Summary
finding torts committed after contract was terminated allegedly violating Massachusetts statute were not "related to or arising out of" the contract
Summary of this case from NRO Bos. v. Yellowstone Capital LLCOpinion
Civil Action No. 02-11174-RWZ
December 6, 2002.
MEMORANDUM OF DECISION AND ORDER
Plaintiff Bay State Anesthesia, Inc.'s contract to sell medical equipment manufactured by defendant Mallinckrodt, Inc., specified the state and federal courts of Missouri as the exclusive jurisdictions for "any dispute related to or arising out of this Agreement." After the contract was terminated, plaintiff filed the present diversity action, alleging that defendant paid commissions late, in violation of the Massachusetts Sales Representative Act, Mass. Gen. Laws ch. 104 § 8. Plaintiff also alleges that defendant tortiously interfered with plaintiff's advantageous business relationships by making "disparaging and untrue statements" to plaintiff's customers and violated the Massachusetts Consumer Protection Act, Mass. Gen. Laws. ch. 93A, by "acting in disregard of known contractual arrangements" and "making disparaging and untrue remarks concerning Bay State." Defendant has filed a motion to dismiss, arguing that all of plaintiff's causes of action are "related to or arising out of" their contract and, therefore, under the terms of the contract's forum selection clause, must be brought in Missouri. The motion is denied.
The dispositive issue is whether plaintiff's predominant claims are "related to or arising out of" the contract. "If . . . the principal focus of the plaintiff['s] claims is on the breach of contract, the judge should enforce the clause. . . . A plaintiff should not be allowed to vitiate the effect of a forum selection clause simply by alleging peripheral claims that fall outside its apparent scope." Jacobson v. Mailboxes Etc. U.S.A., Inc., 419 Mass. 572, 579, 646 N.E.2d 741, 746 (1995). However, if the "greater focus of the plaintiff['s] claims" falls outside the contract, then this Court should not enforce the forum selection clause. Id.
In the light most favorable to plaintiff, although some of the claims in the present case are partly related to the contract, the bulk of plaintiff's allegations involve conduct that was unrelated to the contract's terms and that occurred after the contract was terminated. Count I alleges that defendant violated a Massachusetts statute that requires the payment of commissions within 14 days of the termination of a contract or within 14 days of redate the commissions come due under the terms of a contract. Mass. Gen. Laws. ch. 104, § 8. Plaintiff alleges that defendant "failed to pay commissions owing and due to Bay State within 14 days of termination and/or within 14 days of the date on which they became due." Count I may well allege tortious conduct that occurred largely after the termination of the contract, when the amount and timing of commissions owed were beyond dispute.
Counts II and III are common-law tort and Chapter 93A claims alleging that defendant interfered with advantageous business relationships and made "disparaging and untrue statements" about plaintiff. Although the Chapter 93A claim alleges in part that defendant "act[ed] in disregard of known contractual arrangements," the claims of trade disparagement and tortious interference with business relationships have little, if anything, to do with the contract's terms, nor did defendant's alleged actions occur when the contract was in effect. Cf. Jacobson, 419 Mass. at 579, 646 N.E.2d at 746 (holding that allegations of tortious conduct that occurred before a contract's formation are not subject to a forum selection clause). These allegations are outside the scope of the forum selection clause.
When the essential elements of tort claims consist of contract violations, those claims are related to the contract and therefore are governed by a contract's forum selection clause. Northeast Data Sys., Inc. v. McDonnell Douglas Computer Sys. Co., 986 F.2d 607, 609-10 (1st Cir. 1993) (finding that certain Chapter 93A claims fell within a contractual choice-of-law provision).
Accordingly, defendant's motion to dismiss is DENIED.