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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    1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Chad Ufheil, Plaintiff, 10 11 12 13 14 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. 15 16 In September 2008, Plaintiff Chad Ufheil and Defendants Carrabba’s Italian Grill, 17 LLC and OS Restaurant Services, Inc. entered into an employment agreement and 18 addendum thereto (“the Agreement”). 19 Defendants agreed to employ Plaintiff as the proprietor of a Carrabba’s restaurant located 20 in Mesa, Arizona for a period of not less than five years effective August 1, 2008. Doc. 1 21 ¶¶ 6-8. Less than two years later, Plaintiff received a letter from Defendants informing 22 him that his employment and limited partnership had been terminated effective May 22, 23 2010. Id. at ¶ 12. One year later, Plaintiff filed suit in this Court asserting claims for 24 breach of contract, breach of the covenant of good faith and fair dealing, and failure to 25 pay wages. Id. ¶¶ 20-29. Pursuant to the terms of the Agreement, 26 The Agreement contains the following forum selection clause: “Employee hereby 27 agrees that any action brought by Employee . . . against the Employer, the Company, or 28     1 any of their affiliates, whether arising out of this Agreement or otherwise, shall be 2 brought exclusively in the United States District Court for the Middle District of Florida, 3 Tampa Division, or in the Circuit Court in and for Hillsborough County, Florida.” 4 Doc. 10-1 at 12, ¶ 27. Defendants have filed a motion to dismiss for improper venue 5 pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure. Doc. 10. The motion 6 is fully briefed. Docs. 13, 17. For reasons that follow, the motion will be granted.1 7 I. Legal Standard. 8 A motion to enforce a forum selection clause is to be brought as a motion to 9 dismiss for improper venue under Rule 12(b)(3). Kukje Hwajae Ins. Co. v. M/V Hyundai 10 Liberty, 408 F.3d 1250, 1254 (9th Cir. 2005). Federal law governs the validity of a 11 forum selection clause. 12 Cir.1996). Substantively speaking, “forum selection clauses are prima facie valid and 13 should not be set aside unless the party challenging enforcement of such a provision can 14 show it is ‘unreasonable under the circumstances.’” Id. (quoting M/S Bremen v. Zapata 15 Off-Shore Co., 407 U.S. 1, 10 (1972)). In Bremen, the Supreme Court identified three 16 circumstances where enforcement of a forum selection clause would be unreasonable: 17 the clause was the product of fraud or overreaching, enforcement would deprive a party 18 of his day in court, or enforcement would contravene a strong policy of the forum where 19 the suit was brought. 407 U.S. at 12-18; see Murphy v. Schneider Nat’l, Inc., 362 F.3d 20 1133, 1140 (9th Cir. 2004). 21 II. Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 325 (9th Analysis. 22 Plaintiff argues that the forum selection clause should be declared invalid because 23 Defendants were in a position of “overweening” bargaining power, requiring Plaintiff and 24 witnesses to litigate in Florida would be inconvenient, Arizona has a strong interest in 25 protecting employees, and Plaintiff would be unable to seek certain damages for unpaid 26 27 28 1 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). ‐ 2 ‐      1 wages and attorneys’ fees in Florida. Doc. 13. 2 A. 3 Plaintiff concedes that the forum selection clause was secured through no fraud on 4 the part of Defendants, but nonetheless asserts that “Carrabba’s was certainly in a 5 position of ‘overweening’ bargaining power to the point where the forum selection clause 6 was never a subject up for negotiation.” Doc. 13 at 4. In support of this assertion, 7 Plaintiff notes that he is an individual who lives and works in Arizona, while Carrabba’s 8 is a national chain which operates scores of restaurants throughout the United States. 9 Doc. 13 at 4:17-19. Although the Court recognizes a disparity in bargaining power in 10 Bargaining Power. this case, such disparity is not sufficient to be characterized as “overweening.” 11 In Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), the Supreme Court 12 enforced a standard-form forum selection clause in a commercial cruise line ticket despite 13 a recognizable disparity in bargaining power between the Washington residents and the 14 Florida-based cruise line. In finding the forum selection clause valid and enforceable, the 15 Supreme Court reasoned that a company has a “special interest in limiting the fora in 16 which it could potentially be subject to suit,” that “a clause establishing ex ante the forum 17 for dispute resolution has the salutary effect of dispelling any confusion about where suits 18 arising from the contract must be brought and defended,” and that all parties who enter 19 into contracts containing forum selection clauses benefit from reduced costs. 499 U.S. at 20 593-594. The Supreme Court also found no indication that the company chose Florida as 21 the forum in which disputes were to be resolved as a means of discouraging cruise 22 passengers from pursuing legitimate claims. Id. at 595. 23 Applying the Supreme Court’s reasoning to this case, the Court finds that Plaintiff 24 has failed to establish overweening bargaining power sufficient to invalidate the forum 25 selection clause. As a national chain with its principal place of business in Florida, 26 Carrabba’s has a legitimate interest in limiting the fora in which it could be subject to 27 suit, thus allowing it to minimize litigation expenses and conserve judicial resources. 28 ‐ 3 ‐      1 B. Inconvenience. 2 Plaintiff claims that if he were “required to litigate his Arizona wage contract 3 rights in Florida, it will certainly be inconvenient for him and for virtually all of the 4 witnesses.” Doc. 13 at 4-5. Specifically, he asserts that the Agreement was executed in 5 Arizona, the restaurant that was the subject of the Agreement is located in Arizona, and 6 nearly all witnesses that can attest to the manner in which Plaintiff operated the restaurant 7 are in Arizona. Id. at 5. Although Plaintiff has identified inconveniences, he has not met 8 the “heavy burden of showing that trial in the chosen forum would be so difficult and 9 inconvenient that [he] would effectively be denied a meaningful day in court.” Argueta, 10 87 F.3d at 325. 11 C. 12 Plaintiff argues that the forum selection clause should be set aside because 13 Arizona has demonstrated a “strong public policy respecting employees,” as evidenced 14 by A.R.S. § 23-1501 and § 23-355(A). Doc. 13 at 6. The Court finds these statutes 15 insufficient to support setting aside the forum selection clause in the parties’ Agreement. 16 Section 23-1501 merely provides for the nature of employment relationships, the basic 17 severability requirements of those relationships, and the grounds upon which an 18 employee has a claim against an employer for termination of employment. Arizona’s Public Policy and Damages. 19 Citing A.R.S. § 23-355(A), Plaintiff asserts that the Arizona legislature has 20 “determined that the prompt and timely performance of employment contracts and the 21 payment of wages to Arizona residents is of such importance that penalties may be 22 imposed for failure of an employer to do so.” Doc. 13 at 7. Specifically, § 23-355(A) 23 provides that if an employer “fails to pay wages due any employee, the employee may 24 recover in a civil action against an employer or former employer an amount that is treble 25 the amount of unpaid wages.” Defendants correctly assert that this treble damages 26 provision has been construed by the Ninth Circuit to be available only where a “suit was 27 for wages already performed.” Nieto-Santos v. Fletcher Farms, 743 F.2d 638, 642 (9th 28 ‐ 4 ‐      1 Cir. 1984). Given that Plaintiff’s complaint appears to seek damages for work not yet 2 completed, the treble damages provision is not applicable to this case and enforcement of 3 the forum selection clause will not prevent Plaintiff from receiving a fair damage award. 4 Moreover, because the Agreement in this case contains a Florida choice of law 5 provision (Doc. 10-1 at 12, ¶ 26), it is not clear that Plaintiff would be able to seek treble 6 damages pursuant to Arizona law even if the case were litigated in this Court. By signing 7 the Agreement, Plaintiff effectively waived his right to have Arizona law govern his 8 claim for failure to pay wages.2 9 Citing Sawyer v. Bill Me Later, Inc., No. CV 10-04461 SJO (JCGx), 2010 WL 10 5289537 (C.D. Cal. Oct. 4, 2010), Plaintiff contends that because the Agreement contains 11 both a forum selection clause and a choice of law provision applying Florida law, “the 12 transfer of this case to Florida would contravene Arizona’s important and unique public 13 policies designed to protect its citizens from either foreign or domestic employers who 14 fail or refuse to pay wages.” Doc. 13 at 9. Sawyer is not binding on this Court and 15 otherwise is distinguishable because it concerns public policy specific to California. 16 Plaintiff has identified no analogous violation of public policy here. See Sawyer, 2010 17 WL 5289537, at *6 (where a forum selection clause is bound together with a choice of 18 law clause the former is unenforceable “if the two clauses work together to violate a 19 strong California public policy”). 20 III. Conclusion. 21 Plaintiff ultimately bears the burden of showing that venue is proper in this 22 District. See Kelly v. Qualitest Pharm., Inc., No. CIV-F-06-116 AWI LJO, 2006 WL 23 2536627, at *7 (E.D. Cal. Aug. 31, 2006) (citing Piedmont Label Co. v. Sun Garden 24 Packing Co., 598 F.2d 491, 496 (9th Cir. 1979)). The Agreement entered into by the 25 parties provides that Florida courts shall be the exclusive venue for all disputes between 26 27 28 2 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). ‐ 5 ‐      1 the parties. Doc. 10-1 at 12, ¶ 27. That provision is presumed valid and enforceable. 2 Doe 1 v. AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009). Plaintiff has not carried his 3 “heavy burden” of showing that enforcement of the provision would be unreasonable. 4 Bremen, 407 U.S. at 17. The Court will grant Defendants’ motion and dismiss this action 5 for improper venue. 6 IT IS ORDERED: 7 1. Defendant’s motion to dismiss for improper venue (Doc. 10) is granted. 8 2. The alternative motion to transfer is denied as moot. 9 3. The Clerk is directed to terminate this action. 10 Dated this 22nd day of August, 2011. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ‐ 6 ‐ 

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