Kava Culture Franchise Group Corp. v. Darrigan Investments LLC

Filing 51

ORDER dismissing this case under the plain and unambiguous language of the forum-selection clause as to Dar-Jkta Enterprises, LLC, David Darrigan, and Johnny Qubty and dismissing without prejudice as to Darrigan Investments LLC. The Clerk of Court is DIRECTED to terminate all existing deadlines and deny all pending motions as moot. No later than June 1, 2023, Plaintiff may file an amended complaint against Darrigan Investments LLC only. If Plaintiff chooses to proceed in litigation against all Defendants in a different forum, the Court requests that Plaintiff file a notice with this Court advising it of such. Otherwise, the Court will, without further notice, order the closure of this case if an amended complaint solely against Darrigan Investments LLC is not filed by June 1, 2023. Signed by Judge John L. Badalamenti on 5/18/2023. (RHG)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
KAVA CULTURE FRANCHISE
GROUP CORP., a Florida corporation,
Plaintiff,
Case No: 2:23-cv-278-JLB-KCD

v.
DAR-JKTA ENTERPRISES LLC, a
Texas limited liability company,
DARRIGAN INVESTMENTS LLC,
a Texas limited liability company,
DAVID DARRIGAN, an individual,
JOHNNY QUBTY, an individual,
Defendants.

/
ORDER

This is an action by a franchisor, Kava Culture Franchise Group Corporation
(“Plaintiff”), seeking, among other things, to enforce non-compete clauses in two
franchise agreements (referred to herein as the “Franchise Agreements”). This
Court previously granted a temporary restraining order preventing one of the
defendants from operating a competing business in violation of one of the noncompete provisions. (See Doc. 13 at 18–19).
At issue is whether the case should proceed in the United States District
Court for the Middle District of Florida given the identical forum-selection clause in
the Franchise Agreements. The Court conducted a hearing addressing this issue,
(see Doc. 34; Doc. 42), and provided the parties time to brief this issue after that
hearing (see Doc. 43).
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The forum-selection clause in the Franchise Agreements states that
“[j]urisdiction and venue of any lawsuit between the parties hereto shall be in the
Lee County Court in Fort Myers, Florida, U.S.A.” (Doc. 2-2 at 28, § 18.03; Doc. 2-3
at 31, § 18.03).
The Eleventh Circuit has explained that a plaintiff generally dictates where a
case will proceed. “A plaintiff’s choice of forum is entitled to deference, and there is
a presumption in favor of a plaintiff’s choice.” Wilson v. Island Seas Invs., Ltd., 590
F.3d 1264, 1269 (11th Cir. 2009). But where parties have agreed to a valid forumselection clause, the plaintiff’s choice of forum “merits no weight” and “a district
court should ordinarily transfer the case to the forum specified in that clause.”
Atlantic Marine Const. Co., Inc. v. U.S. Dist. Court for Western Dist. of Texas, 571
U.S. 49, 62–63 (2013). Absent “extraordinary circumstances unrelated to the
convenience of the parties,” a forum-selection clause should be enforced. Id. at 52.
And “the practical result is that forum-selection clauses should control except in
unusual cases.” Id. at 64.
Plaintiff and Defendants agree that the Franchise Agreements contain a
forum-selection clause, but Plaintiff requests that the Court either ignore the clause
or stretch its meaning beyond the words included in such clause. (See Doc. 48).
And although Defendants initially argued that the forum-selection clause was
unenforceable because it was part of an “illegal” contract (see Doc. 29 at 2), they
changed course in later briefing, agreeing that the Court should dismiss this matter
because it does not comply with the forum-selection clause. (See Doc. 47 at 3).

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I.

Whether the forum-selection clause is enforceable.
First, this litigation clearly falls under the forum-selection clause because the

text describing its subject matter is incredibly broad: “Jurisdiction and venue of any
lawsuit between the parties hereto shall be in the Lee County Court.” (Doc. 2-2
at 28, § 18.03; Doc. 2-3 at 31, § 18.03) (emphasis added).
“Forum-selection clauses are presumptively valid and enforceable unless the
plaintiff makes a ‘strong showing’ that enforcement would be unfair or
unreasonable under the circumstances.” Krenkel v. Kerzner Int’l Hotels Ltd., 579
F.3d 1279, 1281 (11th Cir. 2009) (citation omitted).
A forum-selection clause will be invalidated when: (1) its
formation was induced by fraud or overreaching; (2) the
plaintiff would be deprived of its day in court because of
inconvenience or unfairness; (3) the chosen law would
deprive the plaintiff of a remedy; or (4) enforcement of the
clause would contravene public policy.
Id. Defendants initially seemed to argue that enforcement of the forum-selection
clause would contravene public policy because the Franchise Agreements are illegal
under Texas law. (See Doc. 29 at 4–5). In their subsequently filed brief addressing
the impact of the forum-selection clause, Defendants switched gears and asserted
that the Court should enforce the forum-selection clause. (See Doc. 47).
Nevertheless, the Court addresses this argument since it is part of the record and
because Plaintiff suggests that the Court need not enforce the forum-selection
clause because Defendants have alleged fraud. (See Doc. 48 at 8–9).
Defendants have not made a “strong showing” that the forum-selection clause
in the Franchise Agreements was the product of fraud. The Eleventh Circuit has
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found that a party’s “reliance on [a] broader alleged fraudulent scheme . . . is a
nonstarter.” Don’t Look Media LLC v. Fly Victor Ltd., 999 F.3d 1284, 1298 (11th
Cir. 2021).
The fraud exception ‘does not mean that any time a dispute
arising out of a transaction is based upon an allegation of
fraud, as in this case, the clause is unenforceable. Rather,
it means that a[] . . . forum-selection clause in a contract is
not enforceable if the inclusion of that clause in the
contract was the product of fraud or coercion.
Don’t Look Media LLC, 999 F.3d at 1298 (alterations in original) (quoting Scherk v.
Alberto-Culver Co., 417 U.S. 506 (1974)). Defendants do not allege that inclusion of
the forum-selection clause in the Franchise Agreements was the product of fraud.
And their allegations that the overall Franchise Agreements are void and
unenforceable are unpersuasive and, in fact, abut conclusory. Even assuming the
Franchise Agreements were, somehow, void and unenforceable, that would not
impact the enforceability of the agreed-upon forum-selection clause the Franchise
Agreements prescribed––the Lee County Court. See Rucker v. Oasis Legal Fin.,
L.L.C., 632 F.3d 1231, 1237–38 (11th Cir. 2011) (rejecting premise that a forum
selection clause could not be given effect because it was included within a contract
that was void as a matter of law, and stating that “[a] forum selection clause is
viewed as a separate contract that is severable from the agreement in which it is
contained”); AFC Franchising, LLC v. Purugganan, 43 F.4th 1285, 1293 (11th Cir.
2022) (“[A] forum-selection clause isn’t automatically rendered unenforceable if one
of the parties claims that the contract of which it is part is void or voidable due to
fraud, illegality, etc.”).
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Thus, the Court finds that the forum-selection clause itself is enforceable and
need not decide whether the overall Franchise Agreements are illegal, void, or
unenforceable.
II.

Whether the forum-selection clause is mandatory.
Having found that the forum-selection clause applies to this matter and is

enforceable, the Court addresses Defendants’ argument that the forum-selection
clause is not mandatory. Defendants seem to have reneged on this argument, now
arguing that the clause is enforceable (see Doc. 47), but the Court addresses it in an
abundance of caution.
“[C]ourts frequently classify forum selection clauses as either permissive or
mandatory.” Global Satellite Comm. Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1272
(11th Cir. 2004). While a permissive clause “authorizes jurisdiction in a
designated forum,” a mandatory clause “dictates an exclusive forum for litigation
under the contract.” Id. (emphasis added) (citing Snapper, Inc. v. Redan, 171 F.3d
1249, 1262 n.24 (11th Cir. 1999)). Moreover, a forum-selection clause “may
constitute a waiver of a defendant’s right to remove an action to federal court” and
the Eleventh Circuit has held that “the determination of whether such a clause
constitutes a waiver, in the context of removal based solely on diversity jurisdiction,
is to be determined according to ordinary contract principles.” Id.
Defendants initially argued that the forum-selection clause is permissive,
seemingly because it includes the word “shall.” (Doc. 29 at 2). The word “shall” can
be permissive in some contexts. For example, a forum-selection clause stating that

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a court “shall have jurisdiction” has been found to be permissive because it states
only that a court has jurisdiction, not that a particular court is the only court that
has jurisdiction. See First State Bank of Nw. Arkansas v. Georgia 4-S Investments
LLP, 418 F. App’x 838, 839 (11th Cir. 2011) (where forum selection clause stated
that a party “agree[d] that the courts of the State of Georgia shall have jurisdiction
to hear and determine” certain disputes, the district court held [and the Eleventh
Circuit agreed] that the clause did not preclude suit in a federal court in Georgia
because “[t]he clause [did] not contain any language indicating exclusivity,” only
requiring that the party must submit to the jurisdiction of Georgia state courts, but
not mandating that all litigation falling under the clause occur there).
But where a contract provision states that “[v]enue shall be in” a place, the
Eleventh Circuit has found that “because it uses the imperative ‘shall,’” the
provision is most reasonably interpreted to mandate venue in that specific area.
See Global Satellite Communication Co., 378 F.3d at 1272 (emphasis added).
Defendants seem to have misunderstood the Global Satellite case to support their
reading that the forum-selection clause here is permissive. In Global Satellite, the
contract provision stated that “[v]enue shall be in Broward County,” which the
Court found did not designate any particular forum, but rather mandated that the
suit take place somewhere in Broward County, “such that a suit either in the
Seventeenth Judicial District of Florida, or in the Fort Lauderdale Division of the
Southern District of Florida, both of which are located in Broward County, would
satisfy the venue requirement.” Id. In other words, the forum-selection clause

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there was not permissive; it merely failed to designate a particular court in Broward
County, Florida. See City of West Palm Beach v. Visionair, Inc., 199 F. App’x 768,
770 (11th Cir. 2006) (explaining that in Global Satellite, the Eleventh Circuit held
that “the clause mandated venue in Broward County but, because it did not specify
a forum, the clause permitted venue in either the Seventeenth Judicial Circuit . . .
or the Fort Lauderdale Division of the Southern District of Florida, both of which
are located in Broward County”).
Here, the forum-selection clause, unlike the clause in Global Satellite,
specifically designates a particular forum (court)—“[j]urisdiction and venue of any
lawsuit between the parties . . . shall be in the Lee County Court in Fort Myers,
Florida.” (Doc. 2-2 at 28, § 18.03; Doc. 2-3 at 31, § 18.03) (emphasis added). This
provision unambiguously designates the Lee County Court, a Florida state court, as
the only proper forum for this suit.
Plaintiff argues that “[t]here is no ‘the’ Lee County Court” and the forumselection clause is only mandatory “insofar as it says that a lawsuit must be brought
in the Court sitting in Lee County, Florida – which includes this one.” (Doc. 48 at
3–4). This Court disagrees. “When the language of a contract is clear and
unambiguous, courts must give effect to the contract as written and cannot engage
in interpretation or construction as the plain language is the best evidence of the
parties’ intent.” Talbott v. First Bank Fla., FSB, 59 So.3d 243, 245 (Fla. 4th DCA
2011) (citation omitted). Extrinsic evidence may only be considered where “a
contract term is susceptible to more than one reasonable interpretation.” Id. The

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plain language of the clause is that it designates the Lee County Court as the
mandatory venue for this action. See Art. V, § 6, Fla. Const. (“There shall be a
county court in each county. . . The county courts shall exercise the jurisdiction
prescribed by general law.”).
The Court cannot discern more than one meaning from the plain and
unambiguous language of the forum-selection clause. Accordingly, it finds that the
forum-selection clause provides for mandatory venue in the Lee County Court––a
Florida state court.
III.

Whether this matter should be dismissed because of the forum-selection
clause.
Finally, the Court analyzes whether this matter should be dismissed because

of the forum-selection clause. As a threshold matter:
The Supreme Court [has] held that the appropriate
procedural vehicles to enforce a forum-selection clause
were either a motion to transfer under § 1404(a) (when the
clause points to a particular federal district) or a motion to
dismiss under the doctrine of forum non conveniens (when
the clause points to a state or foreign forum).
Schrenkel v. LendUS, LLC, No. 2:18-cv-382-FtM-29CM, 2018 WL 5619358, at *4
(M.D. Fla. Oct. 30, 2018) (citing Atl. Marine Constr. Co., Inc., 571 U.S. at 52, 59–60).
There is no motion to dismiss for forum non conveniens pending in this
matter. But there is a “long-approved practice of permitting a court to transfer a
case sua sponte under the doctrine of forum non conveniens . . . so long as the
parties are first given the opportunity to present their views on the issue.” Tazoe v.
Airbus S.A.S., 631 F.3d 1321, 1336 (11th Cir. 2011). And the Eleventh Circuit has

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found that sua sponte transfers to another federal venue offer a helpful analogy
when discussing sua sponte dismissals under the doctrine of forum non conveniens.
See id., 631 F.3d at 1336 (finding that the district court abused its discretion
because it failed to provide a party with notice of its intent to dismiss or an
opportunity to respond).
The parties have had multiple opportunities to express their views on
whether this matter should be transferred or dismissed. First, the Court entered an
order directing Plaintiff to show cause as to why the matter should not be
transferred to the Eastern District of Texas. (See Doc. 19). Plaintiff filed a ten-page
response (see Doc. 26) and Defendants filed a six-page reply (see Doc. 29). Then, the
Court informed the parties that they should “be prepared to present argument on
the issues raised in the Court’s Order to Show Cause” at a hearing that took place
on May 11, 2023. (Doc. 34). Then, after discussing the issue of the forum-selection
clause at the hearing, the Court directed the parties to file additional briefing in
response to the issues with venue set forth at the hearing. (Doc. 43). Plaintiff then
filed Plaintiff’s Supplemental Brief Regarding Venue (Doc. 48) and Defendants filed
Defendants’ Brief in Support of Dismissal (Doc. 47). The Court finds that the
parties have had ample notice of the Court’s intent to either transfer or dismiss this
matter because the District Court for the Middle District of Florida is not the proper
forum.
Plaintiff has the burden of showing that dismissal of its complaint for refiling
in state court—“the forum for which the parties bargained”—is unwarranted. See

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Atlantic Marine Const. Co., Inc., 571 U.S. at 63–64 (“[P]laintiff’s choice of forum
merits no weight . . . [and] as the party defying the forum-selection clause, the
plaintiff bears the burden of establishing that transfer to the forum for which the
parties bargained is unwarranted”); see also Pappas v. Kerzner Intern. Bahamas
Ltd., 585 F. App’x 962, 967 (11th Cir. 2014) (“Atlantic Marine . . . makes clear that,
because of the forum-selection clause, the [plaintiffs] had the burden of showing
that dismissal of the complaint for refiling in the Bahamas . . . was unwarranted.”).
The only factors relevant to whether Plaintiff has met its burden are public
interest factors, such as “the administrative difficulties flowing from court
congestion[,] the local interest in having localized controversies decided at home[,]
and the interest in having the trial of a diversity case in a forum that is at home
with the law.” Pappas, 585 F. App’x at 967. Plaintiff opines that the parties have
submitted numerous substantive briefs in this case, that the Court is already
familiar with the facts and law that apply to this case, and that sending the case to
another Court would result in “additional, unnecessary expenditure of the receiving
Court’s resources and the parties[’] resources in re-briefing and re-arguing the
issues that already have been presented to this Court.” (Doc. 48 at 8). The Court is
certainly cognizant of the importance of conserving judicial resources, but Plaintiff
has not demonstrated that the burden on the court system is so unusual or
extraordinary as to justify overriding the forum-selection clause. See Atl. Marine
Const. Co., Inc., 571 U.S. at 63 (“[A] valid forum-selection clause should be given
controlling weight in all but the most exceptional cases.”). Plaintiff does not dispute

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that Florida state law applies to some of the claims or that the suit has a
substantial relationship to Florida. And Plaintiff does not claim that litigating in
Lee County Court would cause court congestion.
Plaintiff has failed to show that any public-interest consideration weighs in
favor of this forum or render this dispute the exceptional case that should overrule a
valid forum-selection clause. Accordingly, the Court will enforce the forum-selection
clause and note that should Plaintiff wish to proceed in its claims against Dar-Jkta
Enterprises, LLC, David Darrigan, and/or Johnny Qubty, the proper forum to do so
under the plain and unambiguous language of the Franchise Agreements is the Lee
County Court––a Florida state, not federal, court.
IV.

Whether the forum selection clause applies to Darrigan Investments LLC.
Plaintiff argues that “[w]hether or not the forum selection clause is

enforceable, it is inapplicable to Darrigan Investments LLC” because “Darrigan
Investments LLC did not sign either of the Franchise Agreements.” (Doc. 48 at 7).
The Court finds that keeping this case against Darrigan Investments LLC while the
remainder of the case continues elsewhere would be the peak of judicial inefficiency
and a waste of overall judicial resources. Nevertheless, as a matter of process, the
Court shall allow Plaintiff to file an amended complaint against Darrigan
Investments LLC if it wishes to pursue what may be financially costly, piecemeal
litigation for the same overarching issue.

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CONCLUSION
For the reasons set forth above, it is ORDERED that:
1) This case is DISMISSED under the plain and unambiguous language of the
forum-selection clause as to Dar-Jkta Enterprises, LLC, David Darrigan, and
Johnny Qubty. The proper forum to file is the Lee County Court, a Florida
state court.
2) The Court DISMISSES without prejudice as to Darrigan Investments LLC.
The Clerk of Court is DIRECTED to terminate all existing deadlines and
deny all pending motions as moot.
3) No later than June 1, 2023, Plaintiff may file an amended complaint against
Darrigan Investments LLC only. If Plaintiff chooses to proceed in litigation
against all Defendants in a different forum, the Court requests that Plaintiff
file a notice with this Court advising it of such. Otherwise, the Court will,
without further notice, order the closure of this case if an amended complaint
solely against Darrigan Investments LLC is not filed by June 1, 2023.
ORDERED in Fort Myers, Florida on May 18, 2023.

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