JTV Mfg Inc v. Braketown USA Inc et al
ORDER denying 6 Motion to Dismiss and Motion to Transfer Venue. Signed by Senior Judge Donald E OBrien on 9/9/14. (djs)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
JTV MFG, INC.,
ORDER ON MOTION TO DISMISS
BRAKETOWN USA, INC., and
INTRODUCTION AND BACKGROUND
The above captioned case concerns a lawsuit brought by
the Plaintiff, JTV Manufacturing, Inc. [hereinafter JTV],
Braketown], and Ermak USA, Inc. [hereinafter Ermak], the
distributer and manufacturer of a fiber laser cutting machine
(a piece of industrial equipment).
Defendants’ Motion to Dismiss, Docket No. 6.
seek to dismiss the Plaintiff’s Complaint or have venue
changed to Illinois.
The parties appeared for a hearing on
April 8, 2014. After listening to the parties’ arguments, the
Court took the matter under consideration and now enters the
In short, this case involves a warranty claim made by the
Plaintiff against the Defendants. The Plaintiff bought a high
priced piece of industrial equipment from manufacturer, Ermak,
through sales agent, Braketown.
The Plaintiff claims the
equipment does not work and filed suit.
This case was removed to Federal Court on January 13,
On January 21, 2014, the Defendants filed a Motion to
Dismiss (Docket No. 6).
In their original Motion to Dismiss,
Defendants argue the Court does not have jurisdiction over
Plaintiff has failed to state a claim against Ermak. Finally,
the Defendants argue that even if the case is allowed to
proceed, venue should be changed to Illinois.
On February 10, 2014, the Plaintiff filed an Amended
Complaint and the Plaintiff’s other filings, the Defendants
dropped their claim that the Court does not have personal
See Docket No. 19, p. 1.
MOTION TO DISMISS STANDARD
The notice pleading standard of Federal Rule of Civil
Procedure 8(a)(2) requires a plaintiff to give “a short and
plain statement showing that the pleader is entitled to
In order to meet this standard and to survive a
factual matter, accepted as true, to state a claim to relief
that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S.
662, 663 (2009) (internal quotations and citation omitted).
This requirement of facial plausibility means that the factual
content of the plaintiff's allegations must “allow[ ] the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.”
Cole v. Homier Distrib.
Co., Inc., 599 F.3d 856, 861 (8th Cir. 2010).
courts must assess the plausibility of a given claim with
reference to the plaintiff's allegations as a whole, not in
terms of the plausibility of each individual allegation.
Zoltek Corp. v. Structural Polymer Group, 592 F.3d 893, 896 n.
4 (8th Cir. 2010) (internal citation omitted).
is “a context-specific task that requires the reviewing court
to draw on its judicial experience and common sense.”
556 U.S. at 664.
“While a complaint attacked by a Rule 12(b)(6) motion to
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007) (internal alterations and citations
Nevertheless, although the “plausibility standard
requires a plaintiff to show at the pleading stage that
success on the merits is more than a sheer possibility,” it is
not a “probability requirement.”
Braden v. Wal–Mart Stores,
Inc., 588 F.3d 585, 594 (8th Cir. 2009).
As such, “a
well-pleaded complaint may proceed even if it strikes a savvy
judge that actual proof of the facts alleged is improbable,
and that a recovery is very remote and unlikely,” Id.
In assessing “plausibility,” as required by the Supreme
Court in Iqbal, the Eighth Circuit Court of Appeals has
explained that courts should consider only the materials that
attached to the complaint. See Mattes v. ABC Plastics, Inc .,
323 F.3d 695, 697 n. 4 (8th Cir. 2003), stating that “in
considering a motion to dismiss, the district court may
sometimes consider materials outside the pleadings, such as
materials that are necessarily embraced by the pleadings and
exhibits attached to the complaint.
Porous Media Corp. v.
Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).
may also consider “materials that are part of the public
record or do not contradict the complaint.” Miller v. Redwood
Toxicology Lab., Inc., 688 F.3d 928, 931 (8th Cir. 2012).
more complete list of the matters outside of the pleadings
that a court may consider, without converting a Rule 12(b)(6)
motion to dismiss into a Rule 56 motion for summary judgment,
pursuant to Rule 12(d), includes matters incorporated by
reference or integral to the claim, items subject to judicial
notice, matters of public record, orders, items appearing in
the record of the case, and exhibits attached to the complaint
whose authenticity is unquestioned.”
Van Stelton v. Van
Stelton, 11-CV-4045-MWB, 2013 WL 3776813 (N.D. Iowa 2013)
(internal citations omitted).
In their Motion to Dismiss, the Defendants raise two
First, they argue that the Plaintiff has failed to
state a viable warranty claim against Ermak.
Defendants argue that venue is not proper in the Northern
District of Iowa and that this case should be transferred to
the Northern District of Illinois.1
Failure to State a Claim
contract/warranty claim made by the Plaintiff against the
Specifically, the Plaintiff claims it bought a
piece of industrial equipment from Ermak through Mac-Tech.
The Plaintiffs claim that the Defendants breached the contract
because the equipment does not work.
The parties agree that
a choice of law provision dictates that Illinois law is
In their Motion to Dismiss, Docket No. 6, the
Defendants argue that the Plaintiff has failed to state a
In their original Motion to Dismiss, the Defendants
argued that this Court could not exercise jurisdiction over
the Plaintiff’s claim. Docket No. 6. However, the Defendants
abandoned this claim in their Reply to the Plaintiff’s
Resistence. Docket No. 19.
claim against Ermak because the Plaintiff has failed to allege
a contract with Ermak.2
In their brief, the Defendants set out the applicable
contract law from Illinois:
[t]he requirements of a valid contract are
competent parties, legal purpose, and, if
agreed to by the parties, a written
agreement. Lal v. Naffah, 149 Ill. App. 3d
245, 500 N.E.2d 699, 792 (1st Dist. 1986).
The burden of proving the existence of a
contract rests on the party who seeks
enforcement of the contract.
C. Iber &
Sons, Inc. v. Grimmett, 108 Ill. App. 2d
443, 248 N.E.2d 131, 133 (3d Dist. 1969).
The plaintiff in a breach of contract
action also has the burden of proving all
of the material terms of the contract.
Vandevier v. Mulay Plastics, Inc., 135 Ill.
App. 3d 787, 482 N.E.2d 377, 380 (1st Dist.
1985); DeHeer-Liss v. Friedman, 227 Ill.
App. 3d 422, 427, 592 N.E.2d 13, 17 (1st
Docket No. 6, Att. 1, p. 7-8.
The Defendants then go on to
argue why they believe each of the Plaintiff’s contract claims
against Ermak fails.
Regarding breach of express warranty,
the Defendants argue:
“A careful review of the documents shows that Ermak is
not mentioned anywhere as a party to the documents.” Docket
No. 6, Att. 1, p. 8.
[a] plaintiff pleading a claim for breach
of express warranty must state the terms of
the express warranty or attach them to the
complaint. See Board of Education of City
of Chicago v. A, C & S, Inc., 131 Ill. 2d
428, 546 N.E.2d 580, 595 (1989).
claim against Ermak fails because there are
no allegations that Ermak affirmed any fact
or promise about the quality of the machine
or that Ermak provided a sample or model.
JTV’s Complaint simply concludes, “Ermak
USA also provided an expressed warranty.”
Complaint, 3 ¶18. Paragraph 18 is merely
a legal conclusion that the Court is not
bound to accept. See Papasan v. Allain,
478 U.S. 265, 286 (1986).
does not indicate anything about the
contents of the warranty. The language of
any alleged warranty appears nowhere at all
in the Complaint, nor in any of the
Without anything more than legal conclusion
contained in paragraph 18, JTV’s Complaint
fails to state a claim for breach of
express warranty against Ermak. Therefore,
JTV’s breach of express warranty claim must
be dismissed as to Ermak.
Docket No. 6, Att. 1, p. 9.
Regarding breach of implied
warranties, the Defendants argue:
“[i]n order for a plaintiff to file a claim
for economic damages under the UCC for the
breach of an implied warranty, he or she
must be in vertical privity of contract
Mercedes-Benz U.S.A., L.L.C., 347 Ill. App.
3d 828, 832, 283 Ill. Dec. 324, 807 N.E.2d
1165 (1st Dist. 2004)... “This means that
`the UCC Article II implied warranties give
a buyer of goods a potential cause of
action only against his immediate seller.’”
Mekertichian, 347 Ill. App. 3d at 832...
JTV brings two claims for breach of implied
warranties: Count 4 for Breach of Implied
Warranty of Merchantability and Count 5 for
Breach of Warranty of Fitness for a
Particular Purpose. The damages alleged by
JTV are purely economic.
¶¶29, 35. JTV alleges that it purchased
the machine from Mac-Tech, Complaint, 1 ¶5,
2 ¶9. Likewise, the exhibits attached to
the Complaint indicate that Mac-Tech was
the seller of the machine. For example,
the Sales Order Confirmation and Invoice
were issued by Mac-Tech and written on
Mac-Tech letterhead. Complaint, Exs. A, C.
Furthermore, JTV’s Purchase Order form
lists Mac-Tech as the vendor. Complaint,
The Complaint alleges that
Braketown was the immediate seller of the
machine. Thus, JTV lacks vertical privity
of contract with Ermak. Without vertical
privity with Ermak, JTV cannot state a
claim for breach of implied warranties
against Ermak. See Mekertichian, 347 Ill.
App. 3d at 832. Therefore, JTV’s breach of
implied warranty claims against Ermak must
Docket No. 6, Att. 1, p. 9-10.
The Plaintiffs argue that documentation attached to the
Amended Complaint sets out both the contract and the warranty
between the Plaintiff and Ermak.
As set in the Amended
Complaint, the document referenced by the Plaintiff states:
Fibermak Laser cutting machine warranty is
1 year from the date of first operation.
All the necessary after sales service will
be provided by Ermaksan during the warranty
period for manufacturing defects and
The parts that need to be
replaced will be provided by Ermaksan free
of charge during the warranty period.
Docket No. 14, Ex. A, p. 39.
The Plaintiff cites this
document as evidence of a contract and both an express and
In the supplemental brief, the Defendants argue that the
document quoted above is merely a “price offer.”
No. 19, p. 2.
The Defendants go on to state that under both
Illinois and 8th Circuit law, a price offer is not sufficient
to support a cause of action for breach of contract.
It may turn out that the document quoted by the Plaintiff
and attached to Amended Complaint is a price offer.
that document may not be evidence of a contract or a warranty
under the relevant law.
However, whether that document is a
price offer, a contract, or something in between is a question
(As is the point in time the contract was formed.)
appropriate for the Court to consider or decide questions of
fact at the motion to dismiss stage.
What is clear at this
early stage of the case is that the Plaintiff has alleged a
breach of contract, a breach of express warranty, and breach
of implied warranty against Ermak. The Plaintiff has attached
a document to the Amended Complaint which the Plaintiff
alleges shows the existence of a contract and a warranty.
its face, that document states that Ermak will provide the
Plaintiff a warranty.
Accordingly, the Plaintiff has stated
a claim under the contract and warranty theories discussed
Whether a contract or a warranty actually existed is
a question of fact that will be decided at a latter stage of
Accordingly, the Defendants’ Motion to Dismiss for
failure to state a claim is denied.
The Defendants’ second argument is that venue is not
proper in the Northern District of Iowa, and this case should
either be dismissed or be transferred to the Northern District
Turning first to the issue of whether the case should be
dismissed for lack of venue, Defendants contend that this
Court is an improper venue and dismissal is appropriate
pursuant to Federal Rule of Civil Procedure 12(b)(3).
for example, Docket No. 19, p. 6.
28 U.S.C. Section 1391(b),
the applicable federal venue statute, provides:
[a] civil action may be brought in— (1) a
judicial district in which any defendant
resides, if all defendants are residents of
the State in which the district is located;
(2) a judicial district in which a
substantial part of the events or omissions
giving rise to the claim occurred, or a
substantial part of the property that is
the subject of the action is situated; or
(3) if there is no district in which an
action may otherwise be brought as provided
in this section, any judicial district in
which any defendant is subject to the
court's personal jurisdiction with respect
to such action.
Under 28 U.S.C. Section 1391(b), a court should not “ask
which of two or more potential forums is the ‘best’ venue....”
Setco Enterprises, Corp. v. Robbins, 19 F.3d 1278, 1281 (8th
Rather, the question is whether a plaintiff's
chosen forum has “a substantial connection to the claim....”
[n]one of the defendants reside in the
Northern District of Iowa. As stated in
the Complaint, Braketown’s headquarters is
in Milwaukee, Wisconsin, and Ermak’s
headquarters is in Elk Grove Village,
Illinois. Complaint, 1 ¶¶2,3. With regard
to the events giving rise to the claims,
all the claims are contractual and, as
discussed above, the contract was deemed to
be made and performed in the State of
Complaint, Ex. A, 2 ¶18.
Finally, no defendant may be found in the
Northern District of Iowa. Moreover, the
registered offices for each corporation are
also outside the Northern District of Iowa.
The registered office of Braketown is
located in Lombard, Illinois and the
registered office of Ermak is located in
Ex. 1 ¶¶ 5,8.
Accordingly, because none of the criteria
of 28 U.S.C. § 1391 have been met, venue is
not proper in the Northern District of
Thus, JTV’s Complaint should be
dismissed for improper venue.
Docket No. 6, Att. 1, p. 11.
However, the Plaintiff responds
connection to the claim.
Specifically, the Plaintiff states
that the contract, discussed above, was performed in Iowa when
Ermak delivered the equipment to JTV’s plant in Sutherland,
The Plaintiff goes on to say:
[i]n this case, relevant omissions occurred
in Iowa. Under the terms of the contract,
Defendants were to install a properly
functioning Machine in Sutherland, Iowa.
Defendants failed to do so.
Defendant Ermak sent its employees to
Plaintiff’s plant in Iowa on more than 15
occasions to repair the Machine, each time
without avail. As such, under Tyson Meat
Products, the Northern District of Iowa is
a proper venue because the contract was to
be performed in Iowa and relevant omissions
occurred in Iowa.
Docket No. 12, p. 12.
The Court agrees with the Plaintiff that a substantial
portion of the events or omissions giving rise to the present
claim occurred in the Northern District of Iowa.
above, the contract directed the Defendants to deliver the
equipment to Iowa, and then provide service to ensure its
Defendants failed to provide working equipment to the plant in
Clearly, the (alleged) failure to deliver
working equipment to JTV’s Iowa plant occurred in Iowa, and
the associated omission, Defendants’ failure to repair the
equipment, also occurred in the Northern District of Iowa.
Accordingly, the Defendants’ request that the Plaintiff’s
claim be dismissed for lack of venue is denied.
Finally, the Defendants argue that even if venue is
transferred to Illinois for the convenience of the parties.
28 U.S.C. § 1404(a), provides:
[f]or the convenience of parties and
witnesses, in the interest of justice, a
district court may transfer any civil
action to any other district or division
where it might have been brought....
The primary purpose of § 1404(a) is to provide a district
court discretion to transfer venue for reasons of convenience
and fairness “despite the propriety of the plaintiff's venue
Van Dusen v. Barrack, 376 U.S. 612, 634 (1964).
deference” is given “to a plaintiff's choice of forum,” and,
therefore, the “party seeking a transfer under section 1404(a)
typically bears the burden of proving that a transfer is
In re Apple, Inc., 602 F.3d 909, 913 (8th Cir.
A court should consider “the convenience of the parties,
the convenience of witnesses, [and] the interests of justice,”
as well as any other relevant factors. Terra Intern., Inc. v.
Mississippi Chemical Corp., 119 F.3d 688, 696 (8th Cir. 1997).
Under the general category of “convenience,” a court should
(1) the convenience of the parties, (2) the
convenience of the witnesses—including the
willingness of witnesses to appear, the
ability to subpoena witnesses, and the
adequacy of deposition testimony, (3) the
accessibility to records and documents, (4)
the location where the conduct complained
of occurred, and (5) the application of
each forum state's substantive law.
Id. at 696.
Under the general category “Interest of Justice,” a court
(1) judicial economy, (2) the plaintiff's
choice of forum, (3) the comparative costs
to the parties of litigating in each forum,
(4) each party's ability to enforce a
judgment, (5) obstacles to a fair trial,
(6) conflict of law issues, and (7) the
determine questions of local law.
The Defendants argue:
both Defendants have registered offices in
the Northern District of Illinois, Ex. 1
¶¶5, 8, making the Northern District of
Illinois a convenient forum for the
defendants. In addition, witnesses for the
case will most likely be officers or
employees of the defendants, which again
makes the Northern District of Illinois a
convenient forum because of the proximity
to Defendants’ offices.
defendants’ registered offices in the
Northern District of Illinois, the records
and documents relevant to this case would
also be located in the Northern District of
As for the location of the
installation took place in Iowa, the terms
of the alleged contract indicated that the
Illinois, which weighs in favor of finding
the Northern District of Illinois to be a
convenient forum. Complaint, Ex. A, 2 ¶18.
Furthermore, the choice of law indicates
that Illinois law is to be applied to the
contract. Because Illinois law applies and
because the Northern District of Illinois
is more familiar with Illinois law, this
factor weighs in favor of transfer to the
Northern District of Illinois.
numerous factors favoring transfer [to] the
Northern District of Illinois, in the event
that venue is found proper, there is
substantial reason for transferring the
case. Thus, in the event that this Court
does not dismiss JTV’s complaint, Ermak and
Braketown ask that this Court transfer the
case to the Northern District of Illinois.
Docket No. 6, Att. 1, p. 12-13.
The Plaintiff responds that venue is not appropriate in
Illinois because Illinois does not have personal jurisdiction
over the Plaintiff. See Martin v. Wal-Mart Stores, Inc., 2000
WL 33915814 at 4 (N.D. Iowa 2000), stating, “the statute
permits transfer of a civil action only to a district in which
the action ‘might have been brought.’”
The Plaintiff goes on
Defendants have failed to meet their burden to show that venue
should be transferred to Illinois.
JTV argues that the
Defendants have not named which witnesses are located in
Illinois, nor have they rebutted this Court’s presumption that
“the location of documents is no longer entitled to much
weight in the transfer of venue analysis.”
33915814, at 7.
Martin, 2000 WL
Finally, the Plaintiff argues that the
Defendants have failed to explain why witness having to travel
from one state away truly amounts to an inconvenience.
Again, the Court is persuaded that the Plaintiff is
First, as discussed above, a substantial portion of
the events and omissions giving rise to this cause of action
occurred in the Northern District of Iowa.
For that reason,
Iowa seems like an appropriate forum. Additionally, while the
Court does not doubt that some of the Defendants’ witnesses
witnesses will likely be local to the Northern District of
Thus, that is another factor in favor of retaining
venue in Iowa.
Moreover, the biggest piece of evidence, the
equipment at issue, is located in the Northern District of
Iowa; and, it is beyond doubt that the location of documents
is no longer an important consideration in a case such as
The Court suspects that electronic versions of the
The Court can envision cases which rely on volumes of
Accordingly, in that type of case, location of the documents
may still be a valid consideration. However, this case is
about a contract that arose in 2011, well into the modern era
relevant contracts/documents (beyond those filed at Docket
Nos. 1, 4 and 14) already exist.
If not, it is short
administrative work to scan and (if appropriate) file those
Once electronic versions exist,
they will be readily accessible regardless of the parties’
Finally, while the Court appreciates the
Defendants’ concern that the application of Illinois law may
be particularly onerous, the Court is capable of applying
state law other than Iowa state law, and has done so hundreds
of times in the past. Accordingly, based on those factors and
all those outlined in the Terra Intern. Inc. case cited above,
the Court concludes that this case should not be transferred
to the Northern District of Illinois and the Defendants’
motion to do so is denied.
For the reasons set out above, Defendants’ Motion to
Dismiss and Motion to Transfer Venue, Docket No. 6, is DENIED.
IT IS SO ORDERED this 9th day of September, 2014.
Donald E. O’Brien, Senior Judge
United States District Court
Northern District of Iowa
of electronic documentation. Thus, this is not the type of
case where location of documents commands much thought.
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