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K.K.D. IMPORTS v. KARL HEINZ DIETRICH GMBH & CO.

February 23, 1999

K.K.D. IMPORTS, INC., PLAINTIFF,
v.
KARL HEINZ DIETRICH GMBH & CO. INTERNATIONAL SPEDITION, DEFENDANT.



The opinion of the court was delivered by: Kaplan, District Judge.

MEMORANDUM OPINION

Plaintiff K.K.D. Imports, Inc. ("KKD") seeks damages of more than $2 million against defendant Karl Heinz Dietrich GmbH & Co. International Spedition ("Dietrich"), a German freight forwarder, on the ground that Dietrich negligently misdirected freight shipments. Jurisdiction is based on diversity of citizenship or, more precisely, alienage. Dietrich moves for summary judgment dismissing the complaint on the ground that the forum selection clauses in the parties' contracts foreclose New York as an appropriate forum or, alternatively, that the claim is barred by the contractual limitations period.

Facts

There are no material issues of fact. KKD began using Dietrich's services in 1995. From December 15, 1995 through September 26, 1997, Dietrich issued to KKD sixty-six invoices, each of which bore the legend "ALL BUSINESS IS UNDERTAKEN SUBJECT TO THE STANDARD TRADING CONDITIONS OF THE GERMAN INSTITUTE OF SHIPPING & FORWARDING AGENTS (ADSP.)." The ADSP standard conditions provide that the legal relationships between the forwarder (Dietrich) and its customer (KKD) are governed by German law. They provide further that:

  "The jurisdiction for all lawsuits which arise out
  of, or in connection with, the relationships created
  by the forwarding order is, for all parties concerned
  (insofar as they are `full traders' [Vollkaufleute],
  the place of that commercial establishment of the
  forwarder to which the order is directed; for claims
  against the forwarder this jurisdiction is the sole
  one.)"*fn1

It is undisputed that both Dietrich and KKD are "full traders" or "Vollkaufleute."*fn2

The shipments at issue here are those with respect to which the forty-second through sixty-sixth invoices were issued.*fn3 KKD's affidavit concedes that it received the first forty-one invoices,*fn4 and its memorandum concedes that it received the invoices for the subject shipments, albeit after the goods were delivered.*fn5 It did not object to the form of any of the sixty-six invoices at any time prior to the institution of this action.*fn6

Discussion

Plaintiff objects to the enforcement of the forum selection clause incorporated by reference in the invoices on several grounds.

The enforceability of forum selection clauses in admiralty, diversity and federal question cases is governed by the doctrine of M/S Bremen v. Zapata Off-Shore Co.*fn8 Under Bremen, inconvenience is insufficient to avoid a forum selection clause absent proof that "trial in the contractual forum will be so gravely difficult and inconvenient that [the party resisting enforcement of the clause] will for all practical purposes be deprived of his day in court."*fn9 While litigation in Germany or elsewhere doubtless would be less convenient for KKD than litigation in New York for many of the reasons it claims (although it has exaggerated the difficulties quite substantially*fn10), KKD has not remotely approached the showing necessary to defeat enforcement of the clause on this ground.

2. KKD next argues that it did not receive the invoices for the shipments here at issue until after the shipments were made and therefore cannot be said to have agreed to the forum selection clauses incorporated therein by reference.*fn11 But the argument is unavailing.

Contracts such as this "may validly incorporate by reference terms from other documents or agreements."*fn12 It is equally well established that "[e]vidence of a prior course of dealing may establish a party's awareness of and consent to intended contractual terms."*fn13 The issue here is whether the undisputed facts, viewed in the light most favorable to KKD, require the conclusion that the parties incorporated the choice of forum clause in their contracts with respect to the shipments at issue here by virtue of their prior course of dealing.

In Pervel Industries, Inc. v. T M Wallcovering, Inc.,*fn14 the Second Circuit affirmed a summary determination by the district court that a fabric distributor was bound by an arbitration clause contained on the reverse side of a printed order confirmation form where the manufacturer had a well established custom of sending such confirmations and the buyer repeatedly had made ...


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