Boumatic LLC v. Idento Operations BV
Filing
65
ORDER denying 4 Motion to Dismiss for Lack of Jurisdiction. Signed by District Judge William M. Conley on 11/6/2014. (voc)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
BOUMATIC, LLC,
Plaintiff,
OPINION AND ORDER
v.
11-cv-822-wmc
IDENTO OPERATIONS BV,
Defendant.
Consistent with the Seventh Circuit’s opinion in BouMatic, LLC v. Idento
Operations, BV, 759 F.3d 790 (7th Cir. 2014), this court held an evidentiary hearing on
October 24, 2014, to determine whether the parties had agreed orally that any dispute
arising out of their agreement for the purchase of robotic milking machines would be
resolved in Wisconsin.
Plaintiff appeared at trial through its counsel, Attorney Saul
Glazer of Axley Brynelson and its corporate representative, the CEO, President and
General Counsel Michael (“Mickey”) Mills; defendant appeared by Attorneys Terry
Nilles and Douglas Raines of von Briesen & Roper.
Paragraph 13 of the November 2008 purchase agreement “provides that
additional terms will come from the purchase orders and invoices that the parties
exchange for particular machines.” (Pl.’s Ex. A (dkt. #59) p.4.) BouMatic’s purchase
orders incorporated a clause specifying that litigation would occur in Wisconsin and
Idento’s invoices contained a conflicting clause specifying that litigation would occur in
the Netherlands.
(Pl.’s Ex. B (dkt. #59) p.6; Def.’s Ex. 3 (dkt. #57) p.24.)
In its
opinion, the Seventh Circuit concluded that “the purchase orders and invoices canceled
each other out.” BouMatic, 759 F.3d at 792. Contrary to this court’s original holding,
the Seventh Circuit further found that “the inconsistent purchase-and-sales forms
countermand each other,” but not any prior agreement the parties may have had with
respect to litigating disputes between them in Wisconsin.
Id.
Since BouMatic has
consistently asserted that it had just such an oral agreement with Idento specifying
Wisconsin as the forum for dispute resolution, which Idento has consistently denied, the
Seventh Circuit held an evidentiary hearing was required to resolve this factual dispute.
Having now heard testimony from both sides on this subject, the court finds that such an
oral agreement did exist and that trial on the merits of BouMatic’s complaint and
Idento’s counterclaim must proceed in this court.
FINDINGS OF FACT1
Beginning in 2007, Idento and BouMatic attempted to negotiate the terms of a
detailed Original Equipment Manufacturer (“OEM”) Agreement, which contemplated
that Idento would manufacture and resell fully automatic robotic milking machines in
Europe and potentially elsewhere. When those efforts failed, the parties entered into a
two-page Purchase Agreement, dated April 3 and signed April 7, 2008, by Edwin
Kolsteeg and Karl Hoffman, for Idento and BouMatic respectively. (Pl.’s Ex. C (dkt.
#59) pp.7-8.)
Paragraph 11 of the April 2008 Purchase Agreement states that
“BouMatic’s standard terms and conditions will be sent with each of the quarterly
The court makes the following material findings of fact based on credibility determinations and
the exhibits admitted into evidence at the evidentiary hearing, which assumes the reader’s basic
understanding of the background of this matter as set forth in this court’s and the Seventh
Circuit’s decisions on Idento’s motion to dismiss for lack of personal jurisdiction, improper venue
and insufficient service of process pursuant to Federal Rule of Civil Procedure 12(b). (Dkt.
##42; 52-1.)
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purchase orders.” (Id. at p.8.) Also, initialed by the signators on the same day were
BouMatic’s General Terms and Conditions, including at paragraph 11 the following:
Miscellaneous. This Order is governed by the laws of the State of
Wisconsin. At BouMatic’s option, all disputes arising in connection with
this Order shall be resolved by arbitration in accordance with the rules of
the American Arbitration Association, except that each party shall have the
discovery rights established by the Federal Rules of Civil Procedure. In the
event of any litigation between the parties to this Order, the parties
agree that the only forum in which such litigation may be filed and
adjudicated is in the state or federal courts located in Wisconsin and
both parties consent to personal jurisdiction in such courts and waive
any objection based on jurisdiction or venue of any such action. In
the event that any provision contained in this Order is determined to be
unenforceable, all other provisions will remain in full force and effect and
the affected provision will be construed so as to be enforceable to the
maximum extent permissible by applicable law. This Order may be
transferred into other languages but the English language version shall
control.
(Pl.’s Ex. C (dkt. #59) p.12 (emphasis added).)
The parties’ recollections regarding the import of this provision could hardly
diverge more. For BouMatic, Mr. Mills, who is not a signator to the agreement but acted
as BouMatic’s attorney on this and other legal matters, specifically recalls walking
through each term of the April 2008 Purchase Agreement, as well as the Terms and
Conditions with Mr. Kolsteeg in Houston, Texas.2 In contrast, Mr. Kolsteeg denies ever
discussing the specific terms of the April 2008 Purchase Agreement with Mills, and in
In 2008. Mills was effectively acting as general counsel, although at that time he was still in
private practice.
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particular denies doing so in person in Houston, Texas.3 Although extreme, these kinds
of inconsistencies are not atypical, coming as they do some six and one-half years after
the events themselves and after being prompted to remember helpful details. Ultimately,
the court finds neither version wholly credible.
As for Mills, it seems somewhat
incredible that he would have the kind of specific recollection of discussions with
Kolsteeg over a written agreement that he could not even recall his client entered into
until a few weeks ago.
Similarly, it seems unlikely that Kolsteeg could have no real
memory of the written agreement or its negotiations, despite being a signator, but
somehow be certain that there was never any understanding with respect to BouMatic’s
terms and conditions, including in particular its choice of forum for resolving disputes.
Even so, Mills has consistently maintained since the outset of this lawsuit that he
had an oral understanding with Kolsteeg that Wisconsin state or federal court would
provide the forum for the resolution of any disputes arising out of the November 2008
Purchase Agreement and that those negotiations predated the execution of that
agreement. If nothing else, the April 2008 Agreement would appear to confirm that
general memory.
Indeed, the Seventh Circuit’s opinion in this case found similar
language in paragraph 13 of the November 2008 Purchase Agreement essentially
incorporated into that agreement by reference both the terms and conditions of
Kolsteeg did recall negotiations in Houston over a separate “Strategic Alliance Agreement” and
acknowledged the possibility that those negotiations may have occurred in person in Houston, as
well as in various other locations.
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BouMatic’s purchase orders and Idento’s invoices, albeit it in a manner that ultimately
conflicted and rendered their forum selection provisions void.
The court need not rely on this holding as law of the case, however, since it finds
any ambiguity in paragraph 11 of the April 2008 Agreement must be resolved in
BouMatic’s favor with regard to incorporation of the attached terms and conditions from
its standard purchase orders.
Not only does the court find credible Mills’ general
recollection as to the oral understanding of the parties with respect to paragraph 11, but
also credits his unrefuted testimony that BouMatic generally requires (1) just such a
forum selection clause or (2) where opposed by the other party, at least a provision that a
party initiating a lawsuit arising out of a contractual relationship must file suit in the
other party’s forum of choice. Moreover, it seems persuasive, if not compelling, that both
sides’ signators formally initialed those terms and conditions on the same date as the
April 7 Purchase Agreement, evidencing an intent to incorporate those terms and
conditions, including its forum selection clause, just as the Seventh Circuit inferred with
respect to the November 2008 Agreement. Finally, while Kolsteeg’s testimony was fuzzy
and inconsistent, he ultimately conceded that the reason paragraph 13 of the November
Purchase Agreement was adopted was to change the impact of paragraph 11 of the April
Agreement, which had only incorporated BouMatic’s terms and conditions.
Similarly, given that his earlier affidavits in this lawsuit were decidedly less
specific, the court finds Mills’ specific recollections of telephone conversations with
Lever, an attorney for Idento, and Kolsteeg regarding the survivability of the original
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forum selection clause hard to accept at face value.
Whether this was a result of a
stunning flood of refreshed memories by virtue of the recent uncovering of the April
Purchase Agreement or the convenient and self-serving recreation of events in his mind as
inspired by the Seventh Circuit’s opinion and the terms of the April 2008 Agreement
need not be resolved for purposes of the court’s reconsideration of Idento’s motion to
dismiss. This is because the Seventh Circuit has already held that the November 2008
Purchase Agreement amounts to a battle of the forums in which neither side wins and the
parties’ prior agreement on forum selection remains “unaffected.”
Moreover, were this court required to resolve the issue as a matter of fact, it seems
more likely than not that BouMatic and Idento had general discussions about adopting
paragraph 13 of the November agreement in order to prevent any argument that
paragraph 11 had established Wisconsin as the preferred forum for disputes between the
parties. While now Mills claims that he agreed to such a change because he knew this
would be a legal non-starter without an integration clause, leaving the provision in
paragraph 11 intact and enforceable, strikes the court as more bravado than good
lawyering, but so, too, does Kolsteeg’s claim that paragraph 13 absolutely barred
application of paragraph 11 from the first agreement. Either approach to drafting was at
best risky, because it left the parties and this court with uncertainty.4 In the end, the
In fairness, sometimes parties to a contract decide to proceed without definitively resolving some
issues, accepting the risk that any uncertainty may ultimately be resolved against it is better than
forcing the issue and reaching no agreement at all. From the testimony of the witnesses, this
seems exactly the choice made by the parties here with respect to the forum selection provision.
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Seventh Circuit’s legal decision and this court’s factual findings have now resolved that
uncertainty.
OPINION
Based on these findings, the court concludes that the parties had agreed orally to
incorporate the forum selection clause in BouMatic’s Terms and Conditions of Sale into
the April 2008 Purchase Agreement, consistent with and as evidenced by paragraph 11 of
that agreement. Moreover, that forum selection clause survived any inconsistency in the
later November 2008 Agreement.
Nevertheless, Idento persists in arguing that the April 2008 agreement cannot
govern forum selection because “[w]here, as here, a contract pertaining to the same
subject matter as a prior contract contains terms ‘so inconsistent’ with the prior contract
that the two ‘cannot subsist together,’ the later contract supersedes the earlier contract.”
(Def.’s Post-Hearing Br. (dkt. #62) 4 (citing 17B C.J.S. Contracts § 598; 29 Williston on
Contracts § 73.17 (4th ed.).) Unfortunately for Idento, that ship has already sailed. The
Seventh Circuit found that the inconsistencies with respect to forum selection by
incorporating both parties’ competing terms and conditions into the November 2008
contract were effectively canceled or rendered void. This is now law of the case. Kathrein
v. City of Evanston, Ill., 752 F.3d 680, 685 (7th Cir. 2014) (“The most elementary
application of [law of the case] doctrine is that when a court of appeals has reversed a
final judgment and remanded the case, the district court is required to comply with the
express or implied rulings of the appellate court.”) (internal citation and quotation marks
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omitted). This leaves only the forum selection clause in the April 2008 contract, which
this court has now found selects Wisconsin as the forum for litigation.
Finally, in its motion to dismiss, Idento also purports to challenge venue and
improper service of process.
The former is rendered moot in light of the Seventh
Circuit’s holding and this court’s finding that the parties agreed to litigate disputes in
Wisconsin, including expressly waiving “any objection based on jurisdiction or venue.”
The latter challenge relating to failure of service of process consistent with the Hague
Convention may have since been cured. Regardless, this issue has not been adequately
briefed.
If still in dispute, the parties should ask the Magistrate Judge to schedule
briefing on it and any other issues at the upcoming preliminary pretrial conference.
ORDER
IT IS ORDERED that
1) defendant Idento Operations BV’s motion to dismiss for lack of jurisdiction
(dkt. #4) is DENIED; and
2) the clerk of court should schedule a conference with Magistrate Judge Crocker
to promptly thereafter establish a scheduling order, including setting this case
for jury trial.
Entered this 6th day of November, 2014.
BY THE COURT:
/s/
________________________________________
WILLIAM M. CONLEY
District Judge
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