Opinion
2012 CW 2035
01-16-2014
EATEL DIRECTORIES L.L.C. D/B/A SUNSHINE PAGES v. GENESIS 2000, L.L.C. D/B/A GENESIS PUBLISHER SERVICES
Julie M. McCall Richard Zimmerman, Jr. Baton Rouge, Louisiana Counsel for Plaintiff-Appellant Eatel Directories L.L.C. d/b/a Sunshine Pages Matthew Bailey Kimberly R. Louper Baton Rouge, Louisiana Counsel for Defendant-Appellee Genesis 2000, L.L.C. d/b/a Genesis Publisher Services
NOT DESIGNATED FOR PUBLICATION
ON APPEAL FROM THE TWENTY-THIRD JUDICIAL DISTRICT COURT
NUNBER 102893, DIVISION A, PARISH OF ASCENSION
STATE OF LOUISIANA
HONORABLE RALPH TUREAU, JUDGE
Julie M. McCall
Richard Zimmerman, Jr.
Baton Rouge, Louisiana
Counsel for Plaintiff-Appellant
Eatel Directories L.L.C. d/b/a
Sunshine Pages
Matthew Bailey
Kimberly R. Louper
Baton Rouge, Louisiana
Counsel for Defendant-Appellee
Genesis 2000, L.L.C. d/b/a Genesis
Publisher Services
BEFORE: KUHN, PETTIGREW, GUIDRY, McDONALD, and DRAKE, J J.
MCDONALD, J.,
Plaintiff-appellant, Eatel Directories, L.L.C. d/b/a Sunshine Pages (Eatel), appeals a judgment sustaining the exceptions filed by defendant-appellee, Genesis 2000, L.L.C. d/b/a Genesis Publisher Services (Genesis), which raised the objections of lack of subject matter jurisdiction and improper venue. For the following reasons, we convert this matter to an application for supervisory writs, grant the writ, reverse the judgment in part, amend the judgment, and as amended, affirm.
PROCEDURAL AND FACTUAL BACKGROUND
According to the allegations of Eatel's petition, for several years it had a business relationship with Genesis, a foreign limited liability company doing business in the Parish of Ascension, Louisiana. Specifically, Genesis solicited advertising customers for the Sunshine Pages directories published by Eatel and was responsible for billing and collecting accounts receivable from those customers. Eatel alleged that it recently discovered that Genesis had collected certain accounts receivable exceeding $259,000.00 over a two-year period; had not remitted them to Eatel; and had falsely misrepresented to Eatel that these accounts had not been collected, which acts constituted fraud.
In response, Genesis filed exceptions of lack of subject matter jurisdiction and improper venue, asserting that its relationship with Eatel, including the reconciliation of receivables, was governed by a contract between them (the Agreement) that included a forum selection clause providing for exclusive jurisdiction in the courts of Grand Rapids, Michigan, over all disputes "relating" to the Agreement. At the exception hearing, Eatel did not contest the validity of the forum selection clause, but maintained that the instant dispute, involving allegations of fraud, was not within its scope. The trial court sustained Genesis' exceptions on the grounds that Eatel was bound by the forum selection clause since it failed to meet its burden of proving fraud under Vallejo Enterprise, L.L.C. v. Boulder Image, Inc., 05-2649 (La. App. 1 Cir. 11/3/06), 950 So.2d 832. Subsequently, the trial court also denied Eatel's motion for new trial on the basis that its claims were directly related to that provision of the Agreement requiring the reconciliation of receivables and, therefore, was within the scope of the forum selection clause.
APPEALABILITY
Initially, we note that, even when the issue is not raised by the parties, appellate courts have the duty to determine sua sponte whether they have subject matter jurisdiction over the matter before it. Gaten v. Tangipahoa Parish School System, 11-1133 (La. App. 1 Cir. 3/23/12), 91 So.3d 1073, 1074, Except for limited situations provided by law, only final judgments are appealable. La. C.C.P. art. 2083. Under La. C.C.P. art. 1841, a final judgment is one that determines the merits of a controversy in whole or in part. A final judgment must be precise, definite, and certain. See La. C.C.P. art. 1918; Gaten, 91 So.3d at 1074. Further, a final judgment must contain decretal language setting forth the relief that is granted or denied. These determinations should be evident from the language of a judgment without reference to other documents in the record. Id.
In the instant case, the trial court's judgment states in its entirety: "For the written reasons set forth above, Genesis 2000, LLC d/b/a Genesis Publisher Services' Dilatory Exceptions are GRANTED." This judgment is not precise, definite, and certain, nor does it contain proper decretal language. Since it merely states that Genesis' "Dilatory Exceptions" are granted, without delineating those exceptions, it cannot be determined from the judgment alone what exceptions are being sustained. Resort must be made to other documents in the record to ascertain what exceptions were filed by Genesis. To add to the uncertainty of the judgment, the trial court indicated it was sustaining Genesis' "Dilatory Exceptions" even though both the objection of lack of subject matter jurisdiction and improper venue are properly raised through a declinatory exception. See La. C.C.P. art. 925(A)(4) and (6). Additionally, although the judgment sustained Genesis' exceptions, it did not dismiss Eatel's suit or grant any other relief. See La. C.C.P. arts. 932. In the absence of appropriate decretal language, the judgment before us is fatally defective and does not constitute a "final judgment." See Gaten, 91 So.3d at 1074.
Genesis incorrectly labeled its exceptions objecting to subject matter jurisdiction and improper venue as dilatory exceptions.
Without a final judgment, this Court lacks jurisdiction to review this case under our appellate jurisdiction. See Laird v. St. Tammany Parish Safe Harbor, 02-0045 (La. App. 1 Cir. 12/20/02), 836 So.2d 364, 366. However, in the interest of judicial efficiency, we choose to exercise our discretionary supervisory jurisdiction to convert this appeal into a writ application and review the trial court's judgment. See Stelluto v. Stelluto 05-0074 (La. 6/29/05), 914 So.2d 34, 39.
SUBJECT MATTER JURISDICTION
Due to the uncertainty of the judgment, it is not clear whether the trial court sustained the exception of lack of subject matter jurisdiction, although it seems legally inconsistent for the court to have ruled on the exception of improper venue if it concluded no subject matter jurisdiction existed. Regardless, to the extent that the judgment may have sustained the exception of lack of subject matter jurisdiction, the trial court erred.
Jurisdiction is a separate and distinct legal concept from venue. Turner v. Leslie, 96-2288 (La. 12/6/96), 684 So.2d 395, 396 (per curiam). A forum selection clause expresses the parties' intent with regard to venue, which means "the parish where an action or proceeding may properly be brought and tried under the rules regulating the subject." La. C.C.P. art. 41. Subject matter jurisdiction, on the other hand, is the "legal power and authority of a court to hear and determine a particular class of actions or proceedings, based upon the object of the demand, the amount in dispute, or the value of the right asserted." La. C.C.P. art. 2; also see La. C.C.P. art. 1. Subject matter jurisdiction is created by the constitution or legislative enactment and cannot be conferred or waived by the parties. See La. Const, art. V; La. C.C.P. arts. 2 and 3; Boudreaux v. State, Department of Transportation and Development, 01-1329 (La. 2/26/02), 815 So.2d 7, 12. Accordingly, subject matter jurisdiction is not affected by the parties' agreement, via a forum selection clause, as to the particular forum where a suit may or shall be brought by an aggrieved party. In other words, venue is not concerned with the power of and authority of a court, but with the parish or county where an action may be brought. Dillon v. Bankers Insurance Company, 09-1121 (La. App. 1 Cir. 2/12/10) (unpublished); Luffey ex rel. Fredericksburg Properties of Texas, LP v. Fredericksburg Properties of Texas, LP, 37,591, 37,592 (La. App. 2 Cir. 12/10/03), 862 So.2d 403, 406. Thus, the forum selection clause had no effect on the trial court's subject matter jurisdiction, and Eatel's exception raising this objection should have been overruled. We will reverse the trial court's judgment in this regard.
FORUM SELECTION CLAUSE
The issue presented by Genesis' exception of improper venue is the scope of the Agreement's forum selection clause, which is a matter of contractual interpretation. The proper interpretation of a contract is a question of law subject to de novo review on appeal. See Montz v. Theard, 01-0768 (La. App. 1 Cir. 2/27/02), 818 So.2d 181, 185. The interpretation of a contract is the determination of the common intent of the parties. La. C.C. art. 2045. When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. La. C.C. art. 2046. Further, the words of a contract must be given their generally prevailing meaning. La. C.C. art. 2047.
The Agreement's forum selection clause provides:
Choice of Law and Jurisdiction. This agreement shall be interpreted under the laws of the State of Michigan. The federal and state courts located in Grand Rapids, Michigan shall have exclusive jurisdiction over all disputes relating to this agreement. (Emphasis added.)
Under its express terms, the Agreement's forum selection clause was applicable only to disputes "relating" to the Agreement between the parties. The term "relating" is generally defined as "show[ing] or establish[ing] [a] logical or causal connection between." HTTP://www.merriam-webster.com/dictionarv/relating. Thus, to determine whether the dispute herein "relates" to the Agreement, we turn to the provisions of the Agreement and the allegations of Eatel's petition to see if there is a "logical or causal connection between" the parties' dispute and the Agreement.
Under the Agreement, Genesis' primary responsibility to Eatel was to coordinate, promote, and solicit national advertisers for placement of national advertising in Eatel's Sunshine Pages. Further, Genesis was also required to provide related support services to Eatel, including the processing and billing of orders, and the collection of accounts. Specifically, under Sections 3.4 and 3.5 of the Agreement, Genesis was obligated to "reconcile with [Eatel] on a monthly basis or as receivables come in" and to "provide reasonable assistance in collecting receivables from" advertisers.
Sections 3.4 and 3.5 of the Agreement provided, in pertinent part:
Section 3.4 Reconciliation of receivables. Genesis will reconcile with [Eatel] on a monthly basis or as receivables come in. Genesis will offset outstanding balances owed by [Eatel] to Genesis against receivables as they are passed through.
Section 3.5 Receivables. Genesis will provide reasonable assistance in collecting receivables from the [advertisers] although Genesis is not responsible for any invoices or receivables that are unpaid by the [advertisers]. ...
In its petition, Eatel alleges that Genesis collected a number of accounts receivable on Eatel's behalf, and that as to an amount exceeding $259,000.00, Genesis falsely represented to Eatel that it had not collected these amounts. According to Eatel's petition, Genesis intentionally committed this willful misrepresentation to cause losses to Eatel and that such constituted fraud.
In denying Eatel's motion for new trial, the trial court concluded that Eatel's claims were within the scope of the Agreement's forum selection clause because they were directly related to that provisions of the Agreement dealing with the collection of receivables. Guided by the codal guidelines for the interpretation of contracts set forth in La. C.C. arts. 2045, 2046, and 2047, we agree with the trial court's interpretation.
Eatel's complaint against Genesis concerns Genesis' failure to remit a number of accounts receivable to Eatel. The source of Genesis' obligation to remit receivables to Eatel directly derives from its obligation under Section 3.4 of the Agreement to reconcile with Eatel on a regular basis, as well as from its obligation under Section 3.5 to provide reasonable assistance in collecting receivables. Thus, because the Agreement is the direct source of Genesis' obligation to reconcile and assist in the collection of receivables, and because the "dispute" between the parties directly arises from Genesis' alleged failure to comply with its obligation to reconcile and assist in the collection of receivables, it is clear that there is a "logical and causal connection between" the parties' dispute and the Agreement. Accordingly, the parties' dispute "relates" to the Agreement and falls within the scope of the forum selection clause; the forum selection clause dictates that resolution of the dispute lies within the exclusive jurisdiction of the courts of Grand Rapids, Michigan; and, the trial court correctly granted Genesis' exception of improper venue.
In its original reasons for granting summary judgment, the trial court stated: "Following the First Circuit's ruling in Vallejo, this Court finds that Eatel failed to meet its burden of proof of fraud vitiating either the forum selection clause or the entire contract." The Vallejo case dealt with the validity of the agreement containing a forum selection clause, not the scope of the forum selection clause itself, which is what is at issue herein. However, we need not decide if this difference means the trial court erred in applying Vallejo herein, because we affirm its judgment on the alternative basis that Eatel's claims against Genesis are clearly "related" to the Agreement under the forum selection clause; and, this basis for affirming the judgment requires no proof of fraud.
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Although we conclude the trial court correctly granted Genesis' exception of improper venue, as we earlier noted, the judgment does not expressly dismiss Eatel's suit or grant any other relief. This court has a statutory mandate to render judgment "which is just, legal, and proper upon the record." See La. C.C.P. art. 2164. Generally, in the case of objections to venue, dismissal is appropriate only in those cases where a transfer to the proper court would not be possible or would not be conducive to the administration of justice. Vallejo, 950 So.2d at 838. Thus, in the interest of justice, we amend the trial court's judgment to provide that Eatel's claims are dismissed without prejudice to its right to seek relief in a court of proper venue. See Vallejo, 950 So.2d at 838-39; also see Rising Resources Control, Inc. v. Kie Commodities and Finance, L.L.C., 2011-1026 (La. App. 1 Cir. 12/21/11), 80 So.3d 1217, 1221, writ denied, 2012-0658 (La. 4/27/12), 86 So.3d 632.
CONCLUSION
For the reasons stated, this appeal is converted to an application for supervisory writs and granted. The trial court's judgment is reversed insofar as it granted Genesis' exception of lack of subject matter jurisdiction; is affirmed insofar as it granted Genesis' exception of improper venue; and is amended to dismiss without prejudice Eatel's claims against Genesis. All costs of this converted application for supervisory writs are to be paid by appellant, Eatel Directories, L.L.C. d/b/a Sunshine Pages.
APPEAL CONVERTED TO WRIT APPLICATION AND GRANTED; JUDGMENT REVERSED IN PART; AMENDED, AND AS AMENDED, AFFIRMED.
EATEL DIRECTORIES L.L.C.
D/B/A SUNSHINE PAGES
VERSUS
GENESIS 2000, L.L.C. D/B/A/
GENESIS PUBLISHER SERVICES
NO. 2012 CA 2035
KUHN, J., dissenting in part and agreeing in part:
I agree with the majority's conversion of this appeal to an application for supervisory writs and the reversal of the district court's ruling on the exception of lack of subject matter jurisdiction. However, I disagree that venue was improper in the district court based on the application of the forum-selection clause contained in the parties' agreement.
Given the lack of Louisiana jurisprudence interpreting forum-selection clauses, it is instructive to consider cases dealing with the scope of arbitration agreements since the same rules of contractual interpretation are equally applicable in this case. In interpreting such clauses, the first step is to characterize the clause as either "broad" or "narrow" in scope, based on its language. If the clause is broad, then any dispute whatsoever between the parties falls within the scope of the clause, as long as it is connected with or related to the contract. In contrast, when an arbitration clause is narrowly drawn, the dispute literally must "arise out of the contract" and relate to the parties performance of the contract in order to fall within the scope of the arbitration clause. This Court previously has explained that the main difference between broad and narrow arbitration clauses is that a broad clause considers the facts underlying the dispute and allows application of the arbitration agreement to all disputes between the parties that have a "significant relationship to the contract regardless of the label attached to the dispute." See Snyder v. Belmont Homes, Inc., 04-0445 (La. App. 1st Cir. 2/16/05), 899 So.2d 57, 62, writ denied, 05-1075 (La. 6/17/05), 904 So.2d 699.
An example of a broad clause is one providing that it is applicable to any dispute, controversy or claim "of any kind or nature " that may arise between the parties and that it is the parties' intention that all disputes between them "whether in tort, contract or otherwise" be settled by arbitration. See Snyder, 899 So.2d at 62. Also found to be broad in scope was an arbitration clause providing that it covered "any and all claims, issues or disputes of any nature arising out of this contract in anyway, to include claims under tort law, contract law, statutory law, or common law." See Saavedra v. Dealmaker Developments, LLC, 08-1239 (La. App. 4th Cir. 3/18/09), 8 So.3d 758, 764, writ denied, 09-0875 (La. 6/5/09), 9 So.3d 871. The clause at issue in this case contains no such broad language. Rather, it merely provides that the courts of Grand Rapids, Michigan shall have jurisdiction "over all disputes relating to this agreement."
In A&A Mechanical, Inc. v. Satterfield & Pontikes Construction Group, LLC, 11-0784 (La. App. 4th Cir. 1/11/12), 83 So.3d 363, 369, the Fourth Circuit dealt with an arbitration clause with substantially the same language as the forum-selection clause in this case. Construing such language as being narrow in scope, the Fourth Circuit held that the plaintiff's tort claims, which involved alleged demands for kickbacks and unfair trade practices connected to a construction project, were not "related" to the plaintiff's contract to provide construction services for that project. A&A Mechanical, Inc., 83 So.3d at 369. Thus, it held that the plaintiff's tort claims fell outside the narrow scope of the arbitration clause.
Similarly, based on the language of the instant forum-selection clause, the parties did not contemplate that the clause would be applicable to claims of fraud and conversion. The language of the clause restricting its application to disputes "relating" to the parties' agreement is narrowly drawn. Unlike other cases, this clause does not employ broad language stating it is applicable to all claims of any nature whatsoever whether tort, contract, or otherwise. Compare A&A Mechanical, Inc., 83 So.3d at 369 with Snyder, 899 So.2d at 62. Under its express terms, the forum-selection clause does not apply to all disputes between Eatel and Genesis, but only to those specifically related to the agreement between the parties. Moreover, Eatel does not allege that Genesis negligently performed the services it agreed to provide relative to the collection and reconciliation of receivables. Rather, Eatel alleges that Genesis committed intentional torts of fraud and conversion that did not arise from and were entirely unrelated to the contractual services it was obliged to perform under the Agreement. Accordingly, the forum-selection clause is not applicable to Eatel's claims since those claims do not "relate" to the agreement between the parties in any manner that they contemplated.
For the reasons outlined, I disagree with the majority's broad interpretation of the scope of the forum-selection clause and, therefore, dissent from that portion of the majority opinion affirming the district court judgment sustaining Genesis' declinatory peremptory of improper venue and dismissing plaintiff's claims.