Opinion
Civil Action No. SA-97-CA-1135
December 29, 1997
MEMORANDUM OPINION AND ORDER
The matter before the Court is Defendants' motion to dismiss or, in the alternative, for summary judgment or, in the alternative, to transfer this action to the proper venue. The parties have consented to the Magistrate Judge conducting all proceedings in this case, including the trial and entry of judgment. Therefore, under 28 U.S.C. § 636(c) and the District Court's random assignment of this case to me, I have jurisdiction to enter this order.
Docket Entry No. 32.
Background
This is a breach of contract case. On June 24, 1996, ICOR International and Mosan Corporation executed a "Sales and Marketing Agreement," under which Mosan agreed to be the exclusive sales and marketing representative for ICOR's product "Hot Shot," a Freon replacement. According to Mosan, ICOR engaged in a number of breaches of the agreement, culminating in notice to Mosan on September 5, 1997, that ICOR considered the agreement terminated. Consequently, Mosan sued ICOR and James Tieken, ICOR's president, seeking both injunctive relief and money damages.
ICOR and Tieken will be referred to collectively as "ICOR."
ICOR now moves the Court for dismissal, summary judgment, or transfer on four grounds. First, ICOR maintains that Mosan's complaint fails to allege that all conditions precedent have been performed or have occurred. Second, ICOR contends that Mosan failed to submit its claims to mediation before initiating this lawsuit, as required by the agreement. Third, ICOR argues that Mosan deliberately filed suit in the wrong district court in violation of the agreement's choice of law clause. And finally, ICOR argues that the case should be transferred to the Southern District of Indiana for the convenience of the parties and witnesses under 28 U.S.C. § 1404(a). For the reasons discussed below, I find that ICOR is not entitled to the relief it seeks, and accordingly, will deny its motion.
Conditions Precedent
ICOR first requests dismissal of Mosan's lawsuit because Mosan failed to allege in its complaint that all conditions precedent have been performed or have occurred. Since ICOR filed its motion, Mosan requested leave to file a second amended complaint which includes an averment that "all conditions set out in the Agreement made the basis of this action have been substantially complied with by Plaintiff and any other conditions contained therein that may constitute conditions precedent under the rule have been waived or excused by the Defendants' breach thereof. . . ." This is all that Federal Rule of Civil Procedure 9(c) requires. Today, I granted Mosan leave to file its second amended complaint, thus, rendering this ground for dismissal moot.
Docket Entry No. 31, Exhibit A, ¶ 6.
Forum Selection Clause
ICOR alternatively seeks dismissal based upon the agreement's choice of law clause:
The validity, construction, and enforcement of this Agreement shall be governed by the laws of the State of Indiana, excluding any choice of law rule of [sic] principle which might refer to the laws of another state. Each party consents and submits to this [sic] jurisdiction of the United States District Court for the Southern District of Indiana.
Agreement ¶ 14.
According to ICOR, this provision mandates jurisdiction and venue in the Southern District of Indiana. Mosan, on the other hand, argues that the language is permissive, and although Mosan consented to be sued in the Southern District of Indiana, it is not precluded from initiating this lawsuit in Texas.
I agree with Mosan that the only thing certain with regard to the parties' forum selection is that they consented to personal jurisdiction and venue in the Southern District of Indiana. Beyond that, the language does not clearly indicate that the parties intended that Indiana would be the exclusive forum for adjudication of all disputes arising out of the agreement. Faced with such an ambiguity, the agreement should be construed against the drafter, in this case, ICOR. Therefore, the language is permissive, and dismissal for filing in the wrong court is unwarranted.
Caldas Sons, Inc. v. Willingham, 17 F.3d 123, 128 (5th Cir. 1994) (language which provided "the laws and Courts of Zurich are applicable" permissive); Keaty v. Freeport Indonesia Inn, 503 F.2d 955, 957 (5th Cir. 1974) (provision which stated "the parties submit to the jurisdiction of the courts in New York" permissive).
The only proof of which party drafted the agreement is contained in the affidavit of Adrian Gamez, Mosan's president: "Mr. Tieken prepared and provided the original form of the Agreement to which we made suggested revisions." See Docket Entry No. 33.
Transfer for the Convenience of the Parties and the Witnesses
Again in the alternative, ICOR requests that the Court transfer venue of this case to the Southern District of Indiana under 28 U.S.C. § 1404(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.
Under § 1404(a), the movant — here ICOR — has the burden of demonstrating that a change of venue is warranted. When deciding whether a transfer is warranted, the Court considers the following factors: the availability and convenience of witnesses and parties, the location of counsel, the location of books and records, the cost of obtaining attendance of witnesses and other trial expenses, the place of the alleged wrong, the possibility of delay and prejudice if transfer is granted, and the plaintiff's choice of forum. The plaintiff's choice of forum is entitled to great deference, and should not be disturbed absent a clear showing of facts that establish either oppressiveness or vexatiousness towards a defendant as to be out of proportion to a plaintiff's convenience, or if a trial in the chosen forum is inappropriate because of considerations affecting the Court's own administrative and legal problems.
Peteet v. Dow Chemical Co., 868 F.2d 1428, 1436 (5th Cir. 1989), cert. denied, 493 U.S. 935 (1989); Federal Trade Comm'n v. Multinet Marketing, 959 F. Supp. 394, 395 (N.D.Tex. 1997); Carlile v. Continental Airlines, Inc., 953 F. Supp. 169, 170 (S.D.Tex. 1997).
Carlile v. Continental Airlines, Inc., 953 F. Supp. at 170; United Sonics, Inc. v. Shock, 661 F. Supp. 681, 683 (W.D.Tex. 1986).
Federal Trade Comm'n v. Miltinet Marketing, 959 F. Supp. at 396.
In support of its request for a transfer of venue, the only proof ICOR presents is the declaration of James Tieken, in which he states that:
ICOR is an Indiana corporation with its principal place of business in Indianapolis. All of ICOR's employees, shareholders and officers live and work in Indiana. All of ICOR's records are also stored in Indiana. ICOR's advertising agency, Ken Scott Associates, is also located in Indianapolis. One of ICOR's current employees, Paul McMurray, was formerly employed by Mosan. Mr McMurray now lives and works in Indianapolis.
Docket Entry No. 32.
Mosan presented similar proof that its employees are all in San Antonio, and that many of its witnesses, some of them former employees, would not be able to travel to Indiana to give testimony. Based upon this proof, which is mostly conclusory, ICOR has failed to demonstrate that Mosan's choice of forum should be disturbed. At most, the inconvenience that ICOR will experience by litigating this case in Texas would simply be shifted to Mosan if the case were transferred to Indiana. Having failed to sustain its burden, ICOR's motion to transfer venue should be denied.
Failure to Mediate
Finally, ICOR claims entitlement to summary judgment because Mosan failed to comply with provisions of the Agreement which require pre-litigation mediation. Rather than address this ground on the merits, I find that the interests of justice would be better served by requiring the parties to participate in mediation. Accordingly, I will defer ruling on this ground for summary judgment pending the outcome of the parties' mediation, which shall be directed by separate order.
Order
Accordingly, it is ORDERED:
1. ICOR's motion to dismiss for failure to plead in accordance with Federal Rule of Civil Procedure 9(c) is DENIED AS MOOT;
2. The motion to dismiss for failure to file in the proper court is DENIED;
3. The motion to transfer venue under 28 U.S.C. § 1404(a) is DENIED; and
4. The motion for summary judgment for failure to engage in pre-litigation mediation is DENIED WITHOUT PREJUDICE to re-urging should mediation in accordance with this Court's order prove unsuccessful.