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

Filing 18


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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

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