Rogovsky Enterprise, Inc. v. Masterbrand Cabinets, Inc.
88 F. Supp. 3d 1034
D. Minnesota2015Background
- Rogovsky Enterprise, Inc. (Florida corporation) sued MasterBrand Cabinets, Inc. (Delaware corporation with principal place in Indiana) after MasterBrand terminated a 7-year Exclusive Distribution Agreement granting Rogovsky certain distribution/franchise-related rights and rebates.
- The Agreement obliged Rogovsky to promote MasterBrand products, maintain a Florida showroom and avoid selling competing products; it contained choice-of-law (Indiana) and a forum-selection clause requiring litigation in Indiana.
- Rogovsky alleges breach of contract and multiple state franchise-law claims after MasterBrand terminated Rogovsky’s right to sell additional franchises effective December 31, 2013.
- MasterBrand did not file an answer or Rule 12 motion but participated in mediation and filed a motion to transfer venue (§ 1404(a)) and a motion to stay; Rogovsky moved for an entry of default.
- The magistrate ordered MasterBrand to file a response by July 31, 2014; the district court heard arguments and resolved three motions: default, transfer, and stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default should be entered for failure to file an answer or Rule 12 motion | Rogovsky: MasterBrand failed to timely answer or file Rule 12 motion → default under Fed. R. Civ. P. 55 | MasterBrand: Appeared, mediated, and filed dispositive/administrative motions showing intent to defend | Denied — court exercised discretion; appearance and motions showed intent to contest, no contumacious conduct |
| Whether to transfer venue to Southern District of Indiana under 28 U.S.C. § 1404(a) given a forum-selection clause | Rogovsky: Forum clause should not be enforced because Minnesota public policy (Minn. R. 2860.4400(J)) bars waiving forum for franchise claims; also emphasizes Minnesota connections | MasterBrand: Clause is valid and enforceable; public-interest factors do not overcome it; Indiana is appropriate forum under clause | Granted — Minnesota is proper venue initially, but clause valid and enforceable; public-interest factors do not overcome clause; transfer to S.D. Ind. ordered |
| Whether the Agreement is a franchise/area-franchise contract subject to Minnesota franchise public-policy protection | Rogovsky: Agreement granted franchisor/subfranchisor rights and Rogovsky paid/expended value (showroom, exclusivity) constituting franchise fees/area franchise rights | MasterBrand: Agreement is a supplier/distribution arrangement, not a franchise; no franchise fee, Rogovsky sold "Kitchen & Home Interiors" franchises, not MasterBrand franchises | Held: Agreement is not a franchise or area-franchise contract under Minn. Stat. § 80C; Rogovsky not a franchisee/subfranchisor; Minnesota administrative forum restriction (Minn. R. 2860.4400(J)) does not apply |
| Whether to stay proceedings pending transfer motion | Rogovsky argued against stay | MasterBrand sought stay during transfer consideration | Denied as moot after court granted transfer |
Key Cases Cited
- Ackra Direct Marketing Corp. v. Fingerhut Corp., 86 F.3d 852 (8th Cir. 1996) (entry of default judgment is discretionary)
- Jones Truck Lines, Inc. v. Foster's Truck & Equip. Sales, Inc., 63 F.3d 685 (8th Cir. 1995) (default judgments are disfavored)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses valid absent fraud or overreaching)
- Atlantic Marine Const. Co. v. U.S. District Court for the Western District of Texas, 134 S. Ct. 568 (2013) (valid forum-selection clauses control § 1404(a) analysis; plaintiff’s forum choice merits no weight)
- Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988) (forum-selection clause weight and transfer considerations)
- Time Equip. Rental & Sales, Inc. v. Harre, 983 F.2d 128 (8th Cir. 1993) (default judgment appropriate only where clear record of delay or contumacious conduct)