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Haldrup USA Corp. v. Kincaid Equipment Manufacturing, Inc.

United States District Court, N.D. Indiana, Fort Wayne Division

September 1, 2016

HALDRUP USA CORP., Plaintiff,
v.
KINCAID EQUIPMENT MANUFACTURING, INC., and EMPRISE BANK, Defendants.

          OPINION AND ORDER

          RUDY LOZANO, Judge.

         This matter is before the Court on the Defendant Kincaid Equipment Manufacturing, Inc.'s Motion to Dismiss Plaintiff's Amended Complaint or in the Alternative for Venue Transfer, filed on July 22, 2015 (DE #18). For the reasons set forth below, the Court TRANSFERS this case to the United States District Court for the District of Kansas, pursuant to 28 U.S.C. § 1406(a), and DENIES AS MOOT Kincaid's motion to dismiss (DE #18). The Clerk is hereby ORDERED to transfer this matter to the United States District Court for the District of Kansas.

         BACKGROUND

         Plaintiff Haldrup USA Corp. (“Haldrup”) filed its Complaint on April 30, 2015, in Indiana state court. (DE #4.) After the case was removed to federal court, Haldrup amended the Complaint on July 17, 2015. (DE #16.) The Amended Complaint asserts three breach of contract claims (Counts I-III) and a claim seeking a preliminary and permanent injunction (Count IV) against Defendant Kincaid Equipment Manufacturing, Inc. (“Kincaid”). In response to the Amended Complaint, Kincaid moves to dismiss based on lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and improper venue. In the alternative, Kincaid moves to transfer the case to the United States District Court for the District of Kansas pursuant to 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406(a). (DE #18.) After the parties conducted discovery on the issue of specific personal jurisdiction, Haldrup filed its response to Kincaid's motion on February 26, 2016. (DE #37.) Kincaid filed its reply on March 4, 2016. (DE #38.)

         DISCUSSION

         Facts[1]

         Haldrup is an Indiana corporation with its principal place of business in Wells County, Indiana. (DE #16 at ¶1.) Haldrup is the successor in interest and assignee of certain rights of Haldrup GmbH, formerly known as Inotec Engineering GmbH (“Inotec”), a German business with its principal place of operation in Ilshofen, Germany. (DE #16 at ¶5, ¶14; #19-1 at ¶2.) Inotec is a manufacturer and seller of agricultural implements used in the area of field research. (DE #16 at ¶5.) Kincaid is a Kansas corporation with its principal place of business in Haven, Kansas. (Id. at ¶2.)

         In 2012, Inotec sought to partner with a company based in the United States to introduce, import, and distribute Inotec's products into the United States market. (DE #16 at ¶6.) Inotec and Kincaid discussed a strategic plan to introduce Inotec's products to the United States, and in early May 2012, representatives of Kincaid traveled to Ilshofen, Germany, to negotiate terms of an agreement with Inotec. (Id. at ¶7; DE #19-1 at ¶6.) On May 3, 2012, Inotec and Kincaid entered into a Memorandum of Understanding (“MOU”) whereby Kincaid agreed to introduce Inotec's products to “the North American market, ” and develop sales of these products. (DE #16-1 at 1.) According to the MOU, Inotec's products were to be sold under the name Haldrup A/S (“Haldrup implements”). (Id.) The MOU also provided that Kincaid would buy certain “demo machines” and “act as importer of said machines.” (Id.)

         Pursuant to the MOU, Inotec sold a C85 plot combine to Kincaid on May 16, 2012 (“C85 combine”). (DE #16 at ¶9.) The order confirmation for the C85 combine states that the combine was manufactured in Germany, and delivered to Haven, Kansas. (DE #16-2.) Inotec delivered the C85 combine to Kincaid in Haven, Kansas, and Kincaid sent the full payment for the C85 combine to Inotec in Germany. (DE #19-1 at ¶8-¶9.) Kincaid modified the C85 combine, and used it as a demo machine for customers. (DE #16 at ¶10.) Kincaid's modifications and failure to properly maintain and care for the C85 combine allegedly impacted the combine's functionality. (Id. at ¶11.)

         Pursuant to the MOU, Inotec also sold to Kincaid a CTS-95 twin plot combine on July 18, 2012, and a CTS-95 twin plot combine on February 6, 2013 (“CTS-95 combines”). (Id. at ¶9.) The CTS-95 combines were manufactured in Germany and delivered to Kincaid in Haven, Kansas. (DE #16-3; DE #16-4; DE #19-1 at 11, 14.) Kincaid allegedly modified the CTS-95 combines, but failed to pay the purchase price for them. (DE #16 at ¶12.) Under the terms of the order confirmations for the CTS-95 combines, Inotec retained ownership interest in the CTS-95 combines until Kincaid paid the full purchase price. (Id. at ¶15; see, e.g., DE #16-3 at 6.) The CTS-95 combines are currently located in Kansas. (DE #19-1 at ¶¶ 12, 15.)

         Prior to 2013, Kincaid had sold equipment to a company called Tech Services, Inc. (“Tech Services”), which has offices in Bluffton, Indiana. (DE #37-3 at ¶3, ¶4.) In December 2012, Mike Mossberg (“Mossberg”), President of Tech Services, saw a Haldrup C85 combine at Kincaid's trade show booth in Chicago, Illinois. (Id. at ¶1; DE #37-2 at 3.) Tech Services was interested in purchasing a plow/harvester in 2013. (DE #37-3 at ¶5.) While it is unclear who contacted whom after the Chicago trade show, in May 2013, Kincaid brought the C85 combine to Indiana to perform a demonstration for Tech Services. (Id. at ¶7.) Mossberg attests that the C85 combine did not appear to be “field ready”, and that it appeared to have received no service and only minimal maintenance before the demonstration. (Id. at ¶8, ¶12.) Tech Services attempted to operate the C85 combine in two fields in Indiana and two fields in Illinois, but the combine worked in only one of the four fields. (Id. at ¶9-¶11.) Kincaid brought the C85 combine to Bluffton, Indiana, for inspection and to determine the cause of its problems. (Id. at ¶16.) The C85 combine remained in Bluffton for more than one month. (Id. at ¶17.)

         In December 2013, Andrew Blubaugh of Kincaid met with Mossberg at the Chicago trade show and invited him to travel to Europe to visit the Haldrup facility with Kincaid representatives. (Id. at ¶19-¶22.) Mossberg attests that after his visit to the Haldrup facility, he lacked confidence in Kincaid as a distributor of Haldrup's products because Kincaid's representatives did not appear to understand or have the ability to repair Haldrup implements. (Id. at ¶23-¶24.)

         Between 2013 and 2015, Kincaid sold four Haldrup implements to three entities in Indiana: (1) a 7-Row Distributor to ABG Ag Services (“ABG”) in Sheridan, Indiana; (2) a Thresher & Cleaner to Dow AgroSciences (“Dow”) in West Lafayette, Indiana; and (3) two implements (a 6-Row Planter and a 4-Row Drill) to Purdue University/Elizabeth Rausch Purdue Agronomy Farm (“Purdue”) in West Lafayette, Indiana. (DE #37-1 at 2-3.) Kincaid modified the Haldrup implements it sold to Purdue. (Id. at 3.)

         On or about March 4, 2015, Inotec sent a demand letter to Kincaid regarding the matters asserted in the Amended Complaint, but did not mention its intent to assign its claims. (DE #19-1 at ¶16-¶17.) Kincaid retained legal counsel in Kansas to respond to Inotec's letter, and on April 3, 2015, Kincaid's counsel sent a letter to Inotec in Ilshofen, Germany. (Id. at ¶17, ¶18; DE #13-1.) In that letter, Kincaid refused a settlement offer proposed by Inotec, asserting that Inotec had breached the MOU, and that there were ...


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