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North Country Marketing, Inc. v. Mandako Agri Marketing (2010) Ltd.

United States District Court, D. North Dakota

May 10, 2018

North Country Marketing, Inc., Plaintiff,
v.
Mandako Agri Marketing 2010 Ltd., and Mandako International, Inc. Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

          Daniel L. Hovland, Chief Judge United States District Court

         Before the Court are two motions to dismiss. North Country Marketing, Inc. (“North Country”) brought suit against Mandako Agri Marketing (2010) Ltd. in North Dakota state court in September of 2017. See Docket No. 1-3. Mandako Agri Marketing (2010) Ltd. removed the case to this Court on October 6, 2017, and filed a motion to dismiss on October 12, 2017. See Docket Nos. 1 and 4. North Country filed an amended complaint on October 27, 2017, which added Mandako International, Inc. as a defendant. See Docket No. 7. Both Defendants (together “Mandako”) filed a renewed motion to dismiss on November 22, 2017. See Docket No. 22. North Country filed a response on December 6, 2017. See Docket No. 29. Mandako filed a reply on December 20, 2017. See Docket No. 32. For the reasons set forth below, the Court grants Mandako's renewed motion to dismiss.

         I. BACKGROUND

         The background is based on the allegations in North Country's amended complaint, which the Court takes as true for purposes of deciding this motion to dismiss. See Knapp v. Hanson, 183 F.3d 786, 788 (8th Cir. 1999). North Country is a North Dakota corporation with its principal place of business in West Fargo, North Dakota. See Docket No. 7, p. 1. Mandako Agri Marketing (2010) Ltd. and Mandako International, Inc. are corporations organized under the laws of Manitoba, Canada, with their principal place of business in Plum Coulee, Manitoba, Canada. Id.

         Mandako manufactures and sells agricultural equipment, including land rollers and vertical tillers. See Docket No. 7-1. Mandako sells its products in the United States through a dealership network spanning a number of states. See Docket No. 7, p. 2. North Country began marketing Mandako products in the United States in 2004. Id. In exchange for its marketing services, the parties orally agreed North Country would receive a 9% commission on its sales of Mandako products. See Docket No. 7, p. 3. The parties also agreed North Country would be Mandako's exclusive sales representative for land rollers in the United States and the exclusive sales representative for all other Mandako products in the states of North Dakota, South Dakota, Minnesota, Iowa, Nebraska, and Montana. Id. Along with its sales and marketing activities, North Country also stored and sold replacement parts for Mandako products. See Docket No. 5. North Country received a 9% commission on non-warranty Mandako parts sales. Id. To accommodate storing the parts, North Country increased the size of its headquarters. Id.

         The parties entered into a written Sales Representative's Agreement (the “2004 Agreement”) on July 8, 2004. See Docket No. 7, p. 6. The 2004 Agreement mirrored the terms of the prior oral agreement. North Country would be the exclusive land roller sales representative in the United States and the exclusive dealer for other Mandako products in the states of North Dakota, South Dakota, Minnesota, Iowa, Nebraska, and Montana. Id. At the time of the 2004 Agreement, North Country was Mandako's only sales representative in the United States. Id. Mandako encouraged North Country to expand its sales territories into other states, and Mandako did so “at great expense in time, labor and money.” Id. Due to this effort, North Country began “borrowing heavily to cover expenses.” See Docket No. 7, p. 7.

         In July of 2014, the parties signed a new sales agreement. This began what North Country describes as “a pattern of threatening termination of Sales Representative Agreements with North Country and forcing North Country to enter into new agreements with reduced territories.” See Docket No. 7, p. 10. The parties signed subsequent sales agreements in 2015 and 2016. See Docket No. 7, pp. 9-10. The 2016 Sales Representative's Agreement (“2016 Agreement”) limited North Country's exclusive representation to the states of North Dakota, South Dakota, Minnesota, Iowa, and Wisconsin. See Docket No. 24-1, p. 3. It also contained the following forum and choice of law provision:

This Agreement shall be governed by and shall be construed in accordance with the laws of Manitoba. Proper legal venue for all matters related to this Agreements is agreed as the closest to Winnipeg, Manitoba.

See Docket No. 24-1, p. 6. It also contained the following integration provision:

This Agreement constitutes the entire agreement between the parties pertaining to its subject matter and it supersedes all prior contemporaneous agreements, representations, and understandings of the parties. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by all parties.

Id.

         In September of 2017, North Country brought suit against Mandako Agri Marketing (2010) Ltd. in North Dakota state court. See Docket No. 1-3. The complaint contained a panoply of claims, including wrongful termination of various agreements, breach of various contracts, unjust enrichment, and wrongful interference with business. See Docket No. 10, pp. 9-21. In an attempt to follow North Dakota's service of process laws, North Country filed the state action summons and complaint with the North Dakota Secretary of State. See Docket No. 1-4. On September 15, 2017, the Secretary of State sent the summons and complaint, along with an Admission of Service, via registered mail, to Mandako Agri Marketing (2010) Ltd. See Docket No. 6-1.

         Mandako removed the state lawsuit to this Court on October 6, 2017. See Docket No. 1. On the same date, Mandako filed suit in Winnipeg, Manitoba, Canada. See Docket No. 5-1. Mandako's Canadian action brought claims for, among others, breach of contract, return of equipment, and misappropriation of funds. See Docket No. 5-1, p. 5. On October 12, 2010, Mandako filed a motion to dismiss the present case arguing service of process was insufficient and, under the choice of forum provision contained in the 2016 Agreement, the proper forum is in Winnipeg, Canada. See Docket Nos. 4 and 5. On October 27, 2017, North Country amended its complaint. See Docket No. 7. The amended complaint alleges an oral North Dakota forum selection agreement exists between the parties pursuant to a joint venture. See Docket No. 7, p. 22. It also added Mandako International, Inc. as a party. See Docket No. 7, p. 1. The amended complaint and a summons were personally served on a Mandako purchasing manager in Manitoba, Canada on November 22, 2017. See Docket Nos. 34 and 35. On the same date, Mandako renewed its motion to dismiss alleging the same deficiencies asserted in its initial motion. See Docket Nos. 22 and 23.

         III. LEG ...


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