JAMES E. GRITZNER, District Judge.
This matter comes before the Court on motion by Defendant NCH Healthcare System, Inc. (NCH) to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), or in the alternative, to transfer to the Middle District of Florida, Fort Myers Division pursuant to 28 U.S.C. § 1404(a). Plaintiff Wells Fargo Financial Leasing, Inc. (Wells Fargo) resists. The parties have not requested a hearing, and the Court finds no hearing is necessary in the resolution of this matter. The motion is fully submitted and ready for disposition.
Wells Fargo is an Iowa corporation with its principal place of business in Des Moines, Iowa. NCH operates non-profit community hospitals and related healthcare facilities and services primarily located in Collier County, Florida. Non-party AXSA Document Solutions, Inc. (AXSA) is a Florida corporation that provides "document, software and network solutions." Reimer Aff. ¶ 9 n. 1. Although AXSA is not currently a party in this lawsuit, an agreement between AXSA and NCH is a central issue in this litigation.
On December 12, 2007, NCH and AXSA entered into a twelve-month Value Maintenance Agreement (2007 VMA). The front side of the 2007 VMA provided that for a 12-month term, AXSA would service and maintain various printers at NCH's facilities and that NCH would make twelve monthly payments of $24,459 to AXSA. The reverse side of the 2007 VMA contained standard, commercial agreement clauses, which included incorporation, assignment of rights, and forum selection clauses. While the front side of the 2007 VMA contained signature blocks, the reverse side contained no signature blocks. The parties also signed a "contract addendum" (2007 Addendum) outlining the parties' "accountability and responsibilities under the terms of the [2007 VMA] to fully support and provide print device services, support and management of all NCH laser printers covered by our partnership...." Def.'s App. Ex. A. NCH CFO Vicki Hale and AXSA Major Accounts Manager Thomas Heller
In or before January 2009, NCH and AXSA entered into negotiations for the renewal of the VMA. On February 2, 2009, Jack Silver (Silver), AXSA Vice President of Sales, sent an email to NCH with an attachment containing the proposed VMA (2009 VMA) and an Addendum to Value Maintenance Agreement (2009 Addendum). Silver's email indicated that the 2009 VMA was "the same maintenance agreement you had signed in December 2007." Def.'s App. Ex. C. The terms on the front side of the 2009 VMA provided that for a term of 39 months, AXSA would service NCH's printers, and NCH would make thirty-nine monthly payments of $18,869.00. On February 2, 2009, NCH General Counsel Kevin Cooper (Cooper) signed the customer acceptance block on the 2009 VMA, and NCH CIO Susan Wolff signed the delivery acceptance block.
On February 4, 2009, Silver sent NCH a revised draft of the 2009 Addendum. The Addendum provided as follows:
Def.'s App. Ex. C. Paragraphs 8 and 9 of the 2009 Addendum set out the procedure NCH would follow in the event of performance-related problems. Paragraph 9 stated,
Id.
On February 16, 2009, Cooper signed the 2009 Addendum. NCH returned the documents to AXSA and requested that AXSA return to NCH fully-executed copies of the documents.
According to NCH, despite NCH's requests, AXSA never provided NCH with fully-executed copies of the 2009 VMA or the 2009 Addendum.
On June 1, 2009, Wells Fargo and AXSA executed a Bill of Sale and Assignment (Bill of Sale) assigning the 2009 VMA to Wells Fargo for a purchase price of $662,301.90. The Bill of Sale provided inter alia that the assignment did not "include a transfer to, and shall not be deemed to constitute an assumption by, Wells Fargo of any obligations of [AXSA] with respect to any Contract." Pl.'s Ex. B. Michele Boelling (Boelling) signed the Bill of Sale on behalf of AXSA. As of August 17, 2009, NCH knew that the 2009 VMA had been assigned to Wells Fargo. According to Wells Fargo, AXSA neither provided nor informed Wells Fargo of the 2009 Addendum, which modified terms of the 2009 VMA. After the assignment of the 2009 VMA to Wells Fargo, AXSA continued providing NCH with printer services.
On September 28, 2009, Reimer sent AXSA a letter listing several items of concern regarding AXSA's performance of the 2009 VMA agreement and the 2009 Addendum. Reimer's September 28 letter lists AXSA's president, vice president of sales, and vice president of service, as well as NCH CIO Susan Wolff as copy recipients, but does not list Wells Fargo as a copy recipient.
On October 28, 2009, Wells Fargo sent NCH a re-notification letter reiterating that Wells Fargo held all rights, title, and
On January 28, 2010, Wolff sent AXSA a letter informing AXSA that pursuant to "item #9" of the 2009 Addendum and due to AXSA's unacceptable performance, NCH was "providing written notice that we are canceling this agreement and are to be held harmless of all remaining payments and fees associated with this agreement." Pl.'s App. Ex. J. Wolffs letter listed AXSA's president, vice president of sales, and vice president of service as copy recipients but, as with Reimer's September 28 letter, did not list Wells Fargo as a copy recipient.
After sending AXSA the January 28 letter, NCH stopped making scheduled payments due under the 2009 VMA and refused to make payments upon demand. Wells Fargo, as the 2009 VMA assignee, filed a lawsuit against NCH in the Iowa District Court for Polk County alleging breach of contract. NCH timely removed the case and filed the present Motion to Dismiss, or in the Alternative, Motion to Transfer.
NCH first argues the Court should dismiss this case pursuant to Rule 12(b)(2) for lack of personal jurisdiction, asserting that Iowa being Wells Fargo's principal place of business is not enough to satisfy due process.
"A federal court in a diversity action may assume jurisdiction over nonresident defendants only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause." Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1073 (8th Cir.2004) (quoting Morris v. Barkbuster, Inc., 923 F.2d 1277, 1280 (8th Cir.1991)). Because Iowa's long-arm statute "provides for the broadest expanse of personal jurisdiction consistent with due process," State ex rel. Miller v. Grodzinsky, 571 N.W.2d 1, 3 (Iowa 1997), the Court's analysis is limited to whether the exercise of personal jurisdiction comports with due process.
"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, 471-472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). "To defeat a motion to dismiss for lack of personal jurisdiction, the nonmoving party need only make a prima facie showing of jurisdiction. The party seeking to establish the court's in personam jurisdiction carries the burden of proof, and the burden does not shift to the party challenging jurisdiction." Epps v. Stewart Info. Servs. Corp., 327 F.3d 642,
NCH argues that the dispute behind the present lawsuit derives entirely from "events, documents, and witnesses in Florida," and NCH has not had the requisite minimum contacts with Iowa. Def.'s Br. 6. NCH, therefore, asserts that filing this case in Iowa based upon Wells Fargo's principal place of business is insufficient to satisfy due process and that because the forum selection clause relied upon by Wells Fargo is unenforceable, this case should be dismissed for lack of personal jurisdiction.
Courts generally conduct a minimum contacts analysis to determine whether a party has sufficient minimum contacts with the forum state such that maintaining the suit will not "offend traditional notions of fair play and substantial justice." Dever, 380 F.3d at 1073 (quoting Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir.1996) (quoting WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-92, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980))).
Relying on EFCO Corp. v. Norman Highway Constructors, Inc., 606 N.W.2d 297, 299 (Iowa 2000), Wells Fargo argues that a minimum contacts analysis is unnecessary since the 2009 VMA contains a valid forum selection clause. See also Liberty Bank, F.S.B. v. Best Litho, Inc., 737 N.W.2d 312, 315 (Iowa Ct.App.2007) ("Forum selection clauses can constitute sufficient consent by a nonresident defendant to the exercise of personal jurisdiction by a foreign court.").
"[I]t is settled ... that parties to a contract may agree in advance to submit to the jurisdiction of a given court, to permit notice to be served by the opposing party, or even to waive notice altogether." Norman Highway Constructors, 606 N.W.2d at 299 (quoting Nat'l Equip. Rental Ltd. v. Szukhent, 375 U.S. 311, 315-16, 84 S.Ct. 411, 11 L.Ed.2d 354 (1964)).
Id. (alterations in original) (quoting Ins. Corp. of Ire., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702-03, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982)).
The parties acknowledge that personal jurisdiction can be waived through a valid forum selection clause. See Dominium Austin Partners, L.L.C. v. Emerson, 248 F.3d 720, 726 (8th Cir.2001) ("Due process is satisfied when a defendant consents to personal jurisdiction by entering into a contract that contains a valid forum selection clause." (citing Burger King, 471 U.S. at 472 n. 14, 105 S.Ct. 2174)). Therefore, in this case, this Court's personal jurisdiction over NCH turns on the validity of the forum selection clause.
Paragraph 11 on the reverse sides of both the 2007 and the 2009 VMAs contains the following assignment of rights clause:
Def.'s App. Ex. A; Pl.'s App. Ex. A. Paragraph 15, also on the reverse sides of the 2007 and the 2009 VMAs, contains the following forum selection clause:
Id.
"Forum selection clauses are prima facie valid and are enforced unless they are unjust or unreasonable or invalid for reasons such as fraud or overreaching." M.B. Rests., Inc. v. CKE Rests., Inc., 183 F.3d 750, 752 (8th Cir.1999) (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972)). Wells Fargo argues that the forum selection clause was made in an "arm's-length negotiation by experienced and sophisticated businessmen," and should therefore be enforceable "absent some compelling and countervailing reason." Best Litho, Inc., 737 N.W.2d at 315 (quoting M/S Bremen, 407 U.S. at 15, 92 S.Ct. 1907).
NCH argues the 2009 VMA's forum selection clause, which designates that the VMA would be governed by and construed in accordance with the laws of the assignee's principal place of business, is unenforceable because (1) it was not part of the 2009 VMA that NCH signed, (2) the enforcement thereof was not invoked by AXSA, (3) enforcement would be unjust and/or unreasonable, (4) AXSA fraudulently induced NCH to enter the contract with the forum selection clause, and (5) the forum selection clause is overreaching.
NCH argues that the "floating forum selection clause is not part of the agreement
NCH does not deny consenting to the terms on the front and reverse sides of the 2007 VMA, a copy of which NCH submits in support of its motion to dismiss. The reverse side of the 2007 VMA contains several clauses, including an incorporation clause, an assignment clause, and a forum selection clause. The 2009 VMA contains the same clauses. NCH asserts that during the renewal negotiations, AXSA sent only the front side of the proposed 2009 VMA. However, even if the Court accepts NCH's position that during renewal negotiations AXSA never sent a copy of the reverse side of the 2009 VMA to NCH, evidence in the record demonstrates that the reverse side of that document was, nonetheless, part of the agreement.
Support for finding that NCH gave implied consent to the terms on the reverse side of the 2009 VMA is found in the email exchanges between Silver and NCH during the renewal negotiations. In his February 2, 2009, email, Silver informed NCH that the attached proposed 2009 VMA was "the same maintenance agreement you had signed in December 2007." The email goes on to point out changes that had been made to accommodate NCH's various requests. An examination of the 2007 VMA and the 2009 VMA shows that the two agreements are essentially the same form document and that only the fill-in-the-blanks information appears to be different. Because the 2007 VMA was a two-sided document, Silver's comment to NCH that the renewal 2009 VMA was the same as the 2007 VMA, informed NCH that the 2009 VMA included both a front and a reverse side. In this motion, NCH never directly states that it was unaware of the reverse side of the 2009 VMA; instead, NCH argues that the reverse side of the 2009 VMA cannot be part of the agreement because AXSA never sent NCH a copy of the reverse side of the 2009 VMA during the renewal negotiations. Even assuming that during renewal negotiations NCH did not receive a copy of the reverse side of the proposed 2009 VMA containing the boilerplate language, the facts that (1) NCH knew that the 2009 VMA was a renewal agreement, (2) Silver informed NCH that the 2009 VMA was "the same maintenance agreement you had signed in December 2007," (3) NCH consented to the terms on the reverse side of the 2007 VMA, and (4) NCH is an experienced business entity, support a finding that NCH assented to the terms on the reverse side of the 2009 VMA.
Next, NCH's argument that the reverse side of the 2009 VMA is not part of the agreement contradicts NCH's defense against Wells Fargo's breach of contract claim. That is, in defending against Wells Fargo's breach of contract claim, NCH relies on terms contained in 2009 Addendum that modify and/or supplement terms on the front side of the 2009 VMA. However, the authority to modify or supplement the 2009 VMA comes from the incorporation clause, which, in pertinent part, states,
In addition, AXSA invoked the assignment clause, which also appears on the reverse side of the 2009 VMA. NCH's acquiescence to AXSA's assignment of the 2009 VMA to Wells Fargo is demonstrated by the several contractual payments NCH made to Wells Fargo after AXSA assigned the 2009 VMA, providing further indication that NCH assented to the terms on the reverse side of the 2009 VMA since the authorization to assign is found only on the reverse side of the 2009 VMA. Again, NCH cannot acknowledge and acquiesce to certain clauses, namely the incorporation and assignment clauses that only appear on the reverse side of the 2009 VMA, while asserting that the reverse side of the 2009 VMA was not part of the agreement.
Finally, the terms on the reverse sides of both the 2007 VMA and the 2009 VMA are standard contract provisions. The incorporation, assignment, and the forum selection clauses therein, appear as paragraphs 1, 11, and 15, respectively. The assignment and forum selection clauses on the 2007 VMA are identical to the respective clauses on the 2009 VMA. The only material difference between the 2007 VMA and the 2009 VMA appears on the front side of the VMA in the fill-in-the-blank payment block section.
NCH's final assertion that the Court should find the forum selection clause invalid due to a disparity in the bargaining power between NCH and AXSA merits little discussion. NCH is a large, not-for-profit corporation that owns and operates two regional hospitals and related healthcare facilities in and around Collier County, Florida. AXSA is an Orlando, Florida-based corporation that provides document, software, and network solution services in Florida. The record suggests NCH is as savvy, if not more so, a business entity as AXSA. Kevin Cooper and Susan Wolff signed the 2009 VMA on behalf of NCH. Vicki Hale signed a declaration that "Kevin Cooper is authorized to sign [the 2009 VMA] on behalf of NCH Healthcare System Inc." Def.'s App. Ex. K. Cooper is general counsel for NCH, Wolff is NCH's CIO, and Hale is NCH's CFO; as such, they are all sophisticated business persons. Neither Cooper, Wolff, nor Hale submits an affidavit attesting that he or she lacked knowledge that there were binding contractual terms on the reverse side of the 2009 VMA. Instead, in support of its argument that the reverse side of the 2009 VMA is not part of the agreement, NCH submits Reimer's affidavit. Reimer, however, was not a signatory to the 2009 VMA nor is there evidence that Reimer had authority to sign the VMA. Reimer being a non-signatory notwithstanding, Reimer does not attest that NCH lacked knowledge of the reverse side of the 2009 VMA or of the terms contained therein; rather, Reimer merely avers that NCH never received a fully-executed copy of the 2009 VMA from AXSA. Therefore, on this record, the Court cannot find that the negotiations of the 2007 VMA or the renewal thereof in 2009 were anything other than arm's-length negotiations between experienced business entities.
NCH next contends the forum selection clause is unenforceable because paragraph 15 on the reverse side of the 2009 VMA identifies AXSA, not its assignee, as the entity with the "sole contractual right" to invoke the forum section clause. In support of this contention, NCH points out that the first paragraph on the front side of 2009 VMA purports to use "plain English" and defines that the words "you" and "your" refer to NCH, and that the words "we," "us," and "our" refer to AXSA; therefore the phrase "at the sole election of us" in the forum selection clause necessarily strictly refers to AXSA.
In its entirety, the referenced sentence in the forum selection clause states,
Pl.'s App. Ex. A (emphasis added). Thus, when read in its entirety, the forum selection clause clearly provides that AXSA or its assignee can bring a judicial proceeding in AXSA's home state or the assignee's principal place of business. See, e.g., Thomas v. Progressive Cas. Ins. Co., 749 N.W.2d 678, 681-82 (Iowa 2008) ("`In determining whether a policy provision is subject to two equally proper interpretations, we read the insurance contract `as an entirety rather than seriatim by clauses.''") (quoting Cairns v. Grinnell Mut. Reins. Co., 398 N.W.2d 821, 825 (Iowa 1987) (quoting Archibald v. Midwest Paper Stock Co., 176 N.W.2d 761, 763 (Iowa 1970))).
The assignment clause gave AXSA the unilateral right to "sell, assign, or transfer this Agreement without notice," and that in the event the agreement was sold or transferred, AXSA's "assignee w[ould] have the same rights and benefits
NCH argues that the enforcement of the forum selection clause would be unjust or unreasonable because litigation in Iowa would be inconvenient for witnesses. However, "mere inconvenience to a party is an insufficient basis to defeat an otherwise enforceable forum selection clause." Fru-Con Const. Corp. v. Controlled Air, Inc., 574 F.3d 527, 539 (8th Cir.2009) (quoting Servewell Plumbing, 439 F.3d at 790). To avoid the forum selection clause, NCH must show that proceeding in "the contractual forum will be so gravely difficult and inconvenient that [it] will for all practical purposes be deprived of [its] day in court." Dominium Austin, 248 F.3d at 727 (quoting M/S Bremen, 407 U.S. at 18, 92 S.Ct. 1907). "The `great expense' [a party] claims it will incur if forced to secure witnesses located [in another state], falls well short of depriving it of its day in court." Servewell Plumbing, 439 F.3d at 790. NCH has failed to demonstrate that litigating this case in Iowa would deprive NCH of its day in court.
NCH next contends that AXSA fraudulently induced NCH to enter the 2009 VMA, and therefore the forum selection clause does not apply. Wells Fargo argues that the 2009 VMA contains a "waiver of defense clause," which provides "that the rights of the assignee will not be subject to any claims, defenses or set offs that you may have against us," Sullivan's Aff., Pl.'s Ex. A ¶ 11; and therefore NCH's allegations of fraud against AXSA do not affect the enforceability of the forum selection clause. NCH counters that the waiver of defense clause, as with the forum selection clause, exists on the reverse side of the 2009 VMA and therefore is not part of the agreement.
The Court has already determined that for purposes of the motions currently before the Court, the reverse side of the 2009 VMA is part of the agreement. See supra at Part II.2.a. For those same reasons, the Court finds the waiver of defense clause is also part of the agreement.
A "forum-selection clause in a contract is not enforceable if the inclusion of that clause in the contract was the product of fraud or coercion." Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 n. 14, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974). However, "courts should not allow a defendant, or for that matter a plaintiff, to plead their way out of a forum-selection clause to which they agreed by merely asserting, without offering any evidence, fraud in inducement." Republic Credit Corp. I v. Ficachi, No. 4-04-CV-90246, 2004 WL 3168273, at *3-4 (S.D.Iowa Dec. 2, 2004) (unpublished) (citing Republic Credit Corp. I v. Rance, 172 F.Supp.2d 1178, 1183 (S.D.Iowa 2001)); see also Scherk, 417 U.S. at 519 n. 14, 94 S.Ct. 2449 (1974) (rejecting the notion that "any time a dispute arising out of a transaction is based upon an allegation of fraud, ... the [forum selection] clause is unenforceable. Rather, it means that ... [a] forum selection clause in a contract is not enforceable if the inclusion of that clause in the contract was the product of fraud or coercion" (emphasis added)).
Wells Fargo Fin. Leasing, Inc. v. Orlando Magic Ltd., 431 F.Supp.2d 955, 962 (S.D.Iowa 2006) (citing M.B. Rests., 183 F.3d at 752-53).
Reimer's affidavit is insufficient evidence of fraudulent inducement
NCH's final argument is that the forum selection clause unreasonably "reflects substantial overreaching" because 70 percent of the equipment on the spreadsheet attached to the petition already belonged to NCH at the time the agreement was executed. NCH further argues that Wells Fargo incorrectly described the agreement at issue as an "Equipment Lease Agreement" and alleges that NCH signed the Acceptance of Delivery indicating that the equipment leased was delivered.
NCH again raises issues that may be pertinent to defenses to the underlying breach of contract claim but have no bearing on the issue of the enforceability of the forum selection clause. NCH has not demonstrated that the forum selection clause itself was the product of fraud or overreaching and has therefore failed to meet the "heavy burden of proof required to set aside the forum selection clause. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991) (holding that a forum selection clause requiring litigation to be in Florida was not overreaching or unreasonable); Kowalski v. YellowPages.com, LLC, 09-2382, 2010 WL 3323749, at *3 (D.N.J. Aug. 18, 2010) (unpublished) ("When a party asserts overreaching as a defense to a forum selection clause, that party must demonstrate that the forum selection provision itself, and not the entire contract, is a product of overreaching.").
NCH argues that even if this Court were to find that "the floating venue selection clause was valid and enforceable, this Court should nonetheless transfer this lawsuit under 28 U.S.C. § 1404(a) to the Middle District of Florida, Fort Myers Division, where the lawsuit might have been originally brought." Def.'s Br. 10.
The federal transfer statute, 28 U.S.C. § 1404(a), provides, "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." A transfer analysis pursuant to section 1404(a) follows a three-factor balancing test: "(1) the convenience of the parties, (2) the convenience of the witnesses, and (3) the interests of justice." Terra Int'l, Inc. v. Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir.1997). "District courts are not limited to the factors enumerated in the statute but may consider all relevant factors." Orlando Magic Ltd., 431 F.Supp.2d at 966. A valid, applicable forum selection clause is "one factor, albeit a very important one, in the overall transfer analysis." Id. (quoting Terra Int'l, 119 F.3d at 691). "In general, federal courts give considerable deference to a plaintiffs choice of forum and thus the party seeking a transfer under section 1404(a) typically
"The initial inquiry in ruling on a motion under § 1404(a) is whether this case might have been brought in the [Middle District of Florida, Fort Myers Division]." Biometics, LLC v. New Womyn, Inc., 112 F.Supp.2d 869, 875 (E.D.Mo.2000) (quotation marks omitted). NCH is based in Collier County, Florida, and therefore venue is proper in the Middle District of Florida, Fort Myers Division. See 28 U.S.C. § 1391. Wells Fargo does not contest that this case could have originally been brought in the Middle District of Florida, Fort Myers Division.
When determining whether to grant a motion to transfer where there is a forum selection clause, the Court must first determine whether the venue selection in the clause is permissive or mandatory. "Whether a forum selection clause is mandatory or permissive is a matter of contract interpretation...." Terra Int'l., Inc. v. Miss. Chem. Corp., 922 F.Supp. 1334, 1370 (N.D.Iowa 1996).
Relying on GreatAmerica Leasing Corp. v. Telular Corp., No. C-98-127, 1999 WL 33656867, at *6 (N.D.Iowa Apr. 20, 1999) (unpublished), NCH asserts that if the Court finds the clause is permissive, the court may, after consideration of the relevant factors, transfer venue from the assignee's home state to the state where the underlying dispute occurred.
In GreatAmerica, the forum selection clause stated, "YOU CONSENT TO THE JURISDICTION AND VENUE OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN LESSOR'S OR LESSOR'S ASSIGNEE'S STATE, AND WAIVE ANY OBJECTION RELATING TO IMPROPER VENUE." Id. at *3, 5. Based upon this language, the GreatAmerica court found that "[t]he clause does not provide for `exclusive' jurisdiction. Instead, the clause in this case `falls short of designating an exclusive forum' and states that the parties `consent' to jurisdiction and venue in the lessor's state or the lessor's assignee's state." Id. at *6 (quoting Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 78 (9th Cir.1987)).
The forum selection clause in the case at bar states,
Pl.'s App. Ex. A (emphasis added). The use of the word "may" in the forum selection clause denotes that the clause does not mandate a particular jurisdiction. See Fla. State Bd. of Admin. v. Law Eng. & Envtl. Servs., Inc., 262 F.Supp.2d 1004, 1009-10 (D.Minn.2003) ("[C]ourts have found that use of the words `may' and `should' signify permissive clauses, while use of the words `shall,' `will' or `must' signify mandatory clauses." (collecting cases)). Having considered the language of the forum selection clause as a whole, the Court finds that the forum selection clause is permissive rather than mandatory and therefore not dispositive on the issue of venue. See GreatAmerica, 1999 WL 33656867, at *6.
In balancing the convenience factor, the Court may consider
Terra Int'l, Inc., 119 F.3d at 697. "Merely shifting the inconvenience from one side to the other ... is not a permissible justification for a change of venue." Id. at 696-97 (quoting Scheidt v. Klein, 956 F.2d 963, 966 (10th Cir.1992)); see Lajaunie v. L & M Bo-Truc Rental, Inc., 261 F.Supp.2d 751, 754 (S.D.Tex.2003) (concluding that shifting costs, rather than reducing them, does not support transfer).
NCH argues that Wells Fargo's role in this dispute was "to collect or not collect payments subsequent to the June 2009 Bill of Sale and Assignment, which [NCH] admits it stopped making upon notification of breach and termination to AXSA." Def.'s Br. 13. This concession notwithstanding, NCH argues Wells Fargo has no material witnesses whose convenience must be considered, whereas NCH has "dozens of present and former employees of NCH that suffered through the aggravation of inoperable printers and poor performance by AXSA," six of whom were "material witnesses to all aspects of negotiation, creation, execution, performance or breach (by AXSA)" of the 2009 VMA. Def.'s Br. 13; Reimer Aff. ¶ 35. NCH further argues that NCH considers ten present or former AXSA employees "material to all aspects of negotiation, creation, execution, performance or breach (by AXSA)" of the 2009 VMA. Def.'s Br. 14. NCH further avers that the NCH and AXSA employee and former employee witnesses presumably live in or around the Middle District of Florida, and none are under any obligation to testify. NCH emphasizes that the issue of fraud makes live testimony of those witnesses particularly important because "credibility matters more." and the fact-finder needs to be able to assess credibility. Id.
Relying on Medicap Pharmacies, Inc. v. Faidley, 416 F.Supp.2d 678, 687-88 (S.D.Iowa 2006), Wells Fargo counters that NCH's unspecified allegations of witness inconvenience are insufficient to carry NCH's burden to justify transfer. Wells Fargo counters that the same convenience considerations make Iowa the most convenient forum for Wells Fargo's witnesses since Iowa is Wells Fargo's principal place of business, the original contract documents are in Iowa, communications and payments were directed to Wells Fargo in Iowa, Wells Fargo filed suit to recover money damages owed in Iowa, and numerous Wells Fargo employees that may be called to testify are located in Iowa. Wells Fargo also proffers that there are alternative means of procuring the testimonies of the NCH and AXSA witnesses, making live testimony unnecessary.
The Court "must examine the materiality and importance of the anticipated witnesses' testimony and then determine their accessibility and convenience to the forum." Reid-Walen v. Hansen, 933 F.2d 1390, 1396 (8th Cir.1991) (citing Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1335-36 (9th Cir.1984)). "The burden is on the defendant to provide these facts by way of affidavit or other information." Id.
In Medicap Pharmacies, the Court noted that in support of transfer based upon the inconvenience to non-party witnesses, the defendant merely "attempted to identify relevant testimony to be given by unnamed witnesses." Medicap Pharms., 416 F.Supp.2d at 687-88. The court reasoned that "[t]he convenience of non-party witnesses is generally considered to be one of the most important factors to be weighed
In contrast, in the present case, NCH has identified various non-party witnesses, including Silver, Boelling, and Heller, their roles at AXSA, their knowledge of the 2007 and 2009 VMAs and Addendums, their anticipated testimonies, and the materiality and importance of those anticipated testimonies. Wells Fargo argues that the testimonies of NCH's non-party witnesses are not essential because those witnesses have no knowledge of the conduct underlying Wells Fargo's breach of contract claim against NCH or NCH's alleged failure to make required payments to Wells Fargo.
By contrast, Wells Fargo refers to its own list of non-party witnesses, which includes several employees' names along with generic job descriptions, and merely suggest that those employees all reside in Iowa and "have information and knowledge relevant to this matter." Sullivan Aff. ¶ 3. Wells Fargo does not provide those witnesses' proposed testimonies. Because NCH concedes that it stopped making payments to Wells Fargo, the unspecified testimonies of some, if not all, of Wells Fargo's witnesses, may be unnecessary. On the other hand, NCH's admission that it stopped making payments to Wells Fargo does not alter NCH's burden of demonstrating its purported defense, that is, the validity of the cancellation provisions in the 2009 Addendum. The 2009 Addendum was negotiated, formed, and executed in Florida. Because NCH's defense is based upon the provisions contained in that addendum, it is highly probable that NCH will subpoena the proposed non-party witnesses.
On a motion to transfer venue, the Court will not opine as to the relative strengths or weaknesses of NCH's defense to the underlying claims in the case; however, it is incumbent upon the Court to consider the materiality and importance of anticipated testimony. See Reid-Walen, 933 F.2d at 1396. The Court tends to agree with NCH that its non-party witnesses' testimonies will be important to NCH's defense in this case, and for purposes of weighing credibility, the live testimonies of those witnesses is preferable. Further, the Court recognizes the limits of its subpoena power to secure the testimonies of non-party witnesses located in Florida. See Fed.R.Civ.P. 45(b)(2) (stating that "a subpoena may be served at any place: (a) within the district of the issuing court; [and] (b) outside the district but within 100 miles of the place specified for the deposition, hearing, trial, production, or inspection....").
Given NCH's admission that it stopped making payments to Wells Fargo, the testimonies of Wells Fargo employees confirming that NCH stopped making payments appears to be redundant. Thus, the relevant conduct still in dispute in this case occurred in Florida, which is where all non-party witnesses are purportedly located.
"Relevant, and somewhat overlapping, factors" courts consider in evaluating whether the interests of justice warrant transfer include "(1) judicial economy, (2) the plaintiffs choice of forum, (3) the comparative costs to the parties of litigating in each forum, (4) each party's ability to enforce a judgement, (5) obstacles to a fair trial, (6) conflict of law issues, and (7) the advantages of having a local court determine questions of local law." Terra Int'l, 119 F.3d at 696.
NCH argues that "this case will involve at least two lawsuits if this case is not transferred to Florida,"
In response, Wells Fargo argues Iowa is the favored forum because "[c]onsiderable deference is to be given to a plaintiffs choice of forum, even absent the presence of a valid forum selection clause," Medicap Pharms., 416 F.Supp.2d at 688, and that there is no disparity in the comparative costs to the parties of litigating in each forum. Moreover, Wells Fargo argues the conflict of law factor disfavors transfer because it is advantageous to have a federal court sitting in Iowa apply Iowa law. Wells Fargo denies that multiple lawsuits will result if NCH determines AXSA is a necessary party because this Court has jurisdiction over AXSA based upon AXSA's contractual activities directed at the state, and therefore NCH can file a third-party complaint against AXSA in this same action. Wells Fargo further asserts that there is no reason to believe at this stage that AXSA would resist litigating this matter in Iowa.
The Court finds that because the potential for multiple lawsuits over the issues in this case is more real than speculative, and because judicial economy favors NCH's ability to file a third-party claim against AXSA if this case is transferred to Florida, the interest of justice factor weighs in favor of transfer.
The Court concludes that on balance, the convenience of parties, the convenience of witnesses, and the interest of justice weigh in favor of transferring this case to the Middle District of Florida.
For the reasons stated, Defendant's motion to dismiss for lack of personal jurisdiction (ECF No. 3) must be
Contrary to NCH's assertions, the current record is not conclusive evidence that the 2009 VMA was strictly a service agreement. For example, the "Ownership of Equipment" clause on the reverse side of the 2009 VMA, which states that interest in the equipment that AXSA delivered to NCH would be released for the nominal price of $1.00 upon NCH full performance of the agreement, suggests that the 2009 VMA was a sale and/or lease agreement. See, e.g., Iowa Code §§ 554.1201, .1203. However, because NCH fails to plead facts sufficient to support its allegation of fraud for purposes of defeating the forum selection clause, the Court need not determine whether Wells Fargo is a holder in due course.
