Mark F. Bailey v. ERG Enterprises, LP
2013 U.S. App. LEXIS 1757
| 11th Cir. | 2013Background
- Buyers purchased Ginn Sur Mer lots in the Bahamas; contracts require Bahamas venue and Bahamian law.
- Mortgage financing from Bahamas Sales included Florida forum-selection and Florida law; only Buyers and Bahamas Sales are signatories.
- In May 2010, Buyers sued Bahamas Sales, Ginn Financial Services, Ginn officers, Ginn Title Services for appraisal fraud and related fraud schemes; also sued Credit Suisse entities for related fraud.
- District court dismissed for improper venue, holding claims fell within Bahamas forum-selection clauses and equitable estoppel allowed nonsignatories to invoke them.
- Court of appeals reverses, holding forum clauses do not cover certain claims and equitable estoppel does not authorize nonsignatories to enforce the Bahamas clause.
- Remand instructed for proceedings consistent with the opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Bahamas Sales bind to Florida venue via mortgage notes? | Buyers contend note clauses bind all obligors to Florida venue. | Defendants contend Bahamas Sales is not an obligor to the notes and venue is Bahamas. | No; Bahamas Sales not bound by Florida venue. |
| Do appraisal-fraud and Credit Suisse fraud claims fall within the forum clauses? | Claims relate to lot purchase contracts and agreements executed in connection with them. | Clauses cover disputes involving interpretation, enforcement, or related instruments. | Credit Suisse claims do not fall within the clauses; appraisal-fraud claims do not either. |
| Can nonsignatories invoke the forum clauses via equitable estoppel? | Equitable estoppel allows nonsignatories to enforce contractual forum clauses when appropriate. | Equitable estoppel should permit enforcement against nonsignatories if conditions are met because of related misconduct. | Equitable estoppel cannot be applied to allow Credit Suisse Entities to invoke the Bahamas forum clause; appraisal claims also not covered. |
Key Cases Cited
- Telecom Italia, SpA v. Wholesale Telecom Corp., 248 F.3d 1109 (11th Cir. 2001) (relates to contract when there is a fairly direct relationship)
- Int’l Underwriters AG v. Triple I: Int’l Invs., Inc., 533 F.3d 1342 (11th Cir. 2008) (scope of 'related to' requires direct relationship)
- In re Humana, Inc. Managed Care Litig., 285 F.3d 971 (11th Cir. 2002) (equitable estoppel prerequisites focus on actual dependence on contract)
- MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942 (11th Cir. 1999) (equitable estoppel as a basis to enforce forum clauses)
- Lawson v. Life of the S. Ins. Co., 648 F.3d 1166 (11th Cir. 2011) (equitable estoppel depends on plaintiff's actual reliance on contract)
- Liles v. Ginn-LA West End, Ltd., 631 F.3d 1242 (11th Cir. 2011) (claims may fall within forum clauses when tied to contract duties)
- Becker v. Davis, 491 F.3d 1292 (11th Cir. 2007) (scope of contract-based claims and related enforcement)
- Chase Manhattan Bank v. Rood, 698 F.2d 435 (11th Cir. 1983) (subsidiary standards for substantive law choices)