Midwest Mailing & Shipping Systems, Inc. v. Neopost USA Inc.

Filing 33

MEMORANDUM Opinion Signed by the Honorable Samuel Der-Yeghiayan on 1/28/2016. Mailed notice (cc, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MIDWEST MAILING & SHIPPING
SYSTEMS, INC.,

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Plaintiff,
v.
NEOPOST USA INC.,
Defendant.

No. 15 C 7752

MEMORANDUM OPINION
SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Plaintiff Midwest Mailing & Shipping
Systems, Inc.’s (Midwest) motion to remand. For the reasons stated below, the
motion to remand is granted.

BACKGROUND
Defendant Neopost USA, Inc. (Neopost) allegedly is engaged in the business
of selling, leasing, installing and servicing postage meters and registers and other
related products. In February 1996, Neopost USA, Inc. (Neopost) allegedly entered
into a dealership agreement (Dealership Agreement) with Midwest. The court notes
that the actual Dealership Agreement reflects an agreement between Midwest and
F.M.E. Corporation, which is a former name under which Neopost had done
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business. Under the terms of the Dealership Agreement, Midwest was allegedly
granted an exclusive territory in which to act on behalf of Neopost. In 2002, various
dealers authorized to act on behalf of Neopost filed actions against Neopost.
Midwest allegedly participated in a suit brought against Neopost that was filed in
Illinois state court in the Cook County Circuit Court (State Action). In the State
action, the parties allegedly entered into a settlement pursuant to the terms of a
settlement agreement (Settlement Agreement). Midwest contends that Neopost has
breached the terms of the Settlement Agreement. Midwest brought the instant action
in state court and Neopost removed the action to federal court. Midwest includes in
its complaint a claim seeking injunctive relief (Count I), and a breach of contract
claim (Count II). Midwest now moves to have the instant action remanded to state
court.

LEGAL STANDARD
After an action has been removed to federal court, a plaintiff may move to
remand the case back to state court pursuant to 28 U.S.C. § 1447 (Section 1447(c)).
Section 1447(c) provides the following:
A motion to remand the case on the basis of any defect other than lack of
subject matter jurisdiction must be made within 30 days after the filing of the
notice of removal under section 1446(a). If at any time before final judgment it
appears that the district court lacks subject matter jurisdiction, the case shall be
remanded. An order remanding the case may require payment of just costs and
any actual expenses, including attorney fees, incurred as a result of the
removal. A certified copy of the order of remand shall be mailed by the clerk
to the clerk of the State court. The State court may thereupon proceed with
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such case.
28 U.S.C. § 1447.

DISCUSSION
Midwest contends that in the Settlement Agreement the parties agreed that any
dispute over the enforcement of the terms of the agreement would be brought in
Illinois state court. The Settlement Agreement included the following provision:
Governing Law and venue. This Agreement shall be construed, interpreted,
and enforced in accordance with the laws of the State of Illinois. All disputed
and any actions that may be necessary to enforce this Agreement shall be
brought before the Honorable Julia Nowicki, or if unavailable the Judge sitting
in her place, who shall retain jurisdiction over this matter.
(Sett. Agr. Par. 14). Thus, in the Settlement Agreement the parties expressly agreed
to litigate any issues concerning the enforcement of that agreement in Illinois state
court. Midwest has shown that the forum selection clause in the Settlement
Agreement is valid and enforceable and consistent with the public interest.
Neopost argues that in the Settlement Agreement, the parties acknowledged
the continuation of the Dealership Agreement, which does not have such a limiting
forum selection clause. However, even if that is so, the Dealership Agreement in no
way negates the express forum selection clause in the Settlement Agreement. The
Settlement Agreement also specifically provides that to the extent that it conflicts
with prior dealership agreements, the Settlement Agreement supercedes such
agreements. (Sett. Agr. Par. 8). Neopost also argues that Midwest’s claims in this
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case arise solely under the Dealership Agreement and thus the terms of the
Dealership Agreement are applicable. However, a review of the complaint shows
that Midwest is seeking to enforce the terms of the Settlement Agreement. For
example, in paragraph 8 of the Settlement Agreement, certain terms are set relating
to exclusivity and Midwest contends that Neopost has breached such terms. To the
extent that there are references to a breach of the Dealership Agreement in the
complaint, Midwest makes clear in its motion to remand and reply that it is not
seeking to enforce the terms of the Dealership Agreement. (Rem. 1, 4); (Reply 2).
Neopost disagrees, but Midwest is the master of its own complaint. If upon remand,
Midwest seeks to pursue claims based on a breach of the Dealership Agreement,
Neopost can raise Midwest’s assertions in this case as to the scope of its claims.
Neopost also contends in its surreply that the only terms in the Settlement Agreement
referenced by Midwest relate to rights that were provided to Neopost and not to any
obligation owed to Midwest. (Sur. 3). That is an argument that Neopost can make
before the state court on remand in proving that it did not breach any terms of the
Settlement Agreement. Based on the above, the motion to remand is granted.

CONCLUSION
Based on the foregoing analysis, Midwest’s motion to remand is granted.

___________________________________
Samuel Der-Yeghiayan
United States District Court Judge
Dated: January 28, 2016

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