Opinion
No. 1:02-cv-363
August 11, 2003
MEMORANDUM
Before the Court is the defendants' motion to dismiss [Court File No. 6] for improper venue pursuant to Rule 12(b)(3). After careful consideration, the Court has determined that the forum selection clause must be enforced; therefore, the motion to dismiss will be GRANTED.
I. FACTS
Although outlined in the previous memorandum, the Court will briefly reiterate the relevant facts of this case as alleged by the plaintiffs. Additional allegations shall be discussed where appropriate in the Court's analysis below.
Plaintiffs (collectively referred to as "Navair") bring various claims against the defendants (collectively referred to as "Aircenter"). These claims arise out of a contract in which Aircenter sold an airplane to Navair. The contract contained a forum selection clause, which reads: "Laws of the State of Tennessee shall govern this contract and transaction, and the parties further agree that venue for any matter relating to this contract shall be in Marion County, Tennessee." [Court File No. 1].
In its memorandum and order entered on April 10, 2003, the Court interpreted the forum selection clause ("Clause") to mean that any litigation arising from the contract would be brought in the state courts sitting in Marion County, Tennessee, and not this District Court, which encompasses Marion County. However, the Court reserved ruling on the motion to dismiss pending the parties' submission of briefs discussing the enforceability of the Clause.
II. STANDARD
The Court enforces forum-selection clauses absent a showing that to do so "would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972); see also Security Watch, Inc. v. Sentinel Sys., Inc., 176 F.3d 369, 374 (6th Cir. 1999) (stating "forum-selection clauses generally are enforced by modern courts unless enforcement is shown to be unfair or unreasonable."); Dyersburg Mach. Works, Inc. v. Rentenbach Eng'g Co., 650 S.W.2d 378, 380 (Tenn. 1983) (stating that Tennessee courts should enforce forum-selection clauses "unless the party opposing enforcement demonstrates that it would be unfair and inequitable. . . .").
To determine the enforceability of a forum-selection clause, the Sixth Circuit Court of Appeals examines (1) whether the Clause was obtained by fraud, duress, the abuse of economic power or other unconscionable means, (2) whether the designated forum would be closed to the suit or would not handle it effectively or fairly; or (3) whether the designated forum would be so seriously an inconvenient forum that to require the plaintiff to bring suit there would be unjust. Security Watch, 176 F.3d at 375 (citing RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 80 cmt. c (1988)).
III. ANALYSIS
Navair bears the burden of making a clear showing that enforceability of the Clause is unreasonable. See Carnival Cruise Lines v. Shute, 499 U.S. 585, 595 (1991). Navair argues the enforcement of the Clause would be unreasonable, unjust, and unfair because the state courts of Marion County, Tennessee, would be (1) "closed to the suit;" and (2) "a seriously inconvenient venue." [Court File No. 14].
A. Whether Marion County is Closed to the Suit
First, Navair asserts that Marion County is an improper venue and, thus, is closed to Navair's suit. Venue of actions is governed by statute. See TENN. CODE ANN. § 20-4-101 through § 20-4-211. Tennessee law provides: "In all civil actions of a transitory nature, unless venue is otherwise expressly provided for, the action may be brought in the county where the cause of action arose or where the defendant resides or is found." TENN. CODE ANN. § 20-4-101(a) (emphasis added). Venue is expressly provided for in another statute and is applicable in cases where one or more of the parties is a business entity: "When a corporation, partnership or individual has an office or agency in any county for the transaction of business, actions growing out of, or connected with, the business of that office or agency, may be brought in the county in which such office or agency is located." TENN. CODE ANN. § 20-4-104. Proper venue, therefore, may lie in more than one county. See Garland v. Seaboard Coastline R.R. Co., 658 S.W.2d 528, 533 (Tenn. 1983) (explaining that "this Court has consistently adhered to a construction of T.C.A. § 20-4-104 as allowing suits against business defendants to proceed in any county wherein defendant has an office or agency.")
To establish that Marion County is an improper venue, Navair must show that Aircenter does not have an office in Marion County. Because Navair cannot make this showing, the Court concludes that Marion County is not closed to Navair's suit and venue is proper there.
The parties' dispute has emerged from a United States Postal Service anomaly. Aircenter's corporate office, which is located in defendant Gary Gadberry's home, has a mailing address of 1027 Riverbend Drive, Chattanooga, Tennessee, 37419. The parties agree that Chattanooga is located in Hamilton County, Tennessee. Although the office has a Chattanooga mailing address, and Chattanooga is located in Hamilton County, the Court takes judicial notice that Aircenter's corporate office is physically located in Marion County. Riverbend Drive is on the Marion County side, or on the west side, of Elder Mountain.
Navair alleges that Aircenter's principal place of business is an office located near Lovell Field, the Chattanooga airport. The address of this airport office is 115 Nowlin Lane, Chattanooga, Hamilton County, Tennessee, 37421. Navair supports its allegation by pointing to several documents that comprise the parties' contract and are attached to the complaint [Court File No. 1]. Some correspondence from Navair was received by Aircenter at the Nowlin Lane office [Court File No. 1, Exs. 1, 2, 4, 5, 6]. The Aircraft Purchase Order also lists Nowlin Lane as Aircenter's address [Court File No. 1, Ex. 3]. On the other hand, the Aircraft Purchase Order also contains the forum-selection clause at issue. Additionally, the Acceptance Letter signed by Navair is printed on Aircenter stationary listing the Riverbend Drive address [Court File No. 7].
The office on Nowlin Lane may very well be Aircenter's principal place of business. However, venue is simply not determined by a defendant's "principal" place of business. Navair cannot dispute that Aircenter has an office located on Riverbend Drive in Marion County. Accordingly, venue is proper in Marion County. Venue just so happens to be proper in Hamilton County as well.
B. Whether Marion County is a Seriously Inconvenient Forum
Navair argues that bringing its suit in the state courts of Marion County "would be so seriously inconvenient as to effectively deprive [Navair] of their day in court." [Court File No. 11]. Navair asserts that many of the witnesses in this case reside outside of Tennessee in the states of Minnesota, Georgia, Ohio, and North Carolina. Navair anticipates the non-cooperation of these witnesses because they may be joined as parties or face other civil or criminal liability.
Navair asserts that Minnesota and North Carolina have not adopted the Uniform Foreign Depositions Act ("UFDA"). A state court in a jurisdiction that has adopted the UFDA has the authority to compel a witness to appear and testify at a deposition taken in that state for use in any case pending in a foreign state. See, e.g., OHIO REV. CODE ANN. § 2319.09; GA. CODE ANN. § 24-10-111; TENN. CODE ANN. § 24-9-103. Navair contends that the state courts of Marion County, Tennessee, unlike the federal system pursuant to the Federal Rules of Civil Procedure, cannot afford either party the authority to compel the depositions of witnesses in Minnesota and North Carolina.
Aircenter asserts that both Minnesota and North Carolina have an enforcement mechanism similar to that provided by the UFDA. See MINN.R.CIV.P. 45.04; N.C.R.CIV.P. 28(d)(1). North Carolina's Rule 28 provides, in relevant part:
A person desiring to take depositions in this State to be used in proceedings pending in the courts of any other state or country may present to a judge of the superior or district court a commission, order, notice, consent, or other authority under which the deposition is to be taken, whereupon it shall be the duty of the judge to issue the necessary subpoenas. . . .
N.C.R.Civ.P. 28(d)(1). Minnesota's Rule 45.04 is similar: "Proof of service of notice to take a deposition, as provided in [these rules] or in the rules of a state where the action is pending, constitutes a sufficient authorization for the issuance of subpoenas for the persons named or described therein." MINN.R.CIV.P. 45.04(a). This rule was designed to assist parties in out-of-state proceedings. See id. at advisory committee note ("[This rule] is designed to permit use of the Minnesota subpoena power to assist in taking depositions in Minnesota where the trial is pending in another state. . . . Proof of compliance with the discovery rules of the state where the action is pending is sufficient proof to permit the issuance of a Minnesota subpoena.").
These rules allow Navair to compel the deposition testimony of witnesses in those states. The Court concludes that there is no reason why the state courts of Marion County cannot effectively and fairly handle Navair's suit. Navair's inconvenience, if any, stems from witnesses being located outside of Tennessee and would be the same irrespective of whether this case is brought in state court or federal court.
IV. CONCLUSION
The Court is not persuaded by Navair's arguments. Because it is not unreasonable, unjust, or unfair, the Court will enforce the Clause. For the foregoing reasons, the plaintiffs' motion [Court File No. 6] will be GRANTED, and this case will be DISMISSED.
An order will enter.
ORDER
In accordance with the accompanying memorandum, the defendants' motion to dismiss [Court File No. 6] is GRANTED. This case is DISMISSED.
SO ORDERED.