Case Information
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION
HADAS BENHAMOU, et al.,
Plaintiffs,
Case No. 21-10823 v. Hon. Denise Page Hood MOVING SOLUTIONS, LLC f/k/a
GOLD STANDARD RELOCATION,
A Florida limited liability company,
TRIPLE CROWN MOVING &
STORAGE, LLC, a Texas limited
liability company, FARMERS
INSURANCE, a California Insurance
entity, and JOHN DOE
CORPORATION,
Defendants.
___________________________ /
ORDER DENYING DEFENDANT’S MOTION TO DISMISS (ECF No. 19) I. I NTRODUCTION
This action arises from a dispute over a household move and involves two dissatisfied customers (“Plaintiffs”), various moving companies, and an insurance company. Before the Court is a Motion to Dismiss Based Upon Forum Selection Clause filed by one of the Defendants, Moving Solutions, LLC, f/k/a Gold Standard Relocations (“Moving Solutions”). ECF No. 19. For the reasons set forth below, the Court denies the Moving Solutions’ Motion to Dismiss.
II. B ACKGROUND
On June 17, 2020, Plaintiffs Hadas and Thomas Benhamou hired Moving Solutions for their residential move from Houston, Texas to Berkley, Michigan. (ECF No. 1-1, PageID.12). Moving Solutions, a freight broker, is a Florida limited liability company with its principal place of business in Palm Beach County, Florida. (ECF No. 19, PageID.370). According to Moving Solutions, the contract, electronically signed by Hadas Benhamou on June 17, 2020, included the following language:
1. The provisions of this Agreement, including the terms and conditions contained herein, represents the entire understanding and agreement between Gold Standard Relocation LLC., (Hereafter Gold Standard Relocation LLC.) and customer with respect to the subject matter hereof and supersedes all other negotiations, understandings and representations (if any) made by and between such parties. . . .
*** 5. As a properly licensed interstate moving coordinator/shipper agent/broker, Gold Standard Relocation LLC is not a motor carrier and will not transport an individual customer/shipper’s household goods, but will coordinate and arrange for the transportation of household goods by any FMCSA authorized motor carrier. . . .
*** 10. All of the terms and provisions of this Agreement; whether so expressed or not, shall be binding upon, inure to the benefit of, and be enforceable by the parties and their respective administrators, executors, legal representatives, heirs, successors and permitted assigns. . . .
*** 12. It is agreed by the parties as mandatory that this Agreement shall be governed by the internal laws of the State of Florida without regard to the principles of conflicts of law. Any dispute arising out of or relating to this Agreement shall be brought in the courts of record of the State of Florida and Palm Beach County or the court of the United States, Southern District of Florida in Palm Beach Florida. (ECF No. 19, PageID.381).
Plaintiffs allege that they were not given a copy of these terms and conditions when Ms. Benhamou electronically signed the contract. (ECF No. 1-1, PageID.16, 77). Plaintiffs allege that Moving Solutions only sent a confirmation email which included no forum selection clause. (ECF No. 1-1, PageID.14, ¶ 21; ECF No. 1-1, PageID.71-72).
On July 10, 2020, Ms. Benhamou and Moving Solutions spoke on the phone to re-confirm some details for the move. (ECF No. 1-1, PageID.16, ¶ 30). On that call, Ms. Benhamou stated her desire to add 56 pieces to the contract. (ECF No. 1- 1, PageID.16-17, ¶ 31-33). According to Plaintiffs, Moving Solutions only then attached a “Binding Move Estimate” which contained the forum selection clause. (ECF No. 1-1, PageID.17, ¶¶ 33-34). According to the Complaint, it was the “first time that Plaintiffs were made aware” of various contractual provisions including the forum selection clause. (ECF No. 1-1, PageID.20). Both parties signed the contract.
On July 14, 2020, Triple Crown Moving & Storage, LLC, a motor carrier contracted by Moving Solutions, packed up and picked up Plaintiffs’ household goods in Texas. (ECF No. 1-1, PageID.19-20, ¶ 43). On August 10, 2020, the items were delivered to the Benahmous’ new residence in Michigan. (ECF No. 1-1, PageID.21-22, ¶ 54-55).
Plaintiffs allege, and Moving Solutions disputes, a number of issues relating to this move: (1) household items were damaged or went missing during the move (ECF No. 1-1, PageID.23, ¶ 63-69); (2) Moving Solutions misrepresented that it, and not a third party, would be the actual mover (ECF No. 1-1, PageID.14 ¶¶, 19- 21); (3) Moving Solutions subcontracted with Triple Crown Moving & Storage, LLC without Plaintiffs’ permission (ECF No. 1-1, PageID.19, ¶ 40); (4) Moving Solutions did not ensure a timely pickup and delivery of their household items. (ECF No. 1- 1, PageID.12-18, 35-37).
III. P ROCEDURAL H ISTORY
On March 9, 2021, Plaintiffs filed a Complaint in Oakland County Circuit Court (Michigan), alleging the following counts against Moving Solutions: (1) ordinary negligence; (2) gross negligence; (3) common law fraud; (4) breach of contract; (5) innocent misrepresentation; (6) fraud in the inducement; (7) silent fraud; (8) unconscionability; (9) unilateral mistake; (10) intentional infliction of emotional distress; and (11) vicarious liability.
On April 12, 2021, (former) Defendant Texas Farmers Insurance Company, with the permission of all co-Defendants, removed this action from the Oakland County Circuit Court to this Court on the basis of diversity jurisdiction. (ECF No. 1, PageID.1-8). On August 24, 2021, Moving Solutions filed a Motion to Dismiss Based on the Forum Selection Clause. (ECF No. 19). Moving Solutions asserts, as an affirmative defense, that the forum selection clause in its contract with Plaintiffs requires the parties to resolve this dispute in Florida. Former United States District Judge Stephanie Dawkins Davis conducted a hearing on the Motion to Dismiss via video teleconference on March 23, 2022. Since that hearing, Judge Davis has been appointed and confirmed to sit on the Sixth Circuit Court of Appeals. This case was reassigned to the undersigned on June 16, 2022.
IV. L EGAL S TANDARD
A. 12(b)(3) Standard of Review
In determining a motion to dismiss under Rule 12(b)(3) for improper venue,
a plaintiff bears the burden of proving that the venue is proper under 28 U.S.C.
§ 1391.
Atlantic Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex
., 571 U.S.
49 (2013);
Audi AG & Volkswagen of Am., Inc. v. Izumi
,
“Whether the parties entered into a contract containing a forum-selection clause has no bearing on whether a case falls into one of the categories of cases listed in § 1391(b).” Id. A case filed in a district that falls within § 1391 “may not be dismissed under § 1406(a) or Rule 12(b)(3).” Id. (“Although a forum-selection clause does not render venue in a court “wrong” or “improper” within the meaning of § 1406(a) or Rule 12(b)(3), the clause may be enforced through a motion to transfer under § 1404(a).”).
B. 12(b)(6) Standard of Review
In determining a motion to dismiss under Rule 12(b)(6), the court “must
construe the complaint in the light most favorable to the [nonmoving party] . . . [and]
accept all well-pled factual allegations as true.”
League of United Latin Am. Citizens
v. Bredesen
,
A complaint is subject to dismissal for failure to state a claim if the
allegations, taken as true, show the plaintiff is not entitled to relief, such as “when
an affirmative defense . . . appears on its face.”
Jones v. Bock
,
As a general rule, a court cannot consider matters outside the four corners of
the complaint when ruling on a motion to dismiss under Rule 12(b)(6).
Clark v.
Walt Disney Co
.,
Moving Solutions attaches to the Motion to Dismiss the following exhibits: Exhibit A - Affidavit of Shannon Campanella (ECF No. 19-2, PageID.393); Exhibit A1 – 6/17/20 Contract (ECF No. 19-3, PageID.398); Exhibit A2 – 7/10/20 Contract (ECF No. 19-4, PageID.408); Exhibit B – Company Snapshot (ECF No. 19-5, PageID.418). The Court cannot rely on Exhibits A or B because they contain materials outside of the four corners of Plaintiffs’ Complaint. The Court can consider the contract exhibits (A1, A2) because they are incorporated into Plaintiffs’ Complaint either directly or by reference ( See ECF No. 1-1, PageID.13, ¶ 9; ECF No. 1-1, PageID.17, ¶ 34; ECF No. 1-1, PageID.80-85), and the Court has reviewed and incorporated Exhibits A1 and A2 into the Background section of this Order.
V. ANALYSIS
As an initial matter, Moving Solutions argues that Plaintiffs’ Response to the
present motion does not comply with Rule 56. (ECF No. 21, PageID.449-50)
(Plaintiffs “make all kinds of unsubstantiated factual allegations in their Brief in
support of their Response”). This argument is misplaced because Rule 56 governs
motions for summary judgment, not motions to dismiss, and Plaintiffs sufficiently
identify factual allegations in the Complaint throughout their Response. The Court
therefore proceeds under the Rule 12(b) standard and not under the Rule 56 standard. Pursuant to Rule 12(b), the Court “must construe the complaint in the light most
favorable to the [nonmoving party] . . . [and] accept all well-pled factual allegations
as true.”
League of United Latin Am. Citizens v. Bredesen
,
Moving Solutions argues that Plaintiffs’ Complaint should be dismissed pursuant to Rule 12(b)(3) and 12(b)(6) because “Hadas Benhamou and Moving Solutions entered into a written contract with Moving Solutions that contains a mandatory forum-selection clause requiring the parties to resolve all disputes exclusively in the courts for Palm Beach County, Florida.” (ECF No. 19, PageID.369). Moving Solutions did not file a motion to transfer venue or rely on the forum non conveniens doctrine. [1] As such, the Court will analyze only the validity and enforceability of the forum selection clause as a matter of law.
A. Improper Venue Moving Solutions argues that dismissal is warranted pursuant to Rule 12(b)(3) because a forum selection clause renders the venue improper (ECF No. 19, PageID.369), but this argument is misplaced. As Plaintiffs argue: (1) venue is proper because the Court has original subject matter jurisdiction under 28 U.S.C. § 1332; and (2) Rule 12(b)(3) is not the proper mechanism to enforce a forum selection clause, as a forum selection clause has no bearing on a Rule 12(b)(3) motion.
Under 28 U.S.C. § 1391(b), venue is proper in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated. 28 U.S.C. § 1391(b)(2); see also Medler Elec. Co v. Nilard Co., No. 05-10115-BC, 2005 WL 1983800 (E.D. Mich Aug. 12, 2005) (Lawson, J.) (finding venue proper because, among other reasons, a defendant caused goods to be sent to Michigan).
The Complaint alleges that “[t]he acts and omissions that form the basis of this action took place in whole and/or materially in Oakland County, Michigan.” (ECF No. 1-1, PageID.12, ¶ 2). Plaintiffs further alleges that: (a) they reside, and resided at all times to the relevant action, in Michigan ( Id. at ¶ 3); (b) Moving Solutions services residential and commercial moves nationwide, including in Michigan ( Id. at ¶ 5); (c) they hired Moving Solutions to move household goods to Michigan ( Id. at ¶ 8); (d) Moving Solutions subcontracted with Triple Crown to conduct this move to Michigan (ECF No. 1-1, PageID.19, ¶ 40); and (3) on August 10, 2020, John Doe Corporation delivered the household items to Plaintiffs’ Michigan residence where the property at issue is now located (ECF No. 1-1, PageID.22, ¶ 55). The Court finds that venue is proper under 28 U.S.C. § 1391(b), as a substantial part of the events and omissions giving rise to Plaintiffs’ claims occurred in this district and a substantial part of the household goods at issue in Plaintiffs’ claims is situated in this district.
Moving Solutions’ argument that venue is improper because of a contractual
forum selection clause is unavailing. Dismissal under Rule 12(b)(3) is permitted
only where venue is “wrong” or “improper.” In
Atlantic Marine Const. Co
, the
Supreme Court held that “[w]hether the parties entered into a contract containing a
forum-selection clause has no bearing on whether a case falls into one of the
categories of cases listed in § 1391(b). As a result, a case filed in a district that falls
within § 1391 may not be dismissed under . . . Rule 12(b)(3).”
For the reasons stated above, the Court denies the Motion to Dismiss based on Rule 12(b)(3).
B. Failure to State a Claim Moving Solutions argues that dismissal is warranted pursuant to Rule 12(b)(6) because the forum selection clause limits Plaintiffs’ ability to state a claim for relief. (ECF No. 19, PageID.384). Plaintiffs assert that: (1) a Rule 12(b)(6) motion is not the proper mechanism to enforce a forum selection clause; (2) there exists a dispute of material facts regarding the forum selection clause which precludes dismissal; and (3) even if Rule 12(b)(6) were a proper mechanism, they state a claim for relief in their Complaint on the grounds that the forum selection clause is not valid.
i. Dismissal Mechanism
Rule 12(b)(6) is a proper mechanism to enforce the forum selection clause at
issue in this case. The Supreme Court has not closed the door to these motions but
instead has only indicated that “a motion under Rule 12(b)(6), unlike a motion under
§ 1404(a) or the
forum non conveniens
doctrine, may lead to a jury trial on venue if
issues of material fact relating to the validity of the forum-selection clause arise.”
Atlantic Marine Const. Co
,
ii. Questions of Fact Plaintiffs argue that “Moving Solutions’ motion should be denied because it involves material questions of fact” and “[w]hether the clause at issue was obtained by unconscionable means involves the resolution of fact issues that have yet to be developed through discovery ( i.e. , the if, when and how Plaintiffs were presented with Moving Solutions’ terms and conditions, and if Plaintiffs had any reasonable alternative but to accept them).” (ECF No. 20, PageID.445). At this stage in the proceedings, however, the Court must ascertain whether Plaintiffs allege a plausible claim in their Complaint, not whether there exists a question of material fact.
iii. Validity of Forum Selection Clause
In a diversity suit, “the enforceability of a forum selection clause is governed
by federal law.”
Wong v. Partygaming LTD PLC
,
The party opposing the forum selection clause bears the burden of showing
that the clause should not be enforced.
Wong
,
The Court first concludes that Plaintiffs cannot show that the forum selection
clause should not be enforced based on the ineffectiveness, unfairness, or
inconvenience of proceeding in the forum designated in that clause. Plaintiffs have
not shown that another forum would ineffectively handle this suit, as they must do
as the party opposing a forum selection clause.
Wong
,
As to inconvenience, a party opposing a forum selection clause must show
that enforcement of the clause would be so inconvenient such that its enforcement
would be unjust or unreasonable.
Wong
,
As to whether the clause was obtained in an unconscionable manner, a party
opposing a forum selection clause must show: (1) fraud in the inclusion of the clause
itself; (2) that any agreement as to the forum selection clause was obtained
unknowingly; or (3) that any agreement as to the forum selection clause was obtained
unwillingly.
Wong
,
The Court does find, however, that Plaintiffs have met their burden of sufficiently alleging in the Complaint that that the agreement as to the forum selection clause was obtained unknowingly and unwillingly. Plaintiffs allege that they did not receive the terms and conditions of the forum selection clause when Ms. Benhamou first electronically signed the June 17, 2021 contract. They allege Moving Solutions only sent a confirmation email that did not include mention of any forum selection clause. (ECF No. 1-1, PageID.14, ¶ 21; ECF No. 1-1, PageID.71- 72). For this reason, the Court finds that Plaintiffs have alleged that their agreement to the forum selection clause was obtained unknowingly.
Plaintiffs also sufficiently allege that the forum selection clause was obtained unwillingly. Plaintiffs plausibly allege that the July 10, 2020 agreement was signed under duress, as they had no choice but to accept Moving Solutions’ terms and conditions without losing the buyer to their Texas home. According to the Complaint, it was only on July 10, 2020, when Plaintiffs requested additional items be moved, that Moving Solutions attached a “Binding Move Estimate” which contained the forum selection clause. (ECF No. 1-1, PageID.17, ¶¶ 33-34). The July 10, 2020 contract was executed three days before the July 14, 2020 move and was the “first time that Plaintiffs were made aware” of various contractual provisions. (ECF No. 1-1, PageID.20). Plaintiffs further allege that even if Moving Solutions had provided or explained the various contract provisions sooner, Plaintiffs would have been “left with no other choice but to accept them” given how close in time the move was. (ECF No. 1-1, PageID.18, ¶ 38). Plaintiffs allege that this put them under duress because they had to be moved out of their Texas home by the morning of July 15, 2020. (ECF No. 1-1, PageID.16, ¶ 27). The Court finds the that Plaintiffs have sufficiently alleged that the clause was obtained unwillingly.
In its Reply, Moving Solutions argues that Plaintiffs do not allege sufficient
factual allegations demonstrating the clause was obtained by unconscionable means.
For the reasons discussed above, the Court disagrees. For purposes of its Rule
12(b)(6) analysis, the Court is not persuaded by Moving Solutions’ argument that
Plaintiffs had “hundreds, perhaps thousands, of alternative sources with which they
could have contracted with to move their household goods from Texas to Michigan.”
(ECF No. 21, PageID.454). At the motion to dismiss stage, all well-pleaded factual
allegations as true, and the Court does not address alleged disputes of material fact
at this time.
League of United Latin Am. Citizens
,
As the Court has concluded that Plaintiffs have met their burden of alleging unconscionability as to the forum selection clause, the Court will not enforce the forum selection clause at this time. The Court will order the parties to engage in discovery, during which time they can ferret out the factual issues that will determine whether the forum selection clause should be enforced.
VI. C ONCLUSION
Accordingly, for the reasons discussed herein,
IT IS ORDERED that Defendant Moving Solutions’ Motion to Dismiss Based on Forum Selection Clause [ECF No. 19] is DENIED.
SO ORDERED .
Dated: August 24, 2022
s/Denise Page Hood H ON . D ENISE P AGE H OOD United States District Court Judge
Notes
[1] After the Supreme Court’s ruling in
Atlantic Marine Const. Co
., some defendants have
followed the Court’s guidance that a forum selection clause may be enforced by a motion to
transfer under 28 U.S.C. § 1404, for clauses invoking a federal court’s jurisdiction, or under the
doctrine of
forum non conveniens
, for clauses invoking a state or foreign forum’s jurisdiction.