UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Salform Inc.

v. Civil No. 19-cv-796-LM Opinion No.

Anvil International, LLC

O R D E R

Plaintiff Salform Inc. (”Salform”) brings this action

against defendant Anvil International, LLC (“Anvil”), alleging

Anvil’s failure to make payments due under its contract with

Salform’s predecessor in interest. Salform asserts Anvil’s

liability for breach of contract and for unjust enrichment.

Alleging Salform’s failure to perform its obligations under the

contract, Anvil asserts counterclaims under New Hampshire common

law for breach of warranty, indemnity, and misrepresentation,

and under New Hampshire’s Consumer Protection Act for deceptive

trade practices.

Four motions are now before the court. First, Anvil moves

for judgment on the pleadings as to Salform’s claims against it,

on the sole ground that Salform is not the real plaintiff in

interest. Doc. no. 17. Second, Salform moves for leave to

amend its complaint to add two new causes of action. Doc. no.

18. Third, Anvil moves for leave to file a third-party complaint against Salform’s principal. Doc. no. 27. Fourth and

finally, Anvil moves to strike Salform’s surreply (doc. no. 26)

in support of its opposition to Anvil’s motion for judgment on

the pleadings. Doc. no. 28.

BACKGROUND1

Plaintiff Salform is a Connecticut corporation with its

principal place of business in Connecticut. Salform alleges

that it is “the successor to . . . Salamon Industries,” an

unincorporated business entity owned and operated by Andrew

Salamon (“Salamon”). Doc. no. 1, ¶ 6. Like Salform, Salamon

Industries maintained its principal place of business in

Connecticut. At all material times, Salform and/or Salamon

Industries were in the business of selling machine tools for

metal forming and metal working.

Defendant Anvil is a Delaware corporation with its

principal place of business in New Hampshire. Anvil is the

corporate parent of Beck Manufacturing (“Beck”), a Pennsylvania

corporation which operates a manufacturing plant in Waynesboro,

Pennsylvania.

1 Except as otherwise noted, the recitation that follows is the court’s summary of the parties’s allegations construed in the light most favorable to Salform, in accordance with the legal standard governing motions for judgment on the pleadings, discussed infra. 2 In September 2017, acting on behalf of Salamon Industries,

Salamon visited Beck’s Waynesboro plant for the purpose of

negotiating an agreement. Salamon proposed either to sell a new

metal tapping machine to Beck or to retrofit a tapping machine

that Beck already owned, to permit automation of its functions.

Following initial negotiations, Salamon sent Beck two

alternative proposals, one for a proposed sale transaction and

one for a proposed retrofitting transaction. Under the sale

proposal, Salamon Industries would sell Beck a new metal tapping

machine for a purchase price of $298,000. Under the

retrofitting proposal, Salamon Industries would sell Beck an

8-station indexing table and a pneumatic feeder for $168,134,

and would install those parts on Beck’s existing machine to

automate Beck’s metal tapping process for an additional $124,000

(or a total price of $292,134). Salamon advised Beck that it

would be more prudent to purchase a new machine than to retrofit

an existing machine.

In February 2018, Beck offered to purchase the indexing

table and the pneumatic feeder, without any installation or

retrofitting. Following further negotiations, Salamon offered

to provide technical and installation support to assist Beck in

retrofitting its machine for an additional $15,000. On February

19, 2018, Anvil (as Beck’s corporate parent) sent Salamon

Industries a purchase order (the “Purchase Order”) for the

3 indexing table and pneumatic feeder (for $168,134), as well as

technical and installation support (for an estimated $15,000).

The second page of the Purchase Order contained a lengthy

recital, in fine print, of terms and conditions. Among its

stated terms and conditions, the Purchase Order contained a

provision (the “anti-assignment provision”) prohibiting the

“Seller” from assigning or transferring rights under the

Purchase Order “without written consent of Buyer.” Doc. No. 1-3

at 2. The Purchase Order further provided that it would be

“governed by and construed in accordance with the laws of the

State of New Hampshire (without giving effect to conflict of law

principles).”

It additionally contained a forum selection

provision specifying the United States District Court for the

District of New Hampshire for resolution of disputes between the

contracting parties. Id.2

Salamon Industries sent Beck a formal written

acknowledgment of the Purchase Order (the “Acknowledgment”).

The Acknowledgment expressly stated that Salamon Industries

would provide the goods and services specified in the Purchase

Order by July 9, 2018. Although the parties dispute whether

Salamon Industries agreed to be bound to the terms and

2 In final relevant part, the Purchase Order contained a warranty provision and an indemnity provision, the alleged breach of which forms the basis of two of Anvil’s counterclaims. 4 conditions set forth in Anvil’s Purchase Order, they do appear

to agree that the forms exchanged in February 2018 (or a subset

of them) memorialized a contract (the “February 2018 agreement”)

for the provision of goods and services by Salamon Industries to

Beck. Salamon Industries thereafter invoiced Beck for $91,567,

or 50% of the total price referenced in the Purchase Order.

Anvil paid the invoiced amount.

Salform alleges that, in or around late spring or early

summer of 2018, it “was incorporated” as Salform, Inc. Doc. no.

1, ¶ 20. It is unclear from the parties’ allegations at what

time Anvil or Beck became aware of Salform’s incorporation or of

the distinction between Salform and Salamon Industries. No

party alleges that Anvil or Beck at any time objected to

Salform’s performance of Salamon Industries’s contractual

obligations.

In August 2018, employees of Salform made a site visit to

Beck’s Waynesboro facility to provide the technical and

installation support that Salamon Industries had promised. In

the course of their visit, Salform’s employees determined that

Beck’s existing metal tapping machine had been modified from its

original condition in such a way as to make it unsuitable for

the contemplated retrofitting. Salform advised Beck that due to

these modifications, significant unanticipated additional labor

would need to be performed on Beck’s machine before the

5 retrofitting could be accomplished. Salform further advised

Beck that, even after that additional labor was performed, it

would not be possible to automate the machine’s processes fully.

Beck agreed to permit Salform to perform the additional work and

shipped the machine to Salform’s Connecticut headquarters for

that purpose.

After Beck shipped its machine to Salform’s facility,

Salform repeatedly missed deadlines for completion of the

contemplated work. Ultimately, however, Salform modified Beck’s

machine to permit installation of the indexing table and

pneumatic feeder. Salform also performed additional repairs to

the machine that were unrelated to the contemplated retrofitting

but were necessary to permit the machine to operate

appropriately. The value of the unanticipated work performed on

Beck’s machine, including the repair work, was $20,000.3 Salform

completed the work in December 2018, and returned the machine to

Beck.

Beck completed the retrofitting in January 2019 by

installing the indexing table and pneumatic feeder. The

installation did not result in full automation of the machine’s

3 Anvil’s failure to compensate Salform for this unanticipated work (noted below) is the subject of Salform’s unjust enrichment claim. 6 processes. Beck incurred significant costs in further

unsuccessful efforts to fully automate its machine.

Anvil has not paid either the $91,567 still due and owing

under the February 2018 agreement or the $20,000 for the

additional work performed on Beck’s machine. Salform alleges

breach of contract in the amount of $91,567 and unjust

enrichment in the amount of $20,000. Anvil alleges breach of

warranty, indemnity, misrepresentation, and deceptive trade

practices, and seeks economic damages in an unspecified amount.

DISCUSSION

I. Anvil’s Motion for Judgment on the Pleadings

Anvil argues that it is entitled to judgment on Salform’s

claims on the face of the pleadings because, as a matter of law,

Salform is not the real party in interest. See Fed. R. Civ. P.

17 (“[a]n action must be prosecuted in the name of the real

party in interest”). Anvil asserts that Salform cannot prevail

on its claims because it has pled neither that it was an

original party to the contract with Anvil nor that Salamon

Industries effectively assigned its rights and obligations under

the February 2018 agreement to it. Anvil further argues that,

even if Salform had pled such assignment, the assignment would

be void as a matter of law pursuant to the anti-assignment

provision of the Purchase Order. In response, Salform argues

7 that it is ascertainable on the face of the pleadings that it is

the real plaintiff in interest.4

A. Legal Standard

Motions for judgment on the pleadings are governed by

Federal Rule of Civil Procedure 12(c). Rule 12(c) provides that

“[a]fter the pleadings are closed—but early enough not to delay

trial—a party may move for judgment on the pleadings.” Fed. R.

Civ. P. 12(c). Judgment on the pleadings is proper when the

moving party clearly establishes on the face of the pleadings

that no material issue of fact remains to be resolved and that

it is entitled to judgment as a matter of law. See Beal v.

Missouri Pac. R. R. Corp.,

(1941). In

evaluating a motion for judgment on the pleadings, the court

views the facts presented in the pleadings, and all reasonable

inferences therefrom, in the light most favorable to the party

opposing the motion. See Najas Realty, LLC v. Seekonk Water

Dist.,

(1st Cir. 2016); Feliciano v. State of

R.I.,

(1st Cir. 1998). Moreover, all of the

allegations of the non-moving party are credited as true,

4 As noted, Anvil argues that the parties’ dispute is governed by New Hampshire law, whereas Salform seeks application of Connecticut law. The court need not resolve the conflict for purposes of this order, however, because as the analysis below establishes, the same result would obtain under the law of either jurisdiction. 8 whereas those allegations of the moving party which have been

denied are deemed false. See Villeneuve v. Avon Prod., Inc.,

(1st Cir. 2019). In effect, the standard for

resolving a motion for judgment on the pleadings under Rule

12(c) is identical to that applicable to a motion to dismiss

brought under Federal Civil Procedure Rule 12(b)(6), except that

a Rule 12(c) motion implicates the allegations of all of the

pleadings rather than those of the complaint alone. See Aponte-

Torres v. Univ. Of Puerto Rico,

(1st Cir. 2006).

Pursuant to Federal Civil Procedure Rule 12(d), “[i]f . . .

matters outside the pleadings are presented to and not excluded

by the court,” the court must convert a Rule 12(c) motion to one

for summary judgment under Federal Civil Procedure Rule 56.5

Fed. R. Civ. P. 12(d); see also Feliciano,

.

Under that circumstance, the court must grant all parties

adequate opportunity to conduct discovery and to present

material evidence. See

5 Here, Salform offers evidence in support of its objection to Anvil’s motion, namely Salamon’s declaration. The declaration is attached as an exhibit to Salform’s surreply (doc. no. 26); the surreply and attached declaration are the subject of Anvil’s motion to strike. The court finds that it can resolve the motion for judgment on the pleadings without need to consider Salform’s proffered evidence, and therefore excludes it. Anvil’s motion to strike the surreply and attached exhibit is accordingly denied as moot. 9 B. Analysis

The parties are in agreement that Salform was not an

original party to the February 2018 agreement. However, it does

not follow that Salform can only sue for breach in its own name

if it is Salamon’s assignee. In fact, Salform’s theory is not

that it is Salamon’s assignee but rather that it is the

successor in interest to Salamon Industries’ rights under the

agreement.

Succession and assignment are not synonymous. A corporate

successor in interest takes the place of its predecessor by

operation of law, thereby becoming invested with the

predecessor’s rights and assuming the predecessor’s burdens.

See 15 Fletcher Cyc. Corp. (“Successors” and “succession”)

§ 7203; see also id. at n 1, n 3. Assignment, by contrast, is a

contractual agreement between two parties whereby one party

voluntarily transfers all or some of its rights and/or

obligations to the other in exchange for consideration. See 6A

C.J.S. (Assignments) § 1. Because succession and assignment are

distinct concepts, a provision prohibiting assignment will not

operate to prevent succession, which occurs independently of any

assignment agreement.6 See, e.g., Pratte v. Balatsos,

Any contrary holding would necessarily invite mischief. If an anti-assignment provision could bar succession, then a party to a contract containing such a provision could escape its 10 430, 434-435 (1955) (as a matter of New Hampshire law, a

successor in interest is bound by its predecessor’s contracts in

the absence of assignment); In re Bachand,

, 55

(2012) (as a matter of Connecticut law, succession occurs by

operation of law, without regard to “the act or cooperation” of

the predecessor or successor). Accordingly, it is commonplace

for corporate successors to bring actions in their own name to

enforce the contracts of their predecessors, including in the

absence of any assignment agreement. See, e.g., EnergyNorth

Nat. Gas, Inc. v. Certain Underwriters at Lloyd's,

(2007) (applying New Hampshire law); Celentano v. Oaks

Condo. Ass'n,

, 582 n. 2 (2003) (applying

Connecticut law).

To survive Anvil’s motion, Salform must adequately allege

that it is the successor in interest of Salamon Industries. In

determining whether Salform’s allegations are adequate, the

court looks to the law of the state of Salform’s incorporation.

See, e.g., Chi. Title & Tr. Co. v. 4136 Wilcox Bldg. Corp.,

(1937) (questions of corporate status are

governed by the law of the state in which the entity was

obligations by the simple expedient of reincorporating under a new name.

11 incorporated). Salform was incorporated in Connecticut; thus

Connecticut law governs this question.

As a matter of Connecticut law, when a previously

unincorporated business entity (such as Salamon Industries)

incorporates, and thereafter carries on the operations of the

former unincorporated entity, the new corporation is treated as

the successor to the unincorporated business. See, e.g., Canton

Motorcar Works, Inc. v. DiMartino,

(1986); D.D.J. Elec. Contractors, Inc. v. Nanfito & Sons

Builders, Inc.,

(1984). As a matter of

law, the successor corporation may sue in its own name on a

contract entered into by the unincorporated predecessor.

Here, Salform alleges that it is “the successor” to Salamon

Industries, the unincorporated business entity that originally

contracted with Anvil. Doc. no. 1, ¶ 6. Salform alleges that

after it “was incorporated” as Salform Inc., its employees

continued carrying out Salamon Industries’s obligations under

the February 2018 agreement. Id., ¶ 20. Read in the light most

favorable to Salform, these allegations are adequate to support

the conclusion that Salform is Salamon Industries’s successor in

interest and, therefore, the real plaintiff in interest.

For these reasons, Anvil’s motion for judgment on the

pleadings is denied.

12 II. Salform’s Motion for Leave to Amend

Salform seeks leave to amend its complaint to state a

second claim for breach of contract and a claim under

Connecticut’s Unfair Trade Practices Act for deceptive trade

practices. Anvil objects to Salform’s motion on futility

grounds. Specifically, Anvil argues that amendment would be

futile as to both claims because Salform is not the real

plaintiff in interest, and futile as to the deceptive trade

practices claim because the parties agreed that any dispute

arising out of their contract would be governed by New Hampshire

law.

Anvil’s argument that Salform is not the real party in

interest is unavailing for the reasons stated above. And its

remaining argument—that the proposed statutory claim would not

lie because New Hampshire law governs—is premature. At this

early stage of these proceedings, and in the absence of a

developed evidentiary record, the court cannot find as a matter

of law that Salamon Industries agreed to be bound by the terms

and conditions of Anvil’s Purchase Order, or that the parties’s

dispute is otherwise necessarily governed by New Hampshire law.

For these reasons, Salform’s motion to amend its pleading

is granted. Anvil may raise its choice-of-law arguments again,

with supporting evidence, at a later stage of these proceedings.

13 III. Anvil’s Constructive Motion for Joinder

Anvil seeks leave under Federal Rule of Civil Procedure

14(a) to file a third-party complaint against Salamon containing

the identical claims it has already asserted as counterclaims

against Salform. Anvil’s motion is premised on the same theory

as its motion for judgment on the pleadings, namely that it

entered the February 2018 agreement with Salamon (doing business

as Salamon Industries), and that Salamon lacked authority to

assign his rights and obligations under that agreement to

Salform. Therefore, Anvil argues, its claims lie against

Salamon rather than against Salform.

Anvil has chosen the wrong procedural mechanism for what it

hopes to accomplish. Rule 14(a) provides that “[a] defending

party, as a third-party plaintiff, may cause a summons and

complaint to be served upon a person not a party to the action

who is or may be liable to [it] for all or part of the

plaintiff's claim against [it].” Fed. R. Civ. P. 14(a)

(emphasis supplied). That is, Rule 14(a) governs impleader,

whereby a defending party may implead a non-party who may be

jointly or severally liable to it on the claims against the

party. See Owen Equipment & Erection Co. v. Kroger,

, 368 n. 3 (1978); see also Metro. Life Ins. Co. v. Ditmore,

(1st Cir. 1984). Here, Anvil seeks to bring its

own independent claims against Salamon, not to assert that, if

14 it were found liable on Salform’s claims, Salamon would in turn

be liable to it on those same claims.

The procedural mechanism appropriate to the outcome Anvil

seeks is joinder. Specifically—because Salamon is not a

“required party” who claims an interest in the action or whose

absence would otherwise prevent the court from according

complete relief, see Fed. R. Civ. P. 19(a)(1)—the appropriate

mechanism is permissive joinder of a defendant pursuant to

Federal Civil Rule of Civil Procedure 20(a)(2). The court

therefore construes Anvil’s motion as a Rule 20(a)(2) motion for

permissive joinder.7

A. Legal Standard

Rule 20(a)(2) provides that defendants may permissively be

joined if:

(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and

(B) any question of law or fact common to all defendants will arise in the action.

Fed. R. Civ. P. 20(a)(2).

7 In its reply memorandum, Anvil requests—without analysis of the elements of Rule 20—that its motion be construed alternatively as a motion for joinder. 15 B. Analysis

Both elements required under Rule 20(a)(2) are clearly

present here. Anvil intends to state precisely the same set of

claims against both Salform and Salamon, arising out of

precisely the same set of circumstances. Anvil’s theory is that

its claims lie against Salamon as the originally contracting

party, but in the alternative, in the event Salform succeeded to

Salamon Industries’s obligations under the February 2018

agreement, that they lie against Salform as successor in

interest to Salamon’s unincorporated business entity. Anvil

thus seeks to assert alternative claims arising out of the same

facts and governed by the same law against the two potential

defendants. Joinder is therefore appropriate under Rule

20(a)(2). See, e.g., Arista Records LLC v. Does 1-27,

(D. Me. 2008).

Salform argues that it would nevertheless be futile to

permit Anvil to plead claims against Salamon, because Salamon’s

obligations to Anvil were extinguished when Salform succeeded to

Salamon Industries’s rights and obligations under the February

2018 agreement. Salform further argues that claims against

Salamon are necessarily futile because this court lacks personal

jurisdiction over him. The court disagrees.

First, the court’s disposition of Anvil’s motion for

judgment on the pleadings was made solely on the basis of the

16 parties’s allegations, construed in the light most favorable to

Salform. The court has made no factual findings in this case,

including as to Salform’s status as successor in interest to

Salamon Industries. The possibility has not been foreclosed

that Anvil could establish through evidence that Salamon was at

material times a party to the February 2018 agreement. In

short, Anvil’s proposed claims against Salamon are not futile.

Second, it is not apparent on the face of Anvil’s

allegations that this court would lack personal jurisdiction

over Salamon. Anvil has pled that Salamon agreed to the New

Hampshire forum selection provision contained in the Purchase

Order. It is well established that consent to a forum selection

clause constitutes waiver of the right to challenge personal

jurisdiction in the selected forum. See, e.g., The Bremen v.

Zapata Off-Shore Co.,

(1972). Thus, if the

truth of Anvil’s allegations were established, this court would

likely have personal jurisdiction over Salamon.

For these reasons, Anvil’s constructive motion for joinder

is granted. In the event Salamon wishes to contest personal

jurisdiction in this forum he may do so through either a motion

to dismiss under Federal Rule of Civil Procedure 12(b)(2) or a

motion for summary judgment.

17 CONCLUSION

For the reasons discussed above, Anvil’s motion for

judgment on the pleadings (doc. no. 17) is denied; Salform’s

motion for leave to amend its complaint (doc. no. 18) and

Anvil’s constructive motion for joinder (doc. no. 27) are

granted; and Anvil’s motion to strike (doc. no. 28) is denied as

moot.

SO ORDERED.

__________________________ Landya McCafferty United States District Judge

July 28, 2020

cc: Counsel of Record

18