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Zajac LLC v. Walker Industrial and Turck, Inc.

United States District Court, D. Maine

July 21, 2016

ZAJAC, LLC, Plaintiff,
v.
WALKER INDUSTRIAL and TURCK, INC., Defendants.

          ORDER ON MOTIONS TO DISMISS

          George Z. Singal United States District Judge

         Before the Court are (i) Defendant Walker Industrial’s Motion to Dismiss with Incorporated Memorandum of Law (ECF No. 16) (the “Walker Motion”), (ii) Plaintiff’s Motion to Dismiss Defendant TURCK, Inc.’s Counterclaims with Incorporated Memorandum of Law (ECF No. 22) (the “Zajac Motion”), and (iii) Defendant TURCK, Inc.’s Motion to Dismiss or, in the Alternative, to Transfer Venue with Incorporated Memorandum of Law (ECF No. 27) (the “Turck Motion”). For the reasons explained herein, the Court GRANTS IN PART AND DENIES IN PART the Walker Motion, DENIES the Zajac Motion, and DENIES the Turck Motion.

         I. LEGAL STANDARD

         The Federal Rules of Civil Procedure require only that a complaint contain “a short and plain statement of the grounds for the court’s jurisdiction . . . a short and plain statement of the claim showing that the pleader is entitled to relief; and a demand for the relief sought[.]” Fed.R.Civ.P. 8(a)(1)-(3). The Court assumes the truth of the complaint’s well-pleaded facts and draws all reasonable inferences in plaintiff’s favor. Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). Under Rule 12(b)(6), the Court “may consider only facts and documents that are part of or incorporated into the complaint.” United Auto., Aero., Agric. Impl. Workers of Am. Int’l Union v. Fortuno, 633 F.3d 37, 39 (1st Cir. 2011) (internal citations omitted).

         A viable complaint need not proffer “heightened fact pleading of specifics, ” but in order to survive a motion to dismiss it must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). In considering a motion to dismiss, the Court should “begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Plaintiff must include enough facts supporting a claim for relief that “nudge[] their claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570. “If the factual allegations in the complaint are too meager, vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the complaint is open to dismissal.” Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) (quoting SEC v. Tambone, 597 F.3d 436, 442 (1st Cir. 2010)); see also Iqbal, 556 U.S. at 678 (stating that the Court need not accept “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements”). At this point in the litigation, “the determination of whether an issue is trialworthy simply is not the same as the determination of whether a plaintiff states a claim upon which relief can be granted.” Bodman v. Me., Dept. of Health & Human Servs., 720 F.Supp.2d 115, 121 (D. Me. 2010).

         II. BACKGROUND

         A. Factual Background

         The following summary of background information is drawn from the allegations made by Plaintiff Zajac, LLC (“Zajac” or “Plaintiff”) in its complaint, originally filed in the Superior Court of York County, Maine (ECF No. 1-1) (the “Complaint”). The Court accepts the allegations of Plaintiff for the purposes of its review of the legal adequacy of the claims made in the Complaint.

         Zajac, a limited liability company organized under the laws of the State of Maine, is in the business of providing installation services for customers in certain industries. (Compl. ¶¶ 2 & 6.) Walker Industrial (“Walker”) is a Connecticut corporation and a regional distributor for TURCK, Inc. (“Turck” and, together with Walker, “Defendants”), a Minnesota corporation. (Compl. ¶¶ 3-4 & 10.) In 2014, Zajac contracted with a customer to design, manufacture, and install skid-mounted equipment and piping in a facility in Vermont. (Compl. ¶ 7.) The customer required that the installed equipment include “fire rated” electrical wiring exposed in trays in the skids, a feature that is also known as “tray rated.” (Compl. ¶ 8.) Zajac contacted Walker about purchasing wire sets and cordsets for use in the skid equipment. (Compl. ¶ 10.) Walker directed Zajac to contact Turck directly. (Compl. ¶ 11.)

         In about May of 2014, Zajac’s fabrication manager exchanged emails with Chris Hawj of Turck. (Compl. ¶ 12.) Zajac informed both Turck and Walker that it needed tray rated cordsets, and the correspondence between Zajac and Hawj reflected that Turck knew that Zajac needed tray rated products. (Compl. ¶¶ 12 & 42.) Walker provided Zajac with a printed Turck catalog that described a certain model of cordset (the “Cordsets”) as “tray rated.” (Compl. ¶ 14.) Turck’s website also described the Cordsets as “tray rated.” (Compl. ¶ 15.)

         With information provided by and through Turck and Walker, Zajac decided to purchase the Cordsets, and it placed the first of several orders for the Cordsets through Walker, as Turck’s regional distributor. (Compl. ¶¶ 13 & 16.) There were no terms and conditions attached to Zajac’s purchase order, or to the shipping invoice Zajac received from Walker. (Compl. ¶ 16.) Zajac then proceeded to use the Cordsets in its work for a customer. (Compl. ¶¶ 17-18.)

         In about March of 2015, Zajac discovered that Turck’s website no longer described the Cordsets as “tray rated.” (Compl. ¶ 19.) In discussions with Walker and Turck, Zajac confirmed that the Cordsets are not tray rated. (Id.) Despite Zajac’s demand, Turck and Walker have not paid for the cost of replacing the Cordsets, which Zajac estimates will amount to approximately $128, 000. (Compl. ¶¶ 21-22.)

         B. Litigation

         Zajac filed the Complaint in York County Superior Court, asserting claims against both Defendants in six separate counts: a claim for declaratory judgment (Count I), a claim for breach of express warranty (Count II), a claim for breach of implied warranty of merchantability (Count III), a claim for breach of implied warranty of fitness for a particular purpose (Count IV), a claim for violation of the Maine Uniform Deceptive Trade Practices Act, 10 M.R.S.A. § 1211 et seq. (the “MUDTPA”) (Count V), and a claim for false advertising[1] (Count VI). Defendant Turck filed an answer and counterclaim in response to the filing of the Complaint (ECF No. 15), making counterclaims against Zajac for breach of contract (Count I) and for indemnification (Count II).

         Defendant Walker has filed a motion to dismiss the Complaint (ECF No. 16). Walker argues that Zajac has failed to state a claim against Walker for which relief can be granted as to each of the six counts of the Complaint. Plaintiff has filed a motion to dismiss Turck’s counterclaims (ECF No. 22). Defendant Turck has filed a motion to dismiss the Complaint or, in the alternative, to transfer venue to the United States District Court for the District of Minnesota (ECF No. 27), arguing that the parties are bound by a forum selection clause providing certain federal and state courts located in Minnesota as the exclusive forum for the present dispute. In addition, the parties disagree on the law applicable to this dispute. Plaintiff asserts that the laws of the State of Maine apply, while Defendants argue that an enforceable choice of law provision requires the application of the laws of Minnesota. The Court considers each of these issues below.

         III. DISCUSSION

         The Court will first consider the threshold venue question raised by Turck. Concluding that, based on the present record, venue is proper in this District, the Court denies the Turck Motion and proceeds to the arguments that have been made on the individual claims. In their motions, Walker and Zajac have moved for the dismissal of each filed claim and counterclaim. With the exception of the Walker Motion as to the dismissal of Counts I and VI of the Complaint, which is granted, the Walker Motion as to Zajac’s other claims, and the Zajac Motion, are denied.

         A. Turck’s Argument for Dismissal or Transfer Based on Venue

         Turck makes an argument which lies at the threshold of the Court’s analysis of the Complaint. Turck asserts that the parties are bound by a valid and enforceable forum selection clause providing for the federal and state courts located in Hennepin County, Minnesota, as the exclusive forum for disputes in connection with Zajac’s purchase of the Cordsets. According to Turck, venue is therefore improper in the District of Maine, and this Court should either dismiss the Complaint or transfer venue to the District of Minnesota. If Turck’s argument was correct, then it would not be appropriate for this Court to rule on the arguments made in the Walker Motion or the Zajac Motion, and the need for further consideration of this case would be obviated. However, Turck is mistaken. Based on the record before the Court, the forum selection clause is not enforceable, and venue in this Court remains proper.

         Upon a motion to dismiss, the Court looks to the allegations in the Complaint, and assumes the truth of the well-pleaded facts while drawing all reasonable inferences that support the plaintiff’s stated theory of liability. Carter’s of New Bedford, Inc. v. Nike, Inc., 790 F.3d 289, 291 (1st Cir. 2015). The Court can also consider an underlying document or documents that are expressly linked to the dispute in the Complaint. Beddall v. State St. Bank & Trust Co., 137 F.3d 12, 17 (1st Cir. 1998) (“When . . . a complaint’s factual allegations are expressly linked to . . . a document (the authenticity of which is not challenged), that document effectively merges into the pleadings and the trial court can review it in deciding a motion to dismiss under Rule 12(b)(6).”). As the allegations in this dispute arise out of the sale of the Cordsets to Zajac, documents purported to contain the terms and conditions of such sale, if presented to the Court and not challenged by a party as inauthentic, can be considered.

         Zajac has alleged that the purchase order and the shipping invoice for the Cordsets did not contain any terms or conditions, and Turck has not argued that a forum selection clause was included in any transaction document by which Zajac affirmatively agreed to certain terms and conditions in connection with its purchase of the Cordsets. Instead, Turck argues that the forum selection clause arose out of the “terms of use” section of Turck’s website. Plaintiff has alleged that its review of product information about the Cordsets on Turck’s website was one of the sources of the mistaken assertion by Turck and/or Walker that the Cordsets were tray rated. Turck directs the Court’s attention to the specific allegation in the Complaint that the affirmative representation on Turck’s website that the Cordsets were tray rated “became part of the bargain.” (Compl. ¶ 32.) According to Turck, when Zajac used Turck’s website to learn about the Cordsets, and when it allegedly relied upon the website’s description of the Cordsets in making the decision to order the product through Walker, the terms of use of the website were incorporated into Zajac’s agreement to purchase the Cordsets and became applicable to the transaction.

         Ordinarily, a party arguing that a forum selection clause is inapplicable bears a heavy burden of proof. Carter’s of Bedford, 790 F.3d at 292 (quoting Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 17, 92 S.Ct. 1907 (1972)). However, the Bremen analysis applies where a party seeks to strike a forum selection clause that, on its face, was an express term of a contract. Here, Zajac argues that the forum selection clause was ...


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