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Relion Manufacturing, Inc. v. Tri-Pac, Inc.

United States District Court, W.D. North Carolina, Asheville Division

February 8, 2019

RELION MANUFACTURING, INC., Plaintiff,
v.
TRI-PAC, INC., Defendant/Third Party Plaintiff.
v.
APTARGROUP, INC., Third Party Defendant.

          MEMORANDUM AND RECOMMENDATION

          DAVID S. CAYER UNITED STATES MAGISTRATE JUDGE

         THIS MATTER is before the Court on “Aptar Group, Inc.'s Motion to Dismiss, or in the Alternative, Motion to Compel Arbitration and Stay Judicial Proceedings” (document #34) and the parties' briefs and exhibits.

         This matter was referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1) on November 7, 2018 and this Motion is now ripe for consideration.

         Having fully considered the arguments, the record, and the applicable authority, the undersigned respectfully recommends that Third Party Defendant's Motion to Dismiss and alternative Motion to Compel Arbitration be denied, as discussed below.

         I. PROCEDURAL AND FACTUAL BACKGROUND

         Plaintiff is a contract manufacturing and packaging provider. Defendant provides contract filling and packaging services to marketers of aerosol, liquid, and specialty packaged products. Taking the allegations of the Complaint as true, on July 7, 2016, the parties entered into a contract for Defendant to provide manufacturing and packaging services to Plaintiff's product lines. Plaintiff sent Defendant three purchase orders pursuant to the contract.

         On October 10, 2017, Plaintiff filed this action asserting that Defendant's packaging products were defective and alleging claims for breach of contract and breach of express and implied warranties.

         On July 30, 2018, Defendant filed its Third Party Complaint against Aptar Group, Inc. Defendant alleges that it purchased the defective products from Aptar. Defendant alleges claims for indemnity and breach of implied warranties. Defendant asserts that “any liability of [Defendant] due to the allegations in the Complaint … against [Defendant] are due to the actions, errors, and omissions of Aptar, and Aptar must indemnify” Defendant.

         Defendant sent Aptar three purchase orders. Aptar responded to each order with an email confirmation that incorporated its Terms and Conditions of Sale. Those Terms and Conditions are posted on Aptar's website. They include a mandatory arbitration clause. There is no dispute that Defendant's Third Party claims are within the scope of the arbitration clause.

         On August 27, 2018, Aptar filed its Motion to Dismiss or in the alternative to Compel Arbitration. In addition to seeking enforcement of the arbitration clause, Aptar claims that Defendant “improperly seeks contractual indemnity without attaching any contract or other authority to support such claim.” Document #35 at 3.

         Aptar's Motion has been fully briefed and is ripe for determination.

         II. DISCUSSION

         A. Indemnity Claim

         In reviewing a Rule 12(b)(6) motion, “the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff.” Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The plaintiff's “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Id. at 563. A complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, ...


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