Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-3_11-cv-00146/USCOURTS-almd-3_11-cv-00146-0/pdf.json

Parties Involved:
Thomas M. Hayley
Plaintiff
Trius Energy, LLC
Defendant

Document Text:

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

EASTERN DIVISION

THOMAS M. HAYLEY, )

 )

Plaintiff, )

 )

v. ) CASE NO. 3:11-CV-146-WKW [WO]

 )

TRIUS ENERGY, LLC, )

 )

Defendant. )

MEMORANDUM OPINION AND ORDER

Plaintiff Thomas M. Hayley filed a Complaint (Doc. # 1, Attach. 3) against Trius

Energy, LLC (“Trius”) in the Circuit Court of Lee County, Alabama. The Complaint brings

state-law causes of action for breach of contract, fraud, and unjust enrichment, arising out

of an agreement wherein Mr. Hayley purchased from Trius a one percent working interest

in an oil well in Winkler County, Texas, known as the A.G. Hill Well # 1. According to

Plaintiff, Trius’s representations about the well’s production capabilities were inaccurate

(Compl. ¶¶ 6-7), and Plaintiff, through this lawsuit, seeks to force Trius to abide by the

alleged contract and repurchase Mr. Hayley’s initial investment, plus interest. Trius removed

the case to this court (Not. of Removal (Doc. # 1)), pursuant to 28 U.S.C. §§ 1332, 1441, and

1446. Currently pending is Plaintiff’s fully-briefed Motion to Remand (Doc. # 8) based

solely upon a forum selection clause in the contract. The motion is due to be denied.

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

II. DISCUSSION

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). 

The forum selection clause in this case reads as follows:

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In the event a dispute arises among the parties both agree that the laws of the

State of Alabama shall govern and both parties agree that Venue is proper in

Circuit Court of Lee County, Alabama and consent to the personal and subject

matter jurisdiction thereof regardless of the nature of the claim and amount of

damages.

(Agreement ¶ 8 (Doc. # 8, Ex. A).)

In arguing for remand, Mr. Hayley characterizes the clause as mandatory, stating that

he and Trius “specifically contracted to have all disputes [arising] under this Agreement

heard in the Circuit Court of Lee County, Alabama . . . .” (Mot. to Remand ¶ 7.) Although

the choice-of-law clause is mandatory because the clause states that Alabama law “shall”

govern, see Global Satellite, 378 F.3d at 1272 (interpreting “shall” as stating an imperative),

the forum selection clause itself is more equivocal. It merely states that “[v]enue is proper

in Circuit Court of Lee County, Alabama . . . .” (Agreement ¶ 8.) In deciphering whether

this is a permissive or mandatory forum selection clause, it is important to take stock of what

easily could have been said, but was not. The clause does not say that venue “shall be” in

the Circuit Court of Lee County, Alabama. See Global Satellite, 378 F.3d at 1272 (holding

that “[v]enue shall be in Broward County” is a mandatory clause). Nor does the clause say

that venue is proper “only” in the Circuit Court of Lee County, Alabama, another possible

way of unambiguously stating a mandatory forum selection clause. 

Guided by the plain meaning of what actually was reduced to writing, the court finds

that the forum selection clause at issue is permissive. Stating that one venue is “proper” does

not by its terms exclude every other venue as improper. A plain reading suggests that the

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parties simply agreed that if a lawsuit was filed in the Circuit Court of Lee County, neither

party would contest the court’s subject matter or personal jurisdiction, or venue. 

Trius’s consent to personal and subject matter jurisdiction in the Circuit Court of Lee

County “regardless of the nature of the claim and amount of damages” does not amount to

an unequivocal waiver of the statutory right of removal to federal court. While reference to

the amount of damages may suggest thoughts of removal, it is at best ambiguous language

to be construed against the drafter. Slater, 634 F.3d at 1330 (citing Global Satellite, 378 F.3d

at 1272). Mr. Hayley does not rebut Trius’s assertion that Mr. Hayley drafted the contract,

including the forum selection clause contained therein. (Def.’s Resp. ¶ 11 (Doc. # 10).) 

Thus, even if there exists an ambiguity in the clause as to whether it is permissive or

mandatory, or whether the statement about damages contemplates this court’s diversity

jurisdiction, the court “prefer[s] the reasonable interpretation that operates more strongly

against [Mr. Hayley] . . . .” Slater, 634 F.3d at 1330. 

Based on the parties involved – an individual in Alabama and a corporate resident of

Texas with its principal place of business in Texas (and presumably with few contacts to the

state of Alabama based upon the nature of its business) – it would have been advantageous

for Mr. Hayley to have Trius contractually agree to waive the defenses of improper venue

and lack of personal jurisdiction in the event that Mr. Hayley chose to sue on the contract. 

And, as the drafter of the contract, this is precisely what Mr. Hayley did. But he did not

include language in which Trius unequivocally waived its right of removal to federal court.

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There being no other argument for remand, and the court being satisfied of its

diversity jurisdiction, Mr. Hayley’s motion to remand is due to be denied.

III. CONCLUSION

Based on the foregoing, it is ORDERED that Plaintiff’s Motion to Remand (Doc. #

8) is DENIED.

DONE this 10th day of May, 2011. 

 /s/ W. Keith Watkins 

 UNITED STATES DISTRICT JUDGE

 

 

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