration. The court then issued a joint opinion dealing with the issues raised in the two cases. The court ruled that the "arbitration clauses in the contracts in question are unambiguous. Given the sophistication of the contracting parties, I can only conclude that they understood the contractual provision to arbitrate disputes when the agreements were executed. I find these clear expressions of the intent of the contracting parties to be binding." Accordingly, the district court concluded that Miller, in filing its civil suit against the SAME group, "disregarded a clear contractual duty to arbitrate the claims it has asserted." Having determined that the parties were bound to arbitrate the dispute, the district court rejected Miller's request for an injunction blocking SLH's non-renewal of the Agreement, finding that it "implicate[d] the substantive merits of issues squarely within the contracts' broad arbitration clauses." The district court thus granted SLH's motion to compel arbitration in the lawsuit that it filed. As to the claims Miller advanced in its lawsuit against the SAME group, the court denied the motion for an injunction and stayed all the other claims against SAME. Miller has appealed only the district court's grant of SLH's motion to compel arbitration in the suit brought by SLH, and has seen fit not to appeal any of the district court's rulings in the suit it brought against the SAME group.

II.

We review de novo the district court's grant of summary judgment in favor of SLH. Renovitch v. Kaufman, 905 F.2d 1040, 1044 (7th Cir.1990). Summary judgment should be granted only when "no genuine issues of material fact exist and when the moving party is entitled to judgment as a matter of law." Central States v. Jordan, 873 F.2d 149, 152 (7th Cir.1989). In determining whether a genuine issue of material fact exists, "we must view the record and all of the inferences drawn therefrom in the light most favorable to the party opposing the motion." Beard v. Whitley County REMC, 840 F.2d 405, 409-10 (7th Cir.1988).

III.

Initially, we must determine whether we have jurisdiction to rule on Miller's appeal. Miller asserts that we are empowered to hear this case pursuant to 9 U.S.C. § 16 ("Section 16"), the section of the Arbitration Act which governs the appealability of ...

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