1-Stop Financial Service Centers of America, LLC v. Astonish Results, LLC et al

Filing 42

ORDER GRANTING IN PART AND DENYING IN PART 10 Motion to Dismiss and Alternatively, Motion to Transfer Venue; GRANTING IN PART AND DENYING IN PART 11 Motion to Dismiss or in the Alternative, Motion to Transfer Venue; GRANTING 29 Motion for Leave to File Sur-Reply; DISMISSING AS MOOT 35 Motion to Stay; the Clerk shall transfer this case, as it pertains to claims brought by Plaintiff 1-Stop against Defendants Astonish and Thomas Couture, to the United States District Court for the District of Rhode Island; the Clerk shall transfer this case, as it pertains to claims brought by Plaintiff 1-Stop against Defendant Creekridge Capital, to the United States District Court for the District of Minnesota. Signed by Judge Sam Sparks. (kkc)

FILED
IN THE UNITED STATES DISTRICT COURg74 J$4
23 PM 2 38
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
COURT
BY

1-STOP FINANCIAL SERVICE CENTERS OF
AMERICA, LLC,
Plaintiff,

Case No. A-13-CA-961-SS

-vs-

ASTONISH RESULTS, LLC f/k/a Astonish
Results, L.P.; THOMAS COUTURE; and
CREEKRIDGE CAPITAL LLC,
Defendants.

ORDER
BE IT REMEMBERED on January 7, 2014, the Court called a hearing in the above-styled
cause, and Plaintiff 1-Stop Financial Service Centers of America, LLC, and Defendants Astonish

Results, LLC, Thomas Couture, and Creekridge Capital LLC, appeared by and through counsel.
Before the Court are Defendants Astonish Results and Thomas Couture's Motion to Dismiss and
Alternatively, Motion to Transfer Venue [#10], Plaintiff's Response [#24], and Defendants' Reply
[#27]; Defendant Creekridge Capital LLC's Motion to Dismiss, or in the Alternative, to Transfer

Venue Pursuant to FRCP 12(b)(3) and 28 U.S.C.

§

1406(a) [#1 1], Plaintiff's Response [#23], and

Defendant's Reply [#26]; Defendant Creekridge Capital's Motion for Leave to File Sur-Reply to
Defendants' Motion to Dismiss, or in the Alternative, to Transfer Venue, and Motion to Sever [#29],
and Plaintiff's Response [#33]; Defendants Astonish Results and Thomas Couture's Motion to Stay

Discovery and Motion for Protective Order [#35], and Plaintiffs Response [#41]; and Plaintiffs
Motion for Leave to File Sur-Reply in Opposition to Defendants' Motions to Dismiss [#37]. Having

I

reviewed the documents, the relevant law, and the file as a whole, the Court now enters the following
opinion and orders.

Background
Plaintiff 1-Stop Financial Service Centers of America, LLC, (1-Stop) is an insurance agency,
which contracted first with Defendant Astonish Results, LLC, (Astonish) to provide website design,
marketing, social media, and search engine optimization services. Defendant Thomas Couture was

the salesperson who directly marketed Astonish's services to 1-Stop. 1-Stop and Astonish entered
into a Website Development Design and Marketing Equipment and/or Software License Agreement
(the Marketing Agreement) on September 13, 2012. This contract contains the following forum

selection clause:
This Agreement shall be governed by, and construed in accordance with the laws of
the State of Rhode Island excluding its conflict of law rules. All actions and
proceedings, interpretations, and any matters regarding enforceability or effect arising
out of or relating to this Agreement shall be brought in any Rhode Island state or
federal court sitting in the City of Providence, Rhode Island.

Pl.'s Resp. to Defs.' Mot. to Dismiss and, Alternatively, Mot. to Transfer Venue [#24-2], Ex. 1-A
(Marketing Agreement), at 2.

After entering into the contract with Astonish, 1-Stop then entered into a separate agreement
(the Lender Agreement) with Defendant Creekridge Capital, LLC, (Creekridge), a financial services
company, which leased specific equipment and software to 1-Stop. In short, Creekridge provided
1-Stop the financing for 1-Stop's contract with Astonish. The Lender Agreement contains its own

separate forum selection clause:
CHOICE OF LAW: THIS AGREEMENT WILLBE GOVERNED BY, ENFORCED
IN AND INTERPRETED ACCORDING TO THE LAWS OF THE STATE OF

-2-

MINNESOTA. YOU CONSENT TO EXCLUSIVE JURISDICTION IN THE
STATE OR FEDERAL COURTS OF MINNESOTA.
Id., Ex. 1-B (Lender Agreement), at 2.
1-Stop later became dissatisfied with the performance of the contracts, and filed a lawsuit

in Texas state court against Astonish, Couture, and Creekridge. The causes of action are: (1) breach

of contract against Astonish, and (2) fraud in the inducement against all Defendants.

See Notice

of

Removal [#1-3], Ex. C (Original Petition), at 12-14. 1-Stop seeks declaratoryreliefagainstAstonish
and Creekridge establishing the contracts as unenforceable, rescission against Astonish and
Creekridge, attorneys' fees against all Defendants, and punitive damages against all Defendants. Id.
at 14-17.

After removing the case to federal court on November 4, 2013, Astonish and Couture filed
a motion to dismiss or, in the alternative, motion to transfer venue. There are, in essence, three

layers to this filing. First, there is a motion to dismiss based on improper venue according to Federal

Rule of Civil Procedure 12(b)(3) because the forum selection clause directs any lawsuit arising out

of the contract between 1-Stop and Astonish to be brought in Rhode Island. Second, there is the
alternative motion to transfer pursuant to 28 U.S.C. § 1404(a) based on the forum selection clause.

Third, there is the alternative motion to dismiss based on Federal Rule of Civil Procedure 12(b)(6)
and failure to state a claim upon which relief can be granted.

Creekridge, after filing a plea in abatement, motion to dismiss, and answer in state court,

consented to removal of the case to federal court. Creekridge subsequently filed in federal court its
own separate motion to dismiss or, in the alternative, motion to transfer venue. The basis for

Creekridge's motion is Rule 12(b)(3) and 28 U.S.C.

-3-

§

1406(a), and Creekridge asks the Court to

dismiss the claims against it due to improper venue. In the alternative, Creekridge wants the claims
transferred to a proper venue, and the forum selection clause in the Lender Agreement mandates
Minnesota as the sole venue for any disputes between 1-Stop and Creekridge.
1-Stop opposes both of these motions, arguing neither of the forum selection clauses are
enforceable. Primarily, 1-Stop contends the clauses are contained in boilerplate, non-negotiated, and

unconscionable contracts of adhesion. Creekridge filed a motion for leave to file a sur-reply to the
motion to dismiss or, in the alternative, transfer to Rhode Island filed by Astonish. Creekridge
opposes transfer of the entire case to Rhode Island, rather arguing, if the entire case must be
transferred anywhere, it should be to Minnesota. In addition and in the alternative, Creekridge

moves the Court to sever the case, allowing the claims against Creekridge to go to Minnesota and
those against Astonish and Couture to go to Rhode Island. 1-Stop opposes severance.
Finally, 1-Stop filed a motion for leave to file a sur-reply to the Defendants' motions to

dismiss, bringing to the Court's attention a recent case from the United States Supreme Court, which

bears directly on enforcement of forum selection clauses and the issues of the case, Atl. Marine
Constr. Co., Inc.

v.

US. Dist. Court for the

J'

Dist.

of Tex.,

134 S. Ct. 568 (2013).

Considering the complicated venue issues and the recent precedent from the Supreme Court,
this Court called a hearing in order to allow the parties to argue their respective positions and explain

the impact of Atlantic Marine on the outcome of the pending motions in this matter.

El

Analysis
I.

Enforcement of Forum Selection Clauses and Atlantic Marine

A.

Rule 12(b)(3) and 28 U.S.C. § 1406(a)
Section 1406(a) provides, "[t]he district court of a district in which is filed a case laying

venue in the wrong division or district shall dismiss, or if it be in the interest ofjustice, transfer such
case to any district or division in which it could have been brought." Rule 12(b)(3) states a party

may move to dismiss a case for "improper venue." Therefore, these two provisions authorize
dismissal only when venue is "wrong" or "improper" in the forum in which it was brought.
In the instant case, one of the grounds for Astonish's motion to dismiss or transfer, and for

Creekridge's motion to dismiss or transfer, is a combination of § 1406(a) and Rule 1 2(b)(3). For the
reasons explained below, however, Atlantic Marine rejects this mechanism as a proper means of
enforcing a forum selection clause.
B.

28 U.S.C. § 1391

Whether venue is "wrong" or "improper" for purposes of § 1406(a) and Rule 12(b)(3) is
"generally governed by 28 U.S.C.

§

1391." Ati. Marine, 134 5. Ct. at 577. Section 1391 provides:

"[e]xcept as otherwise provided for bylaw.

. .

this section shall govern the venue of all civil actions

brought in district courts of the United States." 28 U.S.C.

§

1391(a). Subsection (b) further

instructs:
[a] civil action may be brought

in( 1) a judicial district in which any defendant

resides, if all defendants are residents of the State in which the district is located; (2)
a judicial district in which a substantial part of the events or omissions giving rise to
the claim occurred, or a substantial part of property that is the subject of the action
is situated; or (3) if there is no district in which an action may otherwise be brought
as provided in this section, any judicial district in which any defendant is subject to
the court's personal jurisdiction with respect to such action."
-5-

28 U.S.C.

§

139 1(b).

As the Court in Atlantic Marine noted, when a party challenges venue, a court must

determine whether the case falls within one of the three situations described in

Marine, 134 5. Ct. at 577. "As a result, a case filed in a district that falls within
dismissed under
C.

§

§

§

139 1(b). Ati.

1391 may not be

1406(a) or Rule 12(b)(3)." Id.

28 U.S.C. § 1404(a)

"Although a forum-selection clause does not render venue in a court 'wrong' or 'improper'
within the meaning of § 1406(a) or Rule 12(b)(3), the clause may be enforced through a motion to

transfer under

§

1404(a)." Id. at 579. Section 1404(a) provides: "For the convenience of the 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." 28 U.S.C.

§

1404(a). Section 1404(a) "is

intended to place discretion in the district court to adjudicate motions for transfer according to an

'individualized, case-by-case consideration of convenience and fairness." Stewart Org., Inc.
Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen

v.

v.

Barrack, 376 U.S. 612, 622 (1964)).

"There can be no question but that the district courts have 'broad discretion in deciding whether to
order a transfer" under

§

1404(a). In re Volkswagen ofAm., Inc., 545 F.3d 304, 3 13-15 (5th Cir.

2008) (quoting Balawajder

v.

Scott, 160 F.3d 1066, 1067 (5th Cir. 1998)).

The preliminary question in a motion for transfer of venue is whether the suit could have
been filed originally in the destination venue. Id. at 312. After determining the suit could have been

filed in the destination venue, the Court must next focus on whether the party requesting the transfer
has demonstrated the "convenience of parties and witnesses" requires transfer of the action,

considering various private and public interests. See Gulf Oil Corp.

v.

Gilbert, 330 U.S. 501, 508

(1974).1

The private interest factors are: "(1) the relative ease of access to sources of proof; (2) the
availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance
for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious
and inexpensive." In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (citing PzperAircrafi
Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981)). The public interest factors are: "(1) the administrative

difficulties flowing from court congestion; (2) the local interest in having localized interests decided
at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance

of unnecessary problems of conflict of laws [or in] the application of foreign law." Id. Although
the Gilbert factors are "appropriate for most transfer cases, they are not necessarily exhaustive or

exclusive"; indeed, the Fifth Circuit has noted
In re Volkswagen of Am., 545 F.3d at

"none. . . can be said to be of dispositive weight."

3 13-15

(quoting Action Indus., Inc.

v.

US. Fid. & Guar.

Corp., 358 F.3d 337, 340 (5th Cir. 2004)). Despite the wide array of private and public concerns,
a court must make a "flexible and individualized analysis" in ruling on a motion to transfer venue.

Ricoh Corp., 487 U.S. at 29.

Though the above is similar to the standard in theforum non conveniens context,

§

1404(a)

requires a lesser showing of inconvenience. In re Volkswagen ofAm., 545 F.3d at 314. As such, the

movant need not show the Gilbert factors substantially outweigh the plaintiff's choice of venueit
is enough to show the new venue is clearly more convenient than the original one. See id.

it to the

§

A1though Gilbert dealt withforum non conveniens, the Fifth Circuit applies the "Gilbert factors" derived from
1404(a) setting. See In re Volkswagen ofAm., 545 F.3d at 314 n.9.

-7-

Nonetheless, as the Supreme Court has cautioned, while the movant' s burden is lessened, the

plaintiffs choice of venue is still to be considered. See Norwood v. Kirkpatrick, 349 U.S. 29, 32
(1955). Accordingly, the Fifth Circuit's rule is that while the plaintiffs choice of venue is not a

factor under Gilbert, it places a "significant" burden of proof upon the movant to "show good cause

for the transfer." In re Volkswagen ofAm., 545 F.3d at 314 n. 10. "Thus, when the transferee venue
is not clearly more convenient than the venue chosen by the plaintiff, the plaintiffs choice should

be respected." Id. at 315.
Finally, § 1404(a) operates as a safety valve of sorts, and serves to give corporationswhich,
due to their frequently pervasive contacts nationwide, are often subject to venue virtually

anywheresome recourse from the highly permissive general venue rule found in 28 U.S.C. §
See In re Volkswagen ofAm., 545 F.3d at 313. "Theunderlyingpremise of

should prevent plaintiffs from abusing their privilege under

§

1391.

1404(a) is that courts

1391 by subjecting defendants to

venues that are inconvenient under the terms of § 1404(a)." Id. "Thus, while a plaintiff has the
privilege of filing his claims in any judicial division appropriate under the general venue statute,
§

1404(a) tempers the effects of the exercise of this privilege." Id.

C.

Atlantic Marine
To sum up so far, Atlantic Marine first establishes the determination of when venue is

"wrong" or "improper" for purposes of § 1406(a) and Rule 12(b)(3) is governed by

§

1391, and

whether the parties' contract contains a forum selection clause has no bearing on whether a case
satisfies one of § 1391's categories. In other words, forum selection clauses may not be enforced

through

§

1406(a) and Rule 12(b)(3); rather, a motion to transfer under

mechanism for forum selection clauses.

§

1404(a) is a proper

Atlantic Marine next outlines the approach district courts should take when faced with a
§

1404(a) motion. In short, "a proper application of § 1404(a) requires that a forum-selection clause

be 'given controlling weight in all but the most exceptional cases." Atl. Marine, 134 S. Ct. at 579

(quoting Stewart Organization, Inc.
while

§

v.

Ricoh Corp., 487 U.S. 22, 33 (1988)). The Court made clear,

1404(a) motions are appropriate for forum selection clauses pointing to a federal forum,

forum non conveniens is the proper doctrine for enforcing such clauses directing the case to a state
or foreign

forum.2

Id. at 580.

The Court then proceeded to carefully describe the correct § 1404(a) analysis and the relevant
burdens. As an initial matter, "[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. Only under
extraordinary circumstances unrelated to the convenience of the parties should a

be denied." Id. at 581. In a

§

§

1404(a) motion

1404(a) case where there is no forum selection clause at issue, the

district court proceeds through the standard

§

1404(a) analysis described above, but the Court in

Atlantic Marine adjusted the § 1404(a) calculus in three important ways when there is a valid forum
selection clause.

2While the Marketing Agreement points any disputes to state or federal court in Providence, Rhode Island, and
the Lender Agreement points any disputes to state or federal court in Minnesota, none of the parties have made any
arguments regardingforum non conveniens based on the notion the forum selection clauses allow for a state forum, i.e.
a nonfederal forum. Because the clauses contemplate federal forums and because no party has raised any arguments
based on forum non conveniens, this Court will presume the Defendants wanted their cases transferred to federal forums.
Accordingly, the Court will analyze their forum selection clauses through § 1404(a). The Court also notes the significant
overlap between § 1404(a) and forum non conveniens. See Ati. Marine, 134 S. Ct. at 580 ("[B]ecause both § 1404(a)
and the forum non conveniens doctrine from which it derives entail the same balancing-of-interests standard, courts
should evaluate a forum-selection clause pointing to a nonfederal forum in the same way that they evaluate a forumselection clause pointing to a federal forum."). Moreover, "Section 1404(a) is merely a codification of the doctrine of
forum non conveniens for the subset of cases in which the transferee forum is within the federal court system; in such
cases, Congress has replaced the traditional remedy of outright dismissal with transfer." Id.

First, "the plaintiffs choice of forum merits no weight." Id. "Rather, as the party defying

the forum-selection clause, the plaintiff bears the burden of establishing that transfer to the forum
for which the parties bargained is unwarranted." Id. Second, the court "should not consider
arguments about the parties' private interests." Id. at 582. Since the parties agreed ahead of time
to the forum, they waive the right to challenge the preselected forum as inconvenient. Id. The court

still, however, considers the public interest factors, but "[b]ecause those factors will rarely defeat a

transfer motion, the practical result is that forum-selection clauses should control except in unusual
cases." Id. Third, "when a party bound by a forum-selection 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." Id.
The Court summed up its position as follows:

When parties have contracted in advance to litigate disputes in a particular forum,
courts should not unnecessarily disrupt the parties' settled expectations. A forumselection clause, after all, may have figured centrally in the parties' negotiations and
may have affected how they set monetary and other contractual terms; it may, in fact,
have been a critical factor in their agreement to do business together in the first place.
In all but the most unusual cases, therefore, 'the interest of justice' is served by
holding parties to their bargain.
Id. at 583.

With this new framework from Atlantic Marine in mind, this Court proceeds to analyze the
Defendants' motions to dismiss or, in the alternative, transfer.

II.

Astonish and Couture's Motion to Dismiss or, in the Alternative, Transfer
Defendants Astonish and Couture first ask the Court to dismiss the claims against them under

Rule 12(b)(3) because venue in the Western District of Texas is "improper" based on the forum

-10-

selection clause. Given Atlantic Marine, however, Rule 12(b)(3) is not the proper means of
enforcing a forum-selection clause, and Defendants' motion must be DENIED on these grounds.
Defendants alternatively move the Court to transfer pursuant to § 1404(a), which is a proper

vehicle for enforcing a forum selection clause according to Atlantic Marine. The first question on
a § 1404(a) motion is whether the suit could have been filed originally in the destination venue, and

this lawsuit could have originally been filed in the United States District Court for the District of

Rhode Island. Next, typically this Court would weigh the private and public interest factors, but
Atlantic Marine altered the approach in three ways.
First, 1-Stop's selection of the Western District of Texas "merits no weight." The burden
is on 1-Stop to establish transfer to the District of Rhode Island is unwarranted. 1-Stop makes no

specific arguments suggesting transfer to the District of Rhode Island is unwarranted for any reason,
and 1-Stop fails to meet its burden. Second, the Court does not consider any private interest factors

but only public interest factors. Accordingly, none of 1-Stop's arguments concerning the cost of
litigating in Rhode Island or access to proof are considered. 1-Stop perhaps has a few legitimate
arguments when it comes to public interest factors. For instance, many of the events giving rise to
this lawsuit occurred in Texas, so it might be argued this Court has a local interest in having such
a dispute decided here where it originated. Also, 1-Stop argues transfer would result in an

"egregious waste ofjudicial resources." These arguments, though, do not rise to a level sufficient
to deny a motion to transfer. As the Court noted in Atlantic Marine, the public interest factors "will

rarely defeat a transfer motion, [and] the practical result is that forum-selection clauses should
control except in unusual cases." All. Marine, 134 S. Ct. at 582. There is nothing to indicate, nor
does 1-Stop contend, this is an unusual case. 1-Stop fails to meet its burden and explain why the
-11-

Court should not hold it to the forum selection clause it agreed to when it signed the Marketing

Agreement.
1-Stop's primary contention is the forum selection clause was never valid because it was
contained in a contract of adhesion. A forum selection clause should not be enforced if it "is shown

by the resisting party to be unreasonable under the circumstances." Int'l Software Systems, Inc.
Amplicon, Inc., 77 F.3d 112, 114 (5th Cir. 1996) (citing M/SBremen

v.

v.

Zapata Off-Shore Co., 407

U.S. 1, 10(1972)). 1-Stop cites to the Supreme Court's well-known Carnival CruiseLines v. Shute,
499 U.S. 585 (1991), for the proposition forum selection clauses which are included in contracts of

adhesion should not be enforced. Contracts of adhesion are "form contracts offered on a take-orleave basis by a party with stronger bargaining power to a party with weaker power." Pl.'s Resp.
to Defs.' Astonish and Couture's Mot. to Dismiss [#24], at 3 (quoting Carnival Cruise Lines, 499

U.S. at 600 (Stevens, J., dissenting)). According to 1-Stop, Couture gave a two-hour sales

presentation to 1-Stop, at the close which he told 1-Stop if it did not sign up immediately, it would
not be able to buy Astonish's products and services. 1-Stop, under this supposed pressure, signed
the Marketing Agreement five minutes after first gaining possession of it, without counsel present,
and without counsel having an opportunity to review the contract. Moreover, 1-Stop points out the

contract was completely drafted by Astonish with no input from 1-Stop. 1-Stop complains Couture

did not tell it about the forum-selection clause, and 1-Stop was not aware it was in the Marketing
Agreement when it signed. Based on these alleged circumstances, 1-Stop contends it "lacked a

meaningful choice." Id. at 5.
1-Stop does not come to close to sufficiently demonstrating the forum selection clause was

unreasonable under the circumstances as to be invalid. With respect to forum selection clauses, there
-12-

is a presumption of enforceability, and to overcome this presumption there must be a clear showing

the clause is unreasonable under the circumstances. Haynesworth

v. The

Corp., 121 F.3d 956,

962-63 (5th Cir. 1997) (citing Bremen, 407 U.S. at 10). A forum selection clause maybe found
unreasonable if:
(1) the incorporation ofthe forum selection clause into the agreement was the product
of fraud or overreaching; (2) the party seeking to escape enforcement "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 fundamental unfairness of
the chosen law will deprive the plaintiff of a remedy; or (4) enforcement of the forum
selection clause would contravene a strong public policy of the forum state.
Id. at 963 (citing Carnival Cruise Lines, 499 U.S. at 595).

First, there is no allegation the incorporation of the forum selection was the product of fraud
or overreaching. While 1-Stop argues its pleadings contain detailed allegations of fraud, none of

them relate specifically to the inclusion of the forum selection clause. Rather, the fraud allegations
relate more generally to representations made as to Astonish's performance of the contract and the
alleged failure to meet those obligations. At most, 1-Stop merely claims Couture did not tell 1-Stop

about the forum selection clause, but this is insufficient to support a fraud claim. Second, 1-Stop
will not be denied its day in court

if the case is transferred to Rhode Island. 1-Stop offers no

arguments on the third and fourth factors, nor do they appear relevant to the instant case.

1-Stop's allegations simply do not support finding the inclusion of the forum selection was
unreasonable, and they do not support concluding the Marketing Agreement was a contract of
adhesion. 1-Stop is a sophisticated insurance agency and was in total control over whether to buy

Astonish's products and services. At no point in time did 1-Stop have to sign any contract, no matter
how much "pressure" the agent Couture mayhave applied bymaking Astonish's offer "take-it-leave-

-13-

it." 1 -Stop's failure to take sufficient time to read the terms of the contract carefully or have counsel
review them is nobody's fault but its own. 1 -Stop cannot avoid poor business practice and decision-

making by claiming this was a contract of adhesion. 1-Stop could have declined at any point to sign
up for Astonish's program, but instead it signed a two-page contract where even a cursory five-

minute review would reveal the presence of the forum selection clause.
1-Stop's arguments premised on the Marketing Agreement being a contract of adhesion fail,
and it does not meet its burden establishing the forum selection clause is unreasonable.

Consequently, the Court concludes the clause is valid. Furthermore, 1-Stop does not meet its burden
on the

§

1404(a) public interest factors. Therefore, the Court will enforce this valid forum selection

clause and GRANT Astonish and Couture's

§

1404(a) motion to transfer the claims against them by

1-Stop to the United States District Court for the District of Rhode Island.

III.

Creekridge's Motion to Dismiss or, in the Alternative, Transfer
Defendant Creekridge filed a separate motion to dismiss, or, in the alternative, transfer based

entirely on Rule 12(b)(3) and

§

1406(a). In light of Atlantic Marine and for the reasons discussed

above, this motion must be DENIED on these grounds. Unlike Defendants Astonish and Couture,

Creekridge did not alternatively move to transfer the case against it based on § 1404(a). Creekridge
did include in a footnote, however, the possibility their motion should be construed as a § 1404(a)

motion to transfer depending on the eventual outcome of Atlantic Marine. See Mem. of Law in
Support of Creekridge' s Motion to Dismiss, or in the Alternative, to Transfer Venue [#11], at 2, n.2.

Creekridge, in its Reply filed after the Atlantic Marine decision, noted the Supreme Court's position

regarding the proper procedural mechanism for enforcing a forum selection clause. Accordingly,
Creekridge requested the Court construe its motion to dismiss, or in the alternative, to transfer venue
-14-

pursuant to Rule 12(b)(3) and § 1406(a) as a motion to transfer venue under

§

1404(a). The Court

will comply with this request and treat Creekridge's motion as a motion to transfer pursuant to
§

1404(a).

Creekridge wants the Court to enforce the forum selection clause in the Lender Agreement,
which provides 1-Stop, in signing the contract, "CONSENT[S] TO EXCLUSIVE JURISDICTION
iN THE STATE OR FEDERAL COURTS OF MINNESOTA." Lender Agreement, at 2. The first

question on a § 1404(a) motion is whether the suit could have been filed originally in the destination
venue, and this lawsuit could have originally been filed in the United States District Court for the

District of Minnesota. Next, the Court proceeds with the § 1404(a) analysis as instructed byAtlantic
Marine,

§

and it is essentially identical to the above analysis discussing Astonish's and Couture's

1404(a) motion except the transfer destination is Minnesota rather than Rhode Island. In short, 1-

Stop cannot show this is the type of unusual case with extraordinary circumstances which might

merit not enforcing a forum selection clause. 1-Stop fails to meet its burden and explain why the
Court should not hold it to the forum selection clause it agreed to when it signed the Lender

Agreement.
Again, 1-Stop's primary contention is the forum selection clause was never valid because it

was contained in a contract of adhesion, in this instance the Lender Agreement. The arguments
mirror exactly those made concerning the Marketing Agreement. The one difference in the
allegations against Creekridge is the claim "1-Stop became contractually obligated to enter into the

Lender Agreement when 1-Stop entered into the Marketing Agreement on September 13, 2012, a
week before 1-Stop had even seen the Lender Agreement."

Pl.'s Resp. in Opp'n to Def.

Creekridge's Mot. to Dismiss, or in the Alternative, to Transfer Venue [#23], at 3. 1-Stop argues
-15-

the Marketing Agreement "expressly required 1 -Stop to enter into 'a non-cancellable and freely
assignable commercial finance payment agreement' and to 'execute all financing promptly upon

request." Id. (quoting Lender Agreement, at 1). 1-Stop alleges Creekridge was "the only approved
financing company option provided by Astonish to 1-Stop." Id. at

3-4.

According to 1-Stop, if it

had refused to enter into the Lender Agreement, it would have been in breach of the Marketing
Agreement. Id. at 4. Similar to its claims regarding the Marketing Agreement, 1-Stop reiterates it

had "no choice other than to sign the Lender Agreement regardless of its terms." Id.

1-Stop's arguments fail for multiple reasons.

First, 1-Stop's characterization of the

relationship between the Marketing Agreement and Lender Agreement is not accurate.

The

Marketing Agreement does not "expresslyrequire" 1-Stop to enter into a finance agreement. Instead,
the Marketing Agreement clearly provides a choice: (1) enter into a financing agreement, or (2) pay
fully upfront in cash.

See Marketing Agreement, at 1.

1-Stop apparently chose the financing option.

Second, even if the Marketing Agreement did require entering into the Lender Agreement, this still
does not demonstrate the Lender Agreement is a contract of adhesion. The fact remains 1-Stop was

free to enter

intoor

not enter

intothe Marketing

Agreement. If 1-Stop failed to read the

contract's terms, or failed to understand them, it is 1-Stop's fault. Again, poor business judgment
does not make a contract one of adhesion.
In addition, 1-Stop does not come close to overcoming the forum selection clause's

presumption of enforceability by sufficiently demonstrating the clause was so unreasonable as to be
invalid under the Haynesworth factors. The analysis mirrors exactly the above analysis related to the

Marketing Agreement. First, there is no specific allegation the incorporation of the forum selection
was the product of fraud or overreaching. While 1-Stop argues its pleadings contain detailed
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allegations of fraud, none of them relate specifically to the inclusion of the forum selection clause.
Again, 1-Stop claims it was unaware of the Lender Agreement included a forum selection clause,

but 1-Stop's failure to read a two page contract does not amount to fraud on Creekridge's behalf
Second, 1-Stop will not be denied its day in court if the case is transferred to Minnesota. 1-Stop
offers no arguments on the third and fourth factors, nor do they appear relevant to the instant case.

1-Stop's allegations simply do not support finding the inclusion of the forum selection was
unreasonable, and they do not support concluding the Lender Agreement was a contract of adhesion.
To the extent 1-Stop's arguments echo its allegations regarding the Marketing Agreement, they are

rejected. Moreover, 1-Stop's claim it was forced to enter into the Lender Agreement when it signed

the Marketing Agreement is just false and would be irrelevant if true. Once again, 1-Stop is a

sophisticated insurance agency capable of making complicated business decisions. While those
decisions may have proved poor, 1-Stop cannot now escape the terms of the agreements it signed
by claiming it had "no choice." 1-Stop had a choice all along despite its protestations to the contrary.

1-Stop's arguments premised on the Lender Agreement being a contract of adhesion fail, and
it does not meet its burden establishing the forum selection clause is unreasonable. Consequently,

the Court concludes the clause is valid. Furthermore, 1-Stop does not meet its burden on the
§

1404(a) public interest factors. Therefore, the Court will enforce this valid forum selection clause

and GRANT Creekridge's

§

1404(a) motion to transfer the claims against it by 1-Stop to the United

States District Court for the District of Minnesota.
IV.

Creekridge's Motion to Sever
Creekridge filed a motion for leave to file a sur-reply to Astonish's request the case be

transferred to Rhode Island. Creekridge wants the claims against it to be handled in Minnesota under
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the terms of the Lender Agreement. In the alternative, Creekridge moves the Court to sever the

claims, sending the claims against Astonish and Couture to Rhode Island and those against
Creekridge to Minnesota. Rule 21 of the Federal Rules of Civil Procedure provide, "the court may

sever any claim against a party."

FED.

R. Civ. P. 21. The Court, through the above analysis, has

determined the two forum selection clauses are both valid and should be enforced. Therefore,
severance is appropriate.
1-Stop opposes severance, arguing the claims against each of the Defendants arise out of the

same transaction, severance would be a waste ofjudicial resources, and severance would severely

prejudice 1-Stop. While 1-Stop may make be correct on all of its contentions, the undisputed record
in this case shows it signed two separate contracts with two separate forum selection clauses.

Notwithstanding the fact these claims are interrelated and separating them forces two different courts
to handle similar cases, this Court cannot override the parties' contractual agreements. Moreover,

any inconvenience or prejudice imposed on 1-Stop, or any other private interest factor, is not be

considered in the

§

1404(a) analysis given Atlantic

Marine.

1-Stop could have avoided this entire

dilemma if it had read and understood the contracts it signed.

Because 1-Stop's Marketing Agreement with Astonish and Couture requires disputes to be
handled in Rhode Island, and 1-Stop's Lender Agreement with Creekridge requires disputes to be
handled in Minnesota, the Court GRANTS Creekridge's motion to sever.

Conclusion
Accordingly,

IT IS ORDERED that Defendants Astonish Results and Thomas Couture's Motion

to Dismiss and Alternatively, Motion to Transfer Venue [#10] is DENIED IN PART and

GRANTED IN PART, as described above;
IT IS FURTHER ORDERED that Defendant Creekridge Capital LLC's Motion to

Dismiss, or in the Alternative, to Transfer Venue Pursuant to FRCP 12(b)(3) and 28 U.S.C.
§

1406(a) [#11] is DENIED IN PART and GRANTED IN PART, as described above;
IT IS FURTHER ORDERED that Defendant Creekridge Capital's Motion for Leave

to File Sur-Reply to Defendants' Motion to Dismiss, or in the Alternative, to Transfer Venue,

and Motion to Sever [#29], and Plaintiffs Response [#33] is GRANTED, both with respect
to the Motion for Leave and the Motion to Sever;
IT IS FURTHER ORDERED that Plaintiff 1-Stop's claims against Defendants

Astonish Results and Thomas Couture are SEVERED from its claims against Defendant
Creekridge Capital;
IT IS FURTHER ORDERED that Defendants Astonish Results and Thomas

Couture's Motion to Stay Discovery and Motion for Protective Order [#3 5] is DISMISSED
AS MOOT;
IT IS FURTHER ORDERED that Plaintiffs Motion for Leave to File Sur-Reply in

Opposition to Defendants' Motions to Dismiss [#37] is GRANTED;
IT IS FURTHER ORDERED that Defendants Astonish Results and Thomas

Couture's Motion to Transfer Venue [#10] is GRANTED, and the Clerk shall transfer this
case, as it pertains to claims brought by Plaintiff 1-Stop against Defendants Astonish and

Thomas Couture, to the United States District Court for the District of Rhode Island;

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IT IS FURTHER ORDERED that Defendant Creekridge Capital LLC's Motion to

Transfer Venue [#1 1] is GRANTED, and the Clerk shall transfer this case, as it pertains to
claims brought by Plaintiff 1-Stop against Defendant Creekridge Capital, to the United States

District Court for the District of Minnesota.
SIGNED this the

day of January 2014.

UNITED

961 aprnordjtw.fnn

20

STATEISTRICT JUDGE