Kebb Management, Inc. v. Home Depot U.S.A., Inc.

Filing 11

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDER: "Accordingly, defendant's motion to dismiss or, in the alternative, to transfer venue (Docket No. 4 ) is ALLOWED. The case is hereby TRANSFERRED to the United States District Court for the Northern District of Georgia.So ordered." (Moore, Kellyann) [Transferred from Massachusetts on 11/18/2014.]

United States District Court
District of Massachusetts
KEBB MANAGEMENT, INC.,
Plaintiff,
v.
HOME DEPOT U.S.A., INC.,
Defendant.

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Civil Action No.
14-13860-NMG

MEMORANDUM & ORDER
GORTON, J.
This case arises out of a dispute over payment for repair
work allegedly performed by plaintiff Kebb Management, Inc.
(“Kebb” or “plaintiff”) at a Watertown, Massachusetts retail
store owned and operated by defendant Home Depot U.S.A., Inc.
(“Home Depot” or “defendant”).

Kebb contends that Home Depot

approved a work order to repair the concrete floors in its store
but that it has subsequently refused to pay Kebb for the work
performed.
Pending before the Court is Home Depot’s motion to dismiss
pursuant to Fed. R. Civ. P. 12(b)(6) or, in the alternative, to
transfer venue to the United States District Court for the
Northern District of Georgia pursuant to 28 U.S.C. § 1404(a).
For the reasons that follow, the motion will be allowed and the
case will be transferred.
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I.

Factual Background and Procedural History
Kebb is a Massachusetts corporation with its principal

place of business in Methuen, Massachusetts.

Home Depot is

organized and incorporated under the laws of Delaware with its
principal place of business in Atlanta, Georgia.

Home Depot

owns and operates home improvement retail stores throughout the
United States, including in Massachusetts.
In May, 2010, the parties executed a Master Service
Agreement (“MSA”) for plaintiff to perform maintenance and
repair on defendant’s retail stores.

Under the MSA contract,

defendant would issue specific work orders to plaintiff, which
would then perform the required work and receive payment for its
services from defendant.
MSA.

Each work order was governed by the

From the signing of the MSA through May, 2013, the

parties’ contractual arrangement proceeded without issue.

Home

Depot issued work orders, Kebb performed the requested work and
sent invoices to Home Depot, which remitted payment to Kebb.
In June, 2013, plaintiff alleges that it provided a
requested estimate for repair work on the concrete flooring at
defendant’s store located in Watertown, Massachusetts.
Plaintiff estimated the cost of the project at $110,500.

In an

email to plaintiff, defendant’s duly authorized representative
instructed plaintiff to “[u]pload the quote to [this specified
work order number] and I will approve.”
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Plaintiff asserts it

then uploaded the quote and commenced and completed the repair
work by October, 2013.

Thereafter, plaintiff sent defendant an

invoice which defendant refused to pay.

Defendant maintains

that the work order at issue was never approved and therefore
plaintiff performed unauthorized work for which it is not
entitled to payment.
The MSA contains two relevant provisions relating to forumselection and venue for disputes between the parties.

First,

MSA Article 17.0 establishes the governing law and the
appropriate forum by stating that
[t]his agreement will be governed by and construed in
accordance with the laws of ... Georgia without regard
to its conflict of laws rules. The parties agree that
the courts in ... Georgia shall have exclusive
jurisdiction over any disputes under or relating to
this agreement.
Second, MSA Article 18.0 governs dispute resolution and
specifies mandatory venue options for subsequent litigation as
follows:
[e]xcept [for] injunctive or other equitable relief,
[the parties] agree that as a condition precedent to
the institution of any action regarding disputes
arising under or in connection with this agreement,
such disputes shall first be submitted to mediation
before a professional mediator selected by
the
parties.
Such mediation shall be conducted at a
mutually agreed time and place.... If mediation is
unsuccessful, the parties shall submit disputes to
either the United States District Court for the
Northern District of Georgia, Atlanta Division, or the
Superior Court of Cobb County, Georgia.

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Kebb demanded payment for its work and contends that it
requested to engage in mediation with Home Depot but that
defendant has refused to agree to a location for mediation.
such, Kebb initiated the instant suit.

As

Kebb filed its complaint

in the Massachusetts Superior Court for Essex County on
September 16, 2014, alleging both common law and statutory
violations in a four-count complaint.

Kebb asserts claims for

relief against Home Depot for (1) breach of contract, (2) breach
of the covenant of good faith and fair dealing, (3) quantum
meruit and (4) unfair or deceptive trade practices in violation
of M.G.L. c. 93A.
Home Depot timely removed the case to this Court in
October, 2014, based on complete diversity of the parties.

One

week later, it moved to dismiss the complaint for failure to
state a claim or, in the alternative, to transfer venue to the
United States District Court for the Northern District of
Georgia.
II.

Defendant’s Motion to Dismiss or, in the Alternative, to
Transfer Venue
Defendant contends that the two relevant forum-selection

clauses in the MSA establish the State of Georgia as the
appropriate, exclusive forum and identify two possible venues
therein.

Accordingly, it seeks to have the case dismissed for

failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6)

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or, in the alternative, to transfer venue pursuant to 28 U.S.C.
§ 1404(a).
In opposition, plaintiff admits that the MSA includes a
forum-selection clause but argues that the Court should refuse
to enforce it.

Plaintiff asserts that the enforcement of the

forum-selection clause would be unreasonable and unjust because
proceedings in the contractual forum will be so gravely
difficult for it that essentially it will be deprived of its day
in court.

Additionally, plaintiff declares that the forum-

selection clause is not mandatory because its language is not
clear and unequivocal.

Finally, plaintiff asserts that

defendant’s alleged breach of the contract excuses further
performance by plaintiff and permits it to disregard the forumselection provisions.
A.

Legal Standard

The First Circuit Court of Appeals has routinely held that
a valid forum-selection clause is to be enforced through a
motion to dismiss for failure to state a claim pursuant to Fed.
R. Civ. P. 12(b)(6). See, e.g, Rivera v. Centro Medico de
Turabo, Inc., 575 F.3d 10, 15 (1st Cir. 2009); Silva v.
Encyclopedia Britannica Inc., 239 F.3d 385, 387-88 (1st Cir.
2001); Lambert v. Kysar, 983 F.2d 1110, 1112 n.1 (1st Cir.
1993).

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The Supreme Court, however, recently identified a motion to
transfer under 28 U.S.C. § 1404(a) as the appropriate mechanism
for enforcement of a forum-selection clause that points to a
particular federal district. Atl. Marine Constr. Co. v. U.S.
Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 579 (2013).
Under § 1404(a), a district court may transfer a civil action to
any other district where it might have been brought "[f]or the
convenience of parties and witnesses, in the interest of
justice."

Normally, while the decision to transfer a case under

§ 1404 lies solely within the discretion of the trial court,
there is a presumption in favor of the plaintiff's choice of
forum. Momenta Pharm., Inc. v. Amphastar Pharm., Inc., 841 F.
Supp. 2d 514, 522 (D. Mass. 2012) (citation omitted).

“[U]nless

the balance is strongly in favor of the defendant, a plaintiff's
choice of forum should rarely be disturbed.” Gulf Oil Corp. v.
Gilbert, 330 U.S. 501, 508 (1947).
Nevertheless, the Court in Atlantic Marine held that the
“calculus” fundamentally changes when the parties’ contract
contains a valid forum-selection clause. 134 S. Ct. at 581; see
also Rivera, 575 F.3d at 18 (citing M/S Bremen v. Zapata OffShore Co., 407 U.S. 1, 10, 15 (1972)) (forum-selection clauses
are “prima facie valid” and carry a strong presumption of
validity).

Primarily, this is due to the fact that

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enforcement
of
valid
forum-selection
clauses,
bargained
for
by
the
parties,
protects
their
legitimate expectations and furthers vital interests
of the justice system.
Atl. Marine, 134 S. Ct. at 581 (citation omitted).
As such, the Atlantic Marine decision initiated three
changes to the “usual” § 1404(a) analysis which are prompted by
the presence of a forum-selection clause. Id.

First, the

plaintiff’s choice of forum “merits no weight.” Id.

Second, the

district court “should not consider arguments about the parties’
private interests.” Id. at 582.

Only public interest factors

can be considered, however those factors “will rarely defeat a
transfer motion.” Id.

Third, when a plaintiff who is

contractually obligated to file suit in a specific forum
“flouts” that duty, a transfer of venue under § 1404(a) “will
not carry with it the original venue’s choice-of-law rules.” Id.
at 582-83 (holding the opposite only would “encourage
gamesmanship” and give an unwarranted “privilege” to a
plaintiff’s choice of forum).
Accordingly, a forum-selection clause should “be given
controlling weight in all but the most exceptional
circumstances.” Id. at 579, 581 (citation omitted).

In the vast

majority of cases when a forum-selection clause is included, a
§ 1404(a) motion to transfer will be allowed. See id. at 581.

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B.

Application
1.

Motion to Dismiss

Home Depot first moves to dismiss Kebb’s suit for failure
to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).

Although

that has long been the proper procedural way to enforce a forumselection clause in the First Circuit, the Supreme Court’s
Atlantic Marine decision in 2013 holds that
[w]hen the parties have agreed to a valid forumselection clause, a district court should ordinarily
[pursuant to 28 U.S.C. § 1404(a)] transfer the case to
the forum specified in that clause.
Id. (emphasis added).

Notably the Court in Atlantic Marine

opted not to consider whether a motion to dismiss for failure to
state a claim pursuant to Fed. R. Civ. P. 12(b)(6) would also be
an acceptable alternative.1 Id. at 580.
Accordingly, a Rule 12(b)(6) motion remains a proper
vehicle to seek enforcement of a forum-selection clause in the
First Circuit. See Carter’s of New Bedford, Inc. v. Nike, Inc.,
No. 13-cv-11513-DPW, 2014 WL 1311750, at *2 n.5 (D. Mass. Mar.
31, 2014).

Nevertheless, because (1) a district court should

“ordinarily” use § 1404(a) to enforce a forum-selection clause
that identifies a federal forum and (2) the MSA identifies an
appropriate federal district for venue, the Court instead opts

1

The Court noted that the petitioner had not filed a Rule
12(b)(6) motion nor had the parties briefed the matter. Id. at
580.
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to utilize the newly-established analytical framework in
Atlantic Marine and focus on defendant’s motion to transfer
pursuant to § 1404(a).2 See Herbert H. Landy Ins. Agency, Inc. v.
Navigators Mgmt. Co., No. 14-cv-12552-FDS, 2014 WL 3908179, at
*5 (D. Mass. Aug. 8, 2014).
2.

Motion to Transfer

The streamlined analysis established in Atlantic Marine
clearly warrants enforcement of the forum-selection provision
pursuant to § 1404(a).

First, the fact that Kebb filed suit in

Massachusetts is entitled to no weight. Atl. Marine, 134 S. Ct.
at 581.

Second, the Court will not entertain any private

interest arguments in the inquiry. Id. at 582.

Here, no public

interest consideration is sufficient to render this an “unusual
case” warranting a refusal to transfer in light of a forumselection clause. Id. at 582 & n.6.

Upon transfer to the proper

federal forum, here the Northern District of Georgia, that
district court will apply the choice-of-law rules for Georgia.
Id. at 584.
Plaintiff’s opposition memorandum fails to cite Atlantic
Marine or counter defendant’s contention that transfer under
§ 1404(a) is appropriate.

Instead, plaintiff recognizes the

presence of the forum-selection provisions in the MSA but urges
2

Reliance on § 1404(a) rather than Fed. R. Civ. P. 12(b)(6)
allows for a convenient transfer of forum and obviates the need
for plaintiff to re-file its suit.
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the Court to decline to enforce them.

It suggests that

enforcement of those provisions would be “unreasonable and
unjust” because proceedings in the contractual forum would be
“so gravely difficult and inconvenient” that it would
essentially be denied its day in court.

Plaintiff’s contention

relies on language from the Supreme Court’s 1972 decision in M/S
Bremen which provided various bases that may warrant setting
aside a forum-selection clause. 407 U.S. at 15-17; see also
Huffington v. T.C. Grp., LLC, 637 F.3d 18, 23-24 (1st Cir. 2011)
(identifying and analyzing M/S Bremen considerations).
Plaintiff’s argument to set aside the forum-selection
provisions fails for several reasons.

First, the M/S Bremen

decision explained that “[a] forum clause should control absent
a strong showing that it should be set aside” and remarked that
a plaintiff resisting enforcement of a forum-selection clause
carries a “heavy burden” to demonstrate why it should not be
enforced. 407 U.S. at 15, 17.

Second, and more importantly, the

Atlantic Marine decision unequivocally removed any consideration
of private interests in the § 1404(a) context when a forumselection clause is present. 134 S. Ct. at 582.
Kebb knowingly entered into a contract with Home Depot that
clearly and explicitly stated that all disputes between the
parties would take place in a distant, out-of-state forum that
would “impose [] burdens on its litigation efforts.” Id. at 584.
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The inconvenience to Kebb was “foreseeable at the time of
contracting.” Id. at 582 (citation omitted); see also In re
Mercurio, 402 F.3d 62, 66 (1st Cir. 2005) (“[I]nconvenience to
at least one of the parties is an almost forgone conclusion when
dealing with a provision that requires litigating away from
one's home turf”).
Plaintiff adds that the language of the forum-selection
provision is not mandatory and therefore shouldn’t be enforced.
It suggests that the subject provision of the MSA is not
unequivocal and does not state that all suits are to be tried
solely in Georgia.

Plaintiff fails, however, to read the two

relevant forum-selection clauses together.

First, Article 17.0

clearly states that “Georgia shall have exclusive jurisdiction
over any disputes under or relating to this agreement.”
(emphasis added).

Article 18.0 then establishes that in the

event mediation is unsuccessful
the parties shall submit disputes to either the United
States District Court for the Northern District of
Georgia, Atlanta Division, or the Superior Court of
Cobb County, Georgia.
(emphasis added).
The MSA thus clearly mandates that any disputes involving
the parties must be litigated in the State of Georgia.

See

Saturn Mgmt. LLC v. GEM-Atreus Advisors, LLC, 754 F. Supp. 2d
272, 282 (D. Mass. 2010) (“The language ‘exclusive jurisdiction’

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is mandatory, not permissive”); Silva, 239 F.3d at 388-89.

An

email sent to defendant from plaintiff’s counsel admitted as
much when it noted that the MSA “calls for a certain venue for
litigation.”
Moreover, the forum-selection provisions cover any disputes
“relating to” or “in connection with” the MSA.

Those provisions

are generally construed quite broadly. See, e.g., Somerville
Auto Transp. Serv., Inc. v. Auto. Finance Corp., 691 F. Supp. 2d
267, 271 (D. Mass. 2010); Huffington v. T.C. Grp., LLC, 685 F.
Supp. 2d 239, 242 (D. Mass. 2010) (citation omitted).

Here, the

MSA controlled the entire relationship between Kebb and Home
Depot.

Plaintiff even contends that the work for which it is

entitled to payment stems from an approved work order ultimately
governed by the MSA.

The dispute between the parties would not

have occurred but for the MSA. Somerville Auto, 691 F. Supp. 2d
at 272.

As such, all four of plaintiff’s claims are subject to

the forum-selection provisions.
Finally, plaintiff makes much of the fact that defendant
has, to this point, “refused” to mediate the dispute.

Moreover,

Kebb argues that because Home Depot supposedly breached the
contract, it need not comply with the forum-selection
provisions.

Failure of the parties to agree on a time and place

for contractually-mandated mediation, however, does not void the
validity of those provisions.

Moreover, no forum-selection
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clause would ever be enforceable if a defendant’s breach of
contract negated its validity. See Monster Daddy, LLC v. Monster
Cable Products, Inc., 483 F. App’x 831, 835 (4th Cir. 2012).
Plaintiff had a contractual obligation to file its original suit
in either federal or state court within the State of Georgia.
It failed to do so.
The two relevant forum-selection provisions in the MSA
clearly establish that the plaintiff improperly filed suit in
this district.

Because the MSA identifies an appropriate

federal forum, the Court will transfer the case to the Northern
District of Georgia pursuant to § 1404(a).
ORDER
Accordingly, defendant’s motion to dismiss or, in the
alternative, to transfer venue (Docket No. 4) is ALLOWED.

The

case is hereby TRANSFERRED to the United States District Court
for the Northern District of Georgia.
So ordered.
_/s/ Nathaniel M. Gorton_____
Nathaniel M. Gorton
United States District Judge
Dated November 17, 2014

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