Hetronic International Inc v. Hetronic Germany GMBH et al
Filing
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ORDER denying 69 Motion to Dismiss Amended Complaint Against Abitron Germany and Abitron Austria. Signed by Honorable Robin J. Cauthron on 9/22/15. (lg)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
HETRONIC INTERNATIONAL, INC.,
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)
Plaintiff,
)
)
vs.
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)
HETRONIC GERMANY GMBH;
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HYDRONIC-STEUERSYSTEME-GmbH; )
ABI HOLDING GMBH;
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ABITRON GERMANY GmbH;
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ABITRON AUSTRIA GmbH; and
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ALBERT FUCHS,
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Defendants.
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Case No. CIV-14-650-C
MEMORANDUM OPINION AND ORDER
Before the Court is the Motion to Dismiss Amended Complaint Against Abitron
Germany and Abitron Austria (referred to collectively as “Abitron” or “Abitron entities”)
(Dkt. No. 69). Plaintiff filed a Response (Dkt. No. 77). Defendants filed a Reply (Dkt. No.
83). Plaintiff also filed a supplemental Response (Dkt. No. 100), to which Defendants filed
a Reply (Dkt. No. 101). The Motion is at issue.
I. BACKGROUND
Hetronic International, Inc. (“Hetronic”) designs and manufactures radio remote
controls for use in heavy industrial equipment. Hetronic Germany GmbH (“H-Germany”)
and Hydronic-Steuersysteme-GmbH (“Hydronic”), both Defendants in this case, served as
Hetronic’s distributer and assembler for Germany and a number of central eastern European
countries, respectively. The right for both H-Germany and Hydronic to assemble and
distribute Hetronic’s radio remote controls was governed by a Distribution Agreement.
Plaintiff alleges that H-Germany and Hydronic materially breached the Distribution
Agreement causing Plaintiff to subsequently terminate the agreement. After the termination
of the Distribution Agreement, Fuchs (former CEO of Hydronic) incorporated ABI–sole
shareholder of Abitron–and also incorporated the Abitron entities and/or renamed the
existing entities with the Abitron name. Plaintiff alleges that Fuchs transferred substantially
all of H-Germany’s and Hydronic’s assets to Abitron, inter alia, making Abitron successorsin-interest to H-Germany and Hydronic. Plaintiff asserts many tort and contract claims
against Defendants.
Defendants seek dismissal of all Plaintiff’s claims based on a lack of personal
jurisdiction. It is uncontested that the Court has personal jurisdiction over both H-Germany
and Hydronic due to a forum selection clause agreed upon in the Distribution Agreement,
naming Oklahoma as the forum of choice. Plaintiff argues that the forum selection clause
extends to the Abitron entities because they are successors-in-interest of H-Germany and
Hydronic.
Additionally, Defendants contend Plaintiff’s eighth cause of action–conversion–is
subject to dismissal because intangible property may not be the basis for a conversion claim
under Oklahoma law.
II. STANDARD OF REVIEW
Personal Jurisdiction
The Plaintiff has the burden of establishing personal jurisdiction over the Defendant.
Benton v. Cameco Corp., 375 F.3d 1070, 1074 (10th Cir. 2004). The Plaintiff need only
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make a prima facie showing of personal jurisdiction in situations where the district court does
not first conduct an evidentiary hearing on the issue of personal jurisdiction. Id. The Court
must resolve all factual disputes in favor of the Plaintiff when determining whether the
Plaintiff has established personal jurisdiction over the defendant. Far W. Capital, Inc. v.
Towne, 46 F.3d 1071, 1075 (10th Cir. 1995).
Defendants argue jurisdiction in this Court is improper as Plaintiff has failed to
demonstrate sufficient minimum contacts with Oklahoma and any such exercise of
jurisdiction would offend “‘traditional notions of fair play and substantial justice.’” Int’l
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citation omitted). However, even with
a lack of minimum contacts, personal jurisdiction can be waived. Ins. Corp. of Ireland, Ltd.
v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982). A forum selection clause
gives parties the autonomy to choose the forum in which they will litigate in the event a
contract dispute arises. Nat’l Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 316 (1964).
After both parties consent to personal jurisdiction in a certain forum, the need to evaluate a
party’s contacts with the forum evaporates.
Allegiant Mktg. Group, Inc. v. Direct
Innovations, LLC, No. CIV-15-40-D, 2015 WL 5038041, at *4 (W.D. Okla. Aug. 26, 2015).
III. ANALYSIS
Plaintiff contends that the forum selection clause extends to the Abitron entities
because they are successors-in-interest to H-Germany and Hydronic. “When one defendant
completely controls another, the latter’s contacts with the forum may fairly be imputed or
attributed to the former.” Home-Stake Prod. Co. v. Talon Petroleum., 907 F.2d 1012, 1020
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(10th Cir. 1990). Owning a majority of the stock of another corporation, however, does not
destroy the identity of a corporate entity. Rea v. An-Son Corp., 79 F.R.D. 25, 29 (W.D.
Okla. 1978). Also, having the same individual serve as an officer in two corporations,
without more, will not destroy the legal identity of either corporation. Id. However, a
corporation will not be considered to be a separate corporate entity from the affiliated
corporation when “one corporation is so organized and controlled and its business conducted
in such a manner as to make it merely an agency, instrumentality, adjunct, or alter ego of
another corporation.” Id. Put another way, the acts of a corporation can be imputed to a
putative successor for the purpose of establishing personal jurisdiction when that corporation
is an alter ego of the first.
There are several factors a court considers when determining whether a corporation
is a successor in interest of another corporation rather than a separate entity. See generally
Rea v. An-Son Corp., 79 F.R.D. 25 (W.D. Okla. 1978); Pharmacy Providers of Okla., Inc.
v. Q Pharmacy, Inc., No. CIV-12-1405-C, 2013 WL 1688921 (W.D. Okla. Apr. 18, 2013)
(unpublished). Below is the application of the specific facts of this case to those factors:
1.
Transfer of all stock to putative successor. Most all of H-Germany’s and
Hydronic’s assets were transferred to the Abitron entities with a small amount
being left for the purposes of satisfying debt with Hetronic International.
2.
Common owner and/or directors and officers. Fuchs is the owner of both
Abitron entities as well as H-Germany and Hydronic. What is more, the
Abitron entities are using the same facilities, management, employees,
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customer lists, and product mark and dress as H-Germany and Hydronic.
Further, H-Germany’s CEO, Daniela Hammerer, has served as CEO of
Abitron Germany and Abitron Austria.
3.
Putative successor was incorporated subsequent to suit or wrongdoing.
The Abitron entities were created only after the Distribution Agreement was
terminated on June 6, 2014. A mere twenty days later, Fuchs incorporated
Abitron Germany as Hydronic Control Systems Germany GmbH. Following
this, Fuchs changed its name to Abitron Germany on July 16, 2014. Fuchs
incorporated Abitron Austria on June 17, 2014, as Hydronic Control Systems
Produktions and Vertriebs GmbH. Fuchs subsequently changed its name to
Abitron Austria on August 8, 2014.
4.
Distinctions between corporation and putative successor are disregarded
or confused. Abitron has failed to make it clear that the Abitron entities are
any different than H-Germany and Hydronic. The Abitron entities even went
so far as sending letters to customers clarifying that the same business would
be conducted as before with nothing more than a name change. For several
months after the termination of the Distribution Agreement, H-Germany and
Hydronic improperly continued to hold themselves out as authorized Hetronic
distributers and assemblers and used the Hetronic trademarks. Further, HGermany and Hydronic’s website, even after the termination of the
Distribution Agreement, continued to operate with the Hetronic name and
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mark (even advertising the sale of Hetronic-branded parts). This made it very
difficult for customers to identify the differences between H-Germany,
Hydronic, and the Abitron entities.
Taking Plaintiff’s allegations as true and all facts together, Abitron entities are
successors-in-interest to H-Germany and Hydronic, and therefore the Court has an
independent basis for exercising jurisdiction over them; the forum selection clause is imputed
to the Abitron entities. This Court does not, however, find that Abitron is a successor-ininterest for purposes of liability. This finding is strictly to be construed to establish a basis
for personal jurisdiction.
Conversion
Conversion occurs when an individual illegally exerts ownership over the property
of another. Shebester v. Triple Crown Insurers, 1992 OK 20, ¶ 12, 826 P.2d 603, 608. In
Oklahoma, “‘only tangible personal property may be converted.’” Architects Collective v.
Gardner Tanenbaum Grp., L.L.C., No. CIV-08-1354-D, 2010 WL 2721401, at *5 (W.D.
Okla. July 6, 2010) (quoting Beshara v. S. Nat’l Bank, 1996 OK 90, ¶ 30, n.26, 928 P.2d 280,
289 n.26, and Shebester, 1992 OK 20, ¶ 14, 826 P.2d at 608). Tangible property is defined
as property that is corporeal, whereas intangible property “‘has no intrinsic or marketable
value, but is merely the representative or evidence of value.’” United States ex rel. MMS
Const. & Paving, L.L.C. v. Head, Inc., No. CIV-10-1340-M, 2011 WL 4954021, at *3 (W.D.
Okla. Oct. 18, 2011) (quoting Black’s Law Dictionary 1456 (6th ed. 1990)).
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The Supreme Court of Oklahoma has not recognized a conversion claim for
intellectual property. KT Specialty Distribution, L.L.C. v. Xlibris Corp., No. 08-CV-0249CVE-SAJ, 2008 WL 4279620, at *4 (N.D. Okla. Sept. 11, 2008). Defendants allege
Plaintiff’s conversion claim should be dismissed because Plaintiff’s Amended Complaint
only mentions intangible property that has allegedly been converted by Defendants.
However, Plaintiff’s response specifies tangible property that was purportedly converted by
Defendants, including documents, software, and drawings. Because Defendants have
identified tangible property, Defendants’ Motion to Dismiss Plaintiff’s conversion claim is
denied.
IV. CONCLUSION
Accordingly, Motion to Dismiss Amended Complaint Against Abitron Germany and
Abitron Austria (Dkt. No. 69) is DENIED.
IT IS SO ORDERED this 22nd day of September, 2015.
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