ORDER
On March 14, 2014, the court heard argument on defendants’ motion to transfer or, in the alternative, to dismiss. Lawrence Skidmore and Kathleen Lyon appeared for plaintiff; Eric Enson appeared for defendants. Following the hearing, the court ordered supplemental briefing, which has now been filed. After considering the parties’ papers and arguments, the court GRANTS defendants’ motion to transfer.
I. BACKGROUND
On October 15, 2013, plaintiff Morgan Tire of Sacramento (Morgan Tire) filed a complaint alleging conversion, breach of county contracts and piggy-back contracts, intentional interference with prospective business advantage, breach of the covenant of good faith and fair dealing, and unfair business competition against Goodyear Tire and Rubber Company (Goodyear) and Wingfoot Commercial Tire Systems (Wing-foot) (collectively defendants). ECF No. 1.
Defendants filed a motion to change venue or dismiss on December 10, 2013. ECF No. 13. On December 31, 2013, plaintiff filed its first amended complaint (FAC). ECF No. 16. The court then denied the motion to dismiss as moot. ECF No. 17.
On January 21, 2014, defendants filed a new motion to transfer or to dismiss. ECF No. 20. Plaintiff opposed the motion, defendants filed a reply and plaintiffs filed an objection to new evidence defendants filed with the reply. ECF Nos. 23-25.
On February 25, 2014, the court asked the parties for supplemental briefing and rescheduled the hearing on the motion. ECF No. 26. The parties filed their supplemental briefs. ECF Nos. 27-28. Following the March 14, 2014, hearing, the court asked for additional supplemental briefing. ECF No. 31. As noted, the parties have now submitted their supplemental briefs in response to the court’s order. ECF Nos. 34-35.
II. ALLEGATIONS OF THE FIRST AMENDED COMPLAINT
Morgan Tire is a distributor of new tires and for twenty years, until December 2011, operated under a distributorship subject to a New Tire Agreement with Goodyear. FAC, ECF No. 16 ¶ 9 & Ex. A. In January 2012, Goodyear sent another agreement to Morgan Tire, but the latter did not sign it. ECF No. 16 ¶ 11. However, Morgan Tire and Goodyear agreed to continue to do business “under a partly written and partly oral agreement under those terms of the New Tire Agreement acknowledged by the well-established course of business dealings by and between [them] ...including supplying Goodyear tires to national accounts, ordering tires, prices and payment and credit terms for tires. Id. The parties have not previously been in any legal disputes. Id.
In 2001, Morgan Tire opened a Goodyear retread tire plant under a distributorship agreement for retread sales, the Retread Agreement. Id. ¶ 12. The parties have not executed a written Retread Agreement since 2003, but have continued to do business under a partly written, partly oral agreement reflecting their course of business dealings and reflecting
The New Tire and Retread Agreements, collectively the Distributorship Agreements, gave Morgan the exclusive right to service Goodyear’s national accounts, such as UPS and Federal Express; Goodyear tires were preapproved for these accounts. Id. ¶ 15.
Since 1993, Morgan Tire has had written agreements to supply new Goodyear tires to the County of Sacramento. Since 2009, it has had an agreement to supply the County with Goodyear retreads. Id. ¶ 17. In 2012 Morgan Tire again secured a contract with Sacramento County to supply both new and retread tires, using the pricing figures Goodyear employees input directly into Morgan Tire’s bid package. Id. ¶¶ 18, 20.' In order to fulfill its obligations to the County, Morgan Tire entered into a written subcontract with Goodyear for the latter to supply Morgan Tires with the requirements of the County contract. Id. ¶ 19. The City of Roseville and City of Sacramento piggy-backed onto Sacramento County’s agreement with Morgan Tire. Id. ¶ 22.
As part of its agreement to supply Morgan Tire with the retread material necessary to satisfy the County contract, Goodyear required Morgan Tire to use its “cushion and precure” process and to purchase and install new equipment at Morgan Tire’s retread plant. Id. ¶21 & Ex. D.
When Morgan Tire began talking about a retread agreement with Continental Tire some of Goodyear’s employees said Goodyear would not be pleased and would cancel Morgan Tire’s contract. Id. ¶ 24. On January 17, 2013, Morgan Tire received a letter from Goodyear terminating the Distributorship Agreements. Even before the termination went into effect, Goodyear cut off Morgan Tire’s access to Goodyear’s online ordering and accounting system and to the credit balances Morgan Tire had amassed. Id. ¶29. As a result, Morgan Tire did not have enough tire material on hand to honor its contracts with Sacramento County and the City of Roseville. Id. ¶ 3L Goodyear later told Sacramento County and the piggy-back contract parties its subsidiary Wingfoot could fulfill the contract at the same price as Morgan Tire. Id. ¶ 32.
The First Amended Complaint makes five claims: (1) conversion against Goodyear; (2) breach of the Sacramento County and piggy-back contracts, against Goodyear; (3) intentional interference with prospective business advantage against Goodyear and Wingfoot; (4) breach of the covenant of good faith and fair dealing against Goodyear; (5) unfair competition against Goodyear and Wingfoot.
III. MOTION TO TRANSFER
A. Standard
Under 28 U.S.C. § 1404(a) a district court may “transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented .... for the convenience of parties and witnesses.” 28 U.S.C. § 1404(a). Typically, in considering such a transfer, the court “must evaluate both the convenience of the parties and various public-interest considerations,” “weighting] the relevant factors and decid[ing] whether, on balance, a transfer would serve ‘the convenience of the parties and witnesses’ and otherwise promote ‘the interests of justice.’ ” Atl. Marine Constr. Co. v. U.S. Dist. Court, — U.S. —
Accordingly, where presented with such an agreement, the court must disregard plaintiffs choice of forum and the parties’ private interests. Id. at 581-82. It instead “considers] arguments about public-interest factors only,” and “those factors will rarely defeat a transfer motion.” Id. at 582. Further, “the party acting in violation of the forum-selection clause ... must bear the burden of showing that public-interest factors overwhelmingly disfavor a transfer.” Id. at 583. Finally, “when a party bound by a forum-selection clause flouts its contractual obligation 28 and flies suit in a different forum, a § 1404(a) transfer of venue will not carry with it the original venue’s choice-of-law rules.” Id. at 582.
Before the' court may consider the impact of any forum selection clause on plaintiffs choice of forum and the motion to transfer, it must first determine whether a contract exists and, if so, whether it contains the forum selection clause at issue. Kedkad v. Microsoft Corp., No. 13-0141,
When ruling on motions to transfer based on § 1404(a), the court may consider undisputed facts outside of the pleadings. See Martensen v. Koch, No. 12-05257,
B. Analysis
Defendants argue Goodyear’s contracts with Morgan Tire contain a forum selection clause that requires Morgan Tire to bring suit in state or federal court in Summit County, Ohio. Mot. to Transfer, ECF No." 20-1 at 11; see FAC, Ex. A, ECF No. 16 at 32 ¶ 30 (“Dealer agrees that Dealer shall commence, and that Goodyear may commence, any action arising out of .or relating to this Agreement in state or federal court in Summit County, Ohio.”) (New Tire Agreement). They also claim Morgan Tire is bound by admissions in the original complaint that even when the various agreements had lapsed, “Morgan Tire and Goodyear continued their business rela
Morgan Tire contends it was not bound by this clause because it was not a bargained-for, agreed upon term and did not carry over from past agreements; it may plead inconsistently in successive pleadings; the forum selection clause does not govern because it covers only those claims arising out of the New Tire Agreement, but not those arising out of the Retread Agreement, and cannot be relied on by Wingfoot, who did not sign any of the Agreements. Opp’n, ECF No. 23 at 12-20.
In reply, defendants argue a forum selection clause survives the termination of a contract; additionally, the order acknowl-edgement faxed after Morgan Tire submitted a purchase order following the lapse of the contract clearly stated that any disputes arising out of the orders would be subject to the forum selection clause. Reply, ECF No. 24 at 6-8 & No. 24-1 at 6 (“Customer agrees that Customer shall commence, and Seller may commence, any action arising out of or relating to this Acknowledgement, the goods supplied hereunder or the order relating thereto in a state or federal court in Summit County, Ohio.”).
Morgan Tire disputes that order ac-knowledgement forms containing the forum selection clause were faxed with every purchase order it placed and submits a copy of an order confirmation it received from Goodyear without a forum selection clause. PL’s Supplemental Brief (June 25, 2014), ECF No. 34-1, Ex. 1.
1. Judicial Admission
Defendants contend plaintiffs First Amended Complaint is an attempt to plead around admissions in the original complaint that the New Tire Agreement governed the parties’ business relationship over the past two decades. ECF No. 20-1 at 13. .They argue the court may strike or ignore the changed allegations because plaintiff did not explain them. Id. at 14.
Plaintiff argues its characterization of the New Tire Agreement in the First Amended Complaint is neither false nor misleading, but merely a clarification of the status of the New Tire Agreement with its forum selection clause. ECF No. 23 at 9-10. Plaintiff says it did not use the word “governed” in the complaint, which in fact made clear that the New Tire Agreement was not in effect at the time of the events described in the complaint and the First Amended Complaint. Id. at 10.
“[A] statement in a complaint may serve as a judicial admission,” but when the party who made the statement “explains the error in a subsequent pleading or by amendment, the trial court must accord the explanation due weight.” Sicor Ltd. v. Cetus Corp.,
Defendants rely on Bauer v. Tacey Goss, P.S., No. 12-00876, 2012 WL
In the original complaint here, plaintiff said that “[d]uring the last two decades, Morgan Tire has been under a distributorship agreement for new tire sales ... in the basic form and content as attached hereto as Exhibit ‘A.’ Often, the New Tire Agreement term would lapse between renewals. However, at all times Morgan Tire and Goodyear continued their business relationship under the terms of the New Tire Agreement.” ECF No. 1 ¶ 9. It is true plaintiff does not use the word “govern,” but it does say the business relationship was governed by the terms of the New Tire Agreement. Nevertheless, plaintiff explains in its opposition that the First Amended Complaint clarified that the New Tire Agreement in force at the time of the alleged wrongdoing “was by course of business and specifically not by Exhibit A, which Morgan Tire did not execute.” ECF No. 23 at 10.
“[T]here is nothing in the Federal Rules of Civil Procedure to prevent a party from filing successive pleadings that make inconsistent or even contradictory allegations. Unless there is a showing that the party acted in bad faith ... inconsistent allegations are simply not a basis for striking the pleading.” PAE Gov’t Servs., Inc. v. MPRI, Inc.,
2. Is there a contract containing a forum selection clause ?
The parties agree that California law governs the questions of contract formation and that defendants bear the burden of demonstrating the existence of a contract and the inclusion of the forum selection clause in that contract. Pl.’s Supplemental Br. (March 14, 2014), ECF No. 27 at 5-6, 9; Defs.’ Supplemental Br. (March 14, 2014), ECF No. 28 at 2-4; see also Welles v. Turner Entm’t Co.,
Despite defendants’ argument that California law applies, they rely on some out-of-state cases to support their position. For example, they argue a forum selection elause survives the termination of a contract, ECF No. 24 at 7, but cite to cases from the Eastern District of Pennsylvania and the Northern District of Illinois. Moreover, those cases address the situation where a party is suing for a claim that arose when a contract containing a forum selection clause was in force, but had ex
Defendants do cite to New Image Painting, Inc. v. Home Depot U.S.A., Inc., a Central District case, in support of their claim that a forum selection clause is not rendered invalid when a later agreement does not specifically revoke it. No. 09-1224,
The parties do agree that the Uniform Commercial Code (UCC) applies to the question of contract formation and contract terms. Although there is a split of authority whether distributorship agreements are governed by the UCC, see Boyd v. Oscar Fisher Co.,
Under the ÜCC, “[a] contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.” Cal. Com.Code § 2204; see also Cal. Com.Code § 2206(l)(a) (“An offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances.”). Plaintiff argues that when the parties act as though .they have a contract, section 2207(3) applies to fill in the terms. ECF No. 27 at 6. Under that section, “[c]onduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this code.” See Apex LLC v. Sharing World, Inc.,
Also under the UCC, a “course of dealing between the parties ... is relevant in ascertaining the meaning of the parties’ agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement.” Cal. Com.Code § 1303(d). “A ‘course of dealing’ is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.” Cal. Com.Code § 1303(b). See also Expeditors Int’l of Wash., Inc. v. Official Creditors Comm. of CFLC, Inc. (In re CFLC, Inc.),
Plaintiff argues the parties’ course of dealing supplies terms relating to their actual business, but the course of dealing does not cover the forum selection clause. ECF No. 27 at 6; ECF No. 23 at 14.
Defendants contend that the order ac-knowledgement forms provide further evidence that the parties’ relationship is governed by a valid and enforceable forum selection clause. ECF No. 35 at 2. According to this argument, the forms are part of the parties’ decades-long course of dealing, supplying the terms of the parties’ contractual relationship.
Plaintiff does not appear to deny it received the order acknowledgement forms defendants claim Goodyear faxed: plaintiff admits it requested Goodyear stop faxing the forms and says that the forms were “thrown away.”' ECF No. 34-1 ¶6. Plaintiff challenges the forms on the grounds that they are “partial page, illegible, and seemingly altered,” and were attached to a declaration made by “someone that had no direct knowledge of the same.” ECF No. 34 at 4. Plaintiff also objects to the court’s consideration of the forms because no proof of transmission was attached. ECF No. 27 at 7.
A confirmation that a fax reached' its destination, such as a confirmation page or destination phone number on a copy of the document, creates a rebuttable presumption that the fax was received. See Renegade Oil, Inc. v. Progressive Cas. Ins. Co.,
Here, defendants have not provided confirmation pages or destination phone numbers for the order acknowledgement forms, and therefore have not created a rebuttable presumption that plaintiff received the fax. As a result, whether the order acknowledgment forms were received by plaintiff is an issue of fact, which this court must resolve in favor of plaintiff for the purposes of establishing the existence of a forum selection clause. ' See Alcatel,
Defendants also. argue that after the New Tire Agreement expired, the parties continued to perform as before; their conduct implies they mutually assented to a new contract containing the same provisions as the New Tire Agreement, including that agreement’s forum selection
Plaintiff distinguishes Bowlin’s on the ground that the terms imported through the course of dealing were those relating to the day-to-day running of the business. Although plaintiff does not support its argument with citation to any case law, some cases have suggested a course of dealing incorporates those provisions the parties have addressed over the course of the contracts. New Moon Shipping Co., Ltd. v. MAN B & W Diesel AG,
Nevertheless, there are cases finding a forum selection clause incorporated into a contract through a course of dealing even in the absence of any evidence of litigation history between the contracting parties. See Bell, Inc. v. IFS Industries, Inc.,
3. Does the forum selection clause cover all of the claims ?
In Manetti-Farrow, Inc. v. Gucci America, Inc., the Ninth Circuit said that “because' enforcement of a forum selection clause necessarily entails interpretation of the clause before it can be enforced, federal law ... applies to the interpretation of forum selection clauses.”
The clause in this case provides that “Dealer agrees that Dealer shall commence, and that Goodyear may commence, any action arising out of or relating to this
The Ninth Circuit and courts in this circuit have recognized that the scope of a forum or venue selection clause is not necessarily limited to contract claims. Manetti-Farrow, Inc.,
In Manetti-Farrow, the plaintiff had entered into an exclusive dealership contract with Gucci. The contract contained a forum selection clause establishing Florence, Italy as the forum for any litigation “regarding interpretation or fulfillment” of the contract.
All of plaintiffs claims arise out of the contractual relation in this case. For example, plaintiff alleges that Goodyear breached the covenant of good faith and fair dealing by refusing to wind up outstanding amounts due to plaintiff, allegations which also underlie the conversion claim; plaintiffs claim- to amounts due flows from the underlying Distributorship Agreements. In addition, the prices for tires Goodyear supplied for plaintiff to use in the County and piggy-back contracts flowed from the parties’ Distributorship Agreements.
Finally, Wingfoot may also rely on the forum selection clause even though it was not a party to any contract with plaintiff. A forum selection clause may apply to non-signatories when the alleged conduct of those parties is closely related to the contractual relationship. Holland Am. Line Inc. v. Wartsila N. Am., Inc.,
4. Is the clause enforceable?
Once the court finds a valid forum selection clause, it should refuse to enforce it only in “exceptional cases,” based on an evaluation of public-interest,
IV. CONCLUSION '
For the reasons set forth above, the court GRANTS defendants’ motion to transfer.
IT IS SO ORDERED.
Notes
. The document is far from clear, as the print is very small and difficult to read, but the court reproduces it as well as it is able.
. "A novation is the substitution of a new obligation for an existing one,” and is "a contractual 'doctrine.” Howard v. Cnty. of Amador,
. Defendants also rely on National Union Fire Ins. Co. v. Showa Shipping Co., No. 97-16374, 16375,