Gulfport Energy Corporation v. Freeport Lodge #415, Free and Accepted Masons of Ohio
Filing
21
MEMORANDUM OPINION AND ORDER denying 13 Motion to Dismiss. Signed by Senior Judge Peter C. Economus on 11/21/2014. (ds)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
GULFPORT ENERGY
CORPORATION,
Plaintiff,
v.
Case No. 2:14-cv-63
Judge Peter C. Economus
FREEPORT LODGE #415,
FREE AND ACCEPTED
MASONS OF OHIO,
MEMORANDUM OPINION AND ORDER
Defendant.
Plaintiff Gulfport Energy Corporation filed this case seeking recovery of approximately
$300,000 it alleges was mistakenly paid to Defendant Freeport Lodge #415, Free and Accepted
Masons of Ohio, as a signing bonus for an oil and gas lease (the “Lease”). Plaintiff alleges that
the Lease purports to cover about 165 acres of land located in Guernsey County, Ohio, but
Plaintiff’s due diligence uncovered the fact that Defendant does not own the mineral rights to
most of those acres. However, due to an internal processing error, Plaintiff inadvertently sent a
full bonus payment to Defendant, which cashed the check and refused to return the funds.
(Compl. ¶¶ 7–31.) Invoking diversity jurisdiction under 28 U.S.C. § 1332, Plaintiff filed suit in
this Court seeking recovery of the mistaken payment. This matter is before the Court for
consideration of Defendant’s motion to dismiss under the doctrine of forum non conveniens.
(Dkt. 13.) For the reasons that follow, Defendant’s motion is DENIED.
The Lease contains the following forum selection clause (the “Venue Clause”):
The venue for all actions and proceedings arising from this Lease
shall be in the county in which the real property is located.
(Dkt. 1-1 at 7.) The real property is located in Guernsey County, Ohio, in which no federal
courthouse is physically located. (Compl. ¶ 7, Dkt. 1 at 3; Dkt. 1-1 at 1.) While the parties agree
that the Venue Clause is valid and mandatory (Dkt. 14 at 6; Dkt. 15 at 1–2), they disagree as to
whether it requires this case to be heard in state court. Defendant argues that the Venue Clause
mandates venue in a courthouse physically located in Guernsey County; therefore, this case must
be heard in state court. (Dkt. 13 at 7.) Plaintiff counters that the Venue Clause does not satisfy
“the Sixth Circuit’s very strict standards for finding a waiver of the right to invoke diversity
jurisdiction,” and asserts that “[t]he Venue Clause simply restricts venue to courts that would be
. . . proper for an action arising in Guernsey County, Ohio,” including “the federal court that
covers Guernsey County—i.e., this Court.” (Dkt. 14 at 3, 6.) Defendant responds that, to the
extent that the Venue Clause is ambiguous, it must be construed against Plaintiff, as the
successor in interest to the drafter of the contract. (Dkt. 15 at 4.)
As Plaintiff points out, the Sixth Circuit has not decided the precise issue of whether a
forum selection clause setting venue in a county with no federal courthouse constitutes a waiver
of federal diversity jurisdiction. However, the Sixth Circuit has held that the right to remove a
case from state to federal court under 28 U.S.C. § 1441 can be waived only by a “clear and
unequivocal” waiver provision. Regis Associates v. Rank Hotels (Mgmt.) Ltd., 894 F.2d 193, 195
(6th Cir. 1990). In Regis, the Sixth Circuit found that the following forum selection clause did
not waive the right to remove to federal court:
The interpretation and application of this Agreement shall be
governed by the law of the State of Michigan and the parties
hereby submit to the jurisdiction of the Michigan Courts.
Regis, 894 F.2d at 194. In Regis, the contractual provision had been amended from a previous
draft that provided for jurisdiction of English Courts, so it is possible that the parties’ intent was
focused on the distinction between courts located in England versus Michigan rather than the
distinction between federal versus state courts. Id. However, cases decided by the Sixth Circuit
2
since Regis establish that the “clear and unequivocal” standard requires that the provision in
question must specifically mention removal.
In Cadle Co. v. Reiner, Reiner & Bendett, P.C., 307 F. App’x 884, 886 (6th Cir. 2009),
the Sixth Circuit found that the following forum selection clause did not waive the right to
remove to federal court:
All disputes . . . shall be resolved in the Newton Falls, Ohio
Municipal Court or the Trumbull County, Ohio Common Pleas
Court, depending on the amount in controversy.
Cadle, 307 F. App’x at 885. The Court held that “the forum selection clause at issue here neither
mentions removal nor sets forth an explicit waiver of that right . . . Pursuant to Regis, we cannot
reasonably interpret the clause as a clear and unequivocal waiver of [the] right to remove the
case to federal court under § 1441. We therefore conclude that the district court properly denied
[the] motion to remand the case to state court.” Id. at 888.
In another case, EBI-Detroit, Inc. v. City of Detroit, 279 F. App’x 340, 346–47 (6th Cir.
2008), the Court found that the following clause did not waive the right to remove:
The Contractor . . . agrees to submit to the exclusive personal
jurisdiction of, and not commence any action in other than, a
competent State court in Michigan, regardless of residence or
domicile, for any action or suit in law or equity arising out of or
under the Contract Documents.
EBI-Detroit, 279 F. App’x at 346. The Court stated that “[t]he clause is irrelevant because it says
nothing about the defendants’ right to remove,” and “[o]ur circuit has held that any waiver of the
right to remove must be ‘clear and unequivocal.’” Id. (quoting Regis, 894 F.2d at 195). The
Court stated that “[a] clause that does not even mention either removal or the party seeking to
remove cannot be a clear waiver of removal.” Id. at 347.
3
While this case has a difference procedural posture than the cases discussed above, the
Court finds that they are analogous. Here, the Venue Clause is even less clear than the clauses
contained in Regis, Cadle, and EBI-Detroit; and does not constitute a “clear and unequivocal”
waiver of the right to invoke diversity jurisdiction. Therefore, the Venue Clause “cannot be a
clear waiver of removal.” EBI-Detroit, 279 F. App’x at 347. The Court DENIES Defendant’s
motion to dismiss. (Dkt. 13.)
IT IS SO ORDERED.
4
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?