United States District Court, S.D. Texas, Houston Division
OPINION ON TRANSFER
N. Hughes United States District Judge
a dispute about damaged goods. The buyer sent the seller a
tool that the buyer damaged in its warehouse. The buyer erred
by asking the seller for a replacement.
for Imaging, Inc., bought a weather instrument - Ci4000
Weather-Ometer - from Atlas Material Testing Technology, LLC.
Atlas sent Imaging a quote in July 2014. Peter Benoit, who
works for Imaging, responded with a purchase order. Atlas
sent the tool in November.
hired XPO Logistics Freight, Inc. - known as Con-Way - to
ship the tool from Atlas's plant in Chicago to
Imaging's warehouse in New Hampshire. The tool had a tip
indicator put on it.
November 11, 2014, Imaging noted that the indicator had not
been triggered when the tool arrived; however, the next day,
someone at Imaging noticed it had been. Imaging told Atlas
about this and moved the tool into its warehouse in early
December. Later that month, Atlas and Benoit met at
Imaging's warehouse and decided the tool was damaged
beyond repair. Imaging returned it to Atlas, and Atlas
replaced it. Atlas's insurance paid Imaging for the
damaged tool, and Imaging paid for the second tool by January
is an Illinois corporation. Imaging is a Delaware corporation
with its principal place of business in Fremont, California.
Imaging does not have an office, subsidiaries, telephone
listings, mailing listings, bank accounts, or other property
in Texas. Benoit works from his home in Austin, Texas.
Con-Way is a Delaware corporation with several offices in
brings a claim under three theories: (a) breach of contract,
(b) breach of bailment, and (c) recoupment.
Forum Selection Clause.
parties tried but did not include a forum selection clause in
their contract. Atlas's offer is conditioned on Imaging
accepting that Pennsylvania law governs their agreement.
Imaging's acceptance is conditioned on Atlas accepting
that California law governs their agreement. The parties'
writings do not form a contract, but their conduct
does. Atlas shipped the tool. Imaging paid for
it. The contract's terms are only what the parties agreed
to plus terms in state laws.
asks the court to enforce the forum selection clause in its
terms and to transfer the case to California. The forum
selection clause does not apply because it is canceled by
Atlas's. The action was brought in a Texas federal court,
so Texas choice of law rules apply. Texas follows the
Restatement (Second) Choice of Laws. Because the parties'
contract does not cover choice of law, the law of the state
with the most significant relationship to the transaction
applies. New Hampshire is the state with the most significant
relationship. The tool was either damaged in Imaging's
warehouse or it was not. New Hampshire has adopted article
two of the Uniform Commercial Code.New Hampshire's laws do
not provide a forum selection clause in a contract where
there is not one. If Texas, California, Pennsylvania, or
Illinois law applied, the result would be the same.
the forum selection clause does not apply, Imaging asks the
court to transfer the case to the Northern District of
Illinois or District of New Hampshire.
California company with a guy in Texas ordered a tool to be
sent to its New Hampshire warehouse. The forum selection
clauses cancel, and the state with the greatest interest is
New Hampshire. This is where the parties contracted to ship
the tool and where any damage occurred. The action will be