Plаintiff/appellant LFC Lessors, Inc. appeals from the district court’s allowance of defendant/appellee Pacific Sewer Maintenance Corporation’s mоtion to dismiss. The action arose out of a contract executed by the parties in 1980 for the lease of office equipment. LFC alleges that Pacific Sewer has defaultеd under the contract by failing to pay the monthly rental charges on the equipment and by failing to return certain equipment to LFC.
Pacific Sewer’s motion to dismiss was pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(3) and was based upon three grounds. Pacific Sewer alleged that
1. The amount in controversy involved in this action does not exceed the requisite amount of Ten Thousand Dollars ($10,000), exclusive of interest and costs;
2. Under the provisions of the contract between the parties, drafted by the plaintiff, this Court lacks subject matter jurisdiction; and
3. Under the provisions of the contrаct between the parties, the venue of .this action is not properly in this Court.
Appellee’s Appendix at 2.
As stated above, the motion to dismiss was granted, but the district court made no findings of fact or conclusions оf law; indeed, the court did not even file an opinion. Therefore, we come to this appeal without knowledge of the trial judge’s reasoning.
We turn first to Pacific Sewer’s argument thаt the district court was without jurisdiction to hear this diversity case because the amount in controversy was less than $10,000.
See
28 U.S.C. § 1332(a). Pa
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cific Sewer says that the action is founded on twenty-four months of disputed rental payments, said by Pacific Sewer to total $10,289.52. However, Pacific Sewer attached to its memorandum in support of its motion to dismiss copies of four checks to LFC for a total amount of $299.77 and a copy of its “payment record.” These copies, says Pacific Sewer, reflect a reduction of the amount in dispute to $9989.75, about ten dollars less than the jurisdictional amount. LFC, on the other hand, alleges damages of $12,270.42. Pacific Sewer does not allege that LFC has claimed this amount in bad faith.
See St. Paul Mercury Indemnity Co. v. Red Cab Co.,
As noted above, Pаcific Sewer also argues that the suit was dismissed properly because the contract’s forum selection clause deprived the district court of both subject matter jurisdiction and venue. The clause states in its entirety:
This Agreement shall be considered to be a MASSACHUSETTS contract and shall be deemed to have been made in Suffolk County, Massachusetts, regardless of the order in which the signatures of the parties shall be affixed hereto, and shall be interpreted, and the rights and liabilities of the parties hereto determined, in accordance with the law, and in the courts, of the Commonwealth of Massachusetts. Appellant’s Brief at 51.
Pacific Sewer says that the clause means that the contract is enforceable only in the Massachusetts
state
courts. LFC, as one might guess, argues that the clause also allows suit to be filed in a Massachusetts
federal
district court. The problem, then, is whether the phrase “in accordance with the law, and in the courts, of the Commonwealth of Massachusetts” is a term of sovereignty or simply a term of geography.
See City of New York v. Pullman Inc.,
Whatever the correct meaning of the phrase, it is clear that both Pacific Sewer and LFC have misperceived the effect of forum selection clauses in gеneral.
[S]uch a provision does not oust the jurisdiction of the courts; in effect it merely constitutes a stipulation in which the parties join in asking the court to give effect to their agrеement by declining to exercise its jurisdiction. There will always be open to either party the opportunity to present whatever evidence will move a court in the partiсular circumstances not to decline to exercise its undoubted jurisdiction.
Central Contracting Co. v. Maryland Casualty Co.,367 F.2d 341 , 345 (3d Cir. 1966).
*7 To argue, .then, that the forum selection clause quoted above deprives the federal district court in Massachusetts of jurisdiction and'venue is simply off the mark. The court’s subject matter jurisdiction was properly based on diversity of citizenship, and, as we have already explained, the suit appears to present the requisite amount in-controversy. Likewise, venue in the District of Massachusetts is proper under 28 U.S.C. § 1391(a), since it is uncontested both that LFC, the single plaintiff, is a resident of Massachusetts and that the contract was made there.
With this analysis in mind, one recognizes the inappositeness of Pacific Sewer’s motion to dismiss pursuant to Rules 12(b)(1) arid 12(b)(3). Instead, the motion should have been filed under 12(b)(6), urging dismissal for failure to state a claim upon which relief can be granted,
see Central Contracting,
Returning to the matter of the forum selection clause, we note first that the clause is at least somewhat ambiguous. The phrase “courts of Massachusetts” (emphasis added) could mean all the courts physically within the statе or only those courts that trace their origin to the state, i.e., the Massachusetts state courts. See Black’s Law Dictionary (5th ed. 1979). We -think, however, that the latter meaning is more likely to have been intended by the parties. The рhrase appears in the contract as follows: “in accordance with the law, and in the courts, of the Commonwealth of Massachusetts.” In this context, “in accordance with the law” and.“in the courts” are parallel structures, both in effect followed by “of the Commonwealth of Massachusetts.” The passage might have read “in accordance with the law of the Commonwealth of Massachusetts and in the courts of the Commonwealth of Massachusetts”, but instead the passage was written to avoid'this repetition by dovetailing “in acсordance with the law” and “in the courts” into a single “of the Common- ' wealth of Massachusetts.” The point, though, is that the intended meaning of the word “of” in this context must be the meaning’ that is appropriate for both of the parallel structures.
A metaphorical test drive of the two possible meanings may clarify the matter. To be sure, both “in the courts that trace their origin to the state” and “in the courts physically within the state” cruise the syntactic highway with .ease. Significantly, so does “in accordance with the law that traces its origin to the state.” On the оther hand, “in accordance with the law physically within the state” has not a drop of the fuel of logic and never leaves the driveway. Therefore, the word “of” as it appears in the phrase in question must have-been intended to restrict the meaning of both “law” and “courts” to those that trace their origin to the state. Accordingly, we deduce that the phrase in question was intended to mean that all actions on this contract must be brought in the Massachusetts state courts.
Furthermore, even if we were to agree that the phrase is completely ambiguous, so that neither possible meaning was more likely to have been intended than the other, a fundamental principle would control: an ambiguous contract shоuld be construed against the drafting party, which in this case is LFC.
See Chelsea Industries,
*8
Inc. v. Accuray Leasing Corp.,
In light of the above, we conclude that the district court’s allowance of Pacific Sewer's motion to dismiss was proper. The decision of the district court is AFFIRMED.
Notes
. At this juncture we should note that forum selection clauses have not always been well received by the courts.
M/S Bremen v. Zapata Off-Shore Co.,