Tennessee Imports, Inc. v. Filippi

• Decision Date: 14 August 1990
• Docket Number: No. 3-89-0717.,3-89-0717.
• Citation: 745 F. Supp. 1314
• Parties: TENNESSEE IMPORTS, INC. v. Pier Paulo FILIPPI and Prix Italia S.R.L.
• Court: U.S. District Court — Middle District of Tennessee

745 F. Supp. 1314

TENNESSEE IMPORTS, INC. v.Pier Paulo FILIPPI and Prix Italia S.R.L.

No. 3-89-0717.

United States District Court, M.D. Tennessee, Nashville Division.

August 14, 1990.

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R. Jan Jennings, Branstetter, Kilgore, Stranch & Jennings, Nashville, Tenn., for plaintiff.

Samuel D. Lipshie, Charlotte U. Fleming, Boult Cummings Conners & Berry, Nashville, Tenn., for defendants.

MEMORANDUM

JOHN T. NIXON, District Judge.

Pending before the Court is the defendants' motion to dismiss the above-styled action for improper venue or, in the alternative, for lack of subject matter jurisdiction.Also pending before the Court is the plaintiff's motion for leave to amend its complaint, adding Prix U.S.A. Corporation as a defendant.

I.The Defendants' Motion To Dismiss

FACTS

Plaintiff, Tennessee Imports, Inc.("Tennessee Imports"), brought this action for breach of contract and tortious interference with contract pursuant to diversity jurisdiction, 28 U.S.C. § 1332.Tennessee Imports is a Tennessee corporation with its principal place of business in Davidson County, Tennessee.DefendantPrix Italia, S.R.L.("Prix") is an Italian corporation with its principal place of business in Venice, Italy.DefendantPier Paulo Filippi("Mr. Filippi") is Prix's Export Manager and a citizen of Venice, Italy.

In 1985, Tennessee Imports and Prix entered into a one-year contract whereby Prix granted Tennessee Imports the exclusive sales rights in the United States, Canada, and Mexico for certain sequential pricing and labelling machines manufactured by Prix in Italy.In addition to terms for the original one-year period, the contract provided terms for a two-year extension period to become effective unless the parties made "explicit declarations of dissatisfactions."The contract also provided that at the end of the two-year extension the contract would "be automatically renewed year by year, if it is not cancelled by one of the parties giving a three months' notice."Tennessee Imports states that Prix gave the required termination notice on August 21, 1989 and alleges that the contract remained in effect until August 1, 1990.

In its complaint, Tennessee Imports alleges that in May of 1989, Mr. Filippi traveled to New York, New York and Miami, Florida to meet with certain "individuals to discuss import and distribution rights to several machines and products of Prix, including the sequential machines that are the subject of Prix's agreements with Tennessee Imports."Tennessee Imports further alleges that at these meetings, Mr. Filippi "made false, misleading, and intentionally incorrect statements by advising individuals at the meeting that Prix had no relationship with Tennessee Imports ... and that Prix would not in the future sell any of its products to Tennessee Imports."Tennessee Imports alleges that Mr. Filippi assured these individuals "that they may purchase, import, and resell the sequential machines" that are the subject of Prix's exclusive contract with Tennessee Imports.

Tennessee Imports acknowledges that Mr. Filippi's statements and actions may or may not have been made "with the express knowledge and authorization of Prix" and, if made without such knowledge and authorization, may or may not have been "thereafter adopted as the statements and action of Prix."Nevertheless, Tennessee Imports alleges that these representations and other actions of Mr. Filippi resulted in the destruction of "the valuable dealer network, advertising, and other exclusive trade developed by Tennessee Imports."Tennessee Imports also alleges that Mr. Filippi's statements and actions "were negligent and grossly negligent and have interfered with the agreement between Tennessee Imports and Prix thereby directly and permanently causing Tennessee Imports damages in the amount of ... $200,000."Tennessee Imports maintains that these statements and actions "induced and procured a breach of the contract between Prix and Tennessee Imports" in violation of Tenn.Code Ann. § 47-50-109.Finally, Tennessee Imports alleges that Mr. Filippi has informed Tennessee Imports that Prix will not honor recent orders for sequential machines and parts.Tennessee Imports maintains that, should this occur, Tennessee Imports will suffer loss of business and trade and irreparable harm and damage.Tennessee Imports seeks temporary and permanent injunctive relief and, pursuant to Tenn.Code Ann. § 47-50-109, treble damages totaling $600,000.

In response to the plaintiff's complaint, the defendants moved to dismiss for lack of proper venue or, alternatively, for lack of subject matter jurisdiction.In support of their motion, the defendants point to Article 8 of the contract between Prix and Tennessee Imports which provides:

Should any dispute arise between the contractual parties or in connection with the relations stipulated by this contract and no settlement can be achieved, then both parties agree to the competence of the Arbitration Court of the Chamber of Commerce in Venice (Italy).

The defendants claim that this forum selection clause renders venue in this Court improper and thus that this action should be dismissed.

Tennessee Imports filed a memorandum in opposition to Defendants' Motion to Dismiss("Plaintiff's Memo") making the following arguments:

1) That Article 8 of the contract is not a forum selection clause because the Arbitration Court of the Chamber of Commerce in Venice is not a "judicial institution" listed in the Martindale-Hubble Italy Law Digest and therefore is a "non-judicial and possibly non-existent forum";

2) That enforcement of Article 8 would result in substantial inconvenience to Tennessee Imports and would deny Tennessee Imports effective relief;

3) That, because the sequential machines manufactured by Prix are a unique product and unavailable from other free-world sources, the bargaining position of the two parties was unequal.Thus, Tennessee Imports argues, Prix used its economic power to obtain Tennessee Imports' agreement to Article 8 without negotiation and, as such, Article 8 is adhesive and unconscionable;

4) That Mr. Filippi's conduct in inducing and procuring Prix's breach of contract was tortious and, therefore, that its claim against Mr. Filippi is not within the scope of the forum selection clause found in Article 8 of the contract; and

5) That the public policy of the State of Tennessee and the State's interest in protecting its citizens and in providing them with an equitable forum warrant the Court's retention of this action.

Darrell Johnson, CEO of Tennessee Imports, attests that, after inquiry by Tennessee Imports regarding the "availability of Prix's machines for import and distribution into the State of Tennessee," Prix drew up the contract at issue and forwarded it to Tennessee Imports; that "there was no bargaining at all concerning the forum selection clause;" that the sequential machines manufactured by Prix were unavailable from any other source in the free world; and that upon receiving the contract from Prix, Mr. Johnson executed it.Mr. Johnson also attests that "all of the evidence and witnesses except Mr. Filippi ... are found in the United States."

The defendants have responded to the plaintiff's arguments as follows:

1) That the Arbitration Court referred to in Article 8 is the Arbitration Court of the International Chamber of Commerce (the "ICC Arbitration Court"), a well-recognized and competent arbitral body which may conduct proceedings at the Venice location specified in the contract.The defendants maintain that the ICC Arbitration Court is "specifically tailored to handle international disputes" such as that between Prix and Tennessee Imports and will afford Tennessee Imports an effective forum in which to seek relief;

2) That Tennessee Imports has failed to show that arbitration in Italy would cause Tennessee Imports sufficient inconvenience to justify a refusal by this Court to enforce Article 8 of the contract;

3) That the contract between Prix and Tennessee Imports was the result of "arms length negotiations by experienced and sophisticated business entities;"

4) That Tennessee Imports' claim of tortious interference falls within the scope of Article 8 and thus should be resolved through arbitration; and

5) That, because of the expansion of American trade and commerce in world markets, public policy now supports upholding forum selection clauses such as Article 8 of the contract.

In support, Prix has submitted the affidavit of Deborah Inix-Ross, the Manager of Legal Affairs for the United States Council for International Business(the United States Affiliate of the ICC) attesting to the expertise of the ICC Arbitration Court in settling international commercial disputes and to the availability of ICC arbitration in Venice.The defendants have also submitted the sworn declaration of Mr. Filippi stating that although Tennessee Imports did not bargain about Article 8, neither did it raise any objections to its inclusion in the contract.Mr. Filippi maintains that "Tennessee Imports orally agreed to Section 8, ... advising him that the forum selection clause ... was fine," Mr. Filippi also maintains that Tennessee Imports "consistently failed to comply with the terms" of the parties' contract and as a result Prix informed Mr. Johnson in July of 1989"that Tennessee Imports would no longer be Prix's distributor...."Mr. Filippi further maintains that on August 22, 1989, Prix advised Tennessee Imports that, as a result of Tennessee Imports' breaches of the parties' agreement, Prix had terminated the contract.

Mr. Johnson attests by affidavit that "Pier Paulo Filippi was never present during any contract negotiations, and that "all contract negotiations were handled by Filippi's father, Lamberto Filippi."Mr. Johnson maintains that "Article 8 ... was never discussed during those negotiations."Mr. Johnson also denies any failure...