Opinion
A1106339
05-10-2012
KEN/API SUPPLY, Plaintiff, v. PRODIGY CONSTRUCTION and DUSTINE TAMARA BOSCO, Defendants.
DECISION
This case is before the Court following oral argument on Defendants' Motion to Dismiss for lack of personal jurisdiction. For the reasons discussed below, the motion is denied.
STANDARD
When a defendant asserts lack of personal jurisdiction, plaintiff has the burden to establish jurisdiction. Jentzen v. K.M.T. Miniature Golf, Inc., 1994 WL
243955 (Ohio App. 1st Dist.). If no evidentiary hearing is held, Plaintiffs burden is met by a prima facie showing of jurisdiction. Id. The allegations in the pleadings and the evidence must be viewed in the light most favorable to plaintiff.
DISCUSSION
The only issue before the Court is whether the contract between the parties contains a valid forum selection clause. If it does not, Defendant concedes (by not arguing the Court has jurisdiction under the long arm statute or minimum contacts) this Court lacks jurisdiction over Defendants.
The agreement provides:
In the event of a delinquent situation, applicant agrees to pay Ken/API Supply any collection expenses or attorney fees arising as a result of collection activity taken to collect and sums past due or owing Ken/API Supply, by the applicant. It is understood that venue for purpose of collection of any unpaid balance shall lie in Hamilton County, Ohio.
The parties thus provided that venue shall be in Hamilton County, Ohio. The agreement is silent as to jurisdiction. The parties have not cited any case that decides whether an agreement as to venue is also an agreement as to personal jurisdiction. In other words, if a party agrees to venue in a specific place does the party also necessarily agree to jurisdiction? The Court finds that for purposes of a forum selection clause (selecting a forum) the party submits to jurisdiction in that forum even if the word "jurisdiction" is not used. That is the whole point to a forum selection clause - the parties agree to resolve their dispute in a particular forum - here, Hamilton County.
In examining a "floating" forum selection clause in a commercial case, the Supreme Court of Ohio stated in Preferred Capital, Inc. v. Power Engineering Group, Inc., 112 Ohio St.3d 429 (2007):
We begin our analysis by reiterating our previous holding that Vthe requirement that a court have personal jurisdiction over a party is a waivable right and there are a variety of legal arrangements whereby litigants may consent to the personal jurisdiction of a particular court system. Moreover, in the light of present-day commercial realities, it has been stated that a forum selection clause in a commercial contract should control, absent a strong showing that it should be set aside." Kennecorp Mtge. Brokers, Inc. v. Country Club Convalescent Hosp., Inc. (1993), 66 Ohio St.3d 173, 175, |610 N.E.2d 987, citing The Bremen v. Zapata Off-Shore Co. (1972), 407 U.S. 1, 92 S.Q. 1907, 32 L.Ed.2d 513.
In Kennecorp, we adopted a three-pronged test, similar to the test in Bremen to determine the validity of a forum-selection clause: (1) Are both parties to the contract commercial entities? (2) Is there evidence of fraud or overreaching? (3) Would enforcement of the clause be unreasonable and unjust? Kennecorp, 66 Ohio St.3d 173, 610 N.E.2d 987
In Kennecorp, a specific forum. Ohio, was specified in the clause. Here, the facts are slightly different. Rather than a specific named forum, such as Ohio or New Jersey, the clause allows for the forum to change depending on the state in which the headquarters of the entity that holds the interest in the lease payments are located. This type of forum-selection clause has been called a "floating forum clause." While this distinction'is important in the application of the test, we conclude that the rule set forth in Kennecorp still applies. We next apply the test to the facts of this case.
The clause in Preferred Capital read:
This agreement shall be governed by the laws of the State in which Rentor's principal offices are located or, if this Lease is assigned by Rentor, the State in which the assignees' principal offices are located and all legal actions relating to this Lease shall be venued exclusively in a state or federal court located within that State .
While the Court did not discuss the use of "venue" in this clause (as opposed to jurisdiction), the Court treated it as a valid forum selection clause.
In its supplemental briefing, Defendants point out that above the signature line was a statement that the party agrees to jurisdiction and venue as "stated above". "Stated above", of course, uses only the word "venue." again supporting the view that a selection of a forum (venue) relates to jurisdiction as well.
The parties in this case selected a forum - Hamilton County, Ohio. The Court finds that it has jurisdiction under a valid forum selection clause. Thus, Defendants' Motion is denied.