Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

LLC v. Astonish Results, LLC

United States District Court, Fifth Circuit

January 23, 2014

1-STOP FINANCIAL SERVICE CENTERS OF AMERICA, LLC, Plaintiff,
v.
ASTONISH RESULTS, LLC f/k/a Astonish Results, L.P.; THOMAS COUTURE; and CREEKRIDGE CAPITAL LLC, Defendants.

ORDER

SAM SPARKS, District Judge.

BE IT REMEMBERED on January 7, 2014, the Court called a hearing in the above-styled cause, and Plaintiff 1-Stop Financial Service Centers of America, LLC, and Defendants Astonish Results, LLC, Thomas Couture, and Creekridge Capital LLC, appeared by and through counsel. Before the Court are Defendants Astonish Results and Thomas Couture's Motion to Dismiss and Alternatively, Motion to Transfer Venue [#10], Plaintiff's Response [#24], and Defendants' Reply [#27]; Defendant Creekridge Capital LLC's Motion to Dismiss, or in the Alternative, to Transfer Venue Pursuant to FRCP 12(b)(3) and 28 U.S.C. § 1406(a) [#11], Plaintiff's Response [#23], and Defendant's Reply [#26]; Defendant Creekridge Capital's Motion for Leave to File Sur-Reply to Defendants' Motion to Dismiss, or in the Alternative, to Transfer Venue, and Motion to Sever [#29], and Plaintiff's Response [#33]; Defendants Astonish Results and Thomas Couture's Motion to Stay Discovery and Motion for Protective Order [#35], and Plaintiff's Response [#41]; and Plaintiff's Motion for Leave to File Sur-Reply in Opposition to Defendants' Motions to Dismiss [#37]. Having reviewed the documents, the relevant law, and the file as a whole, the Court now enters the following opinion and orders.

Background

Plaintiff 1-Stop Financial Service Centers of America, LLC, (1-Stop) is an insurance agency, which contracted first with Defendant Astonish Results, LLC, (Astonish) to provide website design, marketing, social media, and search engine optimization services. Defendant Thomas Couture was the salesperson who directly marketed Astonish's services to 1-Stop. 1-Stop and Astonish entered into a Website Development Design and Marketing Equipment and/or Software License Agreement (the Marketing Agreement) on September 13, 2012. This contract contains the following forum selection clause:

This Agreement shall be governed by, and construed in accordance with the laws of the State of Rhode Island excluding its conflict of law rules. All actions and proceedings, interpretations, and any matters regarding enforceability or effect arising out of or relating to this Agreement shall be brought in any Rhode Island state or federal court sitting in the City of Providence, Rhode Island.

Pl.'s Resp. to Defs.' Mot. to Dismiss and, Alternatively, Mot. to Transfer Venue [#24-2], Ex. 1-A (Marketing Agreement), at 2.

After entering into the contract with Astonish, 1-Stop then entered into a separate agreement (the Lender Agreement) with Defendant Creekridge Capital, LLC, (Creekridge), a financial services company, which leased specific equipment and software to 1-Stop. In short, Creekridge provided 1-Stop the financing for 1-Stop's contract with Astonish. The Lender Agreement contains its own separate forum selection clause:

CHOICE OF LAW: THIS AGREEMENT WILL BE GOVERNED BY, ENFORCED IN AND INTERPRETED ACCORDING TO THE LAWS OF THE STATE OF MINNESOTA. YOU CONSENT TO EXCLUSIVE JURISDICTION IN THE STATE OR FEDERAL COURTS OF MINNESOTA.

Id., Ex. 1-B (Lender Agreement), at 2.

1-Stop later became dissatisfied with the performance of the contracts, and filed a lawsuit in Texas state court against Astonish, Couture, and Creekridge. The causes of action are: (1) breach of contract against Astonish, and (2) fraud in the inducement against all Defendants. See Notice of Removal [#1-3], Ex. C (Original Petition), at 12-14. 1-Stop seeks declaratory relief against Astonish and Creekridge establishing the contracts as unenforceable, rescission against Astonish and Creekridge, attorneys' fees against all Defendants, and punitive damages against all Defendants. Id. at 14-17.

After removing the case to federal court on November 4, 2013, Astonish and Couture filed a motion to dismiss or, in the alternative, motion to transfer venue. There are, in essence, three layers to this filing. First, there is a motion to dismiss based on improper venue according to Federal Rule of Civil Procedure 12(b)(3) because the forum selection clause directs any lawsuit arising out of the contract between 1-Stop and Astonish to be brought in Rhode Island. Second, there is the alternative motion to transfer pursuant to 28 U.S.C. § 1404(a) based on the forum selection clause. Third, there is the alternative motion to dismiss based on Federal Rule of Civil Procedure 12(b)(6) and failure to state a claim upon which relief can be granted.

Creekridge, after filing a plea in abatement, motion to dismiss, and answer in state court, consented to removal of the case to federal court. Creekridge subsequently filed in federal court its own separate motion to dismiss or, in the alternative, motion to transfer venue. The basis for Creekridge's motion is Rule 12(b)(3) and 28 U.S.C. § 1406(a), and Creekridge asks the Court to dismiss the claims against it due to improper venue. In the alternative, Creekridge wants the claims transferred to a proper venue, and the forum selection clause in the Lender Agreement mandates Minnesota as the sole venue for any disputes between 1-Stop and Creekridge.

1-Stop opposes both of these motions, arguing neither of the forum selection clauses are enforceable. Primarily, 1-Stop contends the clauses are contained in boilerplate, non-negotiated, and unconscionable contracts of adhesion. Creekridge filed a motion for leave to file a sur-reply to the motion to dismiss or, in the alternative, transfer to Rhode Island filed by Astonish. Creekridge opposes transfer of the entire case to Rhode Island, rather arguing, if the entire case must be transferred anywhere, it should be to Minnesota. In addition and in the alternative, Creekridge moves the Court to sever the case, allowing the claims against Creekridge to go to Minnesota and those against Astonish and Couture to go to Rhode Island. 1-Stop opposes severance.

Finally, 1-Stop filed a motion for leave to file a sur-reply to the Defendants' motions to dismiss, bringing to the Court's attention a recent case from the United States Supreme Court, which bears directly on enforcement of forum selection clauses and the issues of the case, Atl. Marine Constr. Co., Inc. v. U.S. Dist. Court for the W. Dist. of Tex., 134 S.Ct. 568 (2013).

Considering the complicated venue issues and the recent precedent from the Supreme Court, this Court called a hearing in order to allow the parties to argue their respective positions and explain the impact of Atlantic Marine on the outcome of the pending motions in this matter.

Analysis

I. Enforcement of Forum Selection Clauses and Atlantic Marine

A. Rule 12(b)(3) and 28 U.S.C. § 1406(a)

Section 1406(a) provides, "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." Rule 12(b)(3) states a party may move to dismiss a case for "improper venue." Therefore, these two provisions ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.