J. MICHELLE CHILDS, District Judge.
Plaintiff Carolina Underground Solutions, LLC ("Plaintiff" or "CUS") filed the instant action against Defendant Commercial Finance Partners, LLC ("Defendant" or "CFP") seeking damages resulting from Defendant's allegedly improper business practices. (ECF No. 1-1 at 4-14.)
This matter is before the court by way of Defendant's Motion to Transfer Venue to the United States District Court for the Southern District of Florida pursuant to 28 U.S.C. § 1404(a). (ECF No. 10 at 1.) Plaintiff opposes Defendant's Motion in its entirety. (ECF No. 24.) For the reasons set forth below, the court
Plaintiff is a provider of boring and drilling services and it alleges that it "attempted to enter into an agreement whereby Defendant would provide accounts receivable factoring services." (ECF No. 1-1 at 5 ¶¶ 7, 9.) Plaintiff alleges that although their initial attempt at entering a signed written agreement failed, the parties did agree to an arrangement that resulted in Defendant providing accounts receivable factoring services for and on behalf of Plaintiff from December 13, 2016, until April 7, 2017. (
On June 8, 2017, Plaintiff filed a Complaint against Defendant in the Greenville County (South Carolina) Court of Common Pleas alleging state law claims for tortious interference with existing economic relationships, conversion, slander of title, and violation of the South Carolina Unfair Trade Practices Act ("SCUTPA"), S.C. Code Ann. § 39-5-10 to -560 (2014). (ECF No. 1-1 at 9 ¶ 29-10 ¶ 56.) On June 14, 2017, Defendant removed the matter to this court pursuant to 28 U.S.C. § 1332 (ECF No. 1) and then on June 29, 2017, filed the instant Motion to Transfer Venue. (ECF No. 10.) Plaintiff filed a Response in Opposition to the Motion to Transfer Venue on July 13, 2017, to which Defendant filed a Reply Memorandum in Support of Motion to Transfer Venue on July 19, 2017. (ECF Nos. 24 & 27.) Additionally, on August 17, 2017, Plaintiff moved to file and filed supplemental materials in opposition to Defendant's Motion to Transfer Venue. (ECF Nos. 40, 40-1 & 40-2.)
The court has subject matter jurisdiction over this action, pursuant to 28 U.S.C. § 1332, based on Defendant's allegations that the parties are citizens of different states and the amount in controversy exceeds $75,000.00. (ECF No. 1 at 3 ¶ 7-4 ¶ 9.) Specifically, Plaintiff "is a limited liability company organized and existing under the laws of the State of South Carolina, with a principal place of business located in Greenville County, South Carolina." (ECF No. 1-1 at 4 ¶ 2.) Defendant "is a limited liability company organized and existing under the laws of the State of Nevada, with a principal place of business located in the State of Florida." (
28 U.S.C. § 1404(a) provides that "[f]or 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 or to any district or division to which all parties have consented."
"In the typical case not involving a forum-selection clause, a district court considering a § 1404(a) motion (or a forum non conveniens motion) must evaluate both the convenience of the parties and various public-interest considerations."
A court conducts a two-part analysis in deciding whether to enforce a forum selection clause. First, the court determines whether the forum-selection clause is valid and enforceable.
Second, the court must consider whether "extraordinary circumstances" would hinder the enforcement of the forum-selection clause. Atl. Marine, 134 S. Ct. at 581. In considering whether extraordinary circumstances are present to avoid enforcement of a valid forum selection clause, a court may consider "arguments about public-interest factors only."
Defendant contends that the claims at issue in this action arise from a Master Purchase and Sale Agreement (the "Agreement") allegedly agreed to by the parties on November 14, 2016. (ECF No. 10 at 1 (referencing ECF No. 1-1 at 60-67).) Defendant further contends that the Agreement has the following forum selection clause that requires this action to be litigated in a state or federal court located in the State of Florida:
(
Based on the aforementioned, Defendant argues that the court should give the forum selection clause controlling weight because its language is mandatory and transfer the case. (
Plaintiff opposes the Motion to Transfer Venue asserting that Defendant's invocation of the forum selection clause is invalid because the Agreement was not "a valid, enforceable, written agreement between the parties." (ECF No. 24 at 1.) Although it does not dispute that the parties signed the Agreement on November 14, 2016, Plaintiff asserts that the Agreement was effectively cancelled when Defendant orally refused to provide factoring services for invoices involving Plaintiff's second biggest customer, Network Controls & Electric, Inc. (See ECF No. 24-1 at 3 ("If CUS could not factor Network Controls' invoices, then there was no use in CUS factoring any invoices with CFP. . . . [CFP's COO] Mr. Palestine also said that, based on this circumstance, CFP could not provide any factoring services to CUS, and that the agreement signed on November 14, 2016 was of no force or effect.").) Plaintiff further asserts that when its circumstances with Network Controls changed, Defendant then agreed on December 9, 2016, to provide factoring services to Plaintiff pursuant to a new factoring agreement, which was never signed by the parties. (ECF No. 12-2 at 3 ¶ 9.) As a result of the foregoing, Plaintiff argues that "[a]ssuming that the November Agreement was canceled, and that Defendant began providing factoring services to Plaintiff in December 2016 without a written agreement—an error that is solely and exclusively Defendant's own fault, then this yields two conclusions: first, that since the forum selection clause upon which Defendant seeks transfer was included in the November Agreement, this clause is not valid or enforceable against Plaintiff; and second, that since Defendant started doing business with Plaintiff in December 2016 without a written agreement, there is no valid forum selection clause that Defendant may utilize to transfer venue for this case to Florida." (ECF No. 24 at 8.) Accordingly, Plaintiff opines that Defendant's Motion to Transfer should be denied "until a decision on the merits of the validity and enforceability of the November Agreement may be reached."
Plaintiff also asserts that the Motion to Transfer should be denied because Defendant waived the right to exercise the forum selection clause when it filed a Third-Party Complaint (ECF No. 20) against Jonathan Carawan, Plaintiff's former president and member, in this court instead of Florida. (ECF No. 24 at 2.) Because Carawan was also allegedly subject to the forum selection clause, Plaintiff argues that "Defendant has chosen to act inconsistently with that provision, and this conduct amounts to nothing less than a waiver of its ability to seek enforcement of that clause." (
Finally, Plaintiff moves the court (ECF No. 40) to supplement the record with "(1) a letter dated November 21, 2016, written by Marc Marin, an employee of Defendant, to Plaintiff and its customers evidencing the cancellation of the Factoring Agreement at issue in this dispute, . . .; and (2) an email dated December 6, 2016, written by Jason Yeaman, an employee of Defendant's, to Plaintiff and one of Plaintiff's customers evidencing that no prior relationship existed between Plaintiff and Defendant. . . ." (
Defendant moves to transfer the matter to the Southern District of Florida, West Palm Beach Division, pursuant to a forum selection clause contained in the purported Agreement between the parties. (ECF No. 10 at 1.) Plaintiff's main argument in opposition to transfer is that the Agreement was terminated by Defendant. Defendant replies that this argument is without merit because the Agreement "was never terminated as required by its terms." (ECF No. 27 at 3.) Defendant expressly cites to the following provisions in support of its position:
(ECF No. 27 at 2 (quoting ECF No. 1-1 at 63 §§ 15-16, 64 § 22 & 65 § 26).) Upon consideration of the parties' positions, their dispute is an issue of contract interpretation.
Under South Carolina law,
Upon review, the court finds that the terms of the Agreement are unambiguous. Therefore, for purposes of the instant Motion, the court concludes that the Agreement was executed by the parties and was not terminated as required by its terms. The foregoing finding resolves Defendant's Motion to Transfer because Plaintiff does not make any arguments suggesting that the forum selection clause was unreasonable under
In addition, the court is not persuaded that Defendant waived implementation of the forum selection clause by filing a counterclaim against Jonathan Carawan. In this regard, the court observes that Defendant expressly states that "[v]enue of this Counterclaim is proper in Palm Beach County, Florida with respect to newly added Counter-Defendant Carawan, pursuant to the individual Limited Guarantee signed by him, . . . ." (ECF No. 20 at 10 ¶ 7.)
Accordingly, this case should be transferred to the Southern District of Florida, West Palm Beach Division, as requested by Defendant.
Upon careful consideration of the entire record and for the reasons set forth above, the court hereby