Carolina Underground Solutions LLC v. Commercial Finance Partners LLC
ORDER granting 40 Motion to Supplement ; granting 10 Motion to Transfer Case and transferring the matter to the United States District Court for the Southern District of Florida, West Palm Beach Division. The court declines to rule on the remaining pending Motions [12, 13 & 45] and leaves resolution of these Motions for the transferee court. Signed by Honorable J Michelle Childs on 09/01/2017.(vdou, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
Carolina Underground Solutions, LLC, a South
Carolina Limited Liability Company,
Plaintiff and Counter-Defendant,
Commercial Finance Partners, LLC, a Nevada
Limited Liability Company,
Defendant and Counter-Claimant.
Commercial Finance Partners, LLC, a Nevada
Limited Liability Company,
Counter-Claimant and Counter-Defendant,
Jonathan Carawan, an individual,
Counter-Claimant and Counter-Defendant.
Civil Action No. 6:17-cv-01563-JMC
ORDER AND OPINION
Plaintiff Carolina Underground Solutions, LLC (“Plaintiff” or “CUS”) filed the instant
action against Defendant Commercial Finance Partners, LLC (“Defendant” or “CFP”) seeking
damages resulting from Defendant’s allegedly improper business practices. (ECF No. 1-1 at 4–
This matter is before the court by way of Defendant’s Motion to Transfer Venue to the
United States District Court for the Southern District of Florida pursuant to 28 U.S.C. § 1404(a).
(ECF No. 10 at 1.) Plaintiff opposes Defendant’s Motion in its entirety. (ECF No. 24.) For the
reasons set forth below, the court GRANTS Defendant’s Motion to Transfer Venue.
RELEVANT BACKGROUND TO PENDING MOTION
Plaintiff is a provider of boring and drilling services and it alleges that it “attempted to
enter into an agreement whereby Defendant would provide accounts receivable factoring
services.” (ECF No. 1-1 at 5 ¶¶ 7, 9.) Plaintiff alleges that although their initial attempt at
entering a signed written agreement failed, the parties did agree to an arrangement that resulted
in Defendant providing accounts receivable factoring services for and on behalf of Plaintiff from
December 13, 2016, until April 7, 2017. (Id. at 5 ¶ 10–6 ¶ 13.) Plaintiff alleges that on April 7,
2017, it sent a notice terminating the performance of Defendant’s services which should have
ended the parties’ relationship. (Id. at 6 ¶¶ 13–14.) However, Defendant allegedly did not cease
accessing the accounts Plaintiff maintained for its customers and engaged in numerous instances
of improper business practices to include accepting payment without authorization, recording a
UCC lien against Plaintiff’s property, and failing to remit funds to Plaintiff. (Id. at 7 ¶ 18–8 ¶
On June 8, 2017, Plaintiff filed a Complaint against Defendant in the Greenville County
(South Carolina) Court of Common Pleas alleging state law claims for tortious interference with
existing economic relationships, conversion, slander of title, and violation of the South Carolina
Unfair Trade Practices Act (“SCUTPA”), S.C. Code Ann. § 39-5-10 to -560 (2014). (ECF No.
1-1 at 9 ¶ 29–10 ¶ 56.) On June 14, 2017, Defendant removed the matter to this court pursuant
to 28 U.S.C. § 1332 (ECF No. 1) and then on June 29, 2017, filed the instant Motion to Transfer
Venue. (ECF No. 10.) Plaintiff filed a Response in Opposition to the Motion to Transfer Venue
on July 13, 2017, to which Defendant filed a Reply Memorandum in Support of Motion to
Transfer Venue on July 19, 2017. (ECF Nos. 24 & 27.) Additionally, on August 17, 2017,
Plaintiff moved to file and filed supplemental materials in opposition to Defendant’s Motion to
Transfer Venue. (ECF Nos. 40, 40-1 & 40-2.)
The court has subject matter jurisdiction over this action, pursuant to 28 U.S.C. § 1332,
based on Defendant’s allegations that the parties are citizens of different states and the amount in
controversy exceeds $75,000.00. (ECF No. 1 at 3 ¶ 7–4 ¶ 9.) Specifically, Plaintiff “is a limited
liability company organized and existing under the laws of the State of South Carolina, with a
principal place of business located in Greenville County, South Carolina.” (ECF No. 1-1 at 4 ¶
2.) Defendant “is a limited liability company organized and existing under the laws of the State
of Nevada, with a principal place of business located in the State of Florida.” (Id. at 5 ¶ 3.)
Additionally, the court is satisfied that the amount in controversy exceeds $75,000.00. (ECF
Nos. 1 at 4 ¶ 9 & 1-1 at 13 ¶ 55.)
28 U.S.C. § 1404(a) provides that “[f]or the convenience of parties and witnesses, in the
interest of justice, a district court may transfer any civil action to any other district or division
where it might have been brought or to any district or division to which all parties have
consented.” Id. “The appropriate venue of an action is a procedural matter that is governed by
federal rule and statutes.” Albemarle Corp. v. AstraZeneca UK Ltd., 628 F.3d 643, 651 (4th Cir.
2010) (citing Fed. R. Civ. P. 12(b)(3); 28 U.S.C. § 1391; 28 U.S.C. § 1406(a)). “Whether a case
should be transferred to an alternative venue rests within the sound discretion of the district
court.” Sw. Equip., Inc. v. Stoner & Co., Inc., C/A No. 6:10-1765-HMH, 2010 WL 4484012, at
*2 (D.S.C. Nov. 1, 2010) (citing In re Ralston Purina Co., 726 F.2d 1002, 1005 (4th Cir. 1984)).
“In the typical case not involving a forum-selection clause, a district court considering a §
1404(a) motion (or a forum non conveniens motion) must evaluate both the convenience of the
parties and various public-interest considerations.”1 Atl. Marine Constr. Co. v. U.S. Dist. Ct.
W.D. Tex., 134 S. Ct. 568, 581 (2013). However, “[w]hen the parties have agreed to a valid
forum-selection clause, a district court should ordinarily transfer the case to the forum specified
in that clause.” Id. “[A] valid forum-selection clause, which ‘represents the parties’ agreement
as to the most proper forum[,]’” should be “‘given controlling weight in all but the most
exceptional cases.’” Id. (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31 & 33
A court conducts a two-part analysis in deciding whether to enforce a forum selection
clause. First, the court determines whether the forum-selection clause is valid and enforceable.
Atl. Marine, 134 S. Ct. at 581. A forum-selection clause is “prima facie valid and should be
enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the
circumstances.” M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 10 (1972). A forumselection clause may be considered unreasonable if “(1) [its] formation was induced by fraud or
over-reaching; (2) the complaining party “will for all practical purposes be deprived of his day in
court” because of the grave inconvenience or unfairness of the selected forum; (3) the
The Court in Atlantic Marine identified the private and public factors as follows:
Factors relating to the parties’ private interests include “relative ease of access to
sources of proof; availability of compulsory process for attendance of unwilling,
and the cost of obtaining attendance of willing, witnesses; possibility of view of
premises, if view would be appropriate to the action; and all other practical
problems that make trial of a case easy, expeditious and inexpensive.” Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 241, n.6, 102 S. Ct. 252, 70 L. Ed. 2d 419
(1981) (internal quotation marks omitted). Public-interest factors may include
“the administrative difficulties flowing from court congestion; the local interest in
having localized controversies decided at home; [and] the interest in having the
trial of a diversity case in a forum that is at home with the law.” Ibid. (internal
quotation marks omitted). The Court must also give some weight to the plaintiffs'
choice of forum. See Norwood v. Kirkpatrick, 349 U.S. 29, 32, 75 S. Ct. 544, 99
L. Ed. 789 (1955).
Atl. Marine, 134 S. Ct. at 581 n.6.
fundamental unfairness of the chosen law may deprive the plaintiff of a remedy; or (4)[its]
enforcement would contravene a strong public policy of the forum state.” Albemarle Corp., 628
F.3d at 651 (quoting Allen v. Lloyd’s of London, 94 F.3d 923, 928 (4th Cir. 1996)).
Second, the court must consider whether “extraordinary circumstances” would hinder the
enforcement of the forum-selection clause. Atl. Marine, 134 S. Ct. at 581. In considering
whether extraordinary circumstances are present to avoid enforcement of a valid forum selection
clause, a court may consider “arguments about public-interest factors only.”2 Id. at 581–82.
The Parties’ Arguments
Defendant contends that the claims at issue in this action arise from a Master Purchase
and Sale Agreement (the “Agreement”) allegedly agreed to by the parties on November 14,
2016. (ECF No. 10 at 1 (referencing ECF No. 1-1 at 60–67).) Defendant further contends that
the Agreement has the following forum selection clause that requires this action to be litigated in
a state or federal court located in the State of Florida:
Governing Law: Submission to Process and Venue. This Agreement shall be
deemed a contract made under the laws of the State of Florida and shall be
construed and enforced in accordance with and governed by the internal laws of
the State of Florida, without reference to the rules thereof in relation to conflict of
law. Seller hereby irrevocably submits itself to the exclusive jurisdiction of the
State and Federal courts located in Florida, and agrees and consents that service of
process may be made upon it in any legal proceeding relating to this Agreement,
the assignment of Purchased or non-Purchased Accounts or any other relationship
“The presence of a valid forum-selection clause requires district courts to adjust their usual §
1404(a) analysis in three ways.” Atl. Marine, 134 S. Ct. at 581. “First, the plaintiff’s choice of
forum merits no weight.” Id. “Second, a court evaluating a defendant’s § 1404(a) motion to
transfer based on a forum-selection clause should not consider arguments about the parties’
private interests.” Atl. Marine, 134 S. Ct. at 582. “Third, when a party bound by a forumselection clause flouts its contractual obligation and files suit in a different forum, a § 1404(a)
transfer of venue will not carry with it the original venue’s choice-of-law rules—a factor that in
some circumstances may affect public-interest considerations.” Atl. Marine, 134 S. Ct. at 582.
between CFP and Seller by any means allowed under state or federal law. Any
legal proceeding arising out of or in any way related to this Agreement, the
assignment of Purchased or non-Purchased Accounts or any other relationship
between CFP and Seller shall be brought and litigated in the state or federal courts
located in the State of Florida and only in a county in which CFP has a business
location, the selection of which shall be in the exclusive discretion of CFP. Seller
hereby waives and agrees not to assert as a defense or otherwise, that an action
brought in accordance with this section was brought in any inconvenient forum or
that the venue thereof is improper.
(Id. at 2 (citing ECF No. 1-1 at 63 § 21).) Defendant also contends that the maintenance of the
instant action in this court is in breach of the Agreement. (Id.)
Based on the aforementioned, Defendant argues that the court should give the forum
selection clause controlling weight because its language is mandatory and transfer the case. (Id.
at 8.) Defendant argues that Plaintiff’s claims are all subject to the forum selection clause
because they arise out of and/or are related to the Agreement. (Id. at 9–10 (citing, e.g., Kentwool
Co. v. NetSuite, Inc., C/A No. 6:14-cv-02678, 2014 WL 12681605, at *5 (D.S.C. Dec. 1, 2014)
(“Although the clause in this case states ‘arising out of or in connection with’ the Agreement and
not ‘arising out of or related to,’ the Fourth Circuit has held that ‘[t]he difference between the
phrases ‘in connection with’ and ‘may arise out of or in relation to’ is largely semantic.’”)).) In
addition, Defendant argues there is no evidence of fraud, unfairness or lack of judicial access that
would make the enforcement of the forum selection clause unreasonable.
(Id. at 10–11.)
Finally, Defendant argues that “there are no known public interest concerns that would warrant
ignoring the forum selection clause including any administrative difficulties flowing from court
congestion” and it instead asserts that the public interest factors actually weigh in favor of
transferring the case to Florida. (Id. at 11–12 (citing, e.g., Sagittarius Sporting Goods Co., Ltd v.
LG Sourcing, Inc., 162 F. Supp. 3d 531, 536 (D.S.C. 2016) (“The preference of having this
diversity case adjudicated in the forum that is much more at home with the [controlling] law . . .
[weighs] in favor of transfer.”)).)
Plaintiff opposes the Motion to Transfer Venue asserting that Defendant’s invocation of
the forum selection clause is invalid because the Agreement was not “a valid, enforceable,
written agreement between the parties.” (ECF No. 24 at 1.) Although it does not dispute that the
parties signed the Agreement on November 14, 2016, Plaintiff asserts that the Agreement was
effectively cancelled when Defendant orally refused to provide factoring services for invoices
involving Plaintiff’s second biggest customer, Network Controls & Electric, Inc. (See ECF No.
24-1 at 3 (“If CUS could not factor Network Controls’ invoices, then there was no use in CUS
factoring any invoices with CFP . . . . [CFP’s COO] Mr. Palestine also said that, based on this
circumstance, CFP could not provide any factoring services to CUS, and that the agreement
signed on November 14, 2016 was of no force or effect.”).) Plaintiff further asserts that when its
circumstances with Network Controls changed, Defendant then agreed on December 9, 2016, to
provide factoring services to Plaintiff pursuant to a new factoring agreement, which was never
signed by the parties. (ECF No. 12-2 at 3 ¶ 9.) As a result of the foregoing, Plaintiff argues that
“[a]ssuming that the November Agreement was canceled, and that Defendant began providing
factoring services to Plaintiff in December 2016 without a written agreement—an error that is
solely and exclusively Defendant’s own fault, then this yields two conclusions: first, that since
the forum selection clause upon which Defendant seeks transfer was included in the November
Agreement, this clause is not valid or enforceable against Plaintiff; and second, that since
Defendant started doing business with Plaintiff in December 2016 without a written agreement,
there is no valid forum selection clause that Defendant may utilize to transfer venue for this case
to Florida.” (ECF No. 24 at 8.) Accordingly, Plaintiff opines that Defendant’s Motion to
Transfer should be denied “until a decision on the merits of the validity and enforceability of the
November Agreement may be reached.”3 (Id. at 9 (citations omitted).)
Plaintiff also asserts that the Motion to Transfer should be denied because Defendant
waived the right to exercise the forum selection clause when it filed a Third-Party Complaint
(ECF No. 20) against Jonathan Carawan, Plaintiff’s former president and member, in this court
instead of Florida. (ECF No. 24 at 2.) Because Carawan was also allegedly subject to the forum
selection clause, Plaintiff argues that “Defendant has chosen to act inconsistently with that
provision, and this conduct amounts to nothing less than a waiver of its ability to seek
enforcement of that clause.” (Id. at 13 (citing Kettler Int’l, Inc. v. Starbucks Corp., 55 F. Supp.
3d 839, 849–51 (E.D. Va. 2014)).) Plaintiff further argues that by waiving the forum selection
clause as to Carawan, the court should consider the relevant public interest factors (i.e., court
administration and judicial economy) and deny the transfer and avoid having “the same set of
witnesses and the same set of evidence  presented in two different forums with regard to the
same set of issues.” (Id. at 14.)
Finally, Plaintiff moves the court (ECF No. 40) to supplement the record with “(1) a
letter dated November 21, 2016, written by Marc Marin, an employee of Defendant, to Plaintiff
and its customers evidencing the cancellation of the Factoring Agreement at issue in this dispute,
. . . ; and (2) an email dated December 6, 2016, written by Jason Yeaman, an employee of
Defendant’s, to Plaintiff and one of Plaintiff’s customers evidencing that no prior relationship
existed between Plaintiff and Defendant . . . .” (Id. at 1–2.)
The Court’s Review
Defendant moves to transfer the matter to the Southern District of Florida, West Palm
Plaintiff observes that without the Agreement, “Defendant can only be successful in transferring
this case to Florida if it can meet the ordinary analysis established by § 1404(a).” (ECF No. 24
at 10.) In this regard, Plaintiff asserts that Defendant has not offered any facts and/or argument
as to why transfer under § 1404(a) is appropriate. (Id. at 11.)
Beach Division, pursuant to a forum selection clause contained in the purported Agreement
between the parties. (ECF No. 10 at 1.) Plaintiff’s main argument in opposition to transfer is
that the Agreement was terminated by Defendant. Defendant replies that this argument is
without merit because the Agreement “was never terminated as required by its terms.” (ECF No.
27 at 3.) Defendant expressly cites to the following provisions in support of its position:
(1) at Section 26, that the “Effective Date” of the Agreement was the date that
CUS signed it, i.e., November 14, 2016; (2) at Section 16, that the “Original Term
of this Agreement shall be for a period of 6 Months from the Effective Date,”
after which it is automatically extended for an additional one (1) year period
unless written notice of the termination is given by CUS to CFP “at least 60 days,
but not more than 90 days, prior to the end of the Original Term…”; (3) at Section
15, that all notices “with respect to this Agreement shall be given in writing,” and
delivered in a certain manner that expressly did not include email; and, (4) at
Section 22, that the Agreement and any written documents executed pursuant
thereto constituted the entire agreement of the parties and that the Agreement
“may not be contradicted by evidence of prior, contemporaneous, or subsequent
oral agreements of the parties” and “[n]o modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed” by both parties.
(ECF No. 27 at 2 (quoting ECF No. 1-1 at 63 §§ 15–16, 64 § 22 & 65 § 26).)
consideration of the parties’ positions, their dispute is an issue of contract interpretation.
Under South Carolina law,4 “‘[w]here the contract’s language is clear and unambiguous,
the language alone determines the contract’s force and effect.’” Id. (quoting McGill v. Moore,
672 S.E.2d 571, 574 (S.C. 2009)). “‘It is a question of law for the court whether the language of
a contract is ambiguous.’”
Id. at 710 (quoting S.C. Dep’t of Nat. Res. v. Town of
McClellanville, 550 S.E.2d 299, 302-03 (S.C. 2001)). “‘A contract is ambiguous when it is
capable of more than one meaning when viewed objectively by a reasonably intelligent person
who has examined the context of the entire integrated agreement and who is cognizant of the
Because this action is premised on diversity jurisdiction, the interpretation of the Agreement is
governed by South Carolina contract law. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78
(1938); Vagish, LLC v. Seneca Specialty Ins. Co., Case No. 3:13-cv-03161-TLW, 2014 WL
12638788, at * (D.S.C. July 25, 2014) (citing Erie R.R.).
customs, practices, usages and terminology as generally understood in the particular trade or
business.’” Id. (quoting Hawkins v. Greenwood Dev. Corp., 493 S.E.2d 875, 878 (S.C. Ct. App.
1997)). Moreover, “‘extrinsic evidence may only be considered if the contract is ambiguous.’”
Rodarte v. Univ. of S.C., 2015 WL 4275972, at *5 (S.C. Ct. App. July 15, 2015) (quoting
Preserv. Capital Consultants, LLC v. First Am. Title Ins. Co., 751 S.E.2d 256, 261 (S.C. 2013)).
“Where a written instrument is unambiguous, parol evidence is inadmissible to ascertain the true
intent and meaning of the parties.” McGill v. Moore, 672 S.E.2d 571, 576 (S.C. 2009).
Upon review, the court finds that the terms of the Agreement are unambiguous.
Therefore, for purposes of the instant Motion, the court concludes that the Agreement was
executed by the parties and was not terminated as required by its terms. The foregoing finding
resolves Defendant’s Motion to Transfer because Plaintiff does not make any arguments
suggesting that the forum selection clause was unreasonable under Albemarle Corp. Therefore,
the court finds that the forum selection clause in the Agreement is valid and that Plaintiff fails to
present exceptional circumstances mandating that the forum selection clause not be given
In addition, the court is not persuaded that Defendant waived implementation of the
forum selection clause by filing a counterclaim against Jonathan Carawan. In this regard, the
court observes that Defendant expressly states that “[v]enue of this Counterclaim is proper in
Palm Beach County, Florida with respect to newly added Counter-Defendant Carawan, pursuant
to the individual Limited Guarantee signed by him, . . . .” (ECF No. 20 at 10 ¶ 7.)
Accordingly, this case should be transferred to the Southern District of Florida, West
Palm Beach Division, as requested by Defendant.
Upon careful consideration of the entire record and for the reasons set forth above, the
court hereby GRANTS Defendant Commercial Finance Partners, LLC’s Motion to Transfer
Venue and TRANSFERS the matter to the United States District Court for the Southern District
of Florida, West Palm Beach Division. (ECF No. 10.) The court further GRANTS Plaintiff
Carolina Underground Solutions, LLC’s Motion to Supplement.5 (ECF No. 40.) The court
DECLINES to rule on the remaining pending Motions (ECF Nos. 12, 13 & 45) in this case and
leaves resolution of these Motions for the transferee court.
IT IS SO ORDERED.
United States District Judge
September 1, 2017
Columbia, South Carolina
Defendant did not oppose the court’s review of the supplemental information, instead it chose
to argue against its substantive impact. (See ECF No. 48.)
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