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RANDOLPH ENGG. CO. v. FREDENHAGEN KOMMANDIT-GESELL

September 28, 1979

RANDOLPH ENGINEERING COMPANY, a corporation, Plaintiff,
v.
FREDENHAGEN KOMMANDIT-GESELLSCHAFT, Defendant.



The opinion of the court was delivered by: COHILL

MEMORANDUM ORDER

Randolph Engineering Company ("Randolph") brought a diversity action in the Western District of Pennsylvania against Fredenhagen Kommandit-Gesellschaft ("Fredenhagen") for damages allegedly arising from Fredenhagen's breach of a contract entered into by the two parties in May, 1977. The contract involved the construction of a conveyor paint line at a Volkswagen assembly plant located in the Western District of Pennsylvania. In early 1977, Volkswagen Manufacturing of America ("VWMOA"), then a Pennsylvania corporation, selected Conveyor Engineering Company, Inc. ("Conveyor") of Michigan as the prime contractor for the installation of material handling equipment at the assembly plant. VWMOA has since merged with Volkswagen of America, Inc., the latter having its headquarters in Michigan. Conveyor subsequently subcontracted with Fredenhagen, a West German limited partnership. Fredenhagen, in turn, subcontracted with Randolph, a Pennsylvania corporation with offices located in the Western District of Pennsylvania, to install equipment supplied by Fredenhagen. The contract entered into by Randolph and Fredenhagen incorporated several provisions of the contract between VWMOA and Conveyor, including Paragraph 25, entitled "Applicable Law." *fn1"

 Randolph filed its complaint against Fredenhagen on August 9, 1978. The defendant responded on November 17, 1978 with a motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b). That motion included challenges based on subject matter jurisdiction, personal jurisdiction, venue and failure to state a claim upon which relief can be granted. The defendant's challenge to venue arose primarily from Paragraph 8 of the Randolph-Fredenhagen contract, which provides: "Place of performance as regards delivery and payment as well as place of jurisdiction for both parties shall be Offenbach on the Main." In a Memorandum Order issued on May 15, 1979, this Court denied the defendant's motion to dismiss. On the issue of venue, we held that the defendant's failure to translate Paragraph 8 into English following a request from Randolph to provide a translation of the purchase order resulted in the exclusion of Paragraph 8 from the operative contract. Furthermore, we found that the parties had intended that the VWMOA-Conveyor provision, rather than Paragraph 8, control the issue of a forum for litigation. Finally, we determined that the VWMOA-Conveyor provision did not establish West Germany as the appropriate forum.

 Fredenhagen filed an answer and a compulsory counterclaim on May 25, 1979. The third defense asserted in the answer resurrected the argument, which this Court had rejected in its Order of May 15, 1979, that Paragraph 8 of the contract required that the plaintiff bring any litigation only in the courts of West Germany. Randolph replied to the counterclaim on June 6, 1979.

 Two days after the plaintiff filed its reply, Fredenhagen made a motion to dismiss on the ground of improper venue, alleging that Paragraph 25 of the VWMOA-Conveyor contract required that Randolph bring its action in Michigan. In the alternative, the defendant moved this Court to transfer the case to the Eastern District of Michigan pursuant to 28 U.S.C. § 1404(a) (1976). Randolph has opposed these motions, and has requested that this Court order the defendant to pay the plaintiff's attorneys' fees for responding to the motions.

 After carefully reviewing the parties' briefs and hearing oral arguments, we will deny the defendant's motion to dismiss, the defendant's motion for transfer, and the plaintiff's motion for an award of attorneys' fees.

 Motion to Dismiss

 The defendant now asserts that the choice of forum provision in the VWMOA-Conveyor contract controls any dispute arising between Randolph and Fredenhagen, and that the provision makes Michigan the proper forum. Although the defendant's present interpretation of Paragraph 25 may have some merit, the Court need not decide that question. The defendant has waived its instant objection to venue by failing to assert the objection in the initial motion to dismiss filed on November 17, 1978. Federal Rule of Civil Procedure 12(h)(1) provides that a defense of improper venue is waived if omitted from a pre-answer motion made pursuant to Federal Rule of Civil Procedure 12(b). This provision enforces Rule 12(g), which requires that a party who makes a pre-answer motion under Rule 12(b) include all defenses and objections then available to him that Rule 12(b) permits to be raised by motion. Thus, "if defendant exercises the option afforded by Rule 12(b) and raises certain defenses and objections by preliminary motion, he is bound by Rule 12(g). . . . The rule generally precludes a second motion based on any Rule 12 defense or objection that defendant could have but neglected to raise in his original motion." 5 C. Wright & A. Miller, Federal Practice and Procedure § 1385, at 838 (1969). The consolidation requirement seeks "to eliminate unnecessary delays at the pleading stage of a case by avoiding the piecemeal consideration of pretrial motions." Rauch v. Day & Night Mfg. Corp., 576 F.2d 697, 701 (6th Cir. 1978) (footnote omitted).

 Fredenhagen made a Rule 12(b) motion on November 17, 1978. Rule 12(h)(1) prohibits it from making a second such motion. The fact that both motions raise a defense based upon improper venue does not deactivate Rule 12(g) and Rule 12(h)(1). The policy concern underlying the consolidation requirement is violated whether the second motion raises a new Rule 12(b) defense or whether it raises a new theory supporting the original Rule 12(b) defense.

 The defendant urges that Rule 12(h)(1) should not preclude its second motion because it did not know, prior to the Court's Order of May 15, 1979, that the Court would void Paragraph 8 of the contract and would find controlling Paragraph 25 of the VWMOA-Conveyor contract. Fredenhagen therefore argues that the Court should not penalize it for failing to allege in its original motion to dismiss the present objection based on Paragraph 25.

 This Court's Order of May 15, 1979 brings into question defendant's present position that it could not have reasonably anticipated that the Court would hold controlling Volkswagen's intention through Paragraph 25. That Order states: "Randolph . . . asserts that the parties had agreed that the forum selected by Volkswagen in the terms and conditions of its orders would be the locus where disputes between Randolph and Fredenhagen would be considered. Fredenhagen appears to agree, but disagrees as to the meaning of the Volkswagen language." The defendant had asserted an interpretation of Paragraph 25 that would make West Germany the appropriate forum. In our Order, we found Fredenhagen's interpretation to be "strained, to say the least."

 When Fredenhagen first argued the issue of venue, it knew that the Court probably would have to interpret Paragraph 25. It also knew that Randolph had urged an interpretation of Paragraph 25 that would make Pennsylvania the appropriate forum. Therefore, the defendant had adequate notice when it first challenged venue that it should assert all interpretations of Paragraph 25 that would render Pennsylvania an inappropriate forum. The defendant should have argued in the alternative, alleging that the contract required the parties to file any actions in the courts of either West Germany or Michigan, but definitely not Pennsylvania. See Fed.R.Civ.P. 8(e)(2). The Federal Rules do not allow a party to delay a case by asserting its arguments seriatim. "Once venue is waived, even by mistake of law, it may not be reasserted. . . . There may be circumstances where, by reason of fraudulent representations or misleading information furnished by a plaintiff, relaxation of the Rule would be justified. Such circumstances are not present here." United Rubber, Cork, Linoleum and Plastic Workers of America, AFL-CIO, Local 102 v. Lee Rubber & Tire Corp., 269 F. Supp. 708, 713-14 (D.N.J.1967), Aff'd, 394 F.2d 362, 364 (3d Cir.), Cert. denied, 393 U.S. 835, 89 S. Ct. 108, 21 L. Ed. 2d 105 (1968).

 The question of whether Randolph's earlier assertions would estop the plaintiff from arguing that Michigan is not the proper forum does not arise because the defendant ...


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