a construction project in Ontario and all witnesses are located in Ontario and beyond the reach of this
Court’s subpoena power, says Tek-Mor, and even if witnesses are willing to appear voluntarily, Tek-
Mor’s costs in producing these witnesses wil! be prohibitive. In contrast, Tek-Mor points out that
it, Eisenmann ard Toyota are all subject to jurisdiction in Ontario.’ Thus, argues Tek-Mor, even in
light of the forum selection clause, a dismissal or stay under the doctrine of forum non conveniens is
warranted.

Tek-Mor’s argument is unpersuasive. It has a “heavy burden of proof” to show that it will
be deprived of its day in court. Quist v. Empire Funding Corp., 1999 WL 982953, at *3 (N.D. Ill.
Oct. 22, 1999). Additional expense alone is not enough to invoke the doctrine of forum non
conveniens under these circumstances. See Paper Express Ltd. v. Pfankuch Maschinen, 972 F.2d
753, 758 (7th Cir. 1992) (rejecting argument that forum selection clause requiring litigation in
Germany is unreasonable even though witnesses and physical evidence located in Illinois). Nor does
the fact that witnesses may be located in a foreign jurisdiction mean that a party will be deprived of
his day in court. See id at 758; Karlberg European Tanspa, Inc. vy. JK-Josef Kratz
Vertrielbsgesellschaft MBH, 618 F. Supp. 344, 348-49 (N.D. Ill. 1985). Flights between certain
cities in Ontario, Canada and Chicago, Ilinois are frequent, of short duration and relatively
inexpensive. Moreover, enforcement of forum selection clauses in international contracts is strongly
favored. See Bonny, 3 F.3d at 159-60. Any burden of litigating in Illinois was foreseeable at the
time Tek-Mor entered into its relationship with Eisenmann on the Toyota project. See AAR Int'l,

Inc., 250 F.3d at 526 (inconvenience of being forced to litigate in particular forum pursuant to forum

* Tek-Mor also argues that the law governing this case is Ontario law, another factor favoring dismissal or stay
of the Illinois action. Eisenmann argues that it is Illinois law that governs the dispute. The issue is not dispositive as
this Court is capable of applying either jurisdiction’s law.

-4-


arguing that it is the initiation of an action in court that matters. In either case, we would reach the
same conclusion. The filing of the lien, the filing of Eisenmann’s complaint and the filing of Tek-
Mort’s statement of claim all occurred within one month, an amount of time which does not render
this factor particularly meaningful. The parties also disagree as to the governing law — Illinois or
Ontario — each citing a different clause from among the many documents that defined their
relationship. However, as we noted in our September 24, 2003 Order, we are capable of applying
Ontario law to the dispute. See [SJ Int’, Inc. v. Borden Ladner Gervais LLP, 316 F.3d 731, 732 (7th
Cir. 2003) (in forum non conveniens case, district judge can, and in some cases should, learn and
apply Canadian law).

Similarly, none of the final three considerations weighs in favor of abstention. While we
have no reason to believe that Eisenmann’s rights with respect to the claims adjudicated by the
Ontario courts are in jeopardy, as previously discussed, we cannot be certain that all of the issues
presented in the two suits will be addressed by the Ontario court. Both suits were initiated at
approximately the same time, and we have no evidence that suggests the Ontario action has
progressed to the point where abstention makes sense. Finally, nothing suggests that Eisenmann
filed its complaint to annoy or harass Tek-Mor. Balancing the factors articulated in Finova, Tek-Mor

has not shown that abstention under the Colorado River doctrine is warranted.

3. General Principles of Comity

Finally, Tek-Mor argues that this action should be dismissed or stayed under general
principles of comity. “The doctrine of comity is based on the principle that recognition by domestic
courts of the decisions of foreign tribunals fosters international recognition and encourages

reciprocity, thereby promoting predictability and stability through satisfaction of mutual expecta-

-9-



is “an extraordinary and narrow exception to the duty of a (d]istrict [cJourt to adjudicate a
controversy properly before it” and may be invoked only in certain exceptional circumstances where
it would “clearly serve an important countervailing interest.” Morton College Bd. of Trustees of
Illinois Community College Dist. No. 527 v. Town of Cicero, 18 F. Supp. 2d 921, 924 (N.D. IH.
1998) (quoting International College of Surgeons v. City of Chicago, 153 F.3d 356, 359 (7th
Cir.1998)). Tek-Mor, as the party requesting abstention, “bears the heavy burden of showing that
abstention is warranted.” Jd. (internal citations omitted). While the Colorado River case concerned
a concurrent state proceeding, the general principles that govern the application of the doctrine also
apply with respect to proceedings in a foreign court. See Finova Capital Corp. v. Ryan Helicopters
U.S.A., Inc., 180 F.3d 896, 898 (7th Cir. 1999).

First, we must determine whether this suit is parallel to the Ontario action. A suit is
“parallel” when substantially the same parties are contemporaneously litigating substantially the
same issues in another forum. Interstate Material Corp. v. City of Chicago, 847 F.2d 1285, 1288
(7th Cir. 1988). The suits need only be parallel and not identical. Morton College Bd. of Trustees
of Illinois Community College Dist. No. 527,18 F. Supp. 2d at 924 (internal citation omitted). “The
question is not whether the suits are formally symmetrical, but whether there is a substantial
likelihood that the foreign litigation will dispose of all claims presented in the federal case.” AAR
Int'l, Inc., 250 F.3d at 518 (internal quotation and citation omitted).

If the two actions are parallel, we then determine whether exceptional circumstances exist
to surrender jurisdiction. In doing so, we consider the following factors:

(1) the identity of the court that first assumed jurisdiction over the property; (2) the

relative inconvenience of the federal forum; (3) the need to avoid piecemeal

litigation; (4) the order in which the respective proceedings were filed; (5) whether
federal or foreign law provides the rule of decision; (6) whether the foreign action

-6-


selection clause was foreseeable at time contract freely entered into); Paper Express, Lid., 972 F.2d
at 758 (additional expense involved in litigation in foreign country was included in consideration
received under contract).

The two district court cases Tek-Mor cites in support ofits argument, Pyrenee, Ltd. v. Wocom
Commodities, Ltd., 984 F. Supp. 1148 (N.D. Ill. 1997) and ISI Int’l, Inc. v. Borden Ladner Gervais,
LLP, 2001 WL 1382572 (N.D. Ill. Nov. 5, 2001), involved the traditional forum non conveniens
analysis and are not on point. In each case there was apparently no forum selection clause which
mandated the application of the stricter standards articulated in Bonny. When enforcing a forum
selection clause freely entered into by sophisticated parties with equal bargaining power, the inquiry
is limited to whether the objecting party would be deprived of his day in court. Roberts & Schaefer
Co. v, Merit Contracting, Inc., 99 F.3d 248, 254 (7th Cir. 1996) (noting differences in evaluating
motion for change of venue and enforcement of forum selection clause). Tek-Mor has not
established that litigating this case in Illinois would be “so gravely difficult and inconvenient that,

for practical purposes, he will be deprived of his day in court.” Quist, 1999 WL 982953, at *3.

2. Abstention Pursuant to the Colorado River Doctrine

In the alternative, Tek-Mor argues that the Colorado River abstention doctrine provides a
basis to stay this action. The doctrine is taken from the Supreme Court’s decision in Colorado River
Water Conservation District v. United States, 424 U.S. 800 (1976). The Colorado River abstention
doctrine permits a district court, under exceptional circumstances, to abstain from hearing a suit and
“await the outcome of parallel proceedings as a matter of wise judicial administration.” See AAR

Int'l, Inc., 250 F.3d at 517 (internal quotations and citations omitted). The doctrine of abstention

-5-


Toyota) was filed pursuant to the Ontario Lien Act and it has not been made clear to us that all of
Eisenmann’s claims against Tek-Mor will be (or even can be) resolved by the Ontario court in an
action filed pursuant to this statute.> Given that any doubt regarding the parallel nature of the foreign
suit should be resolved in favor of exercising jurisdiction, we find that the suits are not parallel. Id.

Even if we were to find that the suits were parallel, Tek-Mor has not demonstrated the
appropriateness of abstention in this case. See Finova, 180 F.3d at 898 (when considering
abstention, “exceptional nature of measure” should be kept in mind), In balancing the eight factors
listed above, we find that none weighs heavily in favor of abstention. The first consideration tips
the balance slightly in favor of abstention. The Ontario action involves a lien on property located
in Ontario. The lien was filed in April 2003; Eisenmann’s complaint was filed in May 2003. But
there is no real conflict because Eisenmann’s complaint does not involve real property and the
Ontario action arises from a contract dispute. None of the other factors supports a decision to
abstain. We found previously that Tek-Mor consented to an Illinois forum and although it has
argued that the property and witnesses are all located in Ontario, these facts do not demand
abstention. Avoiding piecemeal litigation is an important consideration, but we already found that
certain claims filed in the federal action may not be adjudicated by the Ontario court, thus
diminishing any gains in judicial economy derived from abstention. See Schneider Nat'l Carriers,
Inc., 903 F.2d at 1158 (having two active lawsuits instead of one is not enough to justify abstention).

The fourth and fifth considerations do not weigh in favor of abstention. The parties dispute

which action was filed first, Tek-Mor arguing that it is the filing of the lien that matters, Eisenmann

> We note that in its statement of | defence, Eisenmann has challenged the validity of Tek-Mor’s lien under the
Ontario Lien Act. We have no information about the survivability of this litigation in the Ontario courts should the
determination be made that the lien is invalid.

-8-


‘Minute Orit Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge Sit Judge if Of
or Magistrate Judge Paul B. Plunkett ‘than Assigned Judge
CASE NUMBER 03 C4375 DATE 23/2004
CASE EISENMANN CORP. vs. TEK-MOR, INC.
TITLE

{ln the following box (a) indicate the party filing the motion, e.g, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented.]

a)

MOTION:

DOCKET ENTRY:

(i) oO Filed motion of [ use listing in “Motion” box above.]

(2) oO Brief in support of motion due

3) o Answer brief to motion due__. Reply to answer brief due

(4) Oo Ruling/Hearingon___setfor___—_at

(5) Oo Status hearing[held/continued to] [set for/re-set for]on__setfor__—_att

(6) oO Pretrial conference[held/continued to] (set for/re-set for]on ss setfor| at

(7) Oo Trial{set for/re-set for]on__— at _

(8) oO [Bench/Jury trial] [Hearing] held/continued toa

(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
OFRCP4(m) CO Local Rule 41.1. COFRCP41(a)(1) 0 FRCP41(a)(2).

(10) MS [Other docket entry) ENTER MEMORANDUM OPINION AND ORDER: Defendant, Tek-Mor’s

motion to dismiss or stay based on pending foreign litigation is denied.

| [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required.
a number of notices.

Notices mailed by judge’s staff.
Notified counsel by telephone.
Docketing to mail notices.
LY a amtera eq
Mail AO 450 form. : _

Copy to judge/magistrate judge.

courtroom
TBK deputy's ;
initials

Date/time received in
central Clerk's Office

mailing deputy initia



ICI Explosives USA Inc., 817 F. Supp. 1018 (D. Conn. 1993) (breach of contract claim dismissed
in part because it was duplicative and because plaintiff initiated both actions); Suemann vy. Everest
& Jennings, Int'l, 343 F. Supp. 457 (N.D. Ill. 1972) (action stayed in part because same issues
involved in both actions and foreign action was initiated years before domestic action). In this case,
where different claims are involved in different fora and where in each case there are sufficient
jurisdictional contacts, it is appropriate for each forum to proceed with the case before it.’ See
Euromarket Designs, Inc. v. Crate & Barrel Ltd., 96 F. Supp. 2d 824, 845 (N.D. Ill. 2000) (citing
LakerAirways Ltd. v. Sabena Belgian World Airlines, 731 F.2d 909, 926 (D.C. Cir. 1984)). See also
Black & Decker Corp. v. Sanyei America Corp., 650 F. Supp. 406, 408 (N.D. Ill. 1986) (parallel
proceedings should normally be allowed to continue because “[t]he mere filing ofa suit in one forum
does not cut off the pre-existing right of an independent forum to regulate matters subject to its

prescriptive jurisdiction”).
Conclusion
For the reasons set forth above, Tek-Mor’s motion to dismiss or stay based on pending

foreign litigation is denied.

ENTER:

STATES DISTRICT JUDGE

DATED: &@- 7-0 7

7 We found previously that this Court has personal jurisdiction over Tek-Mor. See Eisenmann v. Tek-Mor, No.
03 C4375 (Order dated September 24, 2003 at 5-7).

-1l1-



tions.” Ensign-Bickford Co. v. ICI Explosives USA Inc., 817 F. Supp. 1018, 1031-32 (D. Conn.
1993) (internal quotations and citations omitted). “ The general rule of comity is that the domestic
court should exercise jurisdiction concurrently with the foreign court.” Madanes v. Madanes, 981
F. Supp. 241, 263 (S.D.N.Y. 1997) (citing China Trade & Dev. Corp. v. M.V. Choong Yong, 837
F.2d 33, 36 (2d Cir.1987)). Because a final decision has not been rendered in the Ontario action,
“surrender of jurisdiction is justified only under exceptional circumstances.” Jd. (citing Moses H.
Cone Mem'I Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25-26 (1983)).

Tek-Mor argues that, because the Ontario action and the action before us involve
substantially the same issues, judicial economy would be best served by dismissing this action, or,
in the alternative, issuing a stay. In addition, argues Tek-Mor, if the two suits are allowed to
progress concurrently, there is a risk of contradictory rulings and significant prejudice to Tek-Mor.
Eisenmann emphasizes the extraordinary nature of the relief Tek-Mor secks and argues that Tek-Mor
has not established the exceptional nature of this case to warrant a dismissal or stay. We agree that
Tek-Mor has not made a showing that exceptional circumstances warrant a dismissal or stay
according to the principles of international comity.

Essential to our surrender of jurisdiction is a finding that the parties and issues in both actions
are sufficiently similar. Zd. at 264. As we discussed previously, that is not the case here. The
Ontario action is a lien action brought pursuant to Ontario statute where Tek-Mor essentially argues
a breach of contract claim — it provided labor and materials and has not been paid. Eisenmann’s
complaint alleges a breach of contract claim. But Eisenmann’s complaint also contains allegations
that are not part of the Ontario action and the resolution of those issues involves different factual
findings from those expected to be made in the Ontario action. The cases cited by Tek-Mor in
support of its argument for a dismissal or stay are distinguished by the fact that the claims dismissed

or stayed were identical to claims proceeding in foreign jurisdictions. See Ensign-Bickford Co. v.

6 Forexample, Eisenmann’ s defamation claim against Tek-Mor is not necessarily dependent upon the existence
of, or the performance under, a contract between Eisenmann and Tek-Mor.

-10-



protects the federal plaintiff's rights; (7) the relative progress of the federal and
foreign proceedings; and (8) the vexatious or contrived nature of the federal claim.

Finova, 180 F.3d at 898-99 (citing Colorado River, 424 U.S. at 818). None of the above factors is
dispositive. See Colorado River, 424 U.S. at 818. Tek-Mor has a considerable burden to establish
that abstention is warranted. See Schneider Nat’! Carriers, Inc. v. Carr, 903 F.2d 1154, 1157-58
(7th Cir. 1990) (“balance is heavily weighted in favor of the exercise of federal jurisdiction”).
The parties dispute whether the two cases are parallel. We find that they are not. The parties
to the proceedings before us are Eisenmann and Tek-Mor; the parties in the Ontario action are
Eisenmann, Tek-Mor and Toyota. Toyota’s absence from the proceedings before us does not
preclude a finding that the parties in the two proceedings are substantially the same. See Spizzirri
vy. Mortgage Elec. Registration Sys., Inc.,2003 WL 21640468, at *2 (N.D. Ill. July 11, 2003) (citing
AAR Int'l In.c, 250 F.3d at 518). However, although the two cases stem from the same project and
involve some of the same issues, we cannot say that there is a substantial likelihood that the Ontario
action “will dispose of all claims presented in the federal case.” AAR Int'l Inc., 250 F.3d at 518.
At issue in each suit is the contract that exists between Tek-Mor and Eisenmann and the
parties’ performance thereunder with respect to timeliness of work product, overtime documentation
and payment. But Eisenmann’s suit against Tek-Mor now in federal court involves claims
independent of the foregoing matters and which were not raised by Eisenmann in the statement of
defence it filed in the Ontario court: claims for defamation, fraud in the inducement and interference
with business relations, for example. See AAR Int'l, Inc., 250 F.3d at 520 (claim may be “injected”
into foreign litigation by way of defense or counterclaim). These claims involve different facts from
the facts involved in the Ontario action and as a result, the Ontario court may not reach the issue of

Tek-Mor’s liability to Eisenmann under these claims. Tek-Mor’s suit against Eisenmann (and

-7-


Discussion

1, Forum Non Conveniens

The traditional forum non conveniens analysis, articulated by Kamel v, Hill-Rom Co., 108
F.3d 799, 802 (7th Cir. 1997), is not applicable in this case because the parties have agreed, through
a forum selection clause, that contractual disputes will be resolved in Chicago, Illinois. See
Eisenmann Corp. v. Tek-Mor, Inc., No. 03 C 4375 (Order dated Sept. 24, 2003).? In such a case, a
forum selection clause is “prima facie valid and should be enforced unless enforcement is shown by
the resisting party to be unreasonable under the circumstances.” Bonny v. The Society of Lloyd's,
3 F.3d 156, 159 (7th Cir. 1993) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10
(1972)). Forum selection clauses are “unreasonable under the circumstances” if they were agreed
to as a result of fraud, undue influence or unequal bargaining power, if the selected forum is so
“gravely difficult and inconvenient” as to deprive the complaining party of “its day in court” or if
enforcement of the clause would “contravene a strong public policy of the forum in which the suit
is brought.” Jd. at 160 (internal citation omitted). In order to succeed on its motion the basis of
forum non conveniens, Tek-Mor must demonstrate one of the three factors set forth in Bonny. See
AAR Int'l, Inc. v. Nimelias Enters. S.A., 250 F.3d 510, 526 (7th Cir. 2001). We find that Tek-Mor
has not done so.

Tek-Mor argues that enforcing the forum selection clause will deprive it of its day in court

because it would be inconvenient and costly to defend this action in Illinois. The dispute involves

2 The traditional analysis involves a two-step inquiry, First, the court determines whether an adequate

alternative forum is available to hear the case. If so, the court then balances the public and private interests. /d. at 802-
04.

> We note that Tek-Mor objects to our finding of a valid forum selection clause.

-3-


Construction Lien Act (“Ontario Lien Act”). The lien identified Eisenmann as the contractor and
Toyota as the property owner and was served upon both Eisenmann and Toyota by letter dated May
1, 2003. In accordance with the Ontario Lien Act, Tek-Mor filed a statement of claim against
Eisenmann and Toyota in the Ontario Superior Court of Justice on May 29, 2003. Eisenmann
appeared in the Ontario action and filed a statement of defence.

Before Tek-Mor filed its statement of claim against Eisenmann in Ontario, but after it served
Eisenmann with notice of the lien, Eisenmann filed a complaint against Tek-Mor in Cook County
Circuit Court, alleging breach of contract and other common law violations. In its complaint, filed
May 6, 2003, Eisenmann alleges that Tek-Mor did not complete its work at the Toyota plant in a
timely manner and, as a result of the delay, Eisenmann has suffered injuries and damages. Tek-Mor
removed the action to federal court in June 2003.

Tek-Mor now requests that this Court dismiss or stay this action pending resolution of the
action in Ontario. Tek-Mor advances three theories in support of its motion: (1) the doctrine of
forum non conveniens; (2) the Colorado River abstention doctrine; and (3) general principles of
comity. Eisenmann opposes Tek-Mor’s motion, arguing inter alia that a valid forum selection
clause, which states that, in the event of a contract dispute, “venue is agreed to be in Chicago,

Illinois,” clearly indicates Tek-Mor’s consent to resolve any dispute in an Hlinois forum.


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
EISENMANN CORPORATION, )
)
Plaintiff, )
)
v ) No. 03 C 4375

) Paul E. Plunkett, Senior Judge
TEK-MOR, INC. )
)
Defendant. )

M
wey
’& Teng
~$)
Cbg
MEMORANDUM OPINION AND ORDER

The case is before the Court on Tek-Mor’s motion to dismiss or stay based on pending

foreign litigation. For the reasons set forth below, the motion is denied.

Background!

Plaintiff Eisenmann was hired by Toyota Tsusho Canada, Inc. to engineer and install paint
booths and a plastic parts painting system at a Toyota facility in Ontario, Canada. Following a bid
process, Eisenmann hired Tek-Mor to perform the sheet metal work for the project. Tek-Mor was

: subsequently awarded additional work at the Toyota plant.
As of March 31, 2003, Tek-Mor was owed in excess of $1,000,000.00 by Eisenmann for its

work at the Toyota plant. On April 24, 2003, Tek-Mor filed a lien pursuant to the Ontario

' Only a summary of relevant facts is provided here.

ale