Schindelbeck v. Brumbaugh

Filing 12

MEMORANDUM DECISION AND ORDER granting in part and denying in part 5 Motion to Dismiss. Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

TOBART H. SCHINDELBECK,
Case No. 2:17-cv-00420-EJL
Plaintiff,
vs.
JOHN W. BRUMBAUGH,

MEMORANDUM DECISION AND
ORDER

Defendant.
Currently pending before the Court is Defendant’s Motion to Dismiss (Dkt. 5). The
parties have filed responsive briefing and the motion is now ripe for the Court’s
consideration.
Having fully reviewed the record herein, the Court finds that the facts and legal
arguments are adequately presented in the briefs and record. Accordingly, in the interest of
avoiding further delay, and because the Court conclusively finds that the decisional process
would not be significantly aided by oral argument, the motion shall be decided on the
record before this Court without oral argument.
As explained more full below, the Court grants the Motion in part and denies it in
part. The Court strikes the punitive damages claim and directs Plaintiff to file an amended
complaint consistent with this decision.
MEMORANDUM DECISION AND ORDER-1

BACKGROUND
On October 10, 2017, Plaintiff, Tobart H. Schindelbeck, filed a Complaint against
Defendant, John W. Brumbaugh, in federal district court. (Dkt. 1). Plaintiff alleges that he
is a citizen of Idaho and Defendant is a citizen of either Washington or California. (Dkt. 1,
¶¶ 10-11.) Plaintiff further alleges that Defendant retained him pursuant to a Consulting
Agreement in an effort to open national-brand supplements retail store in Spokane,
Washington. (Dkt. 1, ¶¶ 2, 17.) Plaintiff’s claims against Defendant include: (1) breach of
contract; (2) fraud; (3) defamation; and (4) conversion. (Dkt. 1.) Plaintiff seeks injunctive
and equitable relief; (2) compensatory damages; and (3) punitive damages. (Id.)
The parties do not dispute that Plaintiff’s contract and tort claims arise from or
otherwise relate to the parties’ Consulting Agreement, which contains a choice-of-law and
forum-selection clause. “Governing Law. This AGREEMENT shall be governed by and
construed in accordance with the laws of Idaho and each of the parties hereto agree[s]
irrevocably to conform to the jurisdiction of the Idaho Courts.” (Dkt. 1-1.)
On November 28, 2017, Defendant filed a Motion to Dismiss Plaintiff’s Complaint
pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(3) and Idaho
Code Section 6-1604(2). (Dkt. 5.) Defendant seeks to dismiss the Complaint based on the
forum-selection clause in the parties’ Contract and also because it includes a premature
request for punitive damages. (Dkt. 5-1.)
ANALYSIS
As a preliminary matter, a motion to dismiss under Rule 12(b)(3) is the proper
means for enforcing a contractual forum selection clause. Argueta v. Banco Mexicano,
MEMORANDUM DECISION AND ORDER-2

F.A., 87 F.3d 320, 324 (9th Cir. 1996). Unlike a motion to dismiss for failure to state a
viable claim under Rule 12(b)(6), on a motion for improper venue under Rule 12(b)(3), the
Court may consider supplemental written materials and consider facts outside the pleadings
to resolve the motion. Id.; Murphy v. Scheider Nat’l, Inc., 362 F.3d 1133, 1137 (9th Cir.
2004)). If the Court determines that venue is improper, it may dismiss the case, or, if the
interests of justice so require, the Court may transfer the case to any district in which it
properly could have been brought. 28 U.S.C. § 1406(a); Dist. No. 1, Pac. Coast Dist.,
M.E.B.A. v. Alaska, 682 F.2d 797, 799 (9th Cir. 1982).
1.

Venue is Appropriate in the Idaho Federal District Court.
The parties dispute whether the choice of venue provision in the Consulting

Agreement requires the case be filed in Idaho state court. The provision states that “each
of the parties hereto agree[s] irrevocably to conform to the jurisdiction of the Idaho
Courts.” (Dkt. 1-1.) The issue is whether “Idaho Courts” refers only to the state courts in
Idaho or if it includes both the federal and state courts in Idaho.
“The primary aim in interpretation of all contracts is to ascertain the mutual intent
of the parties at the time the contract was made.” Opportunity, L.L.C. v. Osserwarde, 136
Idaho 602, 607, 38 P.3d 1258, 1263 (2002). “In determining the intent of the parties, the
Court must view the contract as a whole.” Bakker v. Thunder Spring-Wareham, LLC, 141
Idaho 185, 190, 108 P.3d 332, 337 (2004).
When the contract is unambiguous, the intent of the parties can be ascertained from
the language of the agreement. Opportunity, L.L.C., 136 Idaho at 607, 38 P.3d at 1263. (“If
possible, the intent of the parties should be ascertained from the language of the agreement
MEMORANDUM DECISION AND ORDER-3

as the best indication of their intent.”) A contract is ambiguous if the intent of the parties
cannot be ascertained from the language of the agreement and “intent becomes a question
of fact to be determined in light of extrinsic evidence.” Id. “Whether a contract is
ambiguous or unambiguous is a question of law.” Pocatello Hosp., LLC v. Quail Ridge
Medical Investor, LLC, 156 Idaho 709, 720, 330 P.3d 1067, 1078 (2014).
The Consulting Agreement is unambiguous. The term “Idaho Courts” is not defined
in the contract at issue and is broad enough to include both state and federal courts. Had
the parties intended to limit the reach of the provision, they could have done so clearly by
inserting the term “state” somewhere in the choice of venue provision. As it stands,
however, the term is broad and there is no other indication from the four corners of the
agreement that the parties intended to limit jurisdiction to the state courts of Idaho.
2.

The Request for Punitive Damages is Premature and Must Be Stricken
Under Idaho law, “no claim for damages shall be filed containing a prayer for relief

seeking punitive damages.” I.C. §6-1604(2). Instead, “a party may, pursuant to a pretrial
motion and after hearing before the court, amend the pleadings to include a prayer for relief
seeking punitive damages.’ Id.
Plaintiff erred by including a premature claim for punitive damages in the
Complaint. Accordingly, this request for relief must be stricken. This does not constitute
cause to dismiss the Complaint in its entirety. Rather, Plaintiff is instructed to file an
Amended Complaint without the punitive damages claim.

MEMORANDUM DECISION AND ORDER-4

ORDER
NOW THEREFORE IT IS HEREBY ORDERED that Defendant’s Motion to
Dismiss (Dkt. 5) is GRANTED IN PART AND DENIED IN PART as stated herein.

DATED: April 5, 2018

_________________________
Edward J. Lodge
United States District Judge

MEMORANDUM DECISION AND ORDER-5