942 F. Supp. 2d 366
W.D.N.Y.2013Background
- Frankford Crossing Shopping Center Dallas, a Delaware limited partnership with principal office in Rochester, NY, sues Silva, Smooth Sailing, and Pho in NY federal court under a lease with a New York forum selection clause.
- Lease provision §22.03 requires disputes to be decided in the courts where Owner’s principal office is located (New York).
- Guaranty signed by Silva unconditionally guaranteeing Aquaesque’s lease performance; the Guaranty is incorporated by reference into later amendments.
- Smooth Sailing substituted as tenant in 2007; substitution stated the lease remained in full force and effect.
- In 2012, Silva sued Frankford in Texas state court; Frankford sued Silva/guarantors in NY; actions were removed to federal court; Frankford moved to remand; defendants moved to dismiss/transfer.
- Magistrate Judge Ramirez recommended dismissal under forum selection; district court later adopted and granted remand to NY state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum-selection clause grants exclusive jurisdiction in NY fora. | Frankford argues clause binds NY state or federal courts in NY. | Defendants contend clause is not clearly New York-specific. | Yes; clause is mandatory and binding, enforcing NY forum. |
| Whether the forum-selection clause waives the right to remove the case to federal court. | Frankford contends clause does not waive removal rights. | Defendants argue waiver is not clearly explicit. | Yes; clause clearly waives removal rights, so remand appropriate. |
Key Cases Cited
- D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95 (2d Cir.2006) (upholds enforcement of forum-selection clauses in contracts)
- The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (Sup. Ct. 1972) (forum-selection clause enforceability criteria; mandatory vs. permissive)
- Preston Frankford Shopping Center Dallas, Tx. Ltd. Partnership v. Butler Dining Services, LLC, 757 F.Supp.2d 248 (W.D.N.Y. 2010) (similar NY forum-selection interpretation in lease/guaranty context)
- Global Seafood Inc. v. Bantry Bay Mussels Ltd., 659 F.3d 221 (2d Cir.2011) (mandatory forum selection clauses restrict to designated forums)
- John’s Insulation, Inc. v. Siska Constr. Co., 671 F.Supp.289 (S.D.N.Y.1987) (ambiguity in “shall be commenced” wording may affect removal waiver)
- Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460 (NY 1988) (fiduciary shield doctrine rejected in NY; individuals may be bound by forum clauses)
- JP Morgan Chase Bank, N.A. v. Reijtenbagh, 611 F.Supp.2d 389 (S.D.N.Y.2009) (waiver of removal rights via forum clause—court’s interpretation)