Free Appendix - District Court of Delaware - Delaware

Case 1:05-cv-00022-IVIPT Document 114-2 Filed O9/O1/2006 Page f)Eo%€42 Of6
Westlaw
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Slip Copy, 2006 WL 1995128 (D.Del.)
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H Present at the meeting were Thomas Karner and Mr.
Briefs and Other Related Documents Divis of Jurimex, Mr. Loiseleur, and representatives
Only the Westlaw citation is currently available. of IP Consult ("IPC"). Those present at the meeting
United States District Court,D. Delaware. discussed a $20-40 million transaction in which
JURIMEX KOMMERZ TRANSIT G.M.B.H.,et Golden Grain would purchase several hundred
al., Plaintiffs, combines from Case France in exchange for wheat.
v. Plaintiffs and IPC would sell the wheat to offtakers,
CASE CORPORATION, Defendant. in order to finance the purchase of the farm
No. CIV A. 00-83-JJF. equipment. Plaintiffs contend that this meeting
resulted in a binding oral contract, though Plaintiffs
July 17,2006. admit that the price and other terms were not
specified and that the contract was subject to
modification. (D.I. 125, Ex. D at 72-77).
Thomas C. Grimm, and Jeny C. Harris, Jr., of
Morris, Nichols, Arsht, & Tunnell, Wilmington, Several more meetings regarding the Golden Grain
Delaware, Daniel J. Komstein, and Daniel A. Cohen transaction were conducted during May and June
, of Kornstein Veisz Wexler & Pollard, LLP, New 1999:
York, New York, for Plaintiffs, of Counsel. · May 26, 1999: Jurimex, IPC, and Case Europe
David McBride, Dawn Marie Jones, and John W. representatives and Mr. Loiseleur met in Paris to
Shaw, of Young, Conaway, Stargatt, & Taylor, discuss the next steps in the Golden Grain
Wilmington, Delaware, William E. Deitrick, and transaction.
Michelle V. Dohra, of Mayer, Brown, Rowe, & · June 8, 1999: Jurimex, IPC, Mr. Loiseleur, Elena
Maw LLP, Chicago, Illinois, for Defendant, of Gannash, a Case France employee, and Leopold
Counsel. Plattner, the President of Case Europe, met in Paris
again.
MEMORANDUM OPINION • early June 1999: Jurimex and Case France
FARNAN,J. representatives, met with three European banks,
*1 Pending before the Court is Defendant Case ING, West LB, and Societe Generale, to discuss the
Corporation's Motion For Summary Judgment And possibility of financing. The parties dispute whether
To Dismiss Based Upon The Doctrine Of Fomm any of these meetings eventually resulted in a
Non Conveniens (D.I.123). For the reasons financing agreement.
discussed, the Motion will be granted.
During May and June 1999, Jurimex contends that
I.FACTUAL BACKGROUND it acted in reliance on the May 4 agreement.
Jurimex contends that representatives traveled to
ln April 1999, Patrice Loiseleur of Case France Kazakhstan to conduct project and feasability
S.A. ("Case France") contacted Sascha Divis at studies, meet with Golden Grain representatives and
Jurimex Kommerz Transit G.m.b.H ("Jurimex"), local govemment officials, and discuss an extension
asking whether Jurimex would be interested in of credit with a Kazakh bank. Jurimex further
brokering a sale of combines to Agro Industrial contends that it and IPC agreed to form
Corporation Golden Grain, Ltd. ("Golden Grain"), Arge-IPC-Jurimex, for the purpose of completing
a company in Kazakhstan. On May 4, 1999, a the Golden Grain transaction. Finally, Jurimex
meeting was conducted regarding this proposal. contends that it negotiated with offtakers to buy
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Case 1 :05-cv-00022-IVIPT Document 114-2 Filed O9/O1/2006 Page ZPQEC43 0%
Slip Copy Page 2
Slip Copy, 2006 WL 1995128 (D.Del.)
(Cite as: Slip Copy)
295,000 of the 300,000 tons of wheat and that it Complaint. Jurimex Kommerz Transit G.m.b.H v.
secured a $5.8 million non-delivery guarantee from Case Corp., 65 Fed. Appx. 803 (3d Cir.2003). The
aKazakh bank. Third Circuit concluded that Plaintiffs were not
required to clearly establish an agency relationship
In mid-June 1999, letters were exchanged between at the pleading stage and remanded, stating that
Jurimex, IPC, and Case France discussing, inter Plaintiffs should be permitted to conduct discovery
alia, financing issues. The letters exchanged on the agency issue. Id
indicated that ING was not willing to work with
Jurimex, but that Case France would continue
working with Jurimex if Jurimex would assist in III. PARTIES' CONTENTIONS
securing other financing. (D.I.l25, Ex. L-P). By the
end of June 1999, for reasons disputed by the By its Motion, Defendant contends that the Court
parties, Jurimex was no longer considered a part of should grant summary judgment in its favor because
the Golden Grain transaction. no contract was ever formed. Defendant further
contends that Plaintiffs have failed to establish an
agency relationship between Defendant and its
II. PROCEDURAL BACKGROUND subsidiaries, and therefore, summary judgment must
be granted for failure to join indispensable parties.
*2 On February 9, 2000, Plaintiffs filed their Finally, Defendant contends that the Court should
Complaint, asserting claims for (1) breach of dismiss the case based upon the doctrine of forum
contract and implied covenant of good faith and fair non conveniens.
dealing, (2) breach of implied contract, (3)
promissory estoppel, (4) quasi-contract/unjust In response, Plaintiffs contend that there are
enrichmendrestitution, (5) tortious interference, (6) genuine disputes of material fact as to the existence
unfair competition and misappropriation, and (7) of a contract and an agency relationship between
prima facie tort. (D.I.1). Defendant filed a motion to Defendant and its subsidiaries. Plaintiffs also
dismiss pursuant to Federal Rules of Civil contend that Defendant may not raise the defense of
Procedure l2(b)(1), 12(b)(7), and 19 and the forum non conveniens because the Court has
doctrine of forum non conveniens. (D.I.13). The already rejected the defense twice.
Court granted Defendant's motion to dismiss,
concluding that Defendant's subsidiaries, with
whom Plaintiffs' interactions took place, were IV. LEGAL STANDARD
indispensable parties and could not be joined
without destroying jurisdiction. (D.I.44). The Pursuant to Rule 56(c) of the Federal Rules of Civil
Court, however, did not address Plaintiffs' argument Procedure, a party is entitled to summary judgment
that Defendant could be sued due to the agency if a court determines from its examination of "the
relationship between Defendant and its subsidiaries, pleadings, depositions, answers to interrogatories,
because Plaintiffs had not alleged an agency and admissions on file, together with the affidavits,
relationship in their Complaint. Id. Plaintiffs if any," that there are no genuine issues of material
subsequently sought leave to amend their Complaint fact and that the moving party is entitled to
(D.I.46), but the Court denied that motion, judgment as a matter of law. FedR.Civ.P. 56(c). In
concluding that an amendment would be futile determining whether there are triable issues of
(D.I.51). material fact, a court must review all of the
evidence and construe all inferences in the light
The Third Circuit Court of Appeals affirmed the most favorable to the non-moving party. Goodman
Court's decision on the motion to dismiss, but v. Mead Johnson & Co., 534 F.2d 566, 573 (3d
reversed the Court's decision on the motion for Cir.l976). However, a court should not make
leave to amend, concluding that Plaintiffs had credibility determinations or weigh the evidence.
sufficiently alleged agency in their Amended Reeves v. Sanderson Plumbing Prods., Inc., 530
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Case 1 :05-cv-00022-IVIPT Document 114-2 Filed O9/O1/2006 Page §%i€44 OIC6
Slip Copy Page 3
Slip Copy, 2006 WL 1995128 (D.Del.)
(Cite as: Slip Copy)
U.S. 133, 150 (2000). is well-settled that a subsidiary does not become an
agent of its parent corporation merely because the
*3 To defeat a motion for summary judgment, the parent corporation owns a majority of the its voting
non-moving party must "do more than simply show shares. Restatement (SQCOHW of Agency § 14M.
that there is some metaphysical doubt as to the Rather, actual authority is created by words or
material facts. In the language of the Rule, the conduct of the principal, which reasonably cause the
non-moving party must come forward with ‘specific agent to determine that the principal wishes the
facts showing that there is a genuine issue for trial." agent to act on the principal's behalf. Edwards v.
’ Matsushita Elec. Indus. Ca., Ltd v. Zenith Radio gem [ne, 792 rage 387, 389-90 (3d Cir_i936)_FN2
COFP. 475 U·$» 574, 586·87 (1986) (€it¤ti0H$ Apparent authority, on the other hand, can be
Omltmd)- H0W€V€Y, tht? m€Y€ existence of $0m€ created by words or conduct of the principal, which
evidence in SUPPOIT of the n0¤m0VHHY will not be reasonably cause a third party to believe that the
sufficient to SUPDOIT 8 denial of H 1n0ti0n f0f agent is acting on the principal’s behalf. Id at390.
summary judgment; there must be enough evidence
to enable a jury to reasonably find for the
nonmovant on that issue. Anderson v. Liberty FN; The primes ejre te ease igw fiom the
L0bby· [*10, 477 US- 242, 249 (1986)- Third Circuit, District of Delaware, and
Delaware state courts in discussing agency.
In their briefs, the parties suggest that
VDYSCUSSION Austrian, Kazakh, French, or English law
may apply to the issue of whether there is a
Tl’lC COLIIT IIIUSI flI“SI COI1Sld€I` Wl'1€Il”1€l” thé (;()nti·g(;{_ Fgr [hg piiypggg Of determining
subsidiaries were acting as Defendant's agents in the whether there is an agency relationship, the
Golden Grain Transaction. lf they were not acting Ceurt will refer re genera] egeriey
as Defendant's agents, the Court Will grant principals, as discussed in the case law
Defendant's motion for summary judgment, because cited by the parties. Japan Petroleum, 456
the subsidiaries must be joined as necessary parties F,Supp, at 840, n_ 17,
in order to hold the parent company liable.FNl
The Court concludes that no jury could reasonably
find that Defendant's subsidiaries had actual
FN1. As a general rule, the existence of an authority to act on Defendant's behalf. Plaintiffs
agency relationship is decided in a trial on contend that Defendant's subsidiaries had actual
the merits. However, where the parties authority based on oral authorization. However,
have been given an opportunity to conduct Plaintiffs admit that there is no written record of
discovery on the agency relationship, and such authorization and have failed to put forth any
where the plaintiffs have failed to put forth other evidence of this oral authority. (D.l. 127 at 6).
sufficient evidence of such a relationship, At this stage of the proceedings, the Court cannot
the policy of judicial economy is served by accept Plaintiffs' bald assertions that such authority
a decision on summary judgment. Japan existed. Furthermore, in its opinion reversing the
Petroleum Co. (Nigeria) Ltd v. Ashland Court's decision on Plaintiffs' motion to amend, the
Oil, Inc., 456 F.Supp. 831, 838 Third Circuit suggested that evidence of an agency
(D.Del.l978) (court granted summary relationship could be found in "documents
judgment on the agency issue and concerning the communications between Case and
dismissed the case for failure to join its subsidiaries specifically limited to the Golden
indispensable parties following discovery). Grain transaction? Jurimex, 65 Fed. Appx. at 808.
Plaintiffs have failed to put forth any such evidence.
A principal is liable for the actions of its agent that Accordingly, the Court concludes that Plaintiffs
are within the scope of the agent's actual or apparent have failed to establish actual authority sufficient to
authority. Restatement (Second) of Agency § 140. lt survive amotion for summary judgment.
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Case 1 :05-cv-00022-IVIPT Document 114-2 Filed O9/O1/2006 Page 4)8>i€45 Of6
Slip Copy Page 4
Slip Copy, 2006 WL 1995128 (D.Del.)
(Cite as: Slip Copy)
*4 The Court also concludes that no jury could 18, 1999, long after Plaintiffs were "cut out" of the
reasonably find that Defendant‘s subsidiaries had transaction, and therefore, could not have
apparent authority to act on Defendant‘s behalf. contributed to Plaintiffs' belief that Defendant's
Plaintiffs contend that apparent authority was subsidiaries were acting on Defendant‘s behalf.
created through (1) the statements and actions of (D.I.128, Ex. 19).
several parties to the Golden Grain transaction, (2)
a duplication of one officer on Defendant‘s and Finally, Plaintiffs argue that there is apparent
Case Europe's boards, and (3) Jurimex's previous authority based upon a transaction that took place in
transactions with Defendant. The Court will address 1998 (“the Volgograd transaction"), which involved
each of these contentions in tum. Case Corporation, Case France, and Jurimex
Kommerz Agrar and Steel, who is not a party to this
Plaintiffs point to the words and actions of every case. An agency relationship can only be
person involved in the transaction, except established through acts "relevant to the plaintiffs
Defendant's, in an attempt to demonstrate an agency claim of wrongdoing? Phoenix Canada Oil Co. v,.
relationship.FN3 For example, Plaintiffs have put Texaco, [H0, 842 F.2d 1466, I4,/7-78 (3d Cir.i988)
forth the intemal communications of ING's (Citing FiSS€t‘ V· Int'! Book, 282 I:·2d 231, 238 (2d
attorneys and a letter furnished by the Kazakh Clr.1960)). Plaintiffs have admitted that the
govemment. (D.l.127). Plaintiffs also contend that Volgogred iY8¤$¤€ii0¤ is eniiieiy unrelated to the
the actions and words of Defendant‘s subsidiaries Golden Gfdin tF3iiS8¢ti0ii· (D-I· 125, EX· D et 55)-
created apparent authority. (D.l. 127 at 32-35). Accordingly, the Coun is not persuaded by any of
However, "apparent authority can never be derived Plaintiff? efguinents
from the acts of the agent alone." Finnegan Const.
Co. v. Robino-Ladd Co., 354 A.2d 142, 144
(De1.Super.l976). Furthermore, in order to establish VI- CONCLUSION
an agency relationship, Plaintiffs must point to
words or actions Of [he principal] which Plaintiffs FOI` Il'l€ I`€&SOilS diSCl1SSCd, the COl1l`[ C0flCll1d€S that
have gdmittcdthcy cannot do (D_l_l25, EX_ E)_ Plaintiffs have failed to establish an agency
relationship between Defendant and its subsidiaries
sufficient to survive a motion for summary
FN3_ The Coun Suggests that the judgment. Accordingly, the Court concludes that the
references made by other parties involved subsidiaries are indispensable parties, and therefore,
in the Golden Grain transaction to "Cgsc Defendant Case Corporation's Motion For Summary
Corporation" were in fact references to Judgment And To Dismiss Based Upon The
Case France. Plaintiffs also failed to make Doctrine Of Forum Non Conveniens (Di.123) will
this distinction in their briefing, by using " be granted.
Case Corporation" and “Case" to refer to
Qage France and Defendant *5 An appropriate Order will be entered.
Plaintiffs also contend that there is apparent
authority based on Mr. Chiffert's dual roles on ORDER
Defendant‘s board and as Case Europe's president.
However, "the fact that a parent and a subsidiary At Wilmington, the 17th day of July 2006, for the
have common officers [docs not] necessarily I‘eas0ns set i`OI‘th in the Memorandum Opinion
indicate an agency relationship? Japan Petroleum, issued this date;
456 F.Supp. at 841. The Court notes Plaintiffs'
argument that Mr. Chiffert sent a letter to a bank in IT IS HEREBY ORDERED that Defendant Case
Kazakhstan on Defendant‘s letterhead. However, the Comoretion's Motion For Summary Judgment And
Conn finds this letter irrelevant to the creation of To Dismiss Bescd Upon The Doctrine Of Forum
apparent authority. The letter was sent on August Non C0nVe1iie1iS (D-I-I23) is GRANTED-
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