Ufheil v. Carrabba's Italian Grill LLC et al

Filing 18

ORDER granting 10 Motion to Dismiss for improper venue; denying as moot 10 Motion to Change Venue. Clerk is directed to terminate this action. Signed by Judge David G Campbell on 8/22/11.(DMT)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Chad Ufheil,
Plaintiff,

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No. CV-11-0659-PHX-DGC
ORDER

vs.
Carrabba’s Italian Grill, LLC, a Florida
limited liability company; and OS
Restaurant Services, Inc., a Delaware
corporation,
Defendants.

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In September 2008, Plaintiff Chad Ufheil and Defendants Carrabba’s Italian Grill,

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LLC and OS Restaurant Services, Inc. entered into an employment agreement and

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addendum thereto (“the Agreement”).

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Defendants agreed to employ Plaintiff as the proprietor of a Carrabba’s restaurant located

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in Mesa, Arizona for a period of not less than five years effective August 1, 2008. Doc. 1

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¶¶ 6-8. Less than two years later, Plaintiff received a letter from Defendants informing

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him that his employment and limited partnership had been terminated effective May 22,

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2010. Id. at ¶ 12. One year later, Plaintiff filed suit in this Court asserting claims for

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breach of contract, breach of the covenant of good faith and fair dealing, and failure to

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pay wages. Id. ¶¶ 20-29.

Pursuant to the terms of the Agreement,

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The Agreement contains the following forum selection clause: “Employee hereby

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agrees that any action brought by Employee . . . against the Employer, the Company, or

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any of their affiliates, whether arising out of this Agreement or otherwise, shall be

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brought exclusively in the United States District Court for the Middle District of Florida,

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Tampa Division, or in the Circuit Court in and for Hillsborough County, Florida.”

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Doc. 10-1 at 12, ¶ 27. Defendants have filed a motion to dismiss for improper venue

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pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure. Doc. 10. The motion

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is fully briefed. Docs. 13, 17. For reasons that follow, the motion will be granted.1

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I.

Legal Standard.

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A motion to enforce a forum selection clause is to be brought as a motion to

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dismiss for improper venue under Rule 12(b)(3). Kukje Hwajae Ins. Co. v. M/V Hyundai

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Liberty, 408 F.3d 1250, 1254 (9th Cir. 2005). Federal law governs the validity of a

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forum selection clause.

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Cir.1996). Substantively speaking, “forum selection clauses are prima facie valid and

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should not be set aside unless the party challenging enforcement of such a provision can

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show it is ‘unreasonable under the circumstances.’” Id. (quoting M/S Bremen v. Zapata

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Off-Shore Co., 407 U.S. 1, 10 (1972)). In Bremen, the Supreme Court identified three

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circumstances where enforcement of a forum selection clause would be unreasonable:

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the clause was the product of fraud or overreaching, enforcement would deprive a party

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of his day in court, or enforcement would contravene a strong policy of the forum where

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the suit was brought. 407 U.S. at 12-18; see Murphy v. Schneider Nat’l, Inc., 362 F.3d

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1133, 1140 (9th Cir. 2004).

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II.

Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 325 (9th

Analysis.

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Plaintiff argues that the forum selection clause should be declared invalid because

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Defendants were in a position of “overweening” bargaining power, requiring Plaintiff and

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witnesses to litigate in Florida would be inconvenient, Arizona has a strong interest in

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protecting employees, and Plaintiff would be unable to seek certain damages for unpaid

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Defendants’ request for oral argument is denied because the issues have been fully
briefed and oral argument will not aid the Court’s decision. See Fed. R. Civ. P. 78(b); Partridge
v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).
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wages and attorneys’ fees in Florida. Doc. 13.

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A.

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Plaintiff concedes that the forum selection clause was secured through no fraud on

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the part of Defendants, but nonetheless asserts that “Carrabba’s was certainly in a

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position of ‘overweening’ bargaining power to the point where the forum selection clause

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was never a subject up for negotiation.” Doc. 13 at 4. In support of this assertion,

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Plaintiff notes that he is an individual who lives and works in Arizona, while Carrabba’s

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is a national chain which operates scores of restaurants throughout the United States.

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Doc. 13 at 4:17-19. Although the Court recognizes a disparity in bargaining power in

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Bargaining Power.

this case, such disparity is not sufficient to be characterized as “overweening.”

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In Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), the Supreme Court

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enforced a standard-form forum selection clause in a commercial cruise line ticket despite

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a recognizable disparity in bargaining power between the Washington residents and the

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Florida-based cruise line. In finding the forum selection clause valid and enforceable, the

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Supreme Court reasoned that a company has a “special interest in limiting the fora in

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which it could potentially be subject to suit,” that “a clause establishing ex ante the forum

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for dispute resolution has the salutary effect of dispelling any confusion about where suits

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arising from the contract must be brought and defended,” and that all parties who enter

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into contracts containing forum selection clauses benefit from reduced costs. 499 U.S. at

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593-594. The Supreme Court also found no indication that the company chose Florida as

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the forum in which disputes were to be resolved as a means of discouraging cruise

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passengers from pursuing legitimate claims. Id. at 595.

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Applying the Supreme Court’s reasoning to this case, the Court finds that Plaintiff

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has failed to establish overweening bargaining power sufficient to invalidate the forum

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selection clause. As a national chain with its principal place of business in Florida,

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Carrabba’s has a legitimate interest in limiting the fora in which it could be subject to

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suit, thus allowing it to minimize litigation expenses and conserve judicial resources.

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B.

Inconvenience.

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Plaintiff claims that if he were “required to litigate his Arizona wage contract

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rights in Florida, it will certainly be inconvenient for him and for virtually all of the

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witnesses.” Doc. 13 at 4-5. Specifically, he asserts that the Agreement was executed in

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Arizona, the restaurant that was the subject of the Agreement is located in Arizona, and

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nearly all witnesses that can attest to the manner in which Plaintiff operated the restaurant

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are in Arizona. Id. at 5. Although Plaintiff has identified inconveniences, he has not met

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the “heavy burden of showing that trial in the chosen forum would be so difficult and

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inconvenient that [he] would effectively be denied a meaningful day in court.” Argueta,

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87 F.3d at 325.

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C.

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Plaintiff argues that the forum selection clause should be set aside because

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Arizona has demonstrated a “strong public policy respecting employees,” as evidenced

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by A.R.S. § 23-1501 and § 23-355(A). Doc. 13 at 6. The Court finds these statutes

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insufficient to support setting aside the forum selection clause in the parties’ Agreement.

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Section 23-1501 merely provides for the nature of employment relationships, the basic

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severability requirements of those relationships, and the grounds upon which an

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employee has a claim against an employer for termination of employment.

Arizona’s Public Policy and Damages.

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Citing A.R.S. § 23-355(A), Plaintiff asserts that the Arizona legislature has

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“determined that the prompt and timely performance of employment contracts and the

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payment of wages to Arizona residents is of such importance that penalties may be

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imposed for failure of an employer to do so.” Doc. 13 at 7. Specifically, § 23-355(A)

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provides that if an employer “fails to pay wages due any employee, the employee may

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recover in a civil action against an employer or former employer an amount that is treble

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the amount of unpaid wages.” Defendants correctly assert that this treble damages

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provision has been construed by the Ninth Circuit to be available only where a “suit was

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for wages already performed.” Nieto-Santos v. Fletcher Farms, 743 F.2d 638, 642 (9th

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Cir. 1984). Given that Plaintiff’s complaint appears to seek damages for work not yet

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completed, the treble damages provision is not applicable to this case and enforcement of

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the forum selection clause will not prevent Plaintiff from receiving a fair damage award.

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Moreover, because the Agreement in this case contains a Florida choice of law

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provision (Doc. 10-1 at 12, ¶ 26), it is not clear that Plaintiff would be able to seek treble

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damages pursuant to Arizona law even if the case were litigated in this Court. By signing

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the Agreement, Plaintiff effectively waived his right to have Arizona law govern his

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claim for failure to pay wages.2

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Citing Sawyer v. Bill Me Later, Inc., No. CV 10-04461 SJO (JCGx), 2010 WL

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5289537 (C.D. Cal. Oct. 4, 2010), Plaintiff contends that because the Agreement contains

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both a forum selection clause and a choice of law provision applying Florida law, “the

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transfer of this case to Florida would contravene Arizona’s important and unique public

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policies designed to protect its citizens from either foreign or domestic employers who

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fail or refuse to pay wages.” Doc. 13 at 9. Sawyer is not binding on this Court and

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otherwise is distinguishable because it concerns public policy specific to California.

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Plaintiff has identified no analogous violation of public policy here. See Sawyer, 2010

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WL 5289537, at *6 (where a forum selection clause is bound together with a choice of

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law clause the former is unenforceable “if the two clauses work together to violate a

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strong California public policy”).

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III.

Conclusion.

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Plaintiff ultimately bears the burden of showing that venue is proper in this

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District. See Kelly v. Qualitest Pharm., Inc., No. CIV-F-06-116 AWI LJO, 2006 WL

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2536627, at *7 (E.D. Cal. Aug. 31, 2006) (citing Piedmont Label Co. v. Sun Garden

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Packing Co., 598 F.2d 491, 496 (9th Cir. 1979)). The Agreement entered into by the

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parties provides that Florida courts shall be the exclusive venue for all disputes between

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Defendants correctly note (Doc. 17 at 8) that Florida law provides a statutory basis for
employees to recover reasonable attorney fees incurred in action for unpaid wages. See Fla. Stat.
§ 448.08 (2010).
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the parties. Doc. 10-1 at 12, ¶ 27. That provision is presumed valid and enforceable.

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Doe 1 v. AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009). Plaintiff has not carried his

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“heavy burden” of showing that enforcement of the provision would be unreasonable.

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Bremen, 407 U.S. at 17. The Court will grant Defendants’ motion and dismiss this action

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for improper venue.

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IT IS ORDERED:

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1.

Defendant’s motion to dismiss for improper venue (Doc. 10) is granted.

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2.

The alternative motion to transfer is denied as moot.

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3.

The Clerk is directed to terminate this action.

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Dated this 22nd day of August, 2011.

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