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Topcon Agriculture Americas, LLC v. Cote AG Technologies, LLC

United States District Court, W.D. Wisconsin

June 12, 2019

TOPCON AGRICULTURE AMERICAS, LLC, Plaintiff,
v.
COTE AG TECHNOLOGIES, LLC, Defendant.

          OPINION AND ORDER

          JAMES D. PETERSON, District Judge.

         Plaintiff Topcon Agriculture Americas, LLC alleges that defendant Cote Ag Technologies, LLC, breached a contract by refusing to repay a $250, 000 loan and failing to reimburse Topcon for payments it made to a third-party firm. Cote Ag moves to dismiss the case for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Dkt. 10. Its central argument is that it lacks sufficient contacts with Wisconsin to subject it to jurisdiction here. The court will deny Cote Ag's motion.

         BACKGROUND

         The court draws the following facts from the allegations in Topcon's complaint, Dkt. 2, as well as the parties' evidentiary submissions, Dkt. 12 and Dkts. 15-18, which the court may consider in deciding a motion to dismiss on jurisdictional grounds. Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012). At this stage of the case, Topcon need only “make a prima facie showing of jurisdictional facts.” Id. at 672. The court must resolve any factual disputes in favor of the plaintiff. Id.

         Topcon is a Wisconsin limited liability company with a principal place of business in Fort Atkinson, Wisconsin. Its sole member is Topcon Positioning Systems, Inc., a Delaware corporation. It provides “field and farm management solutions to customers in the agricultural industry.” Dkt. 2, ¶ 6.

         Cote Ag is an Iowa limited liability company with its principal place of business in West Des Moines, Iowa. Its members are citizens of Iowa, Nebraska, and Minnesota. Cote Ag is an engineering, design, and development company that focuses on farming equipment.

         In August of 2016, Mike Gomes, a Topcon executive, traveled to Iowa for an agricultural trade show to exhibit Topcon's technologies at a trade booth. Jeff Hallgren, Cote Ag's president and CEO, approached Topcon's booth and talked to Gomes about technology that Cote Ag was developing. A few weeks later, Gomes visited Cote Ag's facilities in West Des Moines at Hallgren's invitation. During that visit, Gomes viewed a demonstration of Cote Ag's technology, and he and Hallgren discussed the possibility of a partnership between the companies in developing a new seed-metering technology. Gomes proceeded to connect Hallgren with additional Topcon executives, some of whom also traveled to Iowa at Hallgren's invitation to see demonstrations of Cote Ag's technology. Hallgren offered Cote Ag's services in developing and licensing the new technology.

         Over the next year, the parties engaged in telephonic and in-person negotiations. All of the in-person negotiating occurred in Iowa, and most of the Topcon representatives who participated in the negotiations were from California, the United Kingdom, Australia, and Italy. But Brian Sorbe, a Wisconsin-based Topcon executive, played a role in the negotiations, albeit a minor one.

         In October 2017, Topcon's California-based lawyer drafted a letter of intent, which committed the parties to exclusive negotiations on agreements to develop and sell a seed-metering technology. See Dkt. 15-1. The letter provided that, as consideration for exclusive negotiations, Topcon would advance two $250, 000 disbursements to Cote Ag. The first $250, 000 was a fee in consideration for Cote Ag's exclusivity, whereas the second $250, 000 was a loan by Topcon to Cote Ag. The letter gave both parties the right to terminate negotiations at their own discretion, but provided that Cote Ag must repay the $250, 000 loan if the parties' negotiations failed to yield definitive agreements to develop and distribute the technology in question. On October 9, 2017, Sorbe executed the letter of intent on behalf of Topcon, and Hallgren executed it on behalf of Cote Ag.

         On October 13, 2017, Topcon wired the initial $250, 000 installment to Cote Ag, which it facilitated from its office in Wisconsin. On October 31, 2017, TopCon wired the second $250, 000 installment, and Cote Ag began work on the seed-metering technology. Topcon also retained a Wisconsin-based product design and engineering firm, i3 Product Development, Inc., to assist Cote Ag with the proof of concept and various engineering and design challenges. The parties agreed that Topcon would pay i3 Development initially, but that Cote Ag would reimburse Topcon for those expenses later. During the development process, engineers from Cote Ag regularly consulted with the development team at ¶ 3 Development. Cote Ag engineers also participated in weekly design review meetings and status updates with representatives from TopCon and i3 Development, which took place over phone or email.

         It became clear that the parties would not be able to develop the definitive agreements by December 31, 2017, the end of the term specified by the letter of intent. The parties extended the exclusive negotiation period through February 28, 2018. See Dkt. 15-2. They later extended the period a second time, through April 30, 2018. As the April 30 deadline approached, Topcon prepared a third amendment to extend the negotiation period, but Cote Ag refused to sign it. As a result, the negotiations would no longer be exclusive after April 30, but they continued nonetheless. On May 9, 2018, Hallgren and other Cote Ag executives visited Topcon's principal offices in Fort Atkinson, Wisconsin. During that visit, Hallgren met with Topcon's president, Kevin Klubertanz, and its CEO, Fabio Isaia. The Cote Ag team brought an updated version of their demo technology and the parties had additional discussions about a development agreement.

         Topcon terminated the parties' negotiations approximately one month later. The letter of intent required Cote Ag to repay Topcon's second $250, 000 loan, but Hallgren refused to do so, asserting that “events before and after the signing of the [letter of intent] supersede the non-binding aspect of [its] terms.” Dkt. 15-3, at 1. Topcon filed this lawsuit a few months later. The court has subject matter jurisdiction over Topcon's claims under 28 U.S.C. § 1332 because there is diversity of citizenship between Topcon and Cote Ag and the amount in controversy is more than $75, 000.

         ANALYSIS

         Cote Ag moves to dismiss the case for lack ...


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