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Graneros Unidos S.A. De C.V., A Foreign Corporation v. the Gsi Group LLC

March 27, 2013

GRANEROS UNIDOS S.A. DE C.V., A FOREIGN CORPORATION, PLAINTIFF,
v.
THE GSI GROUP LLC, GSI GROUP, INC.,
GSI INTERNATIONAL AND GSI, INC., BELIEVED TO BE AN INDIANA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Sue E. Myerscough, U.S. District Judge:

E-FILED Thursday, 28 March, 2013 03:20:00 PM Clerk, U.S. District Court, ILCD

OPINION

This matter is before the Court on the Report and Recommendation (d/e 43) entered by Magistrate Judge Byron G. Cudmore. Defendant, The GSI Group, LLC (GSI), filed its Response and Objection to the Report and Recommendation (Objection) (d/e 47). See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). Plaintiff, Graneros Unidos S.A. de C.V., has responded to GSI's Objection.

In the Report and Recommendation, the Magistrate Judge recommends denying GSI's Motion to Dismiss for Failure to Join Necessary and Indispensable Parties, and in turn, Lack of Subject Matter Jurisdiction (Motion) (d/e 5). This Court reviews de novo any part of the Report and Recommendation that has been properly objected to. 28 U.S.C. § 636(b)(1)(c). Because the Court finds that in equity and good conscious this matter should proceed, the Court overrules the Objections and adopts the Magistrate Judge's Report and Recommendation.

BACKGROUND

GSI has objected to the Magistrate Judge's Report and Recommendation. GSI does not object to any of the facts set forth in the Report and Recommendation. Instead, GSI objects only to the recommendation that this case not be dismissed for Graneros's failure to join an indispensable party.

A. Relevant Facts

As neither party has objected to any of the facts as set forth in the Report and Recommendation, the Court will repeat them verbatim.

This case concerns grain silos and related facilities and equipment (collectively Silos) destroyed by a hurricane in Mexico. The Plaintiff Graneros Unidos S.A. de C.V. (Graneros), a Mexican corporation, bought the Silos from Defendant GSI Group, LLC (GSI). GSI designed and fabricated the Silos in the United States and two other Mexican corporations, Ingenieria de Almancenimientos S.A. de C.V. (Ingenieria), and Luseme Ingenieria S.A. de C.V. (Luseme), constructed the prefabricated Silos on site in Mexico.

In September 2006, a hurricane severely damaged the Silos. In September 2009, Graneros brought a diversity action in the Northern District of Illinois, Case No. 09-5712, against GSI, Ingenieria and Luseme (Northern District Action). Complaint (d/e 1), ¶ 52; Motion, Exhibit A, N.D.Ill. Case No. 09-5712, Plaintiff's First Amended Complaint (Northern District Complaint). The Northern District Court dismissed for improper venue. Graneros then brought this action in March 2010.

Graneros runs a grain storage business. In September 2002, Joel Valenzuela, the General Director of Graneros, traveled to Illinois with his cousin Jesus Valenzuela, to meet with GSI president William Branch and other GSI representatives. Jesus Valenzuela apparently works for Graneros, but the parties do not state his position at the company. Luis Pena and Gerardo Navarro accompanied them on this trip. Pena and Navarro were representatives of Ingenieria and Luseme. Plaintiff's Response to Defendant's Motion to Dismiss for Failure to Join Necessary and Indispensable Parties (d/e 7), Exhibit 1, Declaration of Joel Valenzuela ¶¶ 1-5; Defendant The GSI Group, LLC's Supplemental Brief in Support of its Original Motion to Dismiss for Failure to Join Necessary and Indispensable Parties and in turn Lack of Subject Matter Jurisdiction (d/e 32) (GSI Supplemental Memorandum), attached Deposition of Joel Valenzuela, at 6, 75-77. According to Joel Valenzuela, Pena owns Luseme and Ingenieria. Deposition of Joel Valenzuela, at 79. Joel Valenzuela states that during these meetings in 2002, the GSI executives, "firmly recommended against my preference to purchase domed warehouses, encouraging me, instead to purchase their silos, insisting that the silos were strong enough to handle hurricanes in southern Mexico."

Declaration of Joel Valenzuela ¶ 10.

In October 2003, Graneros contracted with GSI for the purchase of Silos in Obispo, Mexico. In May 2005, Graneros contracted with GSI for enlargement of the facilities in Obispo and for additional Silos in Quila, Mexico. Graneros paid a total of $2,742,000 for the Silos at these locations. Complaint, ¶¶ 12-13. Les Garcia, GSI's sales manager for Latin America, negotiated sale of the Silos directly with Joel Valenzuela. Pena and Navarro were not involved in these negotiations. Joel Valenzuela Deposition, at 16, 87-89.

Graneros signed separate contracts with Ingenieria and Luseme for construction of the Silos on site. Joel Valenzuela understood that Ingenieria and Luseme were the exclusive contractors for GSI. Joel Valenzuela understood that Ingenieria and Luseme personnel performed the construction. Valenzuela stated that GSI sent technicians to supervise the installation of grain dryers included in the purchase of the Silos. Joel Valenzuela Deposition, at 64-65. Graneros made separate payments to GSI and Ingenieria and Luseme. Joel Valenzuela Deposition, at 65-66.

Jesus Valenzuela viewed Ingenieria and Luseme, and Pena and Navarro, to be agents or representatives of GSI. Supplemental Brief Regarding Defendants' Motion to Dismiss for Failure to Join Necessary and Indispensable Parties and, in turn, Lack of Subject Matter Jurisdiction (d/e 41) (Graneros Supplemental Memorandum), Exhibit 3, Deposition Excerpts of Jesus Antonio Valenzuela, at 54. Pena and Navarro were authorized dealers of GSI and wore GSI logos on their shirts. Jesus Valenzuela understood Pena ...


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