Versant Funding LLC v. Teras Breakbulk Ocean Navigation Enterprises LLC
9:17-cv-81140
S.D. Fla.Sep 21, 2017Background
- Versant Funding, a Delaware factoring company, advanced funds to Teras entities (Teras Cargo, Teras Ocean, Teras Chartering) under factoring and security agreements; Sonny Joe Sanders provided personal performance guarantees.
- The factoring agreements contained a forum-selection clause requiring disputes to be litigated only in Palm Beach County, Florida state courts or the U.S. District Court for that county; the security agreements did not contain forum clauses.
- Versant alleges defendants breached contracts and guarantees and committed fraud after a $1,050,000 advance for cargo shipped on the M/V Seattle; the cargo was allegedly not delivered and the buyer paid nothing.
- Versant also sought appointment of a receiver to preserve defendants’ assets.
- Defendants moved to dismiss or, alternatively, to transfer under 28 U.S.C. § 1404(a) relying on the forum-selection clauses; the court considered whether the clauses covered all claims and whether exceptions applied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of forum-selection clause | Clause should not control because another contract provision (receivership provision) allows venue elsewhere | Forum-selection clause is clear and applies to contract and fraud claims | Clause is enforceable; contract and fraud claims must be litigated in Southern District of Florida |
| Scope of forum "carve-out" allowing Versant to "realize upon" collateral in other jurisdictions | The carve-out permits Versant to bring claims in other jurisdictions, including here | Carve-out applies only to post-judgment or enforcement actions to realize on collateral, not to pre-judgment contract/fraud claims | Carve-out is limited to actions to realize on collateral (post-judgment/enforcement); it does not apply to Versant's current claims |
| Effect of receivership provision on forum clause | Receivership clause governs venue for all claims because Versant may seek a receiver in any court | Receivership clause does not override forum clause for adjudication of contract/fraud claims | Receivership provision does not trump the forum-selection clause; it allows post-judgment or ancillary enforcement but not relocation of the underlying claims |
| Whether to transfer receivership claim separately or retain it here | Versant wanted receivership considered locally (implicitly) | Defendants argued for transfer of all interrelated claims consistent with forum clause | Court transferred receivership claim along with the others to Florida in the interest of judicial efficiency and consistency |
Key Cases Cited
- Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568 (2013) (forum-selection clauses should ordinarily be enforced via transfer under § 1404(a))
- Doe 1 v. AOL LLC, 552 F.3d 1077 (9th Cir. 2009) (federal law governs interpretation of forum-selection clauses)
- Manetti–Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509 (9th Cir. 1988) (guidance on applying federal law to forum-selection clauses)
- Klamath Water Users Protective Ass’n v. Patterson, 204 F.3d 1206 (9th Cir. 1999) (contract interpretation principles under federal law)
- Hawkins v. Gerber Prods. Co., 924 F. Supp. 2d 1208 (S.D. Cal. 2013) (transfer can promote efficiency and fairness when claims are interrelated)