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SelectSun GMBH v. Porter, Inc.

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

March 30, 2017

SELECTSUN GMBH, Plaintiff,
v.
PORTER, INC., d/b/a Thunderbird Products, and INTERNATIONAL NAUTIC, LLC, Defendants.

          OPINION AND ORDER

          JAMES T. MOODY JUDGE

         This matter is before the court on numerous motions, most notably cross-motions for summary judgment, arising from a dispute over the sale of a luxury boat. The boat purchaser, a German corporation called SelectSun GMBH (“SelectSun”), claims that it was sold a boat unsuitable for its intended use in the European Union (“EU”) by Porter, Inc. (“Porter”), and its affiliates, International Nautic, LLC (“IN”), and Poker-Run-Boats (“PRB”). Porter claims that it was at the far end of a typical manufacturer-dealer-subdealer-purchaser transactional chain, and that it was not a party to any contract with SelectSun and should not be liable for a boat that it made precisely as instructed by its dealers. However, SelectSun contends that Porter, IN, and PRB are effectively one and the same.

         For the reasons set forth below, the court finds that questions of fact prevent the court from resolving this case completely at the summary judgment stage. A full recitation of the factual background of this case, plus an analysis of the legal issues raised by the parties in various motions, follows.

         I. BACKGROUND

         A. Porter and its Affiliates

         Porter is an Indiana corporation that manufactures boats under the brand names Formula Boats and Thunderbird Products. (DE # 145 at 7, Snyder Dep. 14.) During the relevant time period, Porter sold its boats internationally through IN, a Florida company run by Leila Kitzinger Burger and Peter Burger. (See DE # 145 at 86, Porter Dep. 17-18.) Porter authorized Leila[1] to refer to herself as “international sales coordinator” and provided Leila with business cards. (DE # 145 at 86, Porter Dep. 17.) Wayne Porter, Porter's Vice President of Sales, testified that Porter hired Leila as “director of international sales” to bring capable dealers to the table to sell its products in an international marketplace. (DE # 145 at 85, Porter Dep. 13-14.)

         PRB was one such dealer in the German marketplace, run by Alfred Zurhausen, a citizen of Germany. (DE # 145 at 89, Porter Dep. 31-32.) Orders placed with PRB went through IN to Porter. (DE # 145 at 89, Porter Dep. 32.) It is undisputed that, during the relevant time period, Porter's website listed PRB as a dealer. (DE # 144-5 at 3.) Wayne testified that he was okay with PRB using the name Formula Boats to advertise. (DE # 145 at 90, Porter Dep. 34:7-14.) Porter had no written agreement with PRB or IN. (DE # 145 at 87, 90, Porter Dep. 21, 33.)

         B. SelectSun's Boat Purchase

         In 2012, Erich Schwaiger, a German businessman and owner of SelectSun, decided to buy a Formula boat. According to Schwaiger, he called Porter wanting to buy a boat, but was told that he needed to work with “their Formula Boats representative in Germany, Alfred Zurhausen and Poker-Run-Boats.” (DE # 146 at 2, Schwaiger Aff. ¶ 7.) Schwaiger attested that he told the Porter representative on the other end of the line that he wanted to buy directly from Porter, in order to receive the best price. (Id.) According to Schwaiger, he was assured that Alfred was “their representative” and that he was authorized to provide the best price. (Id.) Schwaiger further swore that the individual on the phone stated that “ordering through Alfred was the same thing as though [sic] ordering directly from the manufacturer.” (Id.)

         Schwaiger contacted Alfred and, through various communications, settled on a custom boat with certain features. According to Schwaiger, he decided to order twin 725 horsepower engines, at Alfred's recommendation, to make his boat extremely fast. (DE # 146 at 5, Schwaiger Aff. ¶ 14.) Schwaiger attested that he planned to use the boat in Europe, so he wanted the boat to be “CE certified, ” meaning it could be legally used in the European Union (“EU”). (DE # 146 at 4, Schwaiger Aff. ¶ 12.) An attachment to the October 2012 purchase agreement indicated that the boat would be CE certified.[2] (DE # 146-7 at 7, 17.) Technically, the boat was purchased by Schwaiger's company, SelectSun. (DE # 146 at 6, Schwaiger Aff. ¶ 19.) Under the agreement, SelectSun agreed to allow the boat to be shown at three boat shows. (DE # 146 at 5, Schwaiger Aff. ¶ 17.)

         Schwaiger attested (DE # 146 at 4, Schwaiger Aff. ¶ 13) that, before he paid for the boat, Alfred supplied him with a copy of a document (“the Acknowledgment”)

         signed by Wayne, which stated “Formula” at the top with a bird logo, included Porter's Decatur, Indiana, contact information, and stated:

         FORMULA BOATS

         International Representation

Formula Boats, manufacturer of Performance, Cruiser, Bow Rider, Cuddy Cabin and Yacht products, does hereby acknowledge International Nautic LLC as its Director of International Sales.
International Nautic LLC is the official representative of Formula Boats.
Wayne M. Porter [signature] Vice President of Sales

(DE # 146-2 at 2.) A seal appears at the bottom of the Acknowledgment. (Id.)

         Schwaiger further attested (DE # 146 at 4, Schwaiger Aff. ¶ 13) that he also received a business card from Leila, which stated “Formula Thunderbird Products” with a bird logo at the top; Leila's name; the title “International Sales Coordinator”; both a Florida address and Porter's Decatur, Indiana, address; phone and fax numbers with a Florida area code; and an email address with “nauticllc.com” as the domain. (DE # 146-3 at 2.) Leila's business card accompanied wire transfer instructions for payment. (DE # 146 at 4, Schwaiger Aff. ¶ 13.) Schwaiger followed the instructions and wired payment to the specified account. In total Schwaiger paid approximately $840, 000.00 for the boat, which he financed through a company called LeaseForce. (DE # 146 at 6-7, Schwaiger Aff. ¶¶ 22-23.) Schwaiger received a confirmation from IN, signed by Leila, that payment was received. (DE # 146-11.)

         Schwaiger attended the Duesseldorf boat show in January of 2013, and claims that he met Wayne, who was with Peter. Schwaiger claims that Wayne thanked him for his business. (DE # 146 at 7, Schwaiger Aff. ¶ 24.) Wayne testified to meeting Schwaiger at Duesseldorf, but recalls being introduced to Schwaiger by Alfred. (DE # 145 at 93, Porter Dep. 48:24-25.) Wayne testified that he “thanked [Schwaiger] for his interest in Formula Boats.” (Id.)

         As Porter prepared to build the boat, numerous communications transpired between Leila and Porter's Dealer Administration Manager, Lori Snyder, frequently via email. While these emails are unclear, it appears that Lori and Leila communicated about the fact that the exhaust system Leila was requesting would not result in CE certification. (See, e.g., DE # 150-37 at 4.) Though the parties disagree as to why and who made the decision, ultimately the boat was built with an exhaust system that was not compatible with CE certification.

         Schwaiger attested that in April 2013, he heard from Alfred, who said the boat had arrived but was stuck in customs because there was “no conformity declaration [DOC] or a CE certificate for the Boat, but that he was getting the documents together to get the Boat out of customs for me.” (DE # 146 at 8, Schwaiger Aff. ¶ 27.) Though it is unclear how, the boat apparently cleared customs at some point, because in May 2013, Schwaiger received the boat. (DE # 146 at 8, Schwaiger Aff. ¶ 28.)

         According to Schwaiger, many parts of the boat began to break down after he received it. (DE # 146 at 8-9, Schwaiger Aff. ¶ 33.) Schwaiger sent pictures of the damage to Alfred in August of 2013, but when Alfred had not responded with any news by September, Schwaiger hired Hubertus Kettner to inspect the boat and write a report on the damage. (DE # 146 at 9-10, Schwaiger Aff. ¶¶ 32-33.)

         In the end of October or beginning of November, Kettner provided Schwaiger with a DOC, dated March 2013, that he had discovered in the course of his investigation. (DE # 150-12 at 8, Schwaiger Dep. II 80:21-81:11; DE # 146-13.) The DOC was purportedly produced by Porter, but Kettner informed Schwaiger that it was fraudulent. (Id.) Wayne testified that the March 2013 DOC was not produced by Porter, as Clarence Boyd, whose signature appeared on the DOC, was a former employee of Porter who did not work there during the relevant time period. (DE # 145 at 92, Porter Dep. 41-43.)

         Alfred took the boat into his possession in November 2013 so he could show it at a boat show. (DE # 146 at 10, Schwaiger Aff. ¶ 37.) According to Schwaiger, Alfred forwarded him “new ‘current' CE documentation on December 4, 2013.” (DE # 146 at 10, Schwaiger Aff. ¶ 38; DE # 146-17 at 5.) The December 2013 DOC was signed by Jason Brune, an engineer at Porter, who testified that he created the certificate for the model, not the specific boat, and only for purposes of displaying the boat at the boat show. (DE # 145 at 190, 216, Brune Dep. 59-60, 161-162.) Alfred never returned the boat after the boat show. (DE # 146 at 11, Schwaiger Aff. ¶ 40.) The current location of the boat is unclear.

         Wayne testified that he believes that PRB has ceased to exist, and that Alfred is now running his business under the name Marine Partner Network. (DE # 145 at 90, Porter Dep. 35.) Similarly, Wayne believes that IN has ceased to exist, and Peter is running another business called INC Trading, possibly with Leila. (DE # 145 at 89, Porter Dep. 25-27.) At the time of Wayne's deposition on March 10, 2015, Porter was still working with INC Trading to fill some orders submitted via IN (DE # 145 at 87, Porter Dep. 24) and Marine Partner Network was still listed as a dealer on Porter's website (DE # 145 at 90, Porter Dep. at 36). However, on March 19, 2015, Wayne emailed Peter stating that Porter was discontinuing its working relationship with INC Trading / IN and Marine Partner Network / PRB due to the present litigation. (DE # 144-9 at 29.)

         C. Litigation History

         SelectSun sued Porter and IN in this court, alleging various tort, fraud, contract, and warranty claims (twelve claims, in total), primarily based on Porter and IN's failure to provide a boat certified for use in the EU. (DE # 67.) No representatives of IN were ever produced for depositions, and IN's counsel withdrew from the case due to IN's decision to abandon its defense. (DE ## 98, 99, 110.) Default judgment was entered against IN as a sanction, though this court withheld entry of final judgment. (DE # 170.) Neither Alfred nor PRB were named as defendants in this case, though it appears litigation between Alfred/PRB and SelectSun is ongoing in Germany.

         Porter moved to dismiss some of the claims against it (DE # 76), as well as for summary judgment on all claims (DE # 149). SelectSun also moved for summary judgment. (DE # 142.) The issues raised in Porter's motion to dismiss are almost entirely duplicated in its motion for summary judgment, [3] so the court denies the motion to dismiss as moot and utilizes summary judgment jurisprudence to address all of Porter's arguments.

         Porter also filed two motions to strike evidence submitted by SelectSun (DE ## 151, 164), a motion to exclude Kettner's purported expert testimony (DE # 134), and a motion to reopen discovery in the event that Kettner's testimony is not excluded (DE # 139). All of the aforementioned motions are ...


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