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Axxon International, LLC v. GC Equipment, LLC

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

September 29, 2019




         THIS MATTER IS BEFORE THE COURT on “Plaintiff’s Motion To Strike Pleadings And For Entry Of A Default Against Defendant GC Equipment, LLC” (Document No. 59) and “Globecore GmbH’s Motion To Dismiss” (Document No. 61, p. 1). The parties have consented to Magistrate Judge jurisdiction pursuant to 28 U.S.C. §636(c), and these motions are ripe for disposition. Having carefully considered the arguments, the record, and the applicable authority, the undersigned will grant the motions in part and deny the motions in part.

         I. BACKGROUND

         Plaintiff Axxon International, LLC (“Plaintiff” or “Axxon”) initiated this action with the filing of its Complaint (Document No. 1) against Defendant GC Equipment, LLC, doing business as Globecore GmbH, on July 20, 2017. GC Equipment, LLC (“GC Equipment”) originally argued for dismissal based on insufficient process and insufficient service of process pursuant to Fed.R.Civ.P 12(b)(4) and 12(b)(5) in a “Motion To Dismiss” filed on September 5, 2017. (Document No. 12). GC Equipment later withdrew its original motion to dismiss. (Document No. 20).

         On November 20, 2017, GC Equipment filed a “Motion to Dismiss, Answer, And Affirmative Defenses.” (Document No. 21). GC Equipment’s Answer asserted for the first time that there is a lack of personal jurisdiction. (Document No. 21, p. 1). The Answer also asserted that GC Equipment should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6). (Document No. 21, p. 2).

         The parties consented to Magistrate Judge jurisdiction on December 8, 2017, and this case was reassigned to the undersigned. (Document Nos. 22 and 23). On January 31, 2018, the Court issued a “Pretrial Order And Case Management Plan” (Document No. 26). The “…Case Management Plan” included the following deadlines: discovery – September 24, 2018; mediation – October 15, 2018; and dispositive motions - October 22, 2018. Id.

         On March 20, 2018, Plaintiff filed an “Amended Complaint” naming both GC Equipment and Globecore GmbH (“Globecore”) as Defendants. (Document No. 28).

         The Amended Complaint states that Plaintiff is a limited liability company, organized and existing under the laws of the State of North Carolina, with its principal place of business in Rock Hill, South Carolina. (Document No. 28, p. 1). Plaintiff is “a wholesale supplier of medical equipment and industrial machinery and fabrication, ” providing “complete project management support for local, state, and federal agencies.” (Document No. 28, p. 4). Plaintiff’s members are Randy Lenz (“Lenz”), Art Ward (“Ward”), and Equity Investment Partners, LLC (“EIP”). Id.

         The Amended Complaint describes GC Equipment as “a limited liability company, organized and existing under the laws of the State of California, with its principal place of business in Los Angeles, California.” (Document 28, p. 2). GC Equipment’s members are Dylan Baum (“Baum”) and Richard Messina (“Messina”), both citizens of California. Id.

         Defendant Globecore “is a foreign corporation organized and existing under the laws of Germany, with its principal place of business in Oldenburg Eversten, Germany.” Id. Plaintiff contends that Globecore “is a transformer oil filtration equipment manufacturer that sells and manufactures industrial equipment for the production of bitumen and transformer oil purification and regeneration across the country.” (Document No. 28, p. 4). GC Equipment is Globecore’s “factory franchised new equipment/material dealer with full parts, service, and warranty capacity in the United States.” (Document 28, p. 4).

         Plaintiff entered into a contract (the “USACE Contract”) with the U.S. Army Corp. of Engineers (the “USACE”) on September 30, 2016, that was later modified on October 17, 2017. Id. See also (Document No. 28-1 and 28-2). Plaintiff then contracted with Globecore through a “Purchase Order” in November 2016, to provide an oil filtration system in fulfillment of Plaintiff’s USACE Contract. (Document No. 28, p. 4) See also (Document No. 28-3). “In order to fulfill the USACE Contract, on November 8, 2016, AXXON entered into an Agreement with GLOBECORE, whereby GLOBECORE agreed to provide the Oil Filtration System referenced in CLIN 001, in compliance with the specifications enumerated in the USACE Contract.” (Document No. 28, ¶ 22) (footnotes omitted). Baum, of GC Equipment, executed the “Purchase Order” agreement as Globecore’s authorized agent on November 9, 2016. Id. See also (Document No. 28-3; Document No. 30, p. 6). The Globecore Contract designates Globecore as “Vendor” and provides an address in Dickinson, Texas. (Document No. 28-3). Plaintiff paid a $20, 000.00 deposit in accordance with the Globecore Contract to GC Equipment as the agent for Globecore. (Document No. 28, p. 5).

         According to the Amended Complaint, this Court has in personam jurisdiction over GC Equipment and Globecore because of their “substantial and continuous contacts with the State of North Carolina, including entering into a subcontractor agreement with AXXON in North Carolina.” (Document No. 28, p. 2). Additionally, Plaintiff asserts that the Globecore Contract “has a mandatory venue provision, which requires that venue for any dispute shall be in North Carolina.” Id.; see also, (Document No. 23-3). Plaintiff maintains that GC Equipment “was and is Globecore’s authorized agent to act on behalf of Globecore, ” and acted as Globecore’s authorized agent pertaining to the Purchase Order agreement. (Document No. 28, pp. 2, 4). Plaintiff also asserts that GC Equipment had “routine and continuous” contact with Plaintiff in North Carolina regarding execution of the underlying agreement(s). (Document No. 28, pp. 2-3).

         The Amended Complaint asserts claims for: (1) breach of contract against Globecore; and (2) intentional interference with contract against both GC Equipment and Globecore. (Document No. 28, pp. 7-10). Plaintiff contends that GC Equipment and Globecore “knowingly and willfully interfered with Axxon’s contractual relationship with USACE.” (Document No. 28, p.9).

         The “Amended Complaint” notes that it was filed with opposing counsel’s written consent. (Document No. 28, p. 1, n. 1). Moreover, on April 3, 2018, “Defendant GC Equipment LLC’s Written Consent To Amend Complaint” was filed with the Court confirming that GC Equipment consented to allowing Plaintiff to amend its Complaint, naming GC Equipment as a Defendant, on March 20, 2018. (Document No. 29). Neither the “Amended Complaint, ” nor “Defendant GC Equipment LLC’s Written Consent To Amend Complaint” suggest that GC Equipment disputed the Court’s jurisdiction in this matter. (Document Nos. 28 and 29).

         “Defendant GC Equipment LLC’s Motion To Dismiss, Answer, And Affirmative Defenses In Response To Plaintiff’s Amended Complaint” (Document No. 30) was also filed on April 3, 2018, and in that pleading GC Equipment again asserted motions to dismiss pursuant to Fed.R.Civ.P. 12 (b)(2) and 12(b)(6). GC Equipment’s Answer acknowledges that “during the time described in Axxon’s Amended Complaint, GC Equipment acted as a manufacturer’s representative and agent for GlobeCore.” (Document No. 30, pp. 4, 12). GC Equipment goes on to assert that it was Axxon and GlobeCore that entered into the “Purchase Order.” (Document No. 30, pp. 6, 9-10) (citing Document No. 28-3).

         “Defendant GC Equipment LLC’s Motion to Dismiss for Lack of Personal Jurisdiction” (Document No. 32) was filed on April 17, 2018. GC Equipment sought dismissal of this action pursuant to Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction. (Document No. 32). GC Equipment contended that it is not subject to personal jurisdiction in North Carolina because it lacks the requisite contacts with the forum state. (Document No. 33, p. 7). The undersigned issued an “Order” on July 6, 2018, denying without prejudice “Defendant GC Equipment, LLC’s Motion to Dismiss for Lack of Personal Jurisdiction” (Document No. 32). (Document No. 39)

         The undersigned issued an “Order” (Document No. 43) on August 17, 2018, granting “Defendant GC Equipment LLC’s Motion To Vacate or Modify Pretrial Order And Case Management Plan And To Stay Or. Suspend Discovery Pending Service And Appearance By Defendant Globecore GMBH” (Document No. 40). The Court stayed this matter “until Defendant Globecore GmbH is served, or December 18, 2018, whichever occurs first.” (Document No. 43, p.1).

         On September 7, 2018, this Court received a letter from Dr. Julia Bessonova, Director of Globecore GmbH, indicating that Globecore received a copy of the Complaint on August 27, 2018, and stating that it “has no financial connection with GC Equipment regarding this or any other contract.” (Document No. 44). Plaintiff then filed a “...Motion To Strike Defendant Globecore GMBH’s Response, ” because it was not filed by licensed counsel. (Document No. 45). The undersigned denied the motion to strike without prejudice. (Document No. 46).

         On October 2, 2018, Plaintiff filed a “Notice Of Filing Of Return Of Service Certificate” (Document No. 47) confirming that the Amended Complaint was served on Defendant Globecore GmbH on August 27, 2018. “Plaintiff’s Motion For Entry Of Clerk’s Default Against Defendant Globecore GMBH” (Document No. 48) was also filed on October 2, 2018.

         On October 9, 2018, notices of appearance of Defendant Globecore’s counsel, Nancy Black Norelli, Donna P. Savage, and Keith A. Gross were filed with the Court. (Document Nos. 48-51). The next day, Globecore’s “…Answer And Motion To Dismiss For Lack Of Personal Jurisdiction” (Document No. 53) was filed.

         On October 12, 2018, the undersigned denied “Plaintiff’s Motion For Entry Of Clerk’s Default…” and directed the parties to file proposed revisions to case deadlines. (Document No. 54). Based on a proposal by counsel for each party, the undersigned re-set case deadlines on October 29, 2018, including the following: Discovery Completion – June 24, 2019; Mediation Report – July 10, 2019; Motions – July 19, 2019; and Trial – October 28, 2019. (Document No. 56).

         On January 10, 2019, counsel for GC Equipment filed a “Motion To Withdraw As Counsel” (Document No. 57). The motion states in part that “GC Equipment does not want the undersigned counsel to pursue any further defense on its behalf, with the understanding that the Court may enter an adverse judgment against GC Equipment if Plaintiff proves its claims against GC Equipment.” (Document No. 57, p. 2). The “Motion To Withdraw…” includes an “Affidavit In ...

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