Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_15-cv-00016/USCOURTS-alsd-1_15-cv-00016-0/pdf.json

Parties Involved:
Bank of Franklin
Plaintiff
SE Property Holdings, LLC
Defendant

Document Text:

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

BANK OF FRANKLIN, :

 :

Plaintiff, :

 :

vs. : CIVIL ACTION NO. 15-00016-KD-B

 : 

SE PROPERTY HOLDINGS, LLC, :

 :

Defendant. :

REPORT AND RECOMMENDATION

This case is before the Court on Plaintiff Bank of 

Franklin’s Motion to Remand. (Doc. 8). The motion, which has

been fully briefed and is ripe for resolution, has been referred 

to the undersigned for a report and recommendation pursuant to 

28 U.S.C. § 636(b)(1)(B) and Local Rule 72.2(c). Upon 

consideration of all matters presented, the undersigned 

RECOMMENDS, for the reasons stated herein, that Plaintiff’s 

Motion to Remand (Doc. 8) be DENIED.

I. Background Facts

Plaintiff, Bank of Franklin (“Franklin”), commenced this 

action for specific performance in the Circuit Court of Baldwin 

County, Alabama on December 9, 2014, against Defendant SE 

Property Holdings, LLC (“SEPH”). (Doc. 1-1 at 1). In the 

complaint, Plaintiff alleges that SEPH (as the successor in 

interest to Vision Bank), breached certain obligations to 

Franklin under a contract/”Participation Agreement” between 

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Franklin and Vision Bank regarding Franklin’s purchase of a 

9.375% interest in a $16 million loan from Vision to ZLM 

Acquisitions, LLC.1 (Doc. 1-1 at 3-4). Franklin seeks the entry 

of an order requiring SEPH to re-purchase Franklin’s interest in 

the loan for $1,456,216.52. (Id.).

On January 13, 2015, SEPH removed the case to this Court 

pursuant to 28 U.S.C. §§ 1441 and 1446. In the Notice of 

Removal, SEPH asserts the existence of subject matter 

jurisdiction under § 1332. (Doc. 1 at 3). On February 10, 

2015, Franklin filed the instant motion seeking to remand this 

action to state court. (Doc. 8). Franklin does not challenge 

SEPH’s assertion of diversity jurisdiction but, rather, bases 

the motion to remand solely upon a forum selection clause in the

contract. The motion has been fully briefed and is now ready 

for resolution.

II. Standard of Review

“Forum selection clauses in contracts are enforceable in 

federal courts.” P & S Bus. Machs., Inc. v. Canon USA, Inc., 

331 F.3d 804, 807 (11th Cir. 2003) (citing M/S Bremen v. Zapata 

Off–Shore Co., 407 U.S. 1, 15 (1972)). “The validity [and 

scope] of a forum selection clause [are] determined under the 

 1 Franklin alleges that the aggregate amount of its 9.375% 

interest in the loan is $1,456,216.52. (Doc. 1-1 at 2).

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usual rules governing the enforcement of contracts in general.” 

Id. (citing In re Ricoh Corp., 870 F.2d 570, 573 (11th Cir.

1989)). “Under general contract principles, the plain meaning 

of a contract’s language governs its interpretation.” Slater v. 

Energy Servs. Grp. Int’l, Inc., 634 F.3d 1326, 1330 (11th Cir.

2011) (citing Belize Telecom, Ltd. v. Belize, 528 F.3d 1298, 

1307 & n.11 (11th Cir. 2008)). If there is any ambiguity in the 

application of the clause, “the court will prefer the reasonable 

interpretation that operates more strongly against the party who 

drafted the document.” Id. (citing Global Satellite Commc’n Co. 

v. Starmill U.K., Ltd., 378 F.3d 1269, 1271 (11th Cir. 2004)).

III. Analysis

The Eleventh Circuit “characterize[s] forum-selection 

clauses as either ‘permissive’ or ‘mandatory.’” Slater, 634 

F.3d at 1330 (quoting Global Satellite, 378 F.3d at 1272). “‘A 

permissive clause authorizes jurisdiction in a designated forum 

but does not prohibit litigation elsewhere[.]’” Id. (quoting 

Global Satellite, 378 F.3d at 1272). On the other hand, “[a] 

mandatory clause . . . ‘dictates an exclusive forum for 

litigation under the contract.’” Id. (quoting Global Satellite, 

378 F.3d at 1272). “Furthermore, a forum selection clause may 

constitute a waiver of a defendant’s right to remove an action 

to federal court.” Global Satellite, 378 F.3d at 1272 (“the 

determination of whether such a clause constitutes a waiver, in 

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the context of removal based solely on diversity jurisdiction, 

is to be determined according to ordinary contract principles, 

and need not meet the higher threshold of a ‘clear and 

unequivocal’ waiver that has otherwise applied to litigationbased waivers.”) (citation omitted).

The forum selection clause in this case reads in pertinent 

part as follows:

Participating Bank [Franklin] further agrees 

that all actions or proceedings instituted

by [Franklin] hereunder shall be brought in 

a court of competent jurisdiction in Baldwin 

County, Alabama or in the United States 

District Court for the Southern District of 

Alabama, Baldwin County Division. 

[Franklin] irrevocably submits to the 

nonexclusive jurisdiction of such court for 

the purposes of all legal proceedings 

arising out of or relating to this Agreement 

and irrevocably waives any present or future 

objection to venue in any such court and any 

present or future claim that any such court 

is an inconvenient forum in connection with 

any action or proceeding relating to this 

Agreement.

(Doc. 1-1 at 16, ¶20) (emphasis added).2

In arguing for remand, Franklin states that ¶ 20 of the 

Participation Agreement confers upon Franklin the option of 

 2 SEPH acknowledges that it (as Vision Bank’s successor in 

interest) is the drafter of the Participation Agreement. (Doc. 

19 at 11). Thus, “[i]f no other contract principles point to a 

particular meaning, the court will prefer the reasonable 

interpretation that operates more strongly against the party who 

drafted the document.” Slater, 634 F.3d at 1330.

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electing to sue in Baldwin County state court or in the United 

States District Court for the Southern District of Alabama, and 

that SEPH “cannot be allowed to vitiate that election through 

removal.” (Doc. 9 at 3). The Court agrees with Franklin that a 

plain reading of the forum selection clause in this case

authorizes jurisdiction in either of those two courts (Baldwin 

County state court or the United States District Court for the 

Southern District of Alabama). However, the Court disagrees 

that the forum selection clause prohibits removal to the federal 

forum. 

Guided by the plain meaning of the agreement, the Court 

finds that the forum selection clause at issue in this case 

mandates that any litigation initiated by Franklin be brought in

either of the two specified courts (one state and one federal). 

However, it does not favor one forum over the other (describing 

them as “nonexclusive”), and it does not prohibit removal to the 

federal court if suit is filed in the state court. 

Specifically, the forum selection clause provides that Franklin 

(alone) expressly agrees to submit to jurisdiction, and waive

all objections to venue, in both designated forums. (Doc. 1-1 

at 15-16). Notably, there is no corresponding waiver by 

Defendant SEPH of any of its rights, particularly the right to 

remove, nor is there any language otherwise limiting litigation

only to the state court forum in the event that suit is filed 

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there. Cf. Snapper, Inc. v. Redan, 171 F.3d 1249, 1260-62 (11th 

Cir. 1999) (holding that where defendants/Guarantors agreed to 

“expressly waiv[e] whatever rights” they might have “by reason 

of [their] present or future domicile,” they waived their right 

to remove because the “waiver of ‘whatever rights’ encompasses 

all rights.”) (emphasis added); Travelers Prop. Cas. Co. of Am. 

v. OneSource Facility Servs., Inc., 2006 U.S. Dist. LEXIS 23342, 

*11, 2006 WL 752925, *3 (M.D. Ala. Mar. 23, 2006) (holding that 

a forum selection clause which provided that any action must be 

“brought and maintained in the City of Tuskegee, Macon County, 

Alabama” constituted a waiver of defendant’s right to remove the 

action to federal court because there was not a federal court in 

Tuskegee, Alabama, and “[i]n the context of civil litigation, 

‘brought’ can only mean ‘filed,’ and ‘maintained,’ . . . can 

only mean ‘kept,’” which “constitutes a clear waiver of any 

right to removal.”) (emphasis added); Global Satellite, 378 F.3d 

at 1272 (holding that the parties’ agreement that “venue shall 

be in Broward County, Florida,” was mandatory but that the 

parties’ waiver of the right “to contest any issues regarding 

venue or in personam jurisdiction” and “submit to the 

jurisdiction of Broward County, Florida,” was too vague and 

imprecise to constitute a waiver of the right to remove the case 

to the federal court sitting in Broward County, Florida) 

(emphasis added). 

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Given that the agreement in the present case listed two 

forum choices for litigation initiated by Franklin, one of which 

was a state court and the other of which was the federal court 

in which that state court was located, it cannot reasonably be 

suggested that removal to the designated federal forum was not 

contemplated by the parties. Moreover, as noted, the waiver 

language in the forum selection clause is directed only to 

Franklin. It provides that Franklin will submit to the 

jurisdiction of, and waive its right to object to the venue of,

the two designated courts. Therefore, the forum selection 

clause cannot reasonably be interpreted to constitute a waiver 

by SEPH of any of its rights, including the right to remove to

the designated federal forum. There being no other argument for 

remand, and the Court being satisfied of its jurisdiction, 

Franklin’s motion to remand is due to be denied.

III. Conclusion

Based on the foregoing, it is RECOMMENDED that Plaintiff's 

Motion to Remand (Doc. 8) be DENIED.

Notice of Right to File Objections

A copy of this report and recommendation shall be served on 

all parties in the manner provided by law. Any party who 

objects to this recommendation or anything in it must, within 

fourteen (14) days of the date of service of this document, file 

specific written objections with the Clerk of this Court. See 28 

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U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); S.D. ALA. L.R. 72.4. 

In order to be specific, an objection must identify the specific 

finding or recommendation to which objection is made, state the 

basis for the objection, and specify the place in the Magistrate 

Judge’s report and recommendation where the disputed 

determination is found. An objection that merely incorporates 

by reference or refers to the briefing before the Magistrate 

Judge is not specific.

DONE this the 31st day of March, 2015.

 /s/ SONJA F. BIVINS 

 UNITED STATES MAGISTRATE JUDGE

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