920 F. Supp. 2d 1176
D. Kan.2013Background
- Teran sues GB International and GB Miami for fiduciary, tort, unfair competition, declaratory relief, and contract claims; Defendants challenge personal jurisdiction and move to dismiss.
- GB International bought 65% of ACTP in 2004; ACTP merged with Teran Tractor in 2006 with Teran retaining 35% and Teran becoming ACTP’s Latin America Managing Director.
- Teran and GB International executed a Shareholders Agreement on Nov 9, 2006 granting GB Miami a call option to buy Teran’s ACTP shares for $1.
- A Redemption Agreement forced ACTP to redeem GB Miami’s shares and left Teran with a 5.8% ACTP stake; Teran later objected to various corporate practices by GB International.
- The Shareholders Agreement contains a forum selection clause mandating Kansas courts; Teran asserts five claims, and the court resolves personal jurisdiction and the sufficiency of the claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum selection clause governs all claims | Teran contends clause applies to all disputes arising under the Agreement, including tort claims | Defendants argue tort claims fall outside the clause | Forum selection clause covers all disputes related to the Agreement, including tort claims; personal jurisdiction denied on this basis |
| Whether the court has personal jurisdiction over Defendants | Plaintiff leverages the forum clause and contract-based contacts | Challenge to jurisdiction; merits of claim not yet addressed | Personal jurisdiction denied only insofar as related to the contract; clause supports jurisdictional reach over tort claims as well |
| Whether Counts I and II breach the Shareholders Agreement or are improper derivative claims | Plaintiff asserts direct injury from Defendants’ actions | In Kansas/Missouri/Florida, such claims are derivative, not direct | Counts I and II dismissed as improper direct actions; Count V related to Call Right preserved; other aspects of Count V dismissed without prejudice to amend |
| Whether the Shareholders Agreement claims fail for lack of contract breach | Call Right never became effective due to purported new agreement; contract breach alleged | Plaintiff resigned under earlier agreement; Call Right invoked wrongly | Plaintiff pleads plausible breach regarding Call Right timing; second allegation under Section 1.3(b) dismissed without prejudice to amend |
| Choice of law governing tort claims and whether public policy exceptions apply | Florida law should apply for damages suffered there | Kansas corporate conflicts rule governs; Missouri law applies to ACTP | Missouri law applies to tort claims due to ACTP’s corporate governance; public policy exception not met |
Key Cases Cited
- Bell Helicopter Textron, Inc. v. Heliqwest Int’l, Ltd., 385 F.3d 1291 (10th Cir. 2004) (standard for personal jurisdiction and related issues in mixed actions)
- OMI Holdings, Inc. v. Royal Ins. Co., 149 F.3d 1086 (10th Cir. 1998) (purpose and limits of forum selection clauses; immunity from jurisdiction)
- Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) (validity and enforcement of forum-selection clauses under due process)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clause enforcement; choice of law principles)
- Prince Alexander v. Beech Aircraft Corp., 952 F.2d 1215 (10th Cir. 1991) (corporate-law-based conflict and derivative vs direct actions)