Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


August 17, 2004.

LASALLE BUSINESS CREDIT, L.L.C., a Delaware limited liability company, and LASALLE BANK NATIONAL ASSOCIATION, Plaintiffs,
GCR EURODRAW S.p.A. (f/k/a EURODRAW SRL), a foreign corporation, and ANDRE SODITIC, S.A. (d/b/a ATLAS CAPITAL, S.A.), a foreign corporation, Defendants.

The opinion of the court was delivered by: MARK FILIP, District Judge


Before the Court are various motions of Defendant GCR Eurodraw S.p.A. and Defendant AS Associated Contractors, S.A. (sued herein as Andre Soditic, S.A.). Defendants collectively move to dismiss Plaintiffs' Second Amended Complaint with prejudice in favor of arbitration for lack of subject matter jurisdiction under Fed.R.Civ. P. 12(b)(1), to dismiss for lack of personal jurisdiction under Fed.R. Civ. P. 12(b)(2), and to dismiss for failure to state a claim upon which relief can be granted under Fed.R. Civ. P. 12(b)(6) and 9(b). Defendant GCR Eurodraw S.p.A. also moves to dismiss for insufficient service of process under Fed.R. Civ. P. 12(b)(5). For the reasons stated below, the Court grants Defendants' motion to dismiss for lack of personal jurisdiction and denies the remaining motions as moot.


  The parties in this case are commercial entities that have various connections to locations in the United States and Europe. Plaintiff LaSalle Bank National Association is a national banking association located in Illinois (Second Am. Compl. (D.E. 19) ¶ 2), and Plaintiff LaSalle Business Credit, L.L.C., one of LaSalle's Bank National Association's affiliates, is a Delaware company with offices in Illinois (id. ¶ 1).*fn1 LaSalle Business Credit is in the business of, among other things, issuing letters of credit. (Id.) As explained further below, Plaintiffs (collectively, "LaSalle") do not sue in their own capacities, but rather sue "in the place of, and as the assignees of the rights of" North American Wire, an Ohio corporation and former client of LaSalle. (Id. ¶ 10.)

  Defendant GCR Eurodraw S.p.A. ("GCR") is an Italian corporation that constructs machines for manufacturing and processing steel wire. (Id. ¶ 4.) Plaintiffs allege that GCR maintains offices in the United States through its agent, GCR-Eurodraw, Inc., which is located in South Carolina. (Id.) Defendant AS Associated Contractors, S.A. ("Associated") is a Swiss financial company that sometimes acts as an intermediary (and did act as GCR's intermediary in this case) in international transactions. (Id. ¶ 5.)

  This suit arises from GCR's agreement to sell wire manufacturing equipment to non-party North American Wire Products ("NAW"), an Ohio company with its principal place of business in Ohio. (Id. ¶ 3.) Specifically, on September 26, 2000, NAW, GCR, Associated, and non-party Confirmec S.p.A., an Italian exporter, entered into a contractual arrangement regarding the sale of machinery to NAW and transportation of the machinery from Italy to Ohio. (Id. ¶ 11; see also Pls.' Resp. to Defs.' Mot. to Dismiss the Second Am. Compl. (D.E. 36), Ex. B ("Agreement") at 1 ¶ 4 (calling for delivery of the machinery in Cleveland, Ohio).) Prior to entering into this contractual arrangement, officers of NAW, the Ohio corporation, and officers of GCR, the Italian supplier, had several face-to-face meetings in Italy, Ohio, and Georgia, to negotiate the terms of the arrangement. (D.E. 19 ¶¶ 17-21.)

  The terms of the arrangement were memorialized as follows. In a document titled "Agreement," GCR agreed to produce machinery in Italy and sell and deliver it to NAW in Ohio. (Id. ¶ 11; Agreement at 1 ¶¶ 2-4.) Pursuant to the Agreement, GCR was to manufacture and deliver the machinery to NAW in Ohio "[s]ubject to the terms and conditions set out in contract no. ED-019/00 R1." (Agreement at 1 ¶ 2.) Contract No. ED-019/00 R1 appears to be a separate document labeled "Order Confirmation K. N° ED-019/00 R1," which describes in detail the machinery to be sold, as well as other aspects of the sale, sometimes duplicating or nearly duplicating provisions of the Agreement. (D.E. 36, Ex. A ("Order Confirmation").)

  The Agreement contained an arbitration clause, calling for arbitration in Geneva, Switzerland (Agreement ¶ 10.) The Agreement provided that all disputes "which may arise between the parties hereto, out of or in relation to or in connection with this Agreement or the breach thereof shall be finally settled by arbitration conducted in accordance with the rules of the International Chamber of Commerce. . . . Such arbitration shall take place in Geneva. . . . The arbitrators shall apply the laws of Switzerland, as to substantive questions." (Id.) The Order Confirmation did not contain an arbitration clause or address the subject of arbitration.

  As part of the transaction, NAW obtained a letter of credit from LaSalle Bank, which guaranteed 85% of the purchase price. (D.E. 19 ¶¶ 2, 12.) In this regard, the Agreement called for eighty-five percent of NAW's total payment to GCR to be deferred and guaranteed by a "Stand-By Letter of Credit . . . issued by LaSalle Bank NA and advised to ABN-Amro Bank N.V., Monaco" ("ABN-Amro" or "ABN-Amro Monaco") (Agreement ¶ 7), in favor of Associated as GCR's intermediary (D.E. 19 ¶ 2). LaSalle issued the letter of credit on March 8, 2001. (D.E. 19 ¶ 15.) The letter of credit named NAW as applicant and allowed Associated to draw on the letter through presentment of a certificate to LaSalle stating that the amount drawn was equal to the value of machinery shipped by GCR and due from NAW under a purchase order. (Id., Ex. C ("Letter of Credit") at 1.) The parties revised the Letter of Credit on April 10, 2001 (before any draws were made on it), substituting the Order Confirmation for the purchase order and allowing ABN-Amro Monaco to "ADD THEIR CONFIRMATION." (Id., Ex. D at 1.) As a consequence, the parties added ABM-Amro Monaco as a confirming bank, which required ABM-Amro Monaco to pay Associated upon presentation by Associated of appropriate documents to ABM-Amro in Monaco, and removed ABM-Amro Monaco from its status as merely an advising bank, as was originally called for in the Agreement. (Agreement ¶ 7.)*fn2

  Plaintiffs allege (again, suing in place of and as assignees of the claims of NAW (D.E. 19 ¶ 10)) that GCR, among other things, lied about its production and delivery capacity to induce NAW to purchase the machinery (id. ¶¶ 26-27). NAW allegedly told GCR during negotiations in Italy, Ohio, and Georgia (and never in Illinois) that delivery of the machinery according to NAW's timetable and specifications was "essential to [NAW's] willingness to enter into the Agreement." (Id. ¶ 18.) Plaintiffs claim that although GCR was planning to relocate its production facilities within Italy (id. ¶ 22) — which GCR knew would leave it without the production capacity to meet either of NAW's requirements (id. ¶ 27) — GCR did not tell NAW about the relocation and assured NAW that it could meet NAW's specifications (id. ¶¶ 19, 21, 23). Plaintiffs further claim that, without the proper production capacity, GCR did not, and could not, perform the contract. Indeed, according to Plaintiffs' allegations, most of the machinery NAW purchased was never delivered to Ohio or installed as promised. (Id. ¶ 24.) And, according to Plaintiffs' allegations, what machinery did arrive in Ohio came late and was so defective as to be "inoperable." (Id.)

  Plaintiffs allege that although GCR and Associated both knew that GCR had not performed in accordance with the Agreement and Order Confirmation (id. ¶ 43), Associated, on behalf of itself and GCR, presented five documents for payment to ABN-Amro in Monaco pursuant to the credit arrangement, each of which falsely certified that GCR had performed a portion of its obligations "in accordance with all of the terms and conditions of" the Order Confirmation (id. ¶ 25). Defendants allegedly drew $2,072,186.14 in this fashion over a period of five months (id.), and the entire transaction allegedly harmed NAW's business in the amount of some $8 million beyond the $2.6 million paid on the contract (id. ¶ 30), leaving NAW unable to repay its obligations to LaSalle under the Letter of Credit and its loan documents with LaSalle (id. ¶ 10).

  NAW assigned its claims against the Defendants to Plaintiffs. (Id.) In Count I, Plaintiffs sue GCR for fraudulent inducement. Plaintiffs claim that GCR falsely promised that it could manufacture and deliver certain machinery to NAW in Ohio when GCR allegedly knew that it could not meet the promised schedule; in doing so, Count I alleges, GCR fraudulently induced NAW to enter into the Agreement, to enter into other commercial agreements with potential customers, to enter into the Letter of Credit, and to spend money remodeling NAW's Ohio production facilities. (Id. ¶¶ 26-31.) Plaintiffs seek compensatory damages in excess of $10.6 million, as well as punitive damages. (Id. ¶¶ 30-31.)

  In Count II, Plaintiffs are suing GCR for promissory fraud, and this count is substantially similar to Count I. (Id. ¶¶ 32-41.) It also is based on alleged misrepresentations made to NAW in Georgia and Italy. (Id. ¶¶ 32-35.) Count II seeks $2.6 million in damages for the purchase price under the Agreement, and more than $8 million for "lost opportunities, sales, profits, reputation and goodwill" for NAW and for "expenses associated with preparing and modifying" NAW's (id. ¶ 40) facilities in Ohio, and punitive damages (id. ¶ 41).

  In Count III, Plaintiffs sue both GCR and Associated for fraudulent misrepresentation in drawing on the Letter of Credit. (Id. ¶¶ 42-46.) More specifically, Plaintiffs allege that Defendants made false statements of material fact to ABN-Amro in Monaco when they represented that "GCR had performed in accordance with [the] Agreement and Confirmation No. ED-019/00/R1." (Id. ¶ 43.) Plaintiffs allege that as a result of Defendants' wrongful conduct, "North American Wire incurred damages in ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.