Opinion
CASE NO. 3:11-CV-146-WKW [WO].
May 10, 2011
MEMORANDUM OPINION AND ORDER
Plaintiff Thomas M. Hayley filed a Complaint (Doc. # 1, Attach. 3) against Trius Energy, LLC ("Trius") in the Circuit Court of Lee County, Alabama. The Complaint brings state-law causes of action for breach of contract, fraud, and unjust enrichment, arising out of an agreement wherein Mr. Hayley purchased from Trius a one percent working interest in an oil well in Winkler County, Texas, known as the A.G. Hill Well # 1. According to Plaintiff, Trius's representations about the well's production capabilities were inaccurate (Compl. ¶¶ 6-7), and Plaintiff, through this lawsuit, seeks to force Trius to abide by the alleged contract and repurchase Mr. Hayley's initial investment, plus interest. Trius removed the case to this court (Not. of Removal (Doc. # 1)), pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Currently pending is Plaintiff's fully-briefed Motion to Remand (Doc. # 8) based solely upon a forum selection clause in the contract. The motion is due to be denied.
I. STANDARD OF REVIEW
"Forum selection clauses in contracts are enforceable in federal courts." P S Bus. Machs., Inc. v. Canon USA, Inc., 331 F.3d 804, 807 (11th Cir. 2003) (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)). "The validity [and scope] of a forum selection clause [are] determined under the usual rules governing the enforcement of contracts in general." Id. (citing In re Ricoh Corp., 870 F.2d 570, 573 (11th Cir. 1989)). "Under general contract principles, the plain meaning of a contract's language governs its interpretation." Slater v. Energy Servs. Grp. Int'l, Inc., 634 F.3d 1326, 1330 (11th Cir. 2011) (citing Belize Telecom, Ltd. v. Belize, 528 F.3d 1298, 1307 n. 11 (11th Cir. 2008)). If there is any ambiguity in the application of the clause, "the court will prefer the reasonable interpretation that operates more strongly against the party who drafted the document." Id. (citing Global Satellite Commc'n v. Starmill U.K., 378 F.3d 1269, 1271 (11th Cir. 2004)).II. DISCUSSION
The Eleventh Circuit "characterize[s] forum-selection clauses as either `permissive' or `mandatory.'" Slater, 634 F.3d at 1330 (quoting Global Satellite, 378 F.3d at 1272). "`A permissive clause authorizes jurisdiction in a designated forum but does not prohibit litigation elsewhere[.]'" Id. (quoting Global Satellite, 378 F.3d at 1272). On the other hand, "[a] mandatory clause . . . `dictates an exclusive forum for litigation under the contract.'" Id. (quoting Global Satellite, 378 F.3d at 1272).
The forum selection clause in this case reads as follows:
In the event a dispute arises among the parties both agree that the laws of the State of Alabama shall govern and both parties agree that Venue is proper in Circuit Court of Lee County, Alabama and consent to the personal and subject matter jurisdiction thereof regardless of the nature of the claim and amount of damages.
(Agreement ¶ 8 (Doc. # 8, Ex. A).)
In arguing for remand, Mr. Hayley characterizes the clause as mandatory, stating that he and Trius "specifically contracted to have all disputes [arising] under this Agreement heard in the Circuit Court of Lee County, Alabama. . . ." (Mot. to Remand ¶ 7.) Although the choice-of-law clause is mandatory because the clause states that Alabama law "shall" govern, see Global Satellite, 378 F.3d at 1272 (interpreting "shall" as stating an imperative), the forum selection clause itself is more equivocal. It merely states that "[v]enue is proper in Circuit Court of Lee County, Alabama. . . ." (Agreement ¶ 8.) In deciphering whether this is a permissive or mandatory forum selection clause, it is important to take stock of what easily could have been said, but was not. The clause does not say that venue "shall be" in the Circuit Court of Lee County, Alabama. See Global Satellite, 378 F.3d at 1272 (holding that "[v]enue shall be in Broward County" is a mandatory clause). Nor does the clause say that venue is proper "only" in the Circuit Court of Lee County, Alabama, another possible way of unambiguously stating a mandatory forum selection clause.
Guided by the plain meaning of what actually was reduced to writing, the court finds that the forum selection clause at issue is permissive. Stating that one venue is "proper" does not by its terms exclude every other venue as improper. A plain reading suggests that the parties simply agreed that if a lawsuit was filed in the Circuit Court of Lee County, neither party would contest the court's subject matter or personal jurisdiction, or venue.
Trius's consent to personal and subject matter jurisdiction in the Circuit Court of Lee County "regardless of the nature of the claim and amount of damages" does not amount to an unequivocal waiver of the statutory right of removal to federal court. While reference to the amount of damages may suggest thoughts of removal, it is at best ambiguous language to be construed against the drafter. Slater, 634 F.3d at 1330 (citing Global Satellite, 378 F.3d at 1272). Mr. Hayley does not rebut Trius's assertion that Mr. Hayley drafted the contract, including the forum selection clause contained therein. (Def.'s Resp. ¶ 11 (Doc. # 10).) Thus, even if there exists an ambiguity in the clause as to whether it is permissive or mandatory, or whether the statement about damages contemplates this court's diversity jurisdiction, the court "prefer[s] the reasonable interpretation that operates more strongly against [Mr. Hayley]. . . ." Slater, 634 F.3d at 1330.
Based on the parties involved — an individual in Alabama and a corporate resident of Texas with its principal place of business in Texas (and presumably with few contacts to the state of Alabama based upon the nature of its business) — it would have been advantageous for Mr. Hayley to have Trius contractually agree to waive the defenses of improper venue and lack of personal jurisdiction in the event that Mr. Hayley chose to sue on the contract. And, as the drafter of the contract, this is precisely what Mr. Hayley did. But he did not include language in which Trius unequivocally waived its right of removal to federal court.
There being no other argument for remand, and the court being satisfied of its diversity jurisdiction, Mr. Hayley's motion to remand is due to be denied.
III. CONCLUSION
Based on the foregoing, it is ORDERED that Plaintiff's Motion to Remand (Doc. # 8) is DENIED.
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1365 1368 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 69 S.Ct. 1221 1225-26 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. Gillespie v. United States Steel Corp. 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing Rinaldo v. Corbett 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal : See also 3pro se 4. Effect of a notice of appeal : 4
Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , , (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , , (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. , 486 U.S. 196, 201, , , (1988); , , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) : The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , , , , (1949); , 890 F.2d 371, 376 (11th Cir. 1989); , , , , , (1964). Rev.: 4/04 : The timely filing of a notice of appeal is mandatory and jurisdictional. , , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).