Ujavri v. 1stdibs.com, Inc.

Filing 30

MEMORANDUMOPINION & ORDER re: 22 MOTION to Dismiss filed by 1stdibs.com, Inc. Defendant has moved to dismiss under Fed. R. Civ. P. 12(b)(1), 12(b)(3), and 12(b)(6), arguing that (1) the forum selection clause in the parties' J une 2014 consulting contract precludes Plaintiffs from maintaining an action in this District; and (2) the Amended Complaint fails to state a claim. (As further set forth in this Order.) For the reasons stated above, Defendant's motion to dismiss is granted. The Clerk of the Court is directed to terminate the motion (Dkt. No. 22) and to close this case. (Signed by Judge Paul G. Gardephe on 9/13/2017) (cf)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#:
I
DATE FILED:
))17

·I/I'

GABOR UJV ARI and GT ART
CONSULTING LTD.,
Plaintiffs,

MEMORANDUM
OPINION & ORDER

- against 16 Civ. 2216 (PGG)
1STDIBS.COM, INC.,
Defendant.

PAUL G. GARDEPHE, U.S.D.J.:
In this diversity action, Plaintiff Gabor Ujvari and Plaintiff GT Art Consulting
Ltd. assert claims against Defendant I stdibs.com Inc. ("I stdibs") for breach of contract,
fraudulent misrepresentation, and negligent misrepresentation. (See Am. Cmplt. (Dkt. No. 18))
The parties entered into a series of consulting contracts, pursuant to which Plaintiffs agreed to
locate art and antique dealers who would pay a subscription fee to list their merchandise on
Defendant's online fine art and antique website. (See id.) Plaintiffs claim, inter alia, that
Defendant did not honor its promise to enter into a new consulting contract, and thereby deprived
Plaintiffs of an opportunity to exercise certain stock options, and to receive additional grants of
stock options.
Defendant has moved to dismiss under Fed. R. Civ. P. 12(b)(l), 12(b)(3), and
12(b)(6), arguing that (1) the forum selection clause in the parties' June 2014 consulting contract
precludes Plaintiffs from maintaining an action in this District; and (2) the Amended Complaint
fails to state a claim. (See Notice of Motion (Dkt. No. 22); Def. Moving Br. (Dkt. No. 23) at 89) For the reasons stated below, Defendant's motion to dismiss will be granted.

BACKGROUND
I.

FACTS 1
A.

The Parties
Plaintiff Ujvari is a Europe-based art and antiques consultant. (See Am. Cmplt.

(Dkt. No. 18) ~~ 7, 26) Ujvari serves as the president and sole employee and shareholder of GT
Art Consulting Ltd., which is a United Kingdom limited liability company. (Id. ~~ 8-9) Ujvari
lived and worked in Italy until July 2014, when he moved to the United Kingdom as a result of
events at issue in this litigation. (See id.

~~

7, 36, 40-41)

Defendant lstdibs.com Inc. - a Delaware corporation with a principal place of
business in New York - operates an online gallery for luxury items, including fine art and
antiques. (See id.

~~

10, 24, 26) Art and antique dealers pay a monthly subscription fee in order

to have their merchandise listed on lstdibs's website.

(Id.~

26)

In September 2012, lstdibs acquired Online Galleries Ltd., which is a United
Kingdom corporation that operates a "UK-based art and antiques portal."

ilih ~~ 12, 25)

Defendant fully owns, operates, and controls Online Galleries and has the authority to, inter alia,
hire and fire employees of Online Galleries.

(Id.~~

11, 13) According to the Amended

Complaint, 1stdibs and Online Galleries are "alter egos of one another." (Id.

B.

~~

16-18)

The July 2011 Consulting Contract
On July 22, 2011, lstdibs retained Ujvari to serve as a "European Sales

Consultant" and lead the company's expansion in Europe. (Id. ~ 26; see also Furmansky Deel.,
Ex. 3 (July 2011 Contract) (Dkt. No. 24-3)) Pursuant to a "Contract of Consulting Services"

1

The Court's factual statement is drawn from the Amended Complaint (Dkt. No. 18), the
allegations of which are presumed true for purposes of resolving Defendant's motion to dismiss.

See Kassner v. 2nd Ave. Delicatessen. Inc., 496 F.3d 229, 237 (2d Cir. 2007).
2

executed by Ujvari and lstdibs (the "July 2011 Consulting Contract"), 2 lstdibs agreed to pay
Ujvari $10,000 per month in exchange for his services in locating and enlisting European art and
antique dealers to subscribe to lstdibs's online marketplace. (See Am. Cmplt. (Dkt. No. 18) ~
26; Furmansky Deel., Ex. 3 (July 2011 Contract) (Dkt. No. 24-3) at§§ 1, 2) The agreement
provides for a three-year term, beginning on July 1, 2011 and ending on June 30, 2014. (Am.
Cmplt. (Dkt. No. 18) ~ 28; Furmansky Deel., Ex. 3 (July 2011 Contract) (Dkt. No. 24-3) at 2) 3
On February 17, 2012, lstdibs agreed to pay Ujvari an additional €500
commission for each entity that Ujvari persuaded to subscribe to Defendant's online marketplace
(Am. Cmplt. (Dkt. No. 18) ~ 28), and on February 13, 2013, lstdibs granted Ujvari an option to
purchase 15,000 shares of its common stock at a strike price of$1.25 per share. (Ml~ 57; see
also Furmansky Deel., Ex. 8 (Stock Options) (Dkt. No. 24-12) at 2-9) The grant notice for these
stock options - and subsequent grant notices - provide that the options "vest and become
exercisable" in incremental installments, and it is a prerequisite for both the vesting of future
option grants and the exercise of the options already vested that Ujvari "continue[] to have a
Service Relationship with [lstdibs]." (See Furmansky Deel., Ex. 8 (Stock Options) (Dkt. No.
24-12) at 2)
C.

The November 2013 Consulting Contract
In October 2013, Carmine Bruno - Online Galleries' chief executive officer -

contacted Ujvari about his employment arrangement with 1stdibs. (See Am. Cmplt. (Dkt. No.
18) ~ 29) As explained above, 1stdibs acquired Online Galleries in September 2012 to serve as
its "UK-based art and antiques portal."

(Ml~~

12, 25) Bruno informed Ujvari that, pursuant to

2

Although the parties executed the contract on July 22, 2011, the contract has an effective date
of July 1, 2011. (See Furmansky Deel., Ex. 3 (July 2011 Contract) (Dkt. No. 24-3) at 2, 4)

3

All citations in this Order reflect page numbers assigned by this District's Electronic Case

Filing system.
3

lstdibs's new internal policy, all Europe-based employees and contractors would work under
Online Galleries instead of 1stdibs. (Id. ~ 29)
Bruno also told Ujvari that he would have greater job security with Online
Galleries, because 1stdibs - as a New York based-company - "hires and fires without cause."
(Id.~

30) Bruno told Ujvari that, because Online Galleries is subject to British and European

Union employment laws, it cannot terminate employees without cause and, moreover, must give
two verbal warnings and two written warnings before firing an employee. (Id.

ii 31) Ujvari

claims that, based on these representations of greater job security, he agreed "to execute a new
[consulting] agreement with Online Galleries." (Id.)
On November 21, 2013, Ujvari entered into a "Consultancy Agreement" with
Online Galleries (the "November 2013 Consulting Contract"). 4 (See Furmansky Deel., Ex. 4
(November 2013 Consulting Contract) (Dkt. No. 24-4)) Pursuant to this consulting contract,
Ujvari agreed to "[r]efer new dealers in Europe" to the lstdibs's online marketplace. In
exchange, Ujvari would be paid €7,500 per month and a €500 commission "per new [dealer]
account referred" to 1stdibs. (See id. at § § 5 .1, 8.1, Schedule 1) The agreement provides for a
one-year term - from November 1, 2013 to December 31, 2014 - and states that Ujvari' s
"[a]ppointment will terminate automatically [on] the [latter] date." (Id. at§§ 3.1, 3.2) The
agreement also permits either party "to terminate th[e] [a]greement earlier giving to the other not
less than 30 days' prior written notice." (Id. at§ 3.1) The agreement further provides that it
constitutes "the entire agreement and understanding between the parties in respect of the subject
matter of this Agreement."

ilil at§ 21.2)

4

Although the parties executed the contract on November 21, 2013, the contract has an effective
date of November 1, 2013. (See Furmansky Deel., Ex. 4 (November 2013 Consulting Contract)

(Dkt. No. 24-4) at 4)
4

The November 2013 Consulting Contract provides that it "shall be governed by
and construed in accordance with Italian law," and that "[e]ach of the parties irrevocably submits
for all purposes in connection with this [a]greement to the exclusive jurisdiction of the courts of
Italy." 5 (Id. at§ 21.9)

D.

lstdibs and Online Galleries' Representations
Concerning Ujvari's Long-Term Employment Prospects
In the months following the execution of the November 2013 Consulting

Contract, Bruno allegedly made a series ofrepresentations concerning Ujvari's future with
lstdibs and Online Galleries. In January 2014, when Ujvari visited lstdibs's United Kingdom
office, Bruno told Ujvari that he would "lead the sales for lstdibs ... in Europe[ and] the United
Kingdom," but that as a prerequisite for this position, Ujvari would be "required to change his
residence [from Italy] to the United Kingdom." (Am. Cmplt. (Dkt. No. 18) ~ 36)
In March 2014, Bruno told Ujvari that "there will be one day when [he] will be
the Sales Director and [his] job will be to hire sales people in Europe and the United Kingdom,
and educate, control and lead them as a sales team, and that [Ujvari] will not have to travel
anymore."

(Id.~

37)

In a May 2, 2014 email to Ujvari, Bruno reiterated these oral statements. (Id.

~

38)
During a May 15, 2014 dinner, David Rosenblatt - CEO of lstdibs - told Ujvari
( 1) that Rosenblatt and 1stdibs were very excited about Ujvari signing up so many great
dealers, and doing an excellent job [in] the field as European Sales Director; (2) that if
Ujvari were to relocate his residence to the United Kingdom and work close to ... Bruno,
that it would be a smart idea, resulting in the company saving on expenses and increasing
sales in [the] United Kingdom; and (3) that Ujvari has a long future with the company,
and that Rosenblatt is going to give Ujvari more Stock Options every year.
5

Ujvari lived and worked in Italy at the time he executed the November 2013 Consulting

Contract. (See Am. Cmplt. (Dkt. No. 18) ~ 36)
5

Plaintiffs claim that these representations were made "with the intent to induce
[Ujvari] to execute a new [consulting] agreement[,] ... to believe that his employment with
[lstdibs and Online Galleries] was ... secure[,] ... [and to continue] developing and expanding
[ 1stdibs' s] business while [ 1stdibs] was preparing to make a public stock offering " (Id. i1i1 3637)

E.

The June 2014 Consulting Contract
As a result of Bruno and Rosenblatt's representations, Ujvari agreed to move to

the United Kingdom and continue his consulting relationship with 1stdibs and Online Galleries.
(See id.

i1~

40, 50)
The parties entered into a new consulting contract, which is dated June 1, 2014

(the "June 2014 Consulting Contract"). 7 (See Furmansky Deel., Ex. 5 (June 2014 Contract)
(Dkt. No. 24-7) at 4) The new agreement "amended" the November 2013 Consulting Contract
(see Am. Cmplt. (Dkt. No. 18) i1 43) and includes the following changes. First, the named
parties to the agreement are lstdibs - rather than Online Galleries - and GT Art Consulting,
Ujvari's company. (See Furmansky Deel., Ex. 5 (June 2014 Contract) (Dkt. No. 24-7) at 4)
Second, the agreement provides for compensation to GT Art Consulting in the amount of £6,000

6

On March 4, 2014, 1stdibs granted Ujvari an option to purchase 5,000 shares of its common
stock. The strike price for these options has not been provided to the Court. On April 30, 2014,
1stdibs granted Ujvari the option to purchase an additional 5,000 shares of its common stock at a
price of $1.29 per share. (IQ,_ i1~ 58-59; see also Furmansky Deel., Ex. 8 (Stock Options) (Dkt.
No. 24-12) at 10-15)
7

Plaintiffs allege that the new agreement was executed "[i]n or around July of2014," but "was
back dated to June 1, 2014." (Am. Cmplt. (Dkt. No. 18) i1~ 42-43; see Furmansky Deel. Ex. 5

(JuM 2014 Contruct) (Dkt. No. 24·9) at 6)
6

per month, plus a £400 commission for each new account signed. 8 @at § 8.1) Third, the
agreement provides that it will be governed by English law, and that "[e]ach of the parties
irrevocably submits for all purposes in connection with this [a]greement to the exclusive
jurisdiction of the courts of England." (Id. at§ 21.9)
The June 2014 Consulting Contract provides for a half-year term, running from
June 1, 2014 to December 31, 2014, and permits either party "to terminate th[e] [a]greement
earlier giving to the other not less than 30 days' prior written notice." (Id. at§ 3) The contract
further states that "[a]ll rights and obligations of the parties shall cease to have effect
immediately upon termination or expiry of this [a]greement," subject to certain exceptions. (Id.
at§ 13.3)
The June 2014 Consulting Contract does not explicitly terminate the November
2013 Consulting Contract, but it contains a provision stating that "[t]his Agreement sets out the
entire agreement and understanding between the parties in respect of the subject matter of this
Agreement." (Id. at§ 21.2) The contract does not address Ujvari's move to the United Kingdom
or his long-term employment prospects with 1stdibs.
On June 1, 2014, 1stdibs granted Ujvari an option to purchase an additional
15,000 shares of its common stock. 9 (Am. Cmplt. (Dkt. No. 18) ~ 60) On September 11, 2014,
1stdibs granted Ujvari an option to purchase 20,000 more shares of its common stock at a price
of $1.29 per share.

(Id.~

61; Furmansky Deel., Ex. 8 (Dkt. No. 24-12) at 18-25) As with the

prior stock option grants, these options "vest[ed] and [became] exercisable" incrementally, and

8

According to the Amended Complaint, lstdibs also agreed to pay "an additional 3%
commission for any advertising sold by Ujvari in Europe and [the] United Kingdom." (Am.
Cmplt. (Dkt. No. 18) ~ 42)
9 The strike price for these options has not been provided to the
7

Court.

included as a condition that Ujvari "continue[] to have a Service Relationship with [ lstdibs]."
(Furmansky Deel., Ex. 8 (Dkt. No. 24-12) at 18)
F.

Ujvari Moves from Italy to the United Kingdom
Ujvari moved to the United Kingdom on July 7, 2014. (Am. Cmplt. (Dkt. No. 18)

~

41)
In November 2014, Ujvari asked Bruno to provide an employment reference in

connection with Ujvari's application to rent a home.

(Id.~

47) According to the Amended

Complaint, Bruno provided a written reference stating that:
o
o
o
o
o
o

(Id.

Ujvari[ had] full time employment with lstdibs as a Consultant;
Ujvari ... ha[d] a base salary [ofj £72,000 per annum;
Ujvari's commission was £40,000 - £50,000 per annum;
Ujvari's total income was £110,000 - £120,000 per annum;
1stdibs [had] approved GT Art Consulting Ltd.' s contract for 2015, and ... signed the
applicable contract in December of 2014;
[through GT Art Consulting Ltd.,] lstdibs [would] extend Ujvari's ... contract
through at least 2016 and/or 2017.

ii 48)
G.

The Proposed January 2015 Consulting Contract
In "late December of 2014," Bruno - acting on behalf of lstdibs - sent Ujvari a

proposed consulting contract for the period from January 1, 2015 to December 31, 2015 (the
"Proposed January 2015 Consulting Contract").

iliL ~ 52; see also Furmansky Deel., Ex. 6

(Proposed January 2015 Contract) (Dkt. No. 24-10)) The proposed agreement-which again
names GT Art Consulting and lstdibs as parties- contains most of the same provisions as the
June 2014 Consulting Contract, including a provision permitting either party to terminate the
contract on 30 days' prior notice, and a forum selection clause stating that "[e]ach of the parties
irrevocably submits for all purposes in connection with this [a]greement to the exclusive

8

jurisdiction of the courts of England." (Furmansky Deel., Ex. 6 (Proposed January 2015
Contract) (Dkt. No. 24-10) at§§ 3, 21.9)
The proposed agreement differs as to compensation, however, providing for a
£3,333.33 monthly base salary, with a £400 commission for each new account signed and a 3%
commission on advertising revenue secured by Ujvari. (Id. at § 8.1) The Amended Complaint
alleges that Bruno told Ujvari that his "decision [concerning compensation] is final and if you
don't like it you are free to go. You are not important anymore, because you built the system for
1stdibs and it is well established and works without you." (Arn. Crnplt. (Dkt. No. 18) ~ 53)
On January 7, 2015 - after the expiration of the June 2014 Consulting Contract Bruno told Ujvari that lstdibs's chief financial officer was finalizing the Proposed January 2015
Consulting Contract and expected that process to be completed by January 15, 2015. (hl ~ 54)
Bruno ''instructed [Ujvari] to make his 2015 travel plans [for the consulting business]," and
Ujvari did so based on Bruno's representations. Qd.) Plaintiffs do not allege that Ujvari or GT
Art Consulting ever signed the proposed agreement.
On January 16, 2015, Bruno informed Ujvari "that his contract was terminated."
(Id.~

55) That same day, lstdibs sent a notice of termination to Ujvari stating:
we hereby give you 30 days' notice that we are terminating the Consultancy Agreement
between lstdibs and GT Art [Consulting Ltd.] dated 1 January 2015 (the "Consultancy
Agreement"). Accordingly, the Consultancy Agreement shall terminate on 15 February
2015 (the "Termination Date").

(Furmansky Deel., Ex. 7 (Notice of Termination) (Dkt. No. 24-11) at 2)
II.

PROCEDURAL HISTORY

The Complaint was filed on March 24, 2016, and asserts claims for breach of
contract, fraudulent misrepresentation, and negligent misrepresentation. (Dkt. No. 1) Plaintiffs
seek an award of compensatory and punitive damages, including ( 1) $300,000 in lost stock

9

options to which Ujvari "would have been entitled ... but for the unlawful termination and
breach [of contract]"; and (2) $98,000 in moving and relocation expenses arising from Ujvari' s
reliance on Defendant's misrepresentations concerning his future employment with lstdibs. (See
id., ad damnum clause)
On November 16, 2016, Defendant moved to dismiss the Amended Complaint for
( 1) improper venue, pursuant to Rule l 2(b )( 1), l 2(b )(3 ), and l 2(b)( 6), because the forum
selection clause in the June 2014 Consulting Contract confers "exclusive jurisdiction [on]
English ... courts" (Def. Moving Br. (Dkt. No. 23) at 15-22); and (2) failure to state a claim,
pursuant to Rule 12(b)(6). (Id. at 12-14, 23-32; see also Notice of Motion (Dkt. No. 22))
On August 18, 2017, Plaintiffs withdrew their claims for moving and relocation
expenses. (Dkt. No. 29)

DISCUSSION
Defendant claims that the Amended Complaint must be dismissed based on the
forum selection clause contained in the parties' June 2014 Consulting Contract. (Def. Moving
Br. (Dkt. No. 23) at 15)
I.

MOTION TO DISMISS PREMISED ON FORUM SELECTION CLAUSE
A.

Procedural Vehicle
The Second Circuit has stated that a forum selection clause may be enforced

through a motion to dismiss. Such a motion may be premised on ( 1) lack of subject matter
jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(l), see AVC Nederland B.V. v. Atrium Inv.
Partnership, 740 F.2d 148, 152 (2d Cir. 1984); (2) improper venue, pursuant to Fed. R. Civ. P.
12(b)(3), see Phillips v. Audio Active Ltd., 494 F.3d 378, 382 (2d Cir. 2007); or (3) failure to

10

state a claim, pursuant to Fed. R. Civ. P. 12(b)(6), see Evolution Online Sys., Inc. v. Koninklijke
PTT Nederland N.V., 145 F.3d 505, 508 n. 6 (2d Cir. 1998).
More recently, the Supreme Court has instructed that generally "the appropriate
way to enforce a forum-selection clause pointing to a state or foreign forum is through the
doctrine of forum non conveniens, "' rather than through application of Rule l 2(b). Atl. Marine
Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 580 (2013). Atlantic Marine
addressed a motion to dismiss for improper venue under Rule 12(b)(3), however, and the Court
reserved decision on whether a "defendant in a breach-of-contract action should be able to obtain
dismissal under Rule l 2(b)( 6) if the plaintiff files suit in a district other than the one specified in
a valid forum-selection clause." Id. at 580.
Here, Defendant - in seeking to enforce the parties' forum selection clause seeks relief under Rule 12(b)(l), 12(b)(3), or 12(b)(6). (See Def. Moving Br. (Dkt. No. 23) at 15
and 15 n.5) Although the Supreme Court's decision in Atlantic Marine makes clear that Rule
12(b)(3) is not the "proper procedural vehicle for enforcing a forum selection clause," see
Martinez v. Bloomberg LP, 740 F.3d 211, 216 (2d Cir. 2014), "[b]ecause ... Atlantic Marine
merely clarified the procedural vehicle through which forum selection clauses are enforced and
did not significantly alter the substantive analysis of the clauses," courts have construed motions
to dismiss brought under Rule 12(b)(3) as proceeding instead under the forum non conveniens
doctrine. See Amto, LLC v. Bedford Asset Mgmt., LLC, 168 F. Supp. 3d 556, 574 n.8
(S.D.N.Y. 2016) (construing motion to dismiss under Rule 12(b)(3) on the basis of forum
selection clause as proceeding under forum non conveniens doctrine); Midamines SPRL Ltd. v.
KBC Bank NV, No. 12 Civ. 8089 (RJS), 2014 WL 1116875, at *2 n.3 (S.D.N.Y. Mar. 18, 2014)
(same); see also Martinez, 740 F.3d at 216-17 (reviewing district court's dismissal pursuant to

11

Rule 12(b )(3) through the lens of forum non conveniens). To the extent that Defendant seeks
dismissal pursuant to the parties' forum selection clause, this Court construes Defendant's
motion as proceeding under the doctrine of forum non conveniens.
In deciding a motion to dismiss for forum non conveniens, a district court "may
rely on the pleadings and affidavits submitted in connection with the motion, but cannot resolve
any disputed material fact in the movant's favor unless an evidentiary hearing is held." Allianz
Glob. Corp. & Specialty v. Chiswick Bridge, No. 13 Civ. 7559 (RA), 2014 WL 6469027, at *2
(S.D.N.Y. Nov. 17, 2014) (citing Martinez, 740 F.3d at 216-17).

B.

Choice of Law
The June 2014 Consulting Contract provides that it "shall be governed by and

construed in accordance with English law." (Furmansky Deel., Ex. 5 (June 2014 Contract) (Dkt.
No. 24-7) at§ 21.9) Accordingly, this Court must determine what role English law should play
in determining the scope and enforceability of the forum selection clause contained in the June
2014 Consulting Contract. Martinez v. Bloomberg LP, 740 F.3d 211 (2d Cir. 2014), is
instructive on this point.
In Martinez, plaintiff worked for Bloomberg in London, and his employment
agreement stated that it '"shall be interpreted and construed in accordance with English law and
any dispute arising hereunder shall be subject to the exclusive jurisdiction of the English
courts."' Id. at 215. Plaintiff brought suit in the Southern District of New York, alleging that
Bloomberg had violated (1) the Americans with Disabilities Act, by discriminating against him
on the basis of a perceived disability, and (2) the New York State Human Rights Law and the
New York City Human Rights Law, by discriminating against him on the basis of his sexual
orientation. Id. Relying on the forum selection clause, Bloomberg moved to dismiss for

12

improper venue pursuant to Fed. R. Civ. P. 12(b)(3), and the district court granted the motion.
Id. at 216.
On appeal, the Second Circuit began its analysis by acknowledging that, in
Atlantic Marine, the Supreme Court had held "that generally 'the appropriate way to enforce a
forum-selection clause pointing to a state or foreign forum is through the doctrine of forum non
conveniens."' Id. at 216 (quoting Atlantic Marine, 134 S. Ct. at 580). The court then addressed
the following question:
Where a contract contains both a choice-of-law and a choice-of-forum clause, does
federal law or the body oflaw specified in the choice-of-law clause govern the effect of
the choice-of-forum clause in an action brought in a federal district court?
Id.at217.
"In answering th[at] question, [the court] distinguish[ed] between the
interpretation of a forum selection clause and the enforceability of the clause." Id. (emphasis in
original). The court concluded that issues regarding enforceability are resolved under federal
law, while "interpretive questions" are resolved under the "body oflaw selected in an otherwise
valid choice-of-law clause." Id. at 217-18 (emphasis omitted).
A four-part analysis applies to motions to dismiss premised on a forum selection
clause, and this analysis includes both "interpretive questions" and questions that go to the
enforceability of the clause. A court considering such a motion must ask:
(1) whether the clause was reasonably communicated to the party resisting enforcement;
(2) whether the clause is mandatory or permissive, i.e., ... whether the parties are
required to bring any dispute to the designated forum or simply permitted to do so; and
(3) whether the claims and parties involved in the suit are subject to the forum selection
clause. If the forum clause was communicated to the resisting party, has mandatory force
and covers the claims and parties involved in the dispute, it is presumptively enforceable.
A party can overcome this presumption only by (4) making a sufficiently strong showing
that enforcement would be unreasonable or unjust, or that the clause was invalid for such
reasons as fraud or overreaching.

13

Id. at 217 (quoting Phillips, 494 F.3d at 383-84) (internal citations and quotation marks omitted).
Questions 1 and 4 above - which go to enforceability - are resolved under federal
law, while Questions 2 and 3 - which involve interpretation of a forum selection clause - are
generally resolved under the law designated in the parties' agreement:
The overriding framework governing the effect of forum selection clauses in federal
courts, therefore, is drawn from federal law. Furthermore, federal law should be used to
determine whether an otherwise mandatory and applicable forum clause is enforceable
under ... step four in our analysis. In answering the interpretive questions posed by parts
two and three of the four-part framework, however, we normally apply the body of law
selected in an otherwise valid choice-of-law clause. Hence, if we are called upon to
determine whether a particular forum selection clause is mandatory or permissive, or
whether its scope encompasses the claims or parties involved in a certain suit, we apply
the law contractually selected by the parties.
Id. at 217-18 (internal citations and quotation marks omitted) (emphasis in original).
Accordingly, with respect to the forum selection clause in the June 2014
Consulting Contract, the questions of whether the clause was reasonably communicated to
Plaintiffs, and whether the clause is ultimately enforceable, will be resolved under federal law,
while English law applies in determining whether the clause is mandatory and whether the
claims and parties in this litigation fall within the clause's scope.
"[E]ven where the contract at issue ... contain[s] a choice-of-law clause,"
however, courts may "cite[] federal law in interpreting a forum selection clause" under certain
circumstances. Id. at 223 (citing Magi XXL Inc. v. Stato della Citta del Vaticano, 714 F.3d 714,
721 (2d Cir. 2013); John Boutari & Son, Wines & Spirits, S.A. v. Attiki Imps. & Distribs. Inc.,
22 F.3d 51, 53 (2d Cir. 1994); Roby v. Corp. of Lloyd's, 996 F.2d 1353, 1363 (2d Cir. 1993)).
For example, in some cases in which a parties' agreement contains a choice-of-law provision
providing for the application of another nation's law, the parties nonetheless cite to federal law in
addressing the "interpretive questions" referenced above. "Just as parties are free, via a choice-

14

of-law clause, to select the law to govern the interpretation of a forum selection clause, nothing
prevents the parties in litigation from choosing not to 'rely on any distinctive features of [the
selected law] and [instead to] apply general contract law principles and federal precedent to
discern the meaning and scope of the forum clause."' Id. (quoting Phillips, 494 F.3d at 386).
That is, "'parties by their acquiescence ... may induce the trial court to assume that foreign law
is similar to that of the forum,' with the result that a court does not err when it articulates its
decision by reference to the law of the forum." Id. (quoting Walter E. Heller & Co. v. Video
Innovations, Inc., 730 F.2d 50, 53 (2d Cir. 1984)); see also Arial Techs., LLC v. Aerophile S.A.,
No. 14 Civ. 4435 (LAP), 2015 WL 1501115, at *3 (S.D.N.Y. Mar. 31, 2015) ("a court need not
apply foreign law to interpret a forum selection clause unless the parties do so"; applying federal
precedent to analyze scope of a forum selection clause where the defendants cited only federal
law and the plaintiff cited no law on the issue).
Accordingly, this "Court will examine [English] law [only] where the parties rely
on it." See Arial Techs., 2015 WL 1501115, at *3. Because Plaintiffs have not cited any law on
the issue, and Defendant cites English law only in arguing that the claims in this litigation fall
within the scope of the forum selection clause (see Def. Moving Br. (Dkt. No. 23) at 18-21), the
Court relies on English law to interpret the scope of the forum selection clause and will
otherwise rely on federal law in resolving the instant motion.
C.

Analysis
In moving to dismiss the Amended Complaint, Defendant relies on the forum

selection clause set forth in the June 2014 Consulting Contract, which is the parties' most recent
agreement. (Def. Moving Br. (Dkt. No. 23) at 17)

15

1.

Whether the Clause Was Reasonably Communicated

At step one of the analysis, a court must determine whether the forum selection
clause was "reasonably communicated to the part[ies] resisting enforcement." See Martinez, 740
F.3d at 217.
A forum selection clause may be deemed "reasonably communicated" where
"[t]he clause at issue ... appear[s] as a standard section in the main body of [an] [a]greement
signed by [plaintiff] and is phrased in both clear and unambiguous language." Gasland
Petroleum, Inc. v. Firestream Worldwide, Inc., No. 14 Civ. 597, 2015 WL 2074501, at *5
(N.D.N.Y. May 4, 2015); see also Leviton Mfg. Co., Inc. v. Reeve, 942 F. Supp. 2d 244, 264
(E.D.N.Y. 2013) (finding "no reason to believe that the clause was not reasonably
communicated" where the parties "signed the agreement containing the clause and thus
presumably had an opportunity to review its contents"); Magi XXI, Inc. v. Stato Della Citta Del
Vaticano, 818 F. Supp. 2d 597, 604-05 (E.D.N.Y. 2011) ("A forum selection clause is reasonably
communicated if it is phrased in clear and unambiguous language."); cf. Midamines SPRL Ltd.,
2014 WL 1116875, at *3 ("A clause is reasonably communicated to a party where the party signs
an agreement that explicitly directs the party to the clause.").
Here, the forum selection clause at issue states that "[ e ]ach of the parties
irrevocably submits for all purposes in connection with this Agreement to the exclusive
jurisdiction of the courts of England." (Furmansky Deel., Ex. 5 (June 2014 Consulting Contract)
(Dkt. No. 24-9) at§ 21.9(b)) The clause appears as a "standard section in the main body" of the
agreement and is plainly "phrased in both clear and unambiguous language." See Gasland
Petroleum, Inc., 2015 WL 2074501, at *5. Although Ujvari is not himself a party to the
agreement, he serves as "the President and sole employee and shareholder of GT Art

16

[Consulting]" (Am. Cmplt. (Dkt. No. 18) ~ 9), and the agreement is "[ e ]xecuted as a Deed by GT
Art Consulting Ltd. acting by Gabor Ujvari." (Furmansky Deel., Ex. 5 (June 2014 Consulting
Contract) (Dkt. No. 24-9) at 6) Accordingly, the Court concludes that the forum selection clause
in the June 2014 Consulting Contract was "reasonably communicated to the part[ies] resisting
enforcement."
2.

Whether the Clause Is Mandatory or Permissive

At step two of the analysis, a court must determine whether the forum selection
clause is permissive or mandatory.
"Mandatory forum selection clauses ... require that disputes must be brought in
the designated forum, to the exclusion of all other fora where jurisdiction may also lie." Global
Seafood Inc. v. Bantry Bay Mussels Ltd., 659 F.3d 221, 225 (2d Cir. 2011) (citation omitted)
(emphasis in original). "A forum selection clause is considered mandatory where: (1) 'it confers
exclusive jurisdiction on the designated forum' or (2) 'incorporates obligatory venue language."'
Id. (quoting Phillips, 494 F.3d at 386).
Here, Section 21. 9(b) of the June 2014 Consulting Contract provides that"[ e]ach
of the parties irrevocably submits for all purposes in connection with this Agreement to the
exclusive jurisdiction of the courts of England." (Furmansky Deel., Ex. 5 (June 2014 Consulting
Contract) (Dkt. No. 24-9) at§ 21.9(b)) "This clause is unquestionably mandatory, as it contains
both language of exclusive jurisdiction and obligatory venue." Arial Techs., 2015 WL 1501115,
at *4.
3.

Whether Claims and Parties Are Subject to the Clause

At step three of the analysis, a court must determine whether the forum selection
clause applies to the claims and parties in the action. In contending that Plaintiffs' claims for

17

breach of contract, fraudulent misrepresentation, and negligent misrepresentation fall within the
scope of the forum selection clause, Defendant cites to English law. (Def. Moving Br. (Dkt. No.
23) at 18-21) Given the choice-of-law provision in the June 2014 Consulting Contract, and the
Court's obligation "to examine [English] law where the parties rely on it," see Arial Techs., 2015
WL 1501115, at *3, this Court applies English law in determining whether Plaintiffs' claims fall
within the scope of the forum selection clause.
In opposing Defendant's motion, Plaintiffs argue that the forum selection clause
in the June 2014 Consulting Contract is "inapplicable" and "provide[s] no basis for dismissal."
(Pltf. Opp. Br. (Dkt. No. 27) at 18) According to Plaintiffs, their contract claim is premised on
the theory that Defendant breached an "implied contract," 10 in which Defendant promised, inter
alia, to renew Plaintiffs' consulting contract and reward Ujvari with "more Stock Options every
year," "in exchange for [Ujvari] relocating from Italy to the UK." 11 (Id. at 7, 17-18; Am. Cmplt.
(Dkt. No. 18) ii~ 39-40) Plaintiffs contend that the forum selection clause does not apply to their
implied contract claim regarding the lost stock options, because this claim does not arise out of,
and is not "in connection with," the June 2014 Consulting Contract. (See Pltf. Opp. Br. (Dkt.
No. 27) at 7, 18)
Under English law, however, the "'proper approach to the construction of [forum
selection] clauses ... is to construe them widely and generously."' Martinez, 740 F.3d at 225
10

Plaintiffs' argument that they are suing on the basis of an "implied contract" contradicts the
Amended Complaint, which discusses the written agreements between the parties at length, and
which pleads that "Defendant has breached [its] multiple contracts described herein with
plaintiffs by terminating plaintiffs' employment." (Am. Cmplt. (Dkt. No. 18) ~ 63; see also id.
~ii 42-43)
11

In the Amended Complaint, Plaintiffs also contend that - as a result of the "defendant's
breach of contract" - Defendant is liable for $98,000 in expenses associated with Plaintiffs'
move from Italy to the United Kingdom. (Am. Cmplt. (Dkt. No. 18) if 64; see also Pltf. Opp. Br.
(Dkt. No. 27) at 7, 17-18) Plaintiffs have since withdrawn their claims for moving and

relocation expenses, however. (See Aug. 18, 2017 Order (Dkt. No. 29))
18

(quoting UBS AG v. HSH Nordbank AG, [2009] EWCA (Civ) 585, [82]). Accordingly, courts
interpreting the scope of a forum selection clause under English law "'should start from the
assumption that the parties, as rational businessmen, are likely to have intended any dispute
arising out of the relationship into which they have entered or purported to enter to be decided by
the same tribunal."' Id. at 224 (quoting Fili Shipping Co. Ltd. v. Premium Nafta Prods. Ltd.,
[2007] UKHL 40, [13]). 12 In this regard, "[t]he House of Lords (now the U.K. Supreme Court) .
. . [has] held that courts should presume that [a forum selection] clause encompasses all disputes
involving the relationship into which the contracting parties entered 'unless the language makes
it clear that certain questions were intended to be excluded from the [selected] jurisdiction.'" Id.
at 224-25 (quoting Fili Shipping, [2007] UKHL 40, [13]). Consistent with this broad
construction, English courts have found that the "'words "arising out of' or ''in connection with"
apply to claims arising from pre-inception matters such as misrepresentation.'" Id. at 225
(quoting UBS AG, [2009] EWCA (Civ) 585, [82]).
The Second Circuit applied this broad construction in Martinez, which - as
discussed above - addressed the scope of a forum selection clause in the context of an
employment agreement governed by English law. Id. at 224. The court concluded that the
forum selection clause in the employment agreement - which covered claims "arising out of' the
contract - encompassed plaintiffs employment discrimination claims, even though such claims
are "statutory tort[s]" under English law. See id. at 224-26. The court rejected plaintiffs
argument that the "forum selection clause only encompasses breach of contract claims," because
that was "precisely the proposition that the House of Lords rejected in the [Fili Shipping] case."
12

Although Fili Shipping Co. addresses an arbitration clause, the Second Circuit has noted that
the "decision refers broadly to the interpretation of 'jurisdiction clauses,'" and that "English
courts have repeatedly applied the holding ... to cases involving forum selection clauses."

Martinez, 740 FJd at 225.
19

Id. at 226. The Second Circuit also cited an English court's cautionary warning that "[t]he scope
of a forum selection clause does not tum on 'whether an ingenious pleader could frame a cause
of action without actually mentioning the ... Agreement."' Id. at 227 (quoting Skype
Technologies SA v. Joltid Ltd., [2009] EWHC (Ch) 2783, [19]).
Given these English precedents, and the Second Circuit's treatment of these cases
in Martinez, the Court concludes that the forum selection clause in the June 2014 Consulting
Contract encompasses Plaintiffs' breach of contract and misrepresentation claims.
The clause at issue confers exclusive jurisdiction on English courts to resolve
disputes arising "in connection with" the June 2014 Consulting Contract. (See Furmansky Deel.,
Ex. 5 (June 2014 Consulting Contract) (Dkt. No. 24-9) at§ 21.9(b)) The gravamen of Plaintiffs'
claims is that Defendant made - and later reneged on - promises to give Ujvari a new consulting
contract in 2015 and more stock options every year, in exchange for his entering into the June
2014 Consulting Contract and relocating to England. (See Am. Cmplt. (Dkt. No. 18) ~~ 35-40,
48, 50-51) Accordingly, Plaintiffs' claims plainly "involve[e] the [business] relationship into
which the contracting parties entered," Martinez, 740 F.3d at 224-25, and representations
allegedly made by Defendant prior to entering, and during the term of, the June 2014 Consulting
Contract. Such claims also clearly arise "in connection with" the agreement, and implicate
provisions of the agreement, including its merger and integration clause. (See Furmansky Deel.,
Ex. 5 (June 2014 Consulting Contract) (Dkt. No. 24-9) at§ 21.2 (providing that "[t]his
Agreement sets out the entire agreement and understanding between the parties in respect of the
subject matter of this Agreement") See also Martinez, 740 F.3d at 225 (recognizing that English
courts interpret forum selection clauses containing the words "in connection with" as covering
"pre-inception matters such as misrepresentation").

20

This Court concludes that the forum selection clause in the June 2014 Consulting
Contract encompasses Plaintiffs claims.
This Court further concludes that Plaintiffs are subject to the clause. 13 There is no
doubt that Plaintiff GT Art Consulting is subject to the clause, because it is a party to the June
2014 Consulting Contract and executed the agreement. (See Furmansky Deel., Ex. 5 (June 2014
Consulting Contract) (Dkt. No. 24-7) at 4; id. (Dkt. No. 24-9) at 6)
Moreover, while Plaintiff Ujvari is not named as a party to the contract, he
nonetheless is subject to its forum selection clause. "It is well-established that forum-selection
clauses are enforceable not only against signatories but also against non-signatories that are
either successors-in-interest or 'closely related' to a signatory." Midamines SPRL Ltd., 2014
WL 1116875, at *5 (citing Magi XXI, Inc., 714 F.3d at 722-23; Aguas Lenders Recovery Grp. v.
Suez, S.A., 585 F.3d 696, 701 (2d Cir. 2009)). "Courts ... have found non-signatories to be
'closely related' where their 'interests are completely derivative of and directly related to, if not
predicated upon the signatory party's interests or conduct.'" Id. (quoting Metro-Goldwyn-Mayer
Studios Inc. v. Canal Distribution S.A.S., 07 Civ. 2918 (DAB), 2010 WL 537583, at *5
(S.D.N.Y. Feb. 9, 2010)).
The touchstone for determining whether a non-signatory is bound by a forum
selection clause is whether "enforcement of the forum selection clause is foreseeable by virtue of
the relationship between the signatory and the party sought to be bound." Metro-GoldwynMayer Studios Inc., 2010 WL 537583, at *5 (citing Direct Mail Prod. Servs. Ltd. v. MBNA
Corp., No. 99 Civ. 10550 (SI-IS), 2000 WL 1277597, *3 (S.D.N.Y. Sept. 7, 2000)). "Applying
13

Because neither side cites English law with respect to whether the parties are covered by the
forum selection clause, this Court relies on federal law to resolve the issue. See Arial Techs.,
2015 WL 1501115, at *3. ("The Court will examine [English] law [only] where the parties rely
.
on it. ") .
21

this standard, courts have enforced forum-selection clauses against non-signatory officers and
directors of signatory corporations." Midamines SPRL Ltd., 2014 WL 1116875, at *5
(collecting cases). This Court concludes that Ujvari - who serves as "the President and sole
employee and shareholder of GT Art [Consulting]," and who is the true party-in-interest for
purposes of the consulting contracts - is "closely related" to GT Art Consulting and therefore
properly subject to the forum selection clause.

*

*

*

*

Because the forum selection clause in the June 2014 Consulting Contract "was
communicated to the resisting part[ies], has mandatory force[,] and covers the claims and parties
involved in th[ is] dispute, [the clause] is presumptively enforceable." Martinez, 740 F.3d at 217.

4.

Whether Plaintiffs Have Rebutted the Presumption of Enforceability

At step four of the analysis, a court must consider whether the resisting party has
overcome the presumption of enforceability by showing that enforcement "would be
unreasonable or unjust," or that the clause is "invalid for such reasons as fraud or overreaching."
Id. There is nothing in the Amended Complaint or in the parties' briefs suggesting that
Defendant secured the forum selection clause through fraud or overreaching. Moreover, there is
no evidence that enforcement of the clause would be unreasonable or unjust. Plaintiff GT Art
Consulting is a limited liability company organized under the laws of the United Kingdom, and
Plaintiff Ujvari resides in the United Kingdom and Italy. (See Am. Cmplt. (Dkt. No. 18) ~~ 7-9)
Moreover, Plaintiffs claim that they relocated to the United Kingdom because of Defendant's
representations concerning the long-term prospects of, and compensation for, UK-based
employment.

22

The Court concludes that Plaintiffs have not rebutted the presumption of
enforceability, and further concludes that the forum selection clause in the June 2014 Consulting
Contract is valid and enforceable. Defendant's motion to dismiss under the doctrine of forum
non conveniens will be granted. 14

CONCLUSION
For the reasons stated above, Defendant's motion to dismiss is granted. The
Clerk of the Court is directed to terminate the motion (Dkt. No. 22) and to close this case.
Dated: New York, New York
September 13, 2017

SO ORDERED.

PJ~~ep~

United States District Judge

14

Because the Court grants Defendant's motion to dismiss based on the forum selection clause,

it does not reach Defendant's alternative arguments premised on Fed. R. Civ. P. 12(b)(6).
23