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Kufahl v. Spaulding Decon Industries, Corp.

United States District Court, D. Kansas

October 23, 2019

JUSTIN KUFAHL, Plaintiff,
v.
SPAULDING DECON INDUSTRIES, CORP. and LAURA SPAULDING, a/k/a LAURA SPAULDING-KOPPEL, a/k/a LAURA KOPPEL, Defendants.

          MEMORANDUM AND ORDER

          ERIC F. MELGREN, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on the Defendants' Amended and Renewed Motion to Dismiss or Alternative Motion to Transfer (Doc. 26). Defendants ask the Court to dismiss the complaint based on the doctrine of forum non conveniens. In the alternative, Defendants ask the Court to transfer to the Middle District of Florida pursuant to 28 U.S.C. § 1404(a). For the reasons stated below, the Court denies the Motion to Dismiss and grants the Motion to Transfer.

         I. Factual and Procedural Background

         Plaintiff Justin Kufahl filed suit against Defendants Spaulding Decon Industries Corp. (“Spaulding Decon”) and Laura Spaulding. His claims arise out of a Franchise Agreement between Kufahl Decon, LLC and Spaulding Decon.[1] Spaulding Decon is a Florida corporation. Laura Spaulding is an individual residing in Florida and Spaulding Decon's chief executive.

         Spaulding Decon was formed by Laura Spaulding in 2014 to perform bio-hazard cleaning services. Upon signing a Franchise Agreement, Plaintiff become a franchisee on February 12, 2016. The Franchise Agreement contained the following forum selection clause:

23.7. Jurisdiction. YOU CONSENT AND IRREVOCABLY SUBMIT TO THE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED IN THE COUNTY AND STATE IN WHICH OUR PRINCIPAL HEADQUARTERS IS LOCATED, AND WAIVE ANY OBJECTION TO THE JURISDICTION AND VENUE OF SUCH COURTS. THE EXCLUSIVE CHOICE OF JURISDICTION DOES NOT PRECLUDE THE BRINGING OF ANY ACTION BY THE PARTIES OR THE ENFORCEMENT BY THE PARTIES IN ANY JUDGMENT OBTAINED IN ANY SUCH JURISDICTION, IN ANY OTHER APPROPRIATE JURSIDICTION OR THE RIGHT OF THE PARTIES TO CONFIRM OR ENFORCE ANY ARBITRATION AWARD IN ANY APPROPRIATE JURISDICTION.[2]

         Shortly after signing the Franchise Agreement, the business relationship between Plaintiff and Defendants began to deteriorate. On November 11, 2016, Spaulding Decon filed an action against Plaintiff and Kufahl Deacon for breach of the Franchise Agreement and Personal Guaranty in Hillsborough County, Florida. On February 9, 2019, Plaintiff filed this diversity action. Plaintiff's complaint contains seven separate claims, five against Spaulding Decon and two against Ms. Spaulding in her individual capacity.

         Before serving an answer to Plaintiff's complaint, Defendants filed a Motion to Dismiss.[3]The Court denied the motion without prejudice, and the Court requested additional briefing. On July 25, 2019, Defendants filed an amended and renewed Motion to Dismiss. They now seek dismissal on the basis of forum non conveniens or transfer pursuant to 28 U.S.C. § 1404(a).

         II. Legal Standard

         It is well settled that freely negotiated contracts, “unaffected by fraud, undue influence, or overweening bargaining power, ” should be given their full effect.[4] A forum selection clause contained in a freely entered into contract is prima facie valid.[5] The clause is enforced unless the party challenging it “'clearly show[s] that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.'”[6]

         The presence of a forum selection clause is a central factor when a district court considers the proper forum.[7] In Atlantic Marine Construction Co., Inc. v. U.S. District Court for the Western District of Texas, the United States Supreme Court determined that the appropriate procedure to enforce a forum selection clause is a motion to dismiss on forum non conveniens grounds or a motion to transfer under 28 U.S.C. § 1404(a).[8] Which particular avenue is appropriate depends on whether the forum section clause references a federal, state, or foreign forum.[9]

         Dismissal for forum non conveniens is proper when “an adequate alternative forum exists in a different judicial system and there is no mechanism by which the case may be transferred.”[10] Where a forum selection clause points to a state or foreign forum, dismissal is the avenue.[11] Where a forum selection clause considers a forum within the federal court system, “Congress has replaced the traditional remedy of outright dismissal with transfer.”[12]

         28 U.S.C. § 1404(a) provides a mechanism for district courts to “transfer any civil action to any other district or division where [the action] might have been brought or to any district or division to which all parties have consented.”[13] When a defendant files a § 1404(a) motion, the district court “should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer.”[14] To determine if extraordinary circumstances exist under a valid forum selection clause, the court does not give any weight to the plaintiff's choice of forum and should only consider arguments related to public-interest factors.[15] These factors include:

(1) administrative difficulties of courts with congested dockets which can be caused by cases not being filed at their place of origin; (2) the burden of jury duty on members of a community with no connection to the litigation; (3) the local interest in having localized controversies decided at home; and (4) the appropriateness of having diversity cases tried in a forum that is familiar with the governing law.[16]

         Deference is given to the contracted forum choice, and the plaintiff bears the burden of demonstrating why a transfer should not be granted.[17]

         III. Analysis

         Defendants seek dismissal or in the alternative, transfer, based on the forum selection clause contained in the Franchise Agreement signed by both parties. As a threshold matter, Plaintiff does not contest the validity of the Franchise Agreement's forum selection clause. Instead, Plaintiff simply contends that he asserts claims in his personal capacity and thus, is not bound by the forum selection clause.[18] Therefore, the clause is presumed valid.

         Defendants primarily assert that Plaintiff's complaint should be dismissed on the basis of forum non conveniens. Yet, Defendants concede that dismissal under forum non conveniens is only proper when “an adequate alternative forum exists in a different judicial system and there is no mechanism by which the case may be ...


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