Opinion
01 Civ. 4448 (WK)
January 28, 2002
For Plaintiff: Alan C. Trachtman, Esq., Dealy Trachtman, LLP, New York, New York.
For Defendant: Stanley McDermott III, Esq., Piper Marbury Rudnick Wolfe LLP, New York, New York.
MEMORANDUM ORDER
Plaintiff brings this action stating claims sounding in contract law to federal court on the basis of diversity of citizenship. Currently before us is defendant's motion to transfer this action to the Central District of California or, in the alternative, to dismiss the complaint.
BACKGROUND
Unless stated otherwise, the following facts are taken from the complaint:
In April 1999, plaintiff Gail Mooney-Kelly ("plaintiff"), a professional photographer residing in New Jersey, entered into a contract with defendant Islands Publishing Company ("defendant"), publisher of Island Magazine, a California corporation with offices in both California and New York, agreeing to take photographs on the Isle of Man to be used in an issue of Island Magazine (the "Photo Assignment Contract"). Among other provisions, the Photo Assignment Agreement states that 1 "[defendant] agrees to use its best efforts to return all Photographs to [plaintiff] within 30 days after publication, but [defendant] will not be responsible for damage to or loss of any of the Photographs." (Declaration of William J. Kasch Exh. 1) (hereinafter "Kasch Decl."). The Photo Assignment Agreement further provides:
9. Governing Law and Jurisdiction: This Agreement is being entered into and shall be construed in accordance with the laws of the state of California. The sole jurisdiction for any legal proceedings under this Agreement shall be Santa Barbara California.
(Id.)
In June 1999 plaintiff performed the photo assignment. On July 6, 1999 plaintiff sent 335 photographs of the Isle of Man ("First Job"), along with a memo ("First Job Delivery Memo"), to Albert Chiang, the Art Director at Island Magazine. Liza Williams, a photo researcher at Islands Magazine, signed the First Job Delivery Memo, indicating that she received the delivery. (Kasch Decl. Exh. 5). The First Job Delivery Memo includes provisions stating that the "[commissioning party] assumes insurer's liability for the safe return of all photographs delivered,""[t]he [commissioning party] shall indemnify the [plaintiff] . . . including reasonable counsel fees, arising from the [commissioning party's] use of the photographs," "[i]f original photographic negatives or transparencies are lost or damaged the [commissioning party] shall pay the [plaintiff] $1500.00 per original for each occurrence." and finally "[t]his agreement is made under, and shall be governed by, the laws of the State of New Jersey." (Id.)
On November 9, 1999 Ms. Williams sent an email to plaintiff with a separate assignment requesting photographs to be used in an essay Islands Magazine planned to publish in its April 2000 issue entitled "Ten Great Places For Romance." On November 24, 1999 plaintiff sent 38 original transparencies and one zip disk to Island Magazine ("Second Job"), along with a memo ("Second Job Delivery Mem o), to Liza Williams. The Second Job Delivery Memo states, in part:
The Second Job Delivery Memo was never signed, however defendant does not deny having received it. (Declaration of Alan C. Trachtman Exh. 5)
[Commissioning party] assumes insurer's liability to (a) indemnify [plaintiff] for loss, damage, or misuse of any photograph(s), and (b) to return all photographs prepaid and fully insured, safe and undamaged, by bonded messenger, air freight, or registered mail . . . [Commissioning party] assumes full liability for its principals, employees, agents, affiliates, successors and assigns (including without any limitation messengers and freelance researchers) for any loss, damage, or misuse of photographs.
Except as provided in [12] below any dispute regarding this agreement shall be arbitrated in MORRIS COUNTY, NEW JERSEY under rules of the American Arbitration Association and the laws of the State of NEW JERSEY. Judgment on the arbitration award may be entered in any court having jurisdiction. Any dispute involving $5000 or less may be submitted without arbitration to any court having jurisdiction thereof. [Commissioning party] shall pay all arbitration and court costs, reasonable legal fees, and expenses, and legal interest on any award or judgment in favor of [plaintiff].
(Declaration of Alan C. Trachtman Exh. 5) (hereinafter "Trachtman Decl.").
Paragraph [12] states that the commissioning party consents to federal court jurisdiction for claims brought by plaintiff under the Copyright Act of 1976. However, this provision does not apply here since plaintiff's claims do not pertain to copyright law.
On February 7, 2000, plaintiff sent a letter to defendant inquiring as to the status of the submissions she made for the Second Job. Subsequently she received a telephone call from Ms. Williams telling her that the submissions from both the First and Second Jobs had been sent to her via DHL Airways, Inc ("DHL"). Plaintiff informed defendant that she never in fact received this delivery.
On February 28, 2000 defendant filed a claim on plaintiff's behalf with DHL. This claim states that the cause of the loss or damage is that the "package was dropped off without a signature." (Trachtman Exh. 8). Although defendant claims that it requires the deliveries it sends to be accepted by the recipient, in a fax sent to plaintiff's attorney dated September 28, 2000 DHL states "[p]lease be advised that Islands Publishing Co. did not require a signature for this shipment when delivery was made." (Id. Exh. 13).
On May 24, 2001 plaintiff filed its complaint in the Southern District of New York based on diversity jurisdiction stating claims sounding in breach of contract, indemnity and bailment. Defendant now moves to transfer to the Central District of California, or in the alternative, to dismiss.
DISCUSSION
Defendant states that this case should be transferred based on the mandatory forum selection clause in the Photo Assignment Agreement which says that Santa Barbara, California must be the forum for any legal proceedings construing it. Defendant further argues that while the Photo Assignment Agreement does not contemplate the Second Assignment, and thus the claims pertaining to it are not subject to the same forum selection clause, those claims, alleging damages in the amount of $57,100, are insufficient to sustain diversity jurisdiction, and thus should be transferred with the other claims, or dismissed. Plaintiff argues that her claims are pursuant to the First and Second Job Delivery Memos, rather than the Photo Assignment Agreement, and thus she is not bound by its mandatory forum selection clause. In the alternative she argues that the mandatory forum selection clause is vague and unenforceable.
It seems to us that our inquiry begins and ends with whether the First and Second Job Delivery Memos are enforceable contracts. Since plaintiff states that she does not seek to enforce the provisions of the unsigned Second Job Delivery Memo, (Pl. Opp. Memo. at 15), we will only address the First Job Delivery Memo, signed by Ms. Williams.
It is well settled law in many jurisdictions that in order for an agent to bind a principal to a contract he or she must have authorization, or apparent authority, to do so. Konsuvo v. Netzke (N.J.Super.Ct. Ch. Div. 1966) 91 N.J. Super. 353, 374-75; South Sacramento Drayage Co. v. Campbell Soup Company (Cal.Dist.Ct.App. 1963) 220 Cal.App.2d 851,856-57 ("[t]o hold otherwise would give any agent, not the authority, but the naked power to bind his principal to any contract within the general scope of his duties, however fantastic or detrimental to the principal's interest such contract might 5 be.")
Nothing in plaintiff's papers gives us any basis for finding that Ms. Williams had apparent authority to bind defendant to the terms of the First Job Delivery Memo. The fact that by signing it she could have not only altered the original agreement between plaintiff and defendant, but could have subjected defendant to substantial liability confirms our belief that she did not have such authority. While in most cases a signature may be sufficient to accept the terms of a contract, the signature of an agent alone without the authorization is not enough to bind the principal to those terms.
Since the First Job Delivery Memo is not an enforceable agreement, we find that plaintiff's cause of action must be brought under the Photo Assignment Agreement. This agreement contains a mandatory forum selection clause, stating that the sole jurisdiction for any legal proceedings concerning it be Santa Barbara, California. The fact that the provision does not specify federal or state court does not make it invalid, but rather allows suit to be brought in either court. City of New York v. Pullman Incorporated (S.D.N Y 1979) 477 F. Supp. 438. However, since the forum selection clause can be interpreted as allowing this case to be brought in either federal or state court, we are left without guidance as to which court we should transfer. For this reason, we dismiss, without prejudice, plaintiff's claims related to the Photo Assignment Agreement, causes of action one, two and three, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Licensced Practical Nurses, Technicians Health Care Workers of New York, Inc. v. Ulysses Cruises, Inc. (S.D.N.Y. 2000) 131 F. Supp.2d 393, 40; see Indymac Mortgage Holdings, Inc. v. Reyad (D.Conn. 2001) 167 F. Supp.2d 222, 247-48. While plaintiff's claims relating to the Second Job, causes of action four, five and six, are not governed by the Photo Assignment Agreement and are thus not subject to its forum selection clause, the damages stated for these claims fall short of the jurisdictional amount required by 28 U.S.C. § 1332. These claims are not enough to sustain an action in federal court based on diversity of citizenship and are therefore dismissed.
Defendant makes its request for dismissal under Rule 12(b)(3) of the Federal Rules of Civil Procedure. For the reasons stated by Judge Gerald E. Lynch in Licensced Practical Nurses, Technicians Health Care Workers of New York, Inc. v. Ulysses Cruises, Inc. (S.D.N.Y. 2000) 131 F. Supp.2d 393, in pages 404-06 we dismiss pursuant to 12(b)(6) rather than 12(b)(3).
CONCLUSION
For the above stated reasons, we dismiss this case in its entirety without prejudice.
SO ORDERED.