AO Precision Manufacturing LLC et al v. High Standard Manufacturing Company, Inc. et al

Filing 17

ORDER severing party, Galion LLC, and granting 7 Motion to Remand to State Court. Signed by Judge Gregory A. Presnell on 10/6/2014. (JU)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
AO PRECISION MANUFACTURING
LLC and GALION LLC,
Plaintiffs,
v.

Case No: 6:14-cv-1203-Orl-31GJK

HIGH STANDARD MANUFACTURING
COMPANY, INC. and ALAN
ARONSTEIN,
Defendants.

ORDER
This matter comes before the Court without a hearing on the Motion for Remand (Doc. 7)
filed by the Plaintiffs and Defendants’ Response to Plaintiffs’ Motion for Remand (Doc. 12)
(“Response”).
I.

Background

Defendant Alan Aronstein, President of High Standard Manufacturing Company, Inc.
(“High Standard”), completed a credit application for purchase of parts from AO Precision
Manufacturing, LLC (“AO Precision”) (Doc. 2-2) (“Credit Application”). The Credit Application
includes a venue selection clause specifying Volusia County, Florida as the appropriate venue for
resolution of disputes. Plaintiffs, AO Precision and Galion, LLC (“Galion”), brought suit in Volusia
County, Florida. Defendants High Standard and Aronstein timely removed this case to the United
States District Court of the Middle District of Florida, Orlando Division, based on diversity
jurisdiction. Plaintiffs now object to the removal and ask the Court to remand the case to the Volusia
County Circuit Court based on the venue selection clause. Galion is not a party to the Credit

Application, and its arguments for remand based on the Credit Application are a source of confusion
within the pleadings.
II.

Legal Standards
a. Sua Sponte Severance of Improperly Joined Parties

The joinder of multiple plaintiffs in an action is permitted if: “(A) they assert any right to
relief jointly, severally, or in the alternative with respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to
all plaintiffs will arise in the action.” Fed. R. Civ. P. 20(a)(1). Rule 21 provides that “[o]n motion
or on its own, the court may at any time, on just terms, add or drop a party . . . [and] sever any claim
against any party.” Fed. R. Civ. P. 21.
In determining whether two plaintiffs are properly joined, courts in this circuit apply a logical
relationship test to give meaning to the first requirement of Rule 20 that all claims regard or arise
from the same transaction or occurrence. Republic Health Corp. v. Lifemark Hosp. of Fla., 755 F.2d
1453, 1455 (11th Cir. 1985). A “logical relationship” exists if the claims rest on the same set of facts
or the facts, on which one claim rests, activate additional legal rights supporting the other claim. Id.;
see also DIRECTV, Inc. v. Brown, No. 6:03-CV-234-Orl-22KRS, 2003 WL 25569731 (M.D. Fla.
May 22, 2003) (holding that, even assuming arguendo that the factual backgrounds of the
Defendants were similar, unrelated, independent purchases of different items from different
manufacturers do not constitute the same transaction or occurrence, or series of transactions or
occurrences).
b. Remand
The general removal statute, 28 U.S.C. § 1441, provides in pertinent part that, except as
otherwise expressly provided by Act of Congress, any civil action brought in a State court of which

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the district courts of the United States have original jurisdiction may be removed by the defendant
or the defendants to the district court of the United States for the district and division embracing the
place where such action is pending. Any other such action shall be removable only if none of the
parties in interest properly joined and served as defendants is a citizen of the State in which such
action is brought. 28 U.S.C. § 1441(a), (b).
Removal statutes are to be construed narrowly, with any uncertainties to be resolved in favor
of remand. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941); Syngenta Crop. Prot.,
Inc. v. Henson, 537 U.S. 28, 32 (2002); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir.
1994); see also Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999). The
Eleventh Circuit has held, in the context of removal based solely on diversity jurisdiction, ordinary
contract principles govern a contractual waiver. Snapper, Inc. v. Redan, 171 F.3d 1249, 1261 (11th
Cir. 1999). Construction of a forum selection clause is a matter of federal common law. P & S Bus.
Machs., Inc. v. Canon USA, Inc., 331 F.3d 804, 807 (11th Cir. 2003). Under federal common law,
forum selection clauses are to be interpreted by reference to “ordinary contract principles” and are
presumptively valid absent some evidence of inequitable conduct. Snapper, 171 F.3d at 1261. See
also Rucker v. Oasis Legal Finance, LLC, 632 F.3d 1231, 1236 (11th Cir. 2011) (quoting Krenkel
v. Kerzner Int’l Hotels Ltd., 579 F.3d 1279, 1281 (11th Cir. 2009)). Thus, a forum selection clause
will only “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.” Slater v. Energy Servs. Group Int’l, Inc., 634 F.3d 1326, 1331 (11th Cir.2011)
(quoting Krenkel, 579 F.3d at 1281). The burden is on the party resisting the enforcement of a forum
selection clause to establish fraud or inequitable conduct sufficient to bar enforcement of the clause.

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Rucker, 632 F.3d at 1236.
III.

Analysis
a. Severance of Galion
Galion’s claims against High Standard are not related to AO’s unpaid transactions (See Docs.

2-1, 2-3). There is no support for or explanation of the bare assertion that Galion is an “affiliated
company of AO.” (“Amended Complaint”) (Doc. 2, ¶ 2). Regardless, the fact that Galion is an
“affiliated” company alone is not sufficient to permit joinder when separate transactions are
involved. Furthermore, the disputed Credit Application does not mention Galion at all and includes
no personal guarantee running from Aronstein and High Standard to Galion. Because there is no
common transaction, occurrence, or series of transactions among the Plaintiffs’ various claims, the
Court finds that Galion was improperly joined. Thus, Galion shall be sua sponte severed from the
proceedings, with all of its claims against High Standard to be dismissed without prejudice.
b. Remand to State Court
At issue is whether the venue selection clause in the Credit Application requires this dispute
to be adjudicated in Volusia County, Florida. While Defendants argue a contract was not formed
because AO Precision never signed it, it is clear from the language of the document and the alleged
conduct which followed its execution by the Defendants that both parties manifested an intent to be
bound. A “valid contract arises when parties’ assent is manifested through written or spoken words,
or ‘inferred in whole or in part from the parties’ conduct.’ ” L&H Const. Co., Inc. v. Circle Redmont,
Inc., 55 So.3d 630, 634 (Fla. Dist. Ct. App. 2011) (quoting Commerce P’ship 8098 Ltd. P’ship v.
Equity Contracting, Co., 695 So.2d 383, 385 (Fla. Dist. Ct. App. 1997)) (finding an enforceable
agreement based on actions of parties, despite lack of a signed document). According to the
Amended Complaint and the attached documentation, after receiving the completed Credit

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Application from Aronstein/High Standard, AO Precision delivered the specified goods based on
credit, and High Standard accepted those goods. 1 AO Precision’s lack of signature on the Credit
Application does not negate the existence of a contract.
Defendants also contend that, if a binding agreement was formed, then only Aronstein was
bound because he was the only party to sign the application. In Falsten Realty Co. v. Kirksey, 137
So. 267, 270 (Fla. 1931), the Supreme Court of Florida made a determination regarding who was
bound by a contract by looking at the whole instrument—accordingly, the simple fact of a party
subscribing an official name will not avoid individual contractual obligations. See also
Manufacturer’s Leasing, Ltd. v. Florida Development & Attractions, Inc., 330 So.2d 171, 172 (Fla.
1976) (stating common law rule that the addition of an official designation, such as “President,”
does not defeat personal liability if the body of the instrument has language binding on the entity
and the individual); Great Lakes Products, Inc. v. Wojciechoski, 878 So.2d 418, 419 (Fla. Dist. Ct.
App. 2005) (holding that a signature made in a representative capacity defeats neither personal
liability nor corporate liability). Here, Aronstein signed the Credit Application as “President,” yet
also filled in High Standard’s company information as the “customer” to receive parts. The
“undersigned” is referred to in both the Credit Application and personal guarantee portions of the
application. Further, Aronstein’s personal guarantee makes no sense, absent the credit which was
extended to High Precision. (Doc. 2-2).
Defendants’ response to Plaintiffs’ Motion to Remand offers no argument against the
validity of the venue selection clause in the personal guarantee. When a venue and jurisdiction

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The attachments to the Amended Complaint include itemized purchase orders, sales
order acknowledgements, and invoices. (See Doc. 2-1). The Defendants’ opposition to remand
does not contest the authenticity of these documents; rather, Defendants simply argue the contract
was not binding because AO Precision never signed it.

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designation clause in a contract, agreed to by the parties, provides that venue “shall be” in a Florida
county with no federal courthouse in that county, the clause precludes removal to federal court. See
Global Satellite Communication Co. v. Starmill U.K., Ltd., 378 F.2d 1269 (11th Cir. 2004); see also
Atlantic Marine Const. Co., Inc. v. U.S Dist. Court for Western Dist. of Texas, 134 S.Ct. 568, 581
(2013) (stating that a district court should ordinarily transfer a case to the forum specified in an
valid, agreed upon forum selection clause). The clause agreed to in the personal guarantee states
that venue shall be in Volusia County, Florida, a county with no federal courthouse. Thus, in
accordance with the venue selection clause, the action will be remanded.
It is hereby
ORDERED that Galion is severed as a party to this action; counts 6-9 of the Amended
Complaint are dismissed without prejudice to Galion; and Plaintiffs’ Motion for Remand (Doc. 7)
is GRANTED. This case is REMANDED to the 7th Judicial Circuit in and for Volusia County,
Florida.
DONE and ORDERED in Chambers, Orlando, Florida on October 6, 2014.

Copies furnished to:
Counsel of Record
Unrepresented Party

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