ROY B. DALTON, Jr., District Judge.
This cause is before the Court on:
Upon consideration, the Court finds that Defendant's motion is due to be denied.
This action arises from a contractual dispute between Upofloor Americas, Inc. (
Upofloor is the North and South American distributor of European commercial floor products manufactured by Upofloor OY, a Finland company (
In 2013, Upofloor Finland and CBCA severed their contractual relationship. (Id. ¶ 8.) Upofloor then entered the United States market directly, and CBCA obtained a new Taiwanese manufacturer for its private label brands, including Ceres Sequoia. (Id.) On October 1, 2013, Upofloor and S2LA entered into an independent contractor agreement, whereby S2LA agreed to use its best efforts to market and sell Upofloor's products in the southern California area (
The following year, Upofloor discovered that S2LA had begun promoting the line of Taiwanese-manufactured Ceres Sequoia flooring produced by Upofloor's competitor, CBCA. (Id. ¶ 15.) Due to S2LA's underperformance in sales during 2014, Upofloor expressed concerns about S2LA's relationship with CBCA; however, S2LA promised Upofloor that its relationship with CBCA would not affect its sales of Upofloor products. (Id. ¶ 16.) Additionally, S2LA reassured Upofloor that it would "promote Upofloor products over and above those of [CBCA]," and that "if Upofloor did not terminate them, S2LA would hit $750,000.00 in sales for 2015." (Id.) Based on S2LA's assurances, Upofloor did not terminate the Agreement. (Id. ¶ 17.) Instead, it agreed to wait for the results of S2LA's performance in 2015. (Id.)
"During approximately the first six months of 2015, S2LA made zero, or almost zero, sales of Upofloor products." (Id. ¶ 18.) At this time, Upofloor also came to learn that S2LA was not using its best efforts to sell and market Upofloor products. (Id.) Rather, S2LA was primarily marketing CBCA products. (Id.) Consequently, in June of 2015, Upofloor approached S2LA about the lack of sales and inquired as to why S2LA had not sold as many products as it had previously promised. (Id. ¶ 19.) In response, S2LA informed Upofloor "that it was meeting with project designers, architects," and properly marketing the Upofloor products in SCA. (Id.) S2LA projected that it would produce about 1.2 million in sales of Upofloor products in 2016 if Upofloor did not terminate the Agreement. (Id.)
Initially, S2LA's sales performance improved. (See id. ¶ 20.) However, virtually all the sales came from "Kaiser projects, which had previously been specified for [CBCA,] a private label product." (Id.) "Upofloor knew . . . that Kaiser had allegedly been experiencing problems with the Taiwanese-manufactured Ceres Sequoia brand, and that sales by S2LA were most likely a result of Kaiser using its own discretion to replace the [CBCA] product and not a direct result of any activity by S2LA." (Id. ¶ 21.) Moreover, as 2015 continued, S2LA's sales remained dismal and fell well below Upofloor's expectations for the SCA. (Id. ¶¶ 22, 23.) (Id.) Indeed, in 2015, S2LA had only sold about $280,000 in products. (Id.) Consequently, on December 1, 2015, Upofloor provided S2LA fourteen (14) days written notice of termination. (Id.)
Once S2LA received Upofloor's notice of termination, it began to claim that it was not under any contract because the Agreement terminated in 2014. (Id.) S2LA also claimed that it was entitled to: (1) several hundred dollars in commissions on future sales based on its previous efforts to market Upofloor products in the SCA; and (2) 2.5% of all U.S. sales made to Kaiser. (Id. ¶¶ 24, 26.) For its part, Upofloor alleges that it paid all commissions due to S2LA for sales made in accordance with the Agreement, and that it never paid S2LA any commission based on a flat percentage of all sales made to Kaiser. (Id. ¶¶ 13, 26.) Upofloor also alleges that it did not obtain sales from Kaiser as a result of any significant efforts on S2LA's part, but rather as the result of the multiple contracts that Upofloor has with Kaiser nationwide (Id. ¶ 28.) Importantly, Upofloor maintains that the Agreement remained in effect until it was terminated in 2015, and that Upofloor does not owe S2LA any compensation for sales that Upofloor did not attain prior to termination of the Agreement. (Id. ¶¶ 13, 27, 29.)
Based on the foregoing facts, Upofloor brought suit against S2LA on February 3, 2016.
The Federal Rules of Civil Procedure sets forth minimum pleading requirements. Rule 8 requires that a complaint consist of simple, concise, and direct allegations and a short and plain statement of the claims. Fed. R. Civ. P. 8(a)(2), (d)(1). When a complaint does not comply with minimum pleading requirements or otherwise "fails to state a claim to relief that is plausible on its face," the defendant may seek dismissal of the complaint under Rule 12(b)(6). Ashcroft v. Iqbal, 556 U.S. 662, 672, 678-79 (2009).
A complaint states a plausible claim if it includes "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 679 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). Courts must resolve a Rule 12(b)(6) motion based solely on the complaint, its attachments, "documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 323 (2007). Further, courts must accept all well-pled factual allegations—but not legal conclusions—in the complaint as true. See id.
S2LA first argues that Upofloor's Complaint should be dismissed because: (1) the Agreement terminated on December 31, 2014; and (2) Upofloor has failed to allege sufficient facts demonstrating that S2LA breached the Agreement. (Doc. 15 at 2-8).
S2LA claims that the Agreement terminated on December 31, 2014. In support of its position, S2LA relies on a letter Upofloor's Vice-President, Jeff Collum, sent to S2LA Representative, Reade Palmer ("
Upofloor contends that Letter should be construed as part of the Agreement because "documents and agreements contemporaneously exchanged by the parties are construed together as part of a single contract." (Doc. 15, p. 4.) In support of its contention, Upofloor cites to Yellow Pages Photos, Inc. v. Ziplocal, LP, 795 F.3d 1255, 1268 (11th Cir. 2015). S2LA also relies on the declaration of Palmer, in which he states that:
(Doc. 15-1 ¶ 10 ("
S2LA is correct that multiple agreements are generally construed together as a single contract when they are "executed by the same parties, at or near the same time and concerning the same transaction or subject matter." Yellow Pages Photos, Inc., 795 F.3d at 1268. However, it is far from clear whether the contracts rule articulated in Braggs and Yellow Pages would even apply to the Letter and Palmer's Declaration ("
Furthermore, it would be improper for the Court to consider S2LA's submissions at this juncture. In considering a motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(6), courts limit their "consideration to the well-pleaded factual allegations, documents central to or referenced in the complaint, and matters judicially noticed." La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004). Neither of the Documents were attached to the pleadings or referenced in the Complaint, and their contents are clearly in dispute. Thus, the Court limits its consideration to the allegations of the Complaint, and the contents of the Agreement, which is central to and referenced throughout the Complaint (Doc. 26-1).
Although the Agreement contains no termination date, it provides each party the right to terminate the Agreement "by providing written notice not less than [fourteen] 14 days prior to the date of termination." (Doc. 26-1 ¶ 4; Doc. 12 ¶ 10.) Based upon the well-pled allegations of the Complaint, the Agreement remained in full force and effect until it was terminated by Upofloor pursuant to its terms in December 2015. (Id. ¶¶ 23, 40.) Accepting these allegations as true, the Court cannot reasonably conclude, as argued by S2LA, that the Agreement terminated in December 2014.
For the foregoing reasons, the Court finds that S2LA's argument is more appropriate for summary judgment. Accordingly S2LA's motion to dismiss on this ground is due to be denied.
S2LA also moves to dismiss Upofloor's claim for breach of contract on the ground that Upofloor "fails to allege how S2LA purportedly breached the Agreement while it was in effect in 2014, and . . . fails to apprise S2LA of the specific manner in which its performance failed." (Doc. 15, p. 15.) The Court disagrees.
To state a claim for breach of contract, a plaintiff must allege that: (1) a valid contract exists; (2) a material breach occurred; and (3) damages resulted. Rollins, Inc. v. Butland, 951 So.2d 860, 876 (Fla. 2d DCA 2006)). The plaintiff need not, however, plead detailed and particular facts to support a claim for breach of contract. Rule 8 sets a very low threshold for determining the sufficiency of facts in the statement of a claim and requires only a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). This standard requires the plaintiff to plead just enough to give the defendant fair notice of "what the plaintiff's claim is and the grounds upon which it rests." Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002).
Here, Upofloor alleges—and S2LA does not dispute—that the Agreement was a valid contract. (Doc. 12, ¶ 9.) Upofloor further alleges that, under the Agreement, S2LA had a duty to use its best efforts to promote and sell Upofloor's products in exchange for a commission on completed sales. (Id. ¶¶ 11-12.) As part of contract, S2LA agreed that a reasonable sales budget for 2014 would be $348,000.00 if it used its best efforts. (Id. ¶ 14.) According to the Complaint, Upofloor paid S2LA all commissions due for sales made through December 2015. (Id. ¶ 13.) However, because S2LA purportedly failed to use its best efforts to promote, market, and sell Upofloor products (id. ¶¶ 15-23), Upofloor suffered damages in "the form of lost sales." (Id. ¶¶ 16-18, 34, 35.)
The Court finds that these allegations, when accepted as true, sufficiently state a cause of action for breach of contract and provide S2LA with sufficient notice of the grounds upon which its claim rests. Accordingly, S2LA's motion to dismiss for failure to state a claim is due to be denied.
In the Complaint, Upofloor suggests that the Court has personal jurisdiction over S2LA because the "parties agreed to the exclusive jurisdiction and venue of Florida state and federal courts for any claims arising out of or relating to the [A]greement between the parties." (Doc. 12 ¶ 4.) In support, Upofloor references a forum selection clause in the Agreement, which states, in pertinent part:
(Doc. 26-1 ¶ 12.1 ("
Despite entering into the Agreement, S2LA argues that the FSC is insufficient to confer personal jurisdiction over S2LA in this Court because S2LA does not have sufficient minimum contacts. (Doc. 15, pp. 8-10.) In support, S2LA relies on Matrix Z, LLC v. Landplan Design, Inc., 493 F.Supp.2d 1242, 1246-1248. (S.D. Fla. 2007). (Doc. 15., p. 8-9.) However, S2LA's reliance on Matrix is misplaced. In Matrix, the Court did not address whether an FSC alone could confer personal jurisdiction upon a Florida court. Rather, the Court merely addressed whether the parties contract "itself contains a forum selection clause." Matrix Z, LLC, 493 F. Supp. 2d at 1246-1248. Second, it is well-established under Florida law, that "if certain requirements are met, parties may, by contract alone, confer personal jurisdiction on the courts of Florida." Jetbroadband WV, LLC v. Mastec N. Am., Inc., 13 So.3d 159, 162 (Fla. 3d DCA 2009) (noting that the Florida Legislature "allowed contracting parties to dispense with the more restrictive Florida long-arm limitations" by promulgating sections 685.101 and 685.102 of the Florida Statutes).
To confer jurisdiction on the courts of Florida, an agreement must:
Jetbroadband, 13 So.3d at 162 (citing Fla. Stat. §§ 685.101 and 685.102).
Here, the first, second, and fifth requirements are easily met because the Agreement: (1) includes a choice of law provision designating Florida Law as the governing law (Doc. 26-1 ¶ 12.1); (2) includes a provision whereby the non-resident agrees to submit to the jurisdiction of the courts of Florida (id.); and (3) Upofloor's principal place of business is in Altamonte Springs, Florida (Doc. 12, ¶ 1). However, S2LA argues that the Agreement does not satisfy the $250,000 consideration threshold (Doc. 12, p. 9-10), and that the Court's exercise of jurisdiction over S2LA would violate the Due Process Clause (id. at 10-12).
With respect to its first argument, S2LA maintains that the only contemplated transactions between the parties under the Agreement was the payment of commissions by Upofloor to S2LA. (Id. ¶¶ 9-10.) S2LA asserts that those transactions involved no more than $69,600, and not the $348,000 Upofloor expected to receive from third-party sales. (Doc. 15, p. 9-10.) The Court disagrees.
Florida case law provides little guidance on the factors the Court should consider in determining whether Upofloor has satisfied the minimum consideration requirements under § 685.101. However, based on a plain reading of the language in §§ 685.101 and 685.102, it is clear that the threshold can be met even if the agreement is "in consideration of
Here, Upofloor alleges that under the Agreement, S2L was obligated to, inter alia, "use its best efforts to market and sell Upofloor products." (Doc. 12, p. 10.) "As part of S2LA's best efforts obligation, S2LA agreed that a reasonable sales budget number for Upofloor products in 2014 was $348,000." (Id. ¶ 14.) S2LA does not dispute that it projected sales in the amount of $348,000, nor does it dispute that its sales obligations exceeded $250,000. Therefore, the Court finds that the Agreement satisfies the consideration requirement under §§ 685.101-102. (Doc. 12, ¶¶ 14, 16).
With respect to its second argument, S2LA maintains that exercising personal jurisdiction over S2LA would violate its rights under the Due Process Clause. The Court again disagrees.
"The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful `contacts, ties, or relations.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). Generally, the constitutional requirement is "satisfied when in personam jurisdiction is asserted over a nonresident corporate defendant that has `certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 414 (1984) (quoting Int'l Shoe, 326 U.S. at 316).
Importantly, however, the U.S. Supreme Court has held that the minimum contacts test is met, in the commercial context, if a forum selection clause exists that is "freely negotiated" and is not "unreasonable and unjust." Burger King Corp, 471 U.S. 462, 473 (1985) ((citing The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)). In order for a forum-selection provision to be unreasonable and unjust, the moving party must show that the contractual forum is "so gravely difficult and inconvenient that he will for all practical purposes be deprived of his day in court." The Bremen, 407 U.S. at 18.
Here, S2LA does not dispute that the FSC was freely negotiated, nor does it argue that the FSC is unreasonable or unjust. Instead, S2LA simply argues that it does not have sufficient contacts to be hauled into court in Florida. (Doc. 15, p. 11.) Specifically, S2LA asserts that: (1) it is not an owner, officer or director of any active Florida corporation and is not a member or manager of any active Florida LLC; (2) it has never committed a tortious or fraudulent act in the state of Florida; and (3) it has no employees in Florida. Id. at ¶ 6. However, S2LA's assertions concerning its lack of business, offices, and employees in Florida, are insufficient to overcome the presumption in favor of upholding the FSC at issue. S2LA does not assert that Upofloor engaged in fraud, undue influence, or overweening bargaining power to include the FSC in the Agreement. S2LA also fails to establish that Florida is "gravely difficult or inconvenient" forum. Therefore, Court finds that its exercise of personal jurisdiction over S2LA is constitutionally reasonable. Accordingly, S2LA motion to dismiss for lack of personal jurisdiction is due to be denied.
S2LA also moves to dismiss the Complaint on the ground that it contains insufficient allegations of fact to demonstrate that venue is proper in the Middle District of Florida. (Doc. 15, p. 12.) In particular, S2LA contends that venue is improper in the Middle District of Florida because a substantial part of the events giving rise to Upofloor's claims occurred in California. (Id.) For similar reasons, S2LA argues that this action should be dismissed pursuant to the doctrine of forum non conveniens. (Id. at 12-13.) The Court rejects both arguments.
It is well-settled law that parties to a contract may bargain in advance to select the forum in which their disputes will be adjudicated. The Breman, 407 U.S. at 12-14. Thus, a forum selection clause is prima facie valid and should be enforced "absent a strong showing that it should be set aside." Id. at 15. As explained above, the burden is on the party resisting enforcement to "clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching." Id.
Upofloor alleges, and the FSC plainly demonstrates, that the parties agreed to: (1) the application of Florida law; (2) the exclusive jurisdiction of Florida courts; and (3) waive any objections to jurisdiction and venue. (Doc. 26-1, ¶ 12.1.) Moreover, S2LA has failed to carry its burden of establishing that the agreed forum is sufficiently inconvenient, or that this suit presents "the type of exceptional situation in which judicial enforcement of a contractual choice of forum clause would be improper." In re Ricoh Corp., 870 F.2d 570, 574 (11th Cir. 1989). As such, the Court declines to set aside a contractual provision that appears to have been properly bargained for and relied upon by Upofloor when filing this action. Accordingly, S2LA's motion to dismiss on the basis of improper venue will be denied.
For similar reasons, the Court will also deny S2LA's motion to dismiss for forum non conveniens. The doctrine of forum non conveniens permits a court to decline to exercise jurisdiction when it appears that the convenience of the parties and the interests of justice weigh in favor of trying the action in an alternative forum. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981). "In the typical case not involving a forum-selection clause, a district court considering a . . . forum non conveniens motion . . . [would] evaluate both the convenience of the parties and various public-interest considerations." Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S.Ct. 568, 581 (2013). "The calculus changes, however, when the parties' contract contains a valid forum-selection clause." Id.
First, "the party defying the forum selection clause, . . . bears the burden of establishing that . . . the forum for which the parties bargained is unwarranted." Second, the court may not consider the parties' private interests. Id. at 582. Indeed, "[w]hen parties agree to a forum selection clause, they waive the right to challenge the preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of the litigation." Id. Therefore, the court must assume that the parties' private interests "weigh entirely in favor of the preselected forum." Id. The court may consider arguments about public interest factors,
As the party defying the FSC, S2LA fails establish that extraordinary circumstances unrelated to the convenience of the parties clearly favor dismissal under the doctrine of forum non conveniens. Rather, S2LA argues—in conclusory fashion—that the forum non conveniens doctrine applies to this case because: "(i) a majority of the material witnesses to Upofloor's purported claims are in California; (ii) a California court would indisputably have jurisdiction over the whole case and the parties[;] and (iii) there would be no undue inconvenience or prejudice to the parties in litigating this matter in California." (See Doc. 15, p. 12-13). S2LA's naked assertions, however, provide no real assessment of the public interest factors identified in Atlantic Marine or Piper Aircraft. As such, the Court gives controlling weight to the FSC, which preselects Florida as the proper forum for litigating disputes arising from the Agreement. Because Upofloor has filed its suit in the Middle District of Florida, venue is proper and S2LA's motion is due to be denied.
Accordingly, it is hereby