OPINION
This case is here on the motion of defendant, Page, Scrantom, Sprouse, Tucker & Ford, P.C. (“Page, Scrantom”), for the following relief: (1) dismissal of the claims of plaintiff, Danka Funding Company, L.L.C. (“DFC”), for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2); (2) dismissal of plaintiffs claims for failure to comply with N.J.S.A. 42:2B-57.a, requiring registration in New Jersey of foreign limited liability companies doing business in this state desiring to bring suit in New Jersey; or, in the alternative, (3) transfer of venue, under 28 U.S.C. § 1404, to the United States District Court for the Middle District of Georgia. The Court has considered these matters under Federal Rule of Civil Procedure 78. For the reasons stated herein, defendant’s motion will be denied.
BACKGROUND
The Parties
Page, Scrantom is a law firm with its sole office in Columbus, Georgia. (George Scran-tom Cert. ¶ 1). It does no business in New Jersey and has no ties to New Jersey other than this lawsuit. {Id. ¶ 2).
DFC is a New York limited liability company engaged in the business of acquiring, pledging, holding, and disposing of certain
The Lease
On January 29, 1997, Page, Scrantom entered into a lease to rent two Konica copiers and related equipment (“the Lease”). (Scrantom Cert., Ex. A.) The Lease was signed in Georgia, and its terms required Page, Scrantom to keep and use the equipment only at the firm’s Columbus, Georgia address. (Id.).
The supplier on the Lease is listed as “DANKA”, with an address in Columbus, Georgia. This Court understands that “DANKA” stands for Danka Industries and/or DANKA OFFICE IMAGING COMPANY (hereinafter “Danka”), a Delaware corporation. (See Davis Laney Aff., Ex. A; Defendant’s Reply Brief, p. 1). The Lessor is listed as “American Business Credit Corporation” (“ABCC”), with an address in St. Petersburg, Florida. (Laney Aff., Ex. A). ABCC is identified on the Lease’s letterhead as “A Danka Company”, and the copyright of the Lease identifies the lease-form as created and used by ABCC. (See Id.). Both ABCC and Danka are alleged to have them principle places of business in Florida; Page, Scran-tom, however, did business with those companies through a Columbus, Georgia office. (Defendant’s Reply Brief, p. 1).
The Lease contains a choice of law/forum-selection clause on its back, where the following language is printed in bold:
CHOICE OF LAW: THIS RENTAL AND EACH SCHEDULE SHALL BE GOVERNED BY THE INTERNAL LAWS FOR THE STATE IN WHICH OUR OR OUR ASSIGNEE’S PRINCIPAL CORPORATE OFFICES ARE LOCATED. YOU CONSENT TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN OUR OR OUR ASSIGN-EE’S STATE, AND WAIVE ANY OBJECTION RELATING TO IMPROPER VENUE. (Scrantom Cert., Ex. A).
Subsequent to the execution of the Lease, it was assigned to DFC. (Quiat Aff., Ex. B).
New Jersey Lawsuit
On January 14, 1998, DFC filed a complaint in the Superior Court of New Jersey, Bergen County, alleging that the assignor of the Lease had delivered to Page, Scrantom certain office equipment. (Id.). Page, Scrantom filed a removal to this Court based on diversity of citizenship.
DFC alleges that defendant has defaulted on its obligations by failing to make regular monthly payments due on the Lease. (Id.). Under the terms of the Lease, DFC argues that all obligations of the defendant are now accelerated and currently due, plus an additional one and one-third percent per month additional interest on all monies due. (Id.). DFC calculates the total amount owed to it as $112,452.71, in addition to other costs relating to this litigation. (Id.).
It is undisputed that all of the witnesses Page, Scrantom will likely call to testify are from Georgia. Nancy Bosch, Vice President of a company that acts as servicing manager for DFC, states in her affidavit that DFC will require “at least one, and perhaps as many as three witnesses from its home office in New Jersey” to testify in this case. (Bosch Aff. ¶ 10).
Georgia Lawsuit
On February 12, 1998, Page, Scrantom filed suit against Danka and ABCC in the United States District Court for the Middle District of Georgia, Columbus Division, Case No. 9:98-CV-32 (JRE). Page, Scrantom had learned of the New Jersey filing, but had not been served. Service of process in the Georgia lawsuit was performed on February 13, 1998, before service of this lawsuit on February 19, 1998. (Defendant’s Brief, p. 5). In the Georgia lawsuit, Page, Scrantom seeks rescission of the Lease and refund of Lease
For purposes of the Georgia lawsuit, Page, Scrantom has. identified eight witnesses of its firm with particular knowledge of the facts; all are from Georgia. (Laney Aff. ¶ 7). Dan-ka and ABCC have identified seven individuals, six identified as Georgia residents, and a seventh who’s address is listed as “unknown.” (Laney Aff., Ex. A).
DISCUSSION
A. Motion to Dismiss for Lack of Personal Jurisdiction
Defendant first moves to dismiss plaintiffs complaint under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. Parties to a contract are free to consent in advance to personal jurisdiction in a foreign court through the use of consent-to-jurisdiction clauses, also known as forum-selection clauses.
1
See M/S Bremen v. Zapata Off-Shore Co.,
The Third Circuit has noted that the construction of a contract is usually a matter of state, not federal, common law.
General Engineering Corp. v. Martin Marietta,
Accordingly, the initial step this Court must undertake is to determine what state law to apply when considering whether the forum-selection clause is an enforceable part of the contract agreed to by the parties. For this preliminary inquiry, the language of the clause itself is not authority for what law to apply. Rather, a federal court sitting in diversity must utilize the choice of law rules of the state in which it sits.
Day & Zimmermann, Inc. v. Challoner,
New Jersey courts have implemented the governmental-interest approach to choice-of-law questions, which requires application of the law of the state with the greatest interest in resolving the particular issue raised by the underlying litigation.
E.g. Gantes v. Kason Corp.,
Here, no actual conflict exists. Regarding the standard for consent to forum-selection
1. Fraud, Undue Influence, and Unequal Bargaining Power
A forum-selection clause will be set aside if it is the product of fraud or overreaching.
Coastal Steel Corp. v. Tilghman Wheelabrator Ltd.,
It is well established that silence may be fraudulent and that fraud may be found where one party suppresses facts that, under the circumstances, it has a duty to disclose.
Strawn v. Canuso,
The Court is also unmoved by defendant’s averments that it signed the agreement on a take-it-or-leave-it basis, implying an unequal bargaining position. (Laney Aff. pg. 2). Defendant is a law firm. The signatory to the Lease on behalf of the defendant was a vice-president and partner of the firm who had been employed by defendant for over twenty-three years. As such, the defendant must be considered to have entered into exactly the type of arm’s-length negotiation by experienced and sophisticated businessman that favors upholding such clauses.
See M/S Bremen, supra,
2. Forum Results in Serious (Unreasonable) Inconvenience
The Third Circuit has made clear that “a party objecting to the enforcement of a forum selection clause as ‘unreasonable’ must meet a strict standard of proof.”
In Re Diaz Contracting, Inc.,
Here, defendant argues that all of the witnesses it will call live in Columbus, Georgia. Defendant further points out that Danka and ABCC have also identified six out of seven witnesses from Georgia in the Georgia lawsuit. Defendant’s sole place of business is in Georgia, and all of its employees reside therein.
This Court understands that defendant will incur more costs as a result of defending suit in New Jersey, but defendant has not submitted any evidence that it will be effectively deprived of its day in court if jurisdiction is maintained. Defendant has
3. Public Policy
Defendant briefly argues that enforcement of the forum-selection clause in this case would violate New Jersey’s policy in favor of deciding all related controversies in a single lawsuit.
See Joel v. Morrocco,
4. Miscellaneous
Defendant also raises another argument that does not neatly fit into any of the preceding categories. Basically, defendant contends that the terms of the forum-selection clause are not enforceable as no specific jurisdiction is cited in the language of the contract.
In
Shelter Sys. v. Lanni Builders,
Any actions, claims or suits (whether in law or equity) arising out of or relating to this Contract, or the alleged breach thereof, shall be brought only in courts located in the State where Seller’s principal place of business is located.
The defendants in Shelter likewise argued that they did not know, upon signing the agreement, the location of the plaintiffs principal place of business. The court ruled: “It is tempting to rule that it does not matter if they did not know; having agreed to a forum in which to litigate disputes, they should have inquired where it was.” Id. The court did not need to go so far, however, as it concluded that defendants were in possession of facts capable of alerting them that New Jersey was involved. Specifically, the plaintiffs letterhead showed five addresses, one of which identified the New Jersey location. Id.
Under the facts of the instant case, this Court is willing to hold what the Appellate Division contemplated, but did not need to hold in Shelter. Accordingly, where a forum-selection clause professing consent to jurisdiction in the state where a party’s or its assignee’s principal place of business lies is part of an agreement in a sophisticated business transaction, and one party to the agreement is a law firm, the forum-selection clause is valid absent fraud, serious inconvenience, or a violation of public policy, notwithstanding that the law firm was unaware of the assignee’s principal place of business at the time of signing the agreement. The law firm, because it professes to be bound by such an agreement, must make any inquiries it feels necessary to ascertain the identity of the assignee before it enters into the agreement. Failure to so inquire will result in the Court’s conclusion that the law firm has consented to jurisdiction wherever the party’s or its assignee’s principal place of business lies.
B. Motion to Dismiss for Plaintiffs Failure to be Registered in New Jersey at Time of Filing
The New Jersey Limited Liability Company Act, N.J.S.A. 42:2b-l et seq., contains a qualifying statute that reads as follows:
a. A foreign limited liability company doing business in this State may not maintain any action, suit or proceeding in this State until it has registered in this State, and has paid to this State all fees and penalties for the years or parts thereof, during which it did business in this State without having registered. N.J.S.A. 42:2B-57a.
DFC was registered to transact business in New Jersey from December 21,1995, until May 15, 1997, at which point the registration either lapsed or was withdrawn. DFC filed suit in the Superior Court of New Jersey, Law Division, Bergen County, on January 14, 1998. DFC became aware of the lapse through plaintiffs pleadings and has since re-registered on May 7, 1998. Based on the language of the qualifying statute, defendant posits that plaintiff had no standing to file suit and, therefore, plaintiffs claim should be dismissed.
Although defendant’s conclusion is reasonable from a casual reading of the statute, it is not the law in New Jersey. Time and time again, New Jersey courts have reiterated their understanding that a company’s failure to register before filing does not require dismissal so long as the company corrects the deficiency and files during the proceedings.
See Materials Research Corp. v. Metron,
Defendant reasons that the cases cited could not be meant to apply in its own circumstances, where defendant had filed in another jurisdiction after plaintiff filed suit in New Jersey, but before plaintiff re-registered. Defendant argues that, because of these facts, defendant should be considered to have filed first for purposes of applying the first-filed rule. The first-filed rule is inapplicable, however, as the filed actions in New Jersey and Georgia involve different parties and different issues.
See Equal Employment Opportunity Comm’n v. University of Pennsylvania,
Furthermore, there is no reason to suppose that the, rather straight-forward interpretation given by New Jersey courts to qualification statutes should be muddled by holding registration not to relate back to the original filing for purposes of the first-filed rule. No suggestion exists in any of the qualification cases that failure to register at commencement of suit affects other possibly related timeliness issues, such as the first-filed rule. In fact, the specific language of the statute only forbids “maintainfing]” an action, not the commencement of one.
See
C. Motion to Transfer Venue under 28 U.S.C. § 1404(a)
Page, Scrantom seeks, in the alternative, a transfer of venue from this Court to the United States District Court for the Middle District of Georgia pursuant to 28 U.S.C. § 1404(a), which provides:
(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
The Supreme Court has held that federal common law rules govern the enforceability of a forum selection clause in federal court, where jurisdiction is based on diversity and a party moves to transfer the action under § 1404(a).
Stewart Organization, Inc. v. Ricoh Corp.,
The decision whether to transfer an action rests in the sound discretion of the trial court “appraising the practical inconvenience posed to the litigants and to the court should a particular action be litigated in one forum or another.”
Lony v. E.I. DuPont de Nemours & Co.,
In Jumara, the Third Circuit enumerated various private and public interests protected by § 1404(a). Private interests include: (1) “plaintiffs forum preference as manifested in the original choice,” (2) “the defendant’s preference,” (3) “whether the claim arose elsewhere,” (4) “the convenience of the parties as indicated by them relative physical and financial condition,” (5) “the convenience of the witnesses-but only to the extent that the witnesses may actually be unavailable for trial in one of the fora,” and (6) “the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).” Id. at 879 (citations omitted).
Public interests include: (1) “the enforceability of the judgment,” (2) “practical considerations that could make the trial easy, expeditious, or inexpensive,” (3) the relative administrative difficulty in the two fora resulting from court congestion, (4) “the local interest in deciding local controversies at home,” (5) “the public policies of the fora,” and (6) “the familiarity of the trial judge with the applicable state law in diversity cases.” Id. at 879-80 (citations omitted).
Although it is clear that defendant’s forum preference is Georgia, plaintiffs preference for New Jersey deserves deference. “[C]ourts of this circuit have noted ‘unless the balance of convenience of the parties is strongly in favor of defendant, the plaintiffs choice of forum prevails.’ ”
Telebrands Direct Response Corp. v. Ovation Communications, Inc.,
In this case, it is clear that the negotiation and signing of the Lease occurred in Georgia. DFC’s choice of forum is therefore accorded less deference. However, because DFC’s principal place of business is in New Jersey, and because this Court has found a valid forum-selection clause to be in effect consenting to venue in New Jersey and professing to waive any object'jn to improper venue, DFC’s choice of its home forum is still entitled to greater deference than Page, Scran-tom’s choice.
Defendant’s other arguments are equally unavailing. Although the facts giving rise to defendant’s claims in its Georgia lawsuit arose in Georgia, here the Lease has been assigned to a New Jersey company. DFC has a considerable interest in protecting its rights under the Lease. Such rights stem from the contract itself. This Court sees no difficulty in determining the rights of DFC under the assignment in this forum.
In addition, defendant has presented no evidence that Page, Scrantom will be unable to physically or financially defend suit in this forum. No evidence has been offered that any witnesses will be unavailable for trial in New Jersey. A similar showing is lacking concerning any required books and records.
A consideration of the public interests counsels no different conclusion. Any judgment awarded by this Court at trial, if any, would be easily domesticated in Georgia. Circumstances do not make it impractical to try this matter here, and there is no reason to transfer due to court congestion; this Court is confident that it is capable of providing an efficient, final, and correct resolution to this matter. New Jersey has a considerable interest in providing protection of its laws to foreign companies making their homes in this state, and no public policy of New Jersey mandates transfer. Finally, the choice of law provision in the contract indicates that New Jersey law is suitable, and this Court will have no difficulty applying the same.
CONCLUSION
Accordingly, this Court will deny defendant’s motion to dismiss, or, in the alternative, to transfer. The valid forum-selection clause contained in the Lease provides this Court with personal jurisdiction. Plaintiff has re-registered and, thus, the statutory impediment barring suit is removed. Finally, the Court is convinced that defendant, a law firm, seeks to accomplish through transfer what defendant failed to through contract. Because the plaintiff was entitled to choose its home forum and because the validity of the forum-selection clause deserves considerable weight — -which weight is not counterbalanced by the other factors — this Court declines to grant defendant relief. Trial of this matter will be scheduled for October 13,1998 at 9:30 a.m.
An appropriate Order is attached.
ORDER
In accordance with the Court’s Memorandum Opinion filed herewith,
It is on this 28th day of September, 1998
ORDERED that defendant’s motions to dismiss, or, in the alternative, to transfer are denied; and it is further
ORDERED that the trial of this matter will commence on October 13, 1998 at 9:30 a.m.
Notes
. The clause in question concerns both choice-of-law and forum-selection language. On this motion, however, the defendant has challenged the forum-selection language and not that relating to choice-of-law.
. The defendant concedes that Georgia follows the approach to forum-selection clauses outlined in
M/S Bremen,
but maintains that the result of
Central Ohio Graphics, Inc. v. Alco Capital Resource, Inc.,
In
Central,
Aleo Capital Resource Incorporated (Aleo), entered into an agreement with Central Ohio Graphics Incorporated (Central) to lease two copier machines. The agreement contained an entirely open-ended forum selection clause that read " 'Aleo Capital has the option of pursuing any action under this agreement in any court of competent jurisdiction and the customer [Central] consents to jurisdiction in the state of our choice.’ ”
Id.
at 434,
.
Accord Clay v. Dep't. of Transp.,
. Defendant contends that it did not receive consideration for the inclusion of the clause because plaintiff had already pre-approved defendant as a potential assignee before the Lease was actually signed. This argument fails because any specific negotiations would have presumably affected the price of the Lease and the terms of its assignment, notwithstanding the quoted price based on the standard pre-approved assignee and lease-form.
See Carnival Cruise Lines, Inc. v. Shute,
