42 F. Supp. 3d 700
E.D. Pa.2014Background
- AAMCO sues former Pennsylvania franchisee Robert Romano and his wife Linda for breach of a covenant not to compete near an AAMCO center.
- Romano operated in Hollywood, FL under a 1992 Franchise Agreement; Linda acted as his agent.
- Franchise Agreement includes a 10-mile covenant not to compete for two years post-termination; Section 21.1 provides Pennsylvania law and EDPA venue.
- Romano and AAMCO terminated the franchise in 2013, but Sections 19.2 and 21.1 remained in effect per termination terms.
- Treasure Coast Transmissions, owned by the Romanos’ wife, operates about 1.5 miles from an AAMCO center, within the restricted area.
- Court considers whether a forum-selection clause remains enforceable post-termination and whether Linda is bound.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does EDPA have personal jurisdiction/venue over Romano and Linda? | AAMCO. | Romano/Linda lack contacts and Florida is proper. | Forum selection clause applies; EDPA retains jurisdiction and venue. |
| Does the forum-selection clause survive termination and bind Linda as non-signatory? | Clause remains enforceable against all related parties. | Clause terminates with Franchise Agreement; Linda not bound. | Clause survives termination and binds Linda as related party. |
| Does AAMCO state a claim against Robert Romano for breach of the covenant? | Treasure Coast Transmissions is operated by Romano; he is in breach. | Romano may not own or control Treasure Coast Transmissions. | Plaintiff states a viable breach claim against Romano. |
| Is the geographic scope of the non-compete reasonable? | Broad, but justified by training and franchise scope. | Ten-mile radius is overbroad. | Not decided on pleadings; denied without prejudice for now. |
| Should the case be transferred for forum non conveniens? | Forum clause favors EDPA; transfer unwarranted. | Florida burden and witnesses justify transfer. | Transfer denied; EDPA retained. |
Key Cases Cited
- TriState HVAC Equipment, LLP v. Big Belly Solar, Inc., 752 F.Supp.2d 517 (E.D. Pa. 2010) (forum-selection clause survival and contract disputes)
- Versar, Inc. v. Ball, 2001 WL 818354 (S.D. Tex. 2001) (forum-selection clause and survival despite termination)
- Nolde Bros., Inc. v. Bakery & Confectionery Workers Union, Local No. 358, 430 U.S. 243 (U.S. 1977) (arbitration/contractual obligations survive termination)
- O’Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312 (3d Cir. 2007) (minimum contacts for personal jurisdiction; due process)
- Atlantic Marine Construction Co. v. City District Court, 134 S. Ct. 568 (S. Ct. 2013) (enforcement of forum-selection clauses; impact on private factors)
- Victaulic Co. v. Tieman, 499 F.3d 227 (3d Cir. 2007) (reasonableness of restrictive covenants; training impact)