United States District Court, E.D. Tennessee, Greenville
L. COLLIE, RUNITED STATES DISTRICT JUDGE.
the Court is Defendant Taylor-Winfield Technology's
(“Seller”) motion to dismiss Plaintiff American
Water Heater's (“Buyer”) breach-of-contract
and breach-of-warranty claims for lack of personal
jurisdiction or, in the alternative, to transfer for improper
venue. (Doc. 8.) Buyer filed a response (Doc. 13), and Seller
filed a reply (Doc. 15). For the following reasons, the Court
will DENY Seller's motion.
is a Nevada corporation headquartered in Johnson City,
Tennessee. (Doc. 6.) In 2013, Buyer invited vendors to bid
for the design and manufacture of two long seam welding
machines (the “Welders”). (Doc. 14.) The Welders
were to be custom-designed according to Buyer's
specifications for use in Buyer's manufacturing plant in
Johnson City, Tennessee.
first inquired about Seller's interest in manufacturing
the Welders in late May 2013. Seller is an Ohio corporation
with its principal place of business in Youngstown, Ohio.
(Doc. 8-1.) A lengthy period of negotiations followed.
11, 2013, Seller responded to Buyer's inquiry with a
presentation regarding its ability to manufacture the
Welders. After a visit to Buyer's Johnson City facility,
Seller sent Buyer its first proposal and concept drawing for
one of the Welders on June 14, 2013. (Doc. 14.) The proposal
quoted a price of $2, 998, 489.00 for one of the Welders and
noted delivery would be made to Buyer's Johnson City
facility at an additional cost of $8, 787.00.
21, 2013, Seller submitted a revised proposal
(“Revision A”) to Buyer. (Id.) It quoted
a price for the second Welder at $2, 748, 249.00. It further
noted delivery would be made to Buyer's Johnson City
facility at the same additional cost as the first Welder.
the next few months, Buyer and Seller remained in frequent
contact. On October 28 and 29, 2013, Seller representatives
visited Buyer's Johnson City facility to view the area in
which the Welders would be installed. Following this visit,
Seller submitted another revised proposal (“Revision
B”). (Id.) The proposal increased the price
for the Welders to $3, 261, 906.00 and $3, 011, 089.00,
December 17, 2013, Seller submitted additional revised
proposals (“Revisions C and D”) to Buyer. Each
noted Seller would provide a service engineer at Buyer's
Johnson City facility during the Welders' installation
who would participate in the system de-bug, start-up, and
run-off. Two days later, Seller submitted yet another revised
proposal (“Revision E”). This revision again
provided for Seller personnel to participate in installation
and start-up, and it estimated shipment at twelve months for
the first system and fourteen months for the second system.
On December 20, 2013, Buyer emailed to Seller a “letter
of intent” instructing Seller to proceed with the
January 27, 2014, Buyer issued separate purchase orders for
each of the Welders (the “Purchase Orders”).
(Docs. 6-1, 6-2.) The purchase orders bore the logo of
Buyer's parent company, “A.O. Smith”-a
Delaware corporation based in Milwaukee, Wisconsin. Under the
logo, the purchase orders directed invoices to Buyer's
headquarters in Johnson City. (Id.) Seller issued
its invoices to the Johnson City address.
the course of negotiations, the parties never signed a
document purporting to be the final written contract.
Numerous proposed terms were exchanged, however.
Significantly, on December 17, 2013, Buyer emailed its draft
of the terms and conditions (the “Initial Terms”)
to Seller, which contained both a choice of law provision and
a forum selection clause. (Doc. 15-1.) This provision
mandated application of Wisconsin law and submission to
exclusive jurisdiction in Milwaukee County,
Wisconsin. That same day, Seller returned a revised
version of the Initial Terms (the “Counteroffer”)
but left the choice of law and forum selection clauses
intact. (Id.) Buyer offers testimony that 1) neither
Buyer nor Seller signed either the Initial Terms or the
Counteroffer; 2) Seller never otherwise communicated
acceptance of the Initial Terms; and 3) the parties
negotiated the Counteroffer no further before Buyer later
submitted its Purchase Orders on January 27, 2014. (Doc. 14.)
Buyer further avers the Purchase Orders bore “general
terms and conditions” on the back of the documents that
retained the Wisconsin choice of law provision but made no
mention of the forum selection clause. (Doc. 13.)
Nonetheless, Buyer emailed to Seller its “letter of
intent” on December 20, 2013 instructing Seller to
proceed without having memorialized the terms of the
agreement. (Doc. 8-1.)
of the Welders did not go as planned. The Welders could not
consistently meet the quality requirements in Buyer's
specifications. From January 2015 to April 2016, the parties
remained in close contact in an attempt to resolve the
performance issues. Seller twice visited Buyer's sister
company in Ashland City, Tennessee to inspect welders in
operation there. (Doc. 14.) The parties made more than thirty
conference calls during this time period, and Buyer
representatives made twenty additional visits to Seller's
Youngstown facility. Id. Despite these efforts, the
Welders' performance issues could not be resolved, and
the Welders were never delivered.
12, 2016, Buyer sued Seller for breach of contract and breach
of warranty for failure to construct and deliver Welders
meeting Buyer's specifications. (Doc. 1.) Seller moves to
dismiss the action for lack of personal jurisdiction pursuant
to Federal Rule of Civil Procedure 12(b)(2) and for improper
venue under Rule 12(b)(3) and 28 U.S.C. § 1391(b). (Doc.
8.) In the alternative, Seller asks the Court to transfer the
case to the United States District Court in either the
Northern District of Ohio or the Eastern District of
Wisconsin pursuant to 28 U.S.C. § 1404 and §
STANDARD OF REVIEW
procedure through which district courts are to dispose of
Rule 12(b)(2) motions to dismiss is well settled.
Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th
Cir. 1991). The plaintiff bears the burden of establishing
personal jurisdiction. Id. To do so, the plaintiff
may not rely solely on the pleadings. Id. Rather, it
must, by affidavit or otherwise, set forth specific facts
demonstrating the court's jurisdiction. Id.
Where, as here, the court considers a motion to dismiss under
Rule 12(b)(2) without the aid of an evidentiary hearing, the
plaintiff need only make a prima facie case the
court has personal jurisdiction. Conn v. Zakharov,
667 F.3d 705, 711 (6th Cir. 2012). In ruling, the court
construes the pleadings and affidavits in the light most
favorable to the plaintiff and may also consider the
defendant's undisputed factual assertions. Id.
The court does not, however, weigh the controverting
assertions of the party seeking dismissal, so as “to
prevent non-resident defendants from regularly avoiding
personal jurisdiction simply by filing an affidavit denying
all jurisdictional facts.” Theunissen, 935
F.2d at 1459.
Rule 12(b)(3) motion to dismiss for improper venue,
“the plaintiff bears the burden of proving that venue
is proper.” Gone To The Beach, LLC v. Choicepoint
Services, Inc., 434 F.Supp.2d 534, 536-37 (W.D. Tenn.
2006). “The Court may examine facts outside the
complaint but must draw all reasonable inferences and resolve
factual conflicts in favor of the plaintiff.”
Id. at 537.
the district court has broad discretion in considering a
motion to transfer under 28 U.S.C. § 1404(a). KANL,
LLC v. Savage Sports Corp., No. 3:13-CV-265-TAV-CCS,
2014 WL 1745443, at *2 (E.D. Tenn. Apr. 30, 2014). Under such
a motion, “[t]he defendant bears the burden of proving
that there is an alternative venue that is proper and that
the convenience of the parties and witnesses, and the
interest of justice, warrant transfer.” Id.
“These burdens are significant. Courts ...