Kutite, LLC et al v. Excell Petroleum, LLC et al

Filing 11

ORDER DENYING DE 3 Motion to Dismiss; ADOPTING DE 9 Report and Recommendations. Signed by Judge John T. Fowlkes, Jr on 10/8/13. (Fowlkes, J.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

KUTITE, LLC, and MOHAMMED Z.
KUTITE,
Plaintiffs,
v.
EXCELL PETROLEUM, LLC, MAJORS
MANAGEMENT, LLC, and EAST
SHELBY DRIVE 3796 CENTER, LLC,
Defendants.

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Case No. 2:13-cv-02106-JTF-cgc

ORDER ADOPTING MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS

Before the Court is Defendants’ Excell Petroleum, LLC, Majors Management, LLC, and
East Shelby Drive 3796 Center, LLC Motion to Dismiss, pursuant to Fed. R. Civ. P. 12(b)(6), 28
U.S.C. § 1406(a), and the doctrine of forum non conveniens, filed on February 22, 2013. (D.E.
#4). On March 22, 2013, Plaintiffs’ Kutite, LLC and Mohammed Z. Kutite filed their Response
in Opposition to Defendants’ Motion to Dismiss. (D.E. #6). Defendants’ filed their Reply to
Plaintiff’s Response on April 2, 2013. (D.E. #7). On June 17, 2013, Defendants’ Motion was
referred to the Magistrate for Report and Recommendation. (D.E. #8). The Magistrate entered
her Report and Recommendation, recommending that Defendants’ Motion to Dismiss should be
denied, on August 20, 2013. (D.E. #9). Defendants filed their Objections to the Magistrate’s
Report and Recommendation on September 3, 2013. (D.E. #10). After reviewing the
Magistrate’s Report and Recommendation, Defendants’ Objections, and the entire record, this
Court finds that the Objections should be overruled and the Magistrate’s Report and
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Recommendation should be adopted. Thus, Defendants’ Motion to Dismiss Complaint is
DENIED.
I.

LEGAL STANDARD
A district judge has the discretion to refer dispositive matters to a magistrate judge to

conduct a hearing and propose findings of fact and recommendations. 28 U.S.C. § 636(b)(1)(B)
(“[A] judge may also designate a magistrate judge to conduct hearings, including evidentiary
hearings, and to submit to a judge of the court proposed findings of fact and recommendations
for the disposition, by the judge of court, of any motion excepted in subparagraph (A) [for which
a motion for summary judgment, judgment on the pleadings, motion to dismiss, etc. are
included]”). The district court judge has the authority to review the magistrate judge’s proposed
findings of fact and recommendations under a de novo determination. See 28 U.S.C. §
636(b)(1)(C); See e.g. Baker v. Peterson, 67 Fed.App’x. 308, 311, 2003 WL 21321184 (6th Cir.
2003) (“A district court normally applies a ‘clearly erroneous or contrary to law’ standard of
review for nondispositive preliminary measures. A district court must review dispositive
motions under the de novo standard.”); U.S. v. Raddatz, 447 U.S. 667,676 (1980) (quoting
Matthews v. Weber, 423 U.S. 261, 275 (1976) (“in providing for a ‘de novo determination’
Congress intended to permit whatever reliance a district judge, in the exercise of sound judicial
discretion, chose to place on a magistrate’s proposed findings and recommendations.”)
I.

ANALYSIS
The Magistrate recommended that: (1) Absent a valid contract, Defendants’ Motion to

Dismiss, pursuant to 12(b)(6) and the forum selection clause, should be denied because there is
no valid forum selection clause governing the appropriate venue for this case; (2) Without an
appropriate alternative forum available, both private and public factors weighing in favor of the

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Western District as the appropriate forum, and without a choice of law provision that mandates
that Georgia law govern the issues in this case, Defendants’ Motion, pursuant to the doctrine of
forum non conveniens should be denied; (3) Because Defendants do not assert that this case
should have been brought in another federal district or division, Defendants’ dismissal, pursuant
to 28 U.S.C. § 1406(a), has been inappropriately raised before this Court.
Defendants filed their Objections to the Magistrate’s Report and Recommendation on
September 3, 2013. (D.E. # 10). Defendants argue that the Magistrate erred in recommending
that the Georgia forum selection clause should not be enforced. Defendants argue that although
the Magistrate found that no valid contract exists between the parties, the Magistrate should have
found that a contractual relationship exists between the parties. Defendants assert that because a
contractual relationship, evident from the various business transactions, exists between the
parties, the forum selection clause does govern the venue of this case. Defendants look to the
court’s ruling in Tritt v. Category 5 Records, LLC, 570 F.Supp.2d 977, 980 (M.D. Tenn. 2008) to
bolster their argument: “‘[W]hen an action arises from a contract or contractual relationship
between two parties, the choice of forum clause in that contract governs.” However, in order to
determine whether a contract or contractual relationship has been formed, this Court must look to
state law. Thus, this Court is compelled to accept the Magistrate’s analysis, based upon Georgia
law, that no valid contract exists between the parties.
Last, Defendants aver that, if this Court adopts the Magistrate’s Report and
Recommendation, then all of Plaintiffs’ causes of action related to contract theories should be
dismissed for failure to state a claim upon which relief should be granted. Although Defendants
raise an appealing argument, Defendants’ objection is more appropriately addressed in a motion

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for summary judgment rather than in a motion to dismiss. Therefore, Defendants’ objection is
overruled as premature.
The Court has reviewed the Magistrate Judge’s Report and Recommendation, the
Magistrate’s legal analysis, the parties’ arguments, and the entire record. Accordingly, for the
reasons set forth above, this Court ADOPTS the Magistrate’s Report and Recommendation.
IT IS THEREFORE ORDERED that Defendants’ Motion to Dismiss is DENIED.
IT IS SO ORDERED this 8th day of October, 2013.
BY THIS COURT:

s/John T. Fowlkes, Jr.
JOHN T. FOWLKES, JR.
United States District Judge

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