United States District Court, W.D. Virginia, Charlottesville Division
Glen E. Conrad Senior United States District Judge
case is presently before the court on the defendants'
motion for partial judgment on the pleadings, partial summary
judgment, or, in the alternative, to compel arbitration as to
Count I of the plaintiffs complaint. For the following
reasons, the court concludes that Count I must be arbitrated.
Accordingly, the court will grant the defendants' motion
to compel arbitration and deny without prejudice its motion
for partial judgment on the pleadings or for partial summary
judgment with respect to that count.
Innotec LLC ("Innotec") is a Colorado limited
liability company based in Lafayette, Colorado that
manufactures and supplies electrical and mechanical
components. Allen Ting, a Colorado resident, is the managing
member of Innotec. Defendant Visiontech Sales, Inc.
("Visiontech") is a Virginia corporation based in
Troy, Virginia that purchases electrical and mechanical
components. The founder, chief executive officer, and
owner of Visiontech is Richard Perrault, a Florida resident.
Perrault is also the owner of Visiontech Sales Group Hong
Kong, Ltd. ("VSG HK"), a related entity based in
Innotec's Complaint and the Agreement on which Count
I is Based
February 1, 2017, Innotec filed the instant action against
Visiontech, VSG HK, and Perrault, seeking to obtain payment
for products ordered from Innotec. The complaint contains
five counts: (1) "Breach of Contract by Visiontech - For
the sale of goods pursuant to the Exclusivity
Agreement"; (2) "Breach of Contract by Visiontech -
Unpaid invoices for the sale of goods and open purchase
orders"; (3) "Unjust Enrichment against
Visiontech"; (4) "Breach of Contract by VSG
HK"; and (4) "Personal Liability against Owners of
Visiontech and VSG HK." Compl. 8-12, Docket No. 1.
first count is the subject of the instant motion. In Count I,
Innotec alleges that Visiontech breached the terms of an
Exclusivity Agreement by failing to pay two invoices issued
by Innotec for goods sold under the agreement:
In the Exclusivity Agreement, Visiontech, as
"Buyer," and Innotec, as "Seller," agreed
to enter into an exclusive agreement for the purchase of all
Vivoplay Charge Adapters .... The terms of such purchases are
to be in accordance with the Seller's quotation dated
March 28, 2013. Payment is required by wire or by check to
the order of Innotec as further set forth therein. Should the
Buyer fail to pay for the goods when due, the Seller has the
option to treat such failure as a material breach of the
Exclusivity Agreement, and seek legal remedies.
The Exclusivity Agreement also provides that in the event of
a dispute related to the agreement, the unsuccessful party
shall pay to the successful party, in additional to all sums
that either party may be called on to pay, a reasonable sum
for the successful party's attorney fees....
In reliance on the Exclusivity Agreement, Visiontech made two
orders of Vivoplay Charger Adapters from Innotec. Innotec
filled such orders, and delivered such goods to Visiontech,
and they were accepted by Visiontech without protest and are
conforming in all material respects. Innotec has in turn
delivered two invoices for payment....
Notwithstanding the above facts and obligations, Visiontech
has failed to make payment of the invoices, and is therefore
in breach of contract, including the terms of the Exclusivity
Id. at ¶¶ 14-17. Based on the foregoing
allegations, Innotec seeks to recover the amounts due under
the invoices, as well as "its attorneys' fees
incurred herein." Id. at 9.
submitted a copy of the Exclusivity Agreement as an exhibit
to the complaint. The Exclusivity Agreement indicates that it
was "made effective as of March 28, 2013, between
Innotec Energy Systems LLC . . . ('Seller'), and
Visiontech Sales, Inc. . . . ('Buyer')." Compl.
Ex. B at 1, Docket No. 1-2. The agreement later identifies
the "Seller" as "Innotec Advance Energy
Systems LLC" ("Innotec AES"). Id. at
4. Allen Ting, who is identified in the Exclusivity Agreement
as the General Manager of Innotec AES, signed the agreement
on behalf of that entity. Richard Perrault signed the
agreement on behalf of Visiontech.
Exclusivity Agreement includes an arbitration clause on which
the pending motion to compel is based. The clause provides,
in pertinent part, that "[a]ny controversies or disputes
arising out of or relating to this Agreement shall be
resolved by binding arbitration in accordance with the
then-current Commercial Arbitration Rules of the American
Arbitration Association." Id. at 3. The clause
further provides that "[t]he agreement to arbitration
shall be specifically enforceable under the prevailing
arbitration law," that "[t]he decision rendered by
the arbitrator(s) shall be final and binding on the
parties," and that "judgment may be entered in
conformity with the decision in any court having
Subsequent Procedural History
March 16, 2017, the defendants answered Innotec's
complaint, and Visiontech filed a counterclaim against
Innotec and Ting. Although the defendants denied certain
allegations underlying Count I in their answer, they did not
raise arbitration as an affirmative defense to Count I. Nor
did they assert as a defense that Innotec cannot recover
under the Exclusivity Agreement because it was not a party to
that particular contract.
and Ting subsequently moved to dismiss the counterclaim filed
by Visiontech. The parties appeared before the court for a
hearing on the motion on September 21, 2017. During the
hearing, the defendants, through counsel, expressed the
desire to amend the answer, defenses, and counterclaim. By
order entered September 22, 2017, the court referred the
pending motion to dismiss to United States Magistrate Judge
Joel C. Hoppe, pursuant to 28 U.S.C. § 636(b)(1)(B), and
directed the defendants to file any motion to amend the
answer, defenses, and counterclaim within fourteen days. The
defendants moved to amend within the allotted time period.
The proposed amended pleading includes the following