A-dec files legal complaint against Austrian partner
Newberg dental manufacturing company A-dec Inc., the city's largest employer, filed a complaint against one of its partners in U.S. District Court of Oregon late last month. The complaint demands a jury trial involving one of A-dec's foreign business partners, W&H Dentalwerk Bürmoos, based in Austria.
"After nearly three decades of leveraging plaintiff A-dec Inc.'s … customer and dealer relationships across the globe, defendant W&H Dentalwerk Bürmoos … has breached its agreements with A-dec, acted dishonestly and violated A-dec's trust," the complaint read. "A-dec brings this action to: (1) Seek a legal determination of its exclusive distribution rights under the relevant contracts; (2) Obtain an order requiring W&H to continue to performs its obligations in North America; and (3) Recover damages resulting from W&H's breaches of its contractual obligations."
A-dec retained lawyers J. Matthew Donohue, Shannon Armstrong and Kristin Asai for the legal fight, along with the Portland-based law firm Holland & Knight LLP.
W&H and A-dec have worked together for more than two decades, the complaint says, with W&H both shipping products to A-dec and fulfilling purchase orders over the decades. The two companies also have business ties in Australia, not to be confused with W&H's home country of Austria.
"In the North American Agreement, W&H agreed that A-dec shall exclusively market, sell and distribute W&H Products in North America," the complaint explained. "In other words, all W&H Products that A-dec distributes in North America are governed by the North American Agreement. In exchange for the right to exclusively distribute W&H Products in North America, A-dec agreed, among other things, to exercise its best efforts to promote W&H Products, pay attention to market conditions, promptly follow up with inquiries from W&H or customers, maintain all necessary permits, and provide information to W&H reasonably necessary to assess the success of W&H Products in the marketplace. A-dec complied with those obligations throughout its relationship with W&H."
Where there is a disconnect is W&H's compliance with the North American Agreement and the two companies' Australian agreement. W&H ran afoul of its obligations beginning in August, the complaint alleges.
"In August 2020, W&H became delinquent on its obligations to timely supply W&H Products to A-dec in both North America and Australia, which has impaired A-dec's ability to satisfy orders to its customers and is creating a backlog for A-dec's pending orders. A-dec inquired about the status of the delays with W&H and received assurances from W&H that the delays were temporary and would be resolved shortly.
"By September 2020, however, W&H remained in default on its obligations. W&H has failed to timely ship approximately $500,000 in W&H Products to A-dec and has not taken any serious efforts to remedy its breaches. The parties have engaged in numerous discussions about their relationship, W&H's failures to timely supply W&H Products to A-dec, and how W&H's conduct is putting A-dec at risk of defaulting on A-dec's obligations to its own customers."
W&H went on to allegedly attempt termination of the Australian agreement between the two companies in mid-September and planned to sell its product directly to its Australian customers, rather than rely on A-dec as a distributor.
The legal dispute is ongoing and it is unclear at this point whether A-dec's complaint will successfully bring a jury trial. The complaint was filed Sept. 28 and the court has yet to rule.
W&H has not yet announced who will represent the company in legal proceedings as A-dec continues pursuing legal recourse and seeks "an order confirming (that) the Common Agreement is a valid and enforceable contract," among other demands.
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