United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 02-3840

___________

Gerald M. Dunne, *

*

Appellant, *

* Appeal from the United States 

v. * District Court for the Eastern 

* District of Missouri.

Peter E. Libbra, *

* [UNPUBLISHED]

Appellee. *

___________

 Submitted: June 02, 2003 

 Filed: June 6, 2003 

___________

Before MELLOY, FAGG, and SMITH, Circuit Judges.

___________

MELLOY, Circuit Judge.

Dunne appeals the district court's dismissal of his diversity action under a

contract's forum selection clause. We reverse.

In the fall of 2000, Libbra and his attorney solicited Dunne in Missouri to

discuss Dunne's possible purchase of Libbra's fifty-one percent ownership interest in

Prairieland Construction, Inc., a Delaware Corporation with its headquarters in

Illinois. Communication, meetings, and due diligence reviews concerning the
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possible purchase continued through the fall of 2001, at which time the parties

executed a series of documents to consummate the sale. One of the documents, a

stock purchase agreement, contained a forum selection clause that lies at the center

of the present dispute. 

Over the course of the next year, Dunne fell behind in his payments to Libbra.

Eventually, Libbra sent Dunne a default notice. Dunne responded by filing the

present diversity action alleging misrepresentation and seeking a declaratory

judgment, permanent injunction, and damages. Libbra, in turn, filed an action in

Illinois state court alleging that Dunne breached each of the separate contracts related

to the sale. Libbra, relying on the forum selection clause from the stock purchase

agreement, moved to dismiss Dunne's diversity action based on lack of personal

jurisdiction and/or improper venue.

The forum selection clause provides, "[t]his agreement shall be governed by

and construed and enforced in accordance with the laws of the State of Illinois, and

the parties consent to jurisdiction to [sic] the state courts of the State of Illinois." The

only issue on appeal is a legal issue of contract construction, namely, whether the

forum selection clause is mandatory such that an action on the contract may be

maintained only in Illinois state court, or whether the clause is merely permissive

such that an action on the contract may be maintained in other reasonably convenient

forums where personal jurisdiction exists. Our review on this legal issue of contract

construction is de novo. Terra Int'l, Inc. v. Mississippi Chem. Corp., 119 F.3d 688,

692 (8th Cir. 1997) .

 The district court found the forum selection clause ambiguous, neither clearly

permissive nor clearly mandatory. Applying the general principle of contract

construction that no provision of a contract should be interpreted in a manner that

would render it surplusage, the district court concluded that, because personal

jurisdiction in Illinois existed even without the forum selection clause, treatment of
1

The district court did not reach this issue. We leave to the district court on

remand the issues of whether there is jurisdiction in Missouri and whether there are

other grounds to dismiss or transfer the case. 

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the forum selection clause as merely permissive would render the forum selection

clause wholly redundant and therefore mere surplusage. Accordingly, the district

court held the forum selection clause mandatory rather than permissive. We disagree.

As an initial matter, we note that neither forum is inconvenient for either party.

In addition, we assume for the purpose of this decision that Missouri and Illinois

enjoy personal jurisdiction over the parties even without the forum selection clause.1

Libbra is an Illinois resident. Libbra maintained extensive contacts within the state

of Missouri related to the formation and performance of the contract. Libbra

repeatedly met with Dunne in Missouri and repeatedly directed communications to

Dunne in Missouri. Further, the contract at issue involved the sale of a fifty-one

percent ownership interest in a construction firm that was formed under Delaware

law, headquartered in Illinois, and involved with numerous ongoing construction

projects throughout the state of Missouri. 

Dunne is a Missouri resident and an attorney licensed in Illinois and Missouri.

He has substantial, general contacts with Illinois by virtue of his role as a licensed

attorney who appears regularly in the courts of Illinois. He has substantial contacts

with Illinois that are specific to the subject matter of this dispute. It appears that his

contract with Libbra is substantially connected with Illinois and concerns the transfer

of ownership of a thing of value that is present in Illinois, as required to satisfy the

requirements of Illinois' long-arm statute. See 735 Ill. Comp. Stat. 5/2-209(a)(7) and

(10) (stating that jurisdiction exists upon the making or performance of a contract

substantially connected with Illinois or involving the transfer of "ownership,

possession or control of any asset or thing of value present within [Illinois] when . .

. acquired"). Taken together, each party's contacts with its non-domiciliary forum
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appear to provide the requisite minimum contacts and satisfy the "traditional notions

of fair play and substantial justice" as set forth generally in International Shoe Co. v.

Washington, 326 U.S. 310, 319 (1945), and its progeny, and as set forth specifically

in the context of contract disputes in Burger King Corp. v. Rudzewicz, 471 U.S. 462,

472-479 (1985).

The stock purchase agreement states that it "shall" be construed in accordance

with Illinois law. Applying Illinois law to construe the contract, it is clear that "[a]

contract's language must be given its plain and ordinary meaning if possible." In re

Marriage of Ackerley, 775 N.E.2d 1045, 1059 (Ill. App. Ct. 2002) (citing Owens v.

McDermott, Will & Emery, 736 N.E.2d 145, 150 (Ill. App. Ct. 2000)); Dowd &

Dowd, Ltd. v. Gleason, 693 N.E.2d 358, 368 (Ill. 1998) ("The terms of an agreement,

if not ambiguous, should generally be enforced as they appear . . . and those terms

will control the rights of the parties.") (citations omitted). Applying this cardinal rule

to the forum selection clause, we find no language that has an ordinary meaning that

would suggest exclusivity. Unlike the immediately preceding choice of law

provision, which unambiguously mandates the application of Illinois law for the

purpose of construing the contract, the forum selection clause does not employ the

term "shall." Similarly, the forum selection clause does not use the words

"exclusive," "only," "must," or any other terms that might suggest exclusivity. With

no plain language basis to support a finding of exclusivity, we do not view the forum

selection clause as ambiguous. With no ambiguity, it is not necessary to resort to

other principals or canons of contract interpretation as urged by Libbra. The forum

selection clause is permissive.

Even if there were an ambiguity to justify reliance on lesser rules of contract

interpretation, we would reject Libbra's challenge. Under substantive Illinois contract

law, "any ambiguity in the terms of a contract must be resolved against the drafter of

the disputed provision." Dowd & Dowd, 693 N.E.2d at 368. It is undisputed that

Libbra's attorneys drafted the stock purchase agreement. Accordingly, we would not
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be inclined to resolve the alleged ambiguity in Libbra's favor and infer exclusivity.

In addition, we disagree with Libbra's argument that the forum selection clause

becomes surplusage if read as permissive rather than mandatory. A permissive forum

selection clause in a negotiated contract between sophisticated actors is a risk

management tool. With such a clause, a defendant is more strongly deterred from

challenging personal jurisdiction in a suit that is filed in the consented-to-jurisdiction

than he or she would be if such a clause were absent. This is the case even if it is

later determined that jurisdiction would have been proper in the consented-tojurisdiction under a traditional minimum contacts analysis. The presence of the

clause avoids the need to rely solely on the traditional minimum contacts analysis by

providing a second, stronger basis for jurisdiction thereby minimizing the risk that

anything more than a frivolous challenge to jurisdiction may arise.

The order of the district court is reversed and this matter is remanded. In light

of our decision, we deny as moot Libbra's pending motion to strike the new

arguments raised in Dunne's reply brief.

A true copy.

Attest.

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT