L&M Ventures LLC et al v. Travelers Casualty & Surety Company of America et al

Filing 18

ORDER DENYING DEFENDANT'S MOTION TO DISMISS (SI, COURT STAFF) (Filed on 4/14/2011)

1
2
3
4
5

IN THE UNITED STATES DISTRICT COURT

6

FOR THE NORTHERN DISTRICT OF CALIFORNIA

7
8

L&M VENTURES, LLC, et al.,

9
United States District Court
For the Northern District of California

10
11
12
13

No. C 10-05764 SI

Plaintiffs,

ORDER DENYING DEFENDANT’S
MOTION TO DISMISS

v.
TRAVELERS CASUALTY & SURETY CO.
OF AM., et al.,
Defendants.

/

14
Defendant Lipscomb & Pitts Insurance Agency’s motion to dismiss is currently scheduled for
15
hearing on April 22, 2011. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate
16
for resolution without oral argument and hereby VACATES the hearing. Having considered the papers
17
submitted, and for good cause shown, the Court hereby DENIES defendant’s motion.
18
Defendant has filed a motion to dismiss the four counts alleged against it pursuant to Rule
19
12(b)(3) of the Federal Rules of Civil Procedure. Defendant states that “a forum selection clause in the
20
parties’ written agreement requires that any dispute arising out of the alleged agreement to procure
21
insurance be filed in Shelby County, Tennessee.” Memorandum at 3 (Doc. 4). Defendant states that
22
“[t]he contract terms at issue here are clear and subject to only one interpretation: the parties must
23
adjudicate any disputes arising out of the Agreement exclusively in the designated forum.” Id. at 6.
24
Defendant states that “[p]laintiffs contractually agreed that any lawsuit arising out of Lipscomb & Pitts’
25
procurement of insurance would be decided in the courts of Shelby County, Tennessee.” Id.
26
Rule 12(b)(3) is the proper tool for enforcing forum selection clauses. See Argueta v. Banco
27
Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996); see also Murphy v. Schneider Nat'l, Inc., 362 F.3d
28

1

1133, 1137 (9th Cir. 2004) (explaining that on a 12(b)(3) motion the pleadings need not be accepted as

2

true and the Court may consider facts outside of the pleadings). However, defendant has not presented

3

any evidence of a forum selection clause. Rather, defendant has cited to this single contract term:

4

6

Cutchin Decl. Ex. A at 30 (Doc. 4-1 at 36); see also Cutchin Decl. Ex. B. at 31 (Doc. 4-1 at 67)

7

(containing identical term). The first sentence of the provision purports to govern choice of law for

8

certain disputes.1 The second sentence of the provision purports to govern personal jurisdiction for

9

certain disputes—that is, it states that the Client will submit to the jurisdiction of the courts of Shelby

10
United States District Court
For the Northern District of California

5

Applicable Law: This Agreement shall be governed by, construed and enforced in
accordance with federal law and the laws of the State of Tennessee. If there is a lawsuit,
Client agrees to submit to the jurisdiction of the courts of Shelby County, Tennessee.

County, Tennessee if the Client is sued there.2 The provision is not a forum selection clause.

11

Defendant’s motion is DENIED. (Doc. 4.)

12
13

IT IS SO ORDERED.

14
15

Dated: April 14, 2011
SUSAN ILLSTON
United States District Judge

16
17
18
19
20
21
22
23
24

1

The parties disagree about whether the provision is applicable to this case. Because it
is not a forum selection clause, the Court does not need to consider that question at this time.
2

25
26
27
28

This is the only possible reading of the clause, even though the clause uses the reciprocalsounding phrase “If there is a lawsuit” rather than the more accurate but one-sided phrase “If Client is
sued.” Another clause on the same page of the contract uses the same language in the same manner:
The clause labeled “Collection Costs” says “Agent may hire or pay third-parties to collect amounts due
hereunder if Client does not pay according to the Agent’s credit policy, and Client will pay Agent any
amounts paid by Agent in so doing. This includes, subject to any limitations under applicable law,
Agent’s attorneys’ fees and legal expenses, whether or not there is a lawsuit . . . .” A “lawsuit” to
“collect amounts due” would be a lawsuit where the Client is sued.
2