757 F. Supp. 2d 248
W.D.N.Y.2010Background
- This case involves Preston Frankford Shopping Center Dallas, TX, Limited Partnership’s (Preston) lease with Newk's Café (Newk's) for space in Dallas, Texas, and a guaranty signed by Tommy and Gale Butler; the guaranty bonds Newk's performance of the lease covenants.
- The lease and guaranty contain forum selection provisions directing disputes to the forum where Preston’s principal office is located (Monroe County, NY), and grant consent to venue there.
- Preston sought a TRO previously; the court denied a temporary restraining order regarding the seizure of defendants’ movable property for unpaid rent.
- Defendants moved to dismiss for improper venue under Rule 12(b)(3) or, in the alternative, to transfer to the Southern District of Mississippi or Northern District of Texas under 28 U.S.C. § 1404(a).
- The court must determine enforceability of the forum selection clause and whether transfer or dismissal is proper; the clause appears permissive but is coupled with a waiver of objections to venue.
- The court ultimately denied both dismissal and transfer, keeping the case in this district.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum selection clause mandates NY venue. | Preston argues clause effectively designates Monroe County as forum. | Butlers contend clause was not communicated and is not mandatory. | Clause presumptively enforceable; not rebutted by defendants. |
| Whether the waiver of forum non conveniens affects enforceability. | Waiver strengthens enforceability of clause. | Waiver does not exist or applies differently. | Waiver plus forum selection makes clause mandatory when plaintiff chooses designated forum. |
| Whether transfer or dismissal is proper under 1404(a) and Bremen principles. | Plaintiff chosen forum; convenience weighs against transfer. | Transfers to Mississippi or Texas would be more convenient. | Transfer/dismissal denied; forum clause enforceable. |
| Whether the clause is enforceable given alleged concealment of terms. | Preston allegedly concealed forum clause. | No concealment; clause plainly drafted. | No fraud or concealment proven; enforceable. |
Key Cases Cited
- Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir.2007) (presumptive enforceability of forum clause; steps for enforcement)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (Supreme Court 1972) (forum selection clauses; stay or dismiss unless unreasonable or unjust)
- S.K.I. Beer Corp. v. Baltika Brewery, 612 F.3d 705 (2d Cir.2010) (limits on enforcement; strict interpretation of clause standards)
- Aguas Lenders Recovery Group v. Suez, S.A., 585 F.3d 696 (2d Cir.2009) (permissive vs mandatory forum clause in conjunction with waiver)
- AAR Int'l, Inc. v. Nimelia's Enter. S.A., 250 F.3d 510 (7th Cir.2001) (treatment of forum selection with binding effects)
- New York Marine and Gen. Ins. Co. v. Lafarge North America, Inc., 599 F.3d 102 (2d Cir.2010) (clear-and-convincing-evidence standard for transfer decisions)