Court Opinion

ID: 4344372
Source: CourtListenerOpinion
Date Created: 2018-11-23 18:01:14.044464+00
Date Added: 2024-06-11T14:21:54.284052
License: Public Domain

NOT PRECEDENTIAL

           UNITED STATES COURT OF APPEALS
                FOR THE THIRD CIRCUIT
                    ______________

                   Nos. 17-2275 and 17-2361
                       ______________

               ROBERT WALL; LINDA WALL,
                    Husband and Wife,
                              Appellants in 17-2361

                               v.

                  *CORONA CAPITAL, LLC;
                    ALTIUM GROUP, LLC

                    ALTIUM GROUP, LLC,
                              Appellant in 17-2275

         *(Withdrawn per Court’s order dated 6/21/2018)
                      ______________

         On Appeal from the United States District Court
            for the Western District of Pennsylvania
                 (D.C. Civ. No. 2-16-cv-01044)
          Honorable Mark A. Kearney, District Judge
                       ______________

           Submitted under Third Circuit LAR 34.1(a)
                      November 6, 2018

BEFORE: HARDIMAN, KRAUSE, and GREENBERG, Circuit Judges

              (Opinion Filed: November 23, 2018)
                                     ______________

                                        OPINION
                                     ______________

GREENBERG, Circuit Judge.

                                  I. INTRODUCTION

       These matters come on before this Court on the appeal and cross-appeal of

Defendant-Appellant Altium Group LLC (“Altium”) and Plaintiff-Appellees and Cross-

Appellants, Robert and Linda Wall (“the Walls”), respectively. Altium challenges the

District Court’s orders that (1) denied its motion to dismiss this action removed from a

state court to the Western District of Pennsylvania on forum non conveniens grounds, (2)

granted summary judgment to the Walls on their breach of contract claim against Altium,

and (3) denied Altium’s motion for summary judgment on that claim. The order also

dismissed an unjust enrichment claim that the Walls asserted against Altium as moot. In

their cross-appeal the Walls challenge the District Court’s calculations of damages and

attorney’s fees. We will affirm the Court’s denial of Altium’s motion to dismiss, reverse

the order for summary judgment in favor of the Walls on their contract claim, reverse the

order denying Altium’s motion for summary judgment on that claim, and remand the case

to the District Court for further proceedings on the Walls’ unjust enrichment claim.

Because we are reversing the grant of summary judgment in their favor on their contract

claim, we will dismiss the Walls’ cross-appeal from the order for damages and attorney’s

fees as moot.


 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
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                                II. FACTUAL BACKGROUND

       The Walls, on the advice of their financial advisor Roy D’Alessandro, approached

Altium regarding the purchase of a structured settlement annuity that Altium had listed

on its website. Altium is a broker of structured settlement annuities and connects sellers

of such annuities with interested buyers. In the matter involved here an original

defendant in this case, Corona Capital LLC (“Corona”), since dismissed as a party

because the Court determined that it lacked jurisdiction over it, see Wall v. Corona

Capital, LLC, 221 F. Supp. 3d 652, 657 (W.D. Pa. 2016) (“Wall I”), was a prior seller of

the structured settlement annuity.1 Corona, at least in form, obtained the annuity from

Kenneth Stevens (“Stevens”), who received the annuity—issued by the New York Life

Insurance Company (“New York Life”)—after Stevens settled a personal injury matter in

a Florida state court action.

       Under Florida law, in a provision applicable in Stevens’ case, a court must

approve transfers of structured settlement annuities. Corona facilitated the transaction

and obtained a Florida state court’s approval of the transfer of the Stevens annuity to it

and then sold the annuity to Altium, which, in turn, sold it to the Walls.2 A so-called

1
 The Walls cross-appealed from the District Court’s order dismissing Corona as a party
for lack of personal jurisdiction, but have abandoned that appeal.
2
 The parties dispute whether Altium ever obtained title to the annuity from Corona.
Because the issue is not dispositive, we assume, without deciding, that, as the Walls
contend, Altium did obtain title and thus the transaction between Corona and Altium can
be characterized as a sale. We note that the District Court said that “Altium owned the
                                              3
master agreement that governed the Altium-Walls transaction contained a choice-of-law

and a forum selection clause, stating:

       The validity, construction, and enforcement of this Agreement shall be
       governed by the laws of the State of New Jersey, excluding its conflicts of
       law provisions. In the event of a dispute concerning this agreement, the
       parties agree that venue lies in a court of competent jurisdiction in
       Monmouth County, New Jersey.

App. 379.

       Two years after Altium sold the annuity to the Walls, Stevens in a Florida state

court challenged the original transfer of the annuity, i.e., the transfer from him,

contending that he never received notice of the transfer and did not sign the transfer

papers. He further claimed that his wife had forged his signature on the documents

authorizing the transfer. The Florida state court evidently accepted his contentions as it

vacated the transfer, and ordered New York Life to stop making payments to the Walls

on the annuity. It directed New York Life instead to make the annuity payments to

Stevens’ attorney.

       This turn of events led the Walls to file suit against Altium in a Pennsylvania state

court asserting breach of contract and unjust enrichment claims. After the case was

removed to the Western District of Pennsylvania, Altium filed a motion to dismiss on

forum non conveniens and contractually improper venue grounds, arguing that the parties

had selected New Jersey as the exclusive venue for this dispute pursued to the Altium-

Walls master agreement. The Court denied the motion on November 22, 2016, and also

Stevens Annuity.” Wall v. Altium Grp., LLC, Civ. No. 16-1044, 2017 WL 1169725, at
*5 (W.D. Pa. Mar. 28, 2017).
                                              4
declined to transfer the case to another court. See Wall I, 221 F. Supp. 3d at 660. After

completion of discovery, the parties filed cross-motions for summary judgment. The

Court ultimately granted summary judgment against Altium in favor of the Walls on their

breach of contract claim because the Walls had not received the stream of payments that

Altium sold them pursuant to the terms of their contract. See Wall v. Altium Grp., LLC,

Civ. No. 16-1044, 2017 WL 1169725, at *4 (W.D. Pa. Mar. 28, 2017) (“Wall II”). The

Court dismissed the Walls’ unjust enrichment claim as moot because the Walls had made

a full recovery on their contract claim.

                                    III. DISCUSSION

       The District Court had diversity of citizenship jurisdiction under 28 U.S.C. §§

1441 and 1332(a). We have jurisdiction under 28 U.S.C. § 1291. We review decisions

on motions to dismiss on forum non conveniens grounds for abuse of discretion. See

Windt v. Qwest Commc’ns Int’l, Inc., 529 F.3d 183, 189 (3d Cir. 2008). We review

contract interpretations for clear error, and contract constructions de novo. Wayne Land

and Mineral Grp. LLC v. Del. River Basin Comm’n, 894 F.3d 509, 528 (3d Cir. 2018).

“If the contract as a whole is susceptible to more than one reading, the fact finder

resolves the matter, but if it is unambiguous and can be interpreted only one way, the

court interprets the contract as a matter of law.” Allied Erecting & Dismantling, Co. v.

USX Corp., 249 F.3d 191, 201 (3d Cir. 2001) (internal quotation marks and citation

omitted).

       “Our review of the District Court’s [summary judgment] decision is plenary, and

we apply the same standard as the District Court to determine whether summary

                                             5
judgment was appropriate.” State Auto Prop. & Cas. Ins. Co. v. Pro Design, P.C., 566

F.3d 86, 89 (3d Cir. 2009). “Thus, summary judgment is properly granted ‘if the movant

shows that there is no genuine dispute as to any material fact and the movant is entitled to

judgment as a matter of law.’” Sconiers v. United States, 896 F.3d 595, 597 n.3 (3d Cir.

2018) (quoting Fed. R. Civ. P. 56(a)).

       A. Motion to Dismiss

       Altium challenges the District Court’s denial of its motion to dismiss on forum

non conveniens grounds. But notwithstanding the contractual venue clause, Altium does

not argue that the Walls as a matter of law mislaid venue in the Western District of

Pennsylvania.3 It could not plausibly have advanced that contention because the

Supreme Court has held that a court determines whether venue is appropriate solely on

the basis of the applicable statutes, and forum selection clauses do not deprive courts of

venue in actions brought in undesignated forums. Atl. Marine Constr. Co. v. U.S. Dist.

Ct. for the W. Dist. of Tex., 571 U.S. 49, 57, 134 S.Ct. 568, 578 (2013). “Instead, the

appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is

through the application of the doctrine of forum non conveniens,” id. at 60, 134 S.Ct. at

580, which was the exact course that Altium followed in the District Court.

       The District Court initiated its forum non conveniens analysis by addressing the

issue of whether the forum selection clause was mandatory or permissive. This was an

important consideration because, under Atlantic Marine, the presence of a mandatory

3
  Actually the Walls did not lay venue in the Western District of Pennsylvania as they
filed suit in a state court. The case was removed to the federal court.
                                             6
forum selection clause is a significant factor in a forum non conveniens analysis. “When

parties agree to a forum-selection clause, they waive the right to challenge the preselected

forum as inconvenient or less convenient for themselves or their witnesses, or for their

pursuit of litigation. A court accordingly must deem the private-interest factors to weigh

entirely in favor of the preselected forum.” Id. at 64, 134 S.Ct. at 582. “As a

consequence, a district court [in making such an analysis] may consider arguments about

public-interest factors only. Because those factors will rarely defeat a transfer motion,

the practical result is that forum-selection clauses should control except in unusual

cases.” Id. (citation omitted).

       Analyzing the contractual language, the District Court found that the forum

selection clause did not mandate that a party bring a suit arising from the master

agreement only in Monmouth County, New Jersey. It held that “[a] mandatory forum

selection clause provides venue is proper only in the identified forum. A permissive

forum selection clause authorizes venue in the selected forum.” Wall I, 221 F. Supp. 3d

at 658. It further held that “[t]he Walls’ forum selection clause . . . authorized venue in

Monmouth County, New Jersey over contract disputes but the clause does not exclusively

limit the forum. The parties agreed to a permissive venue selection clause.” Id.

       The language of the forum selection clause supports the District Court’s

conclusion whether the mandatory-permissive inquiry is viewed as involving contractual

construction or contractual interpretation. Even though the clause stated “the parties

                                              7
agree that venue lies in a court of competent jurisdiction in Monmouth County, New

Jersey” it simply did not state that venue could be laid only in Monmouth County.4

       We also point out that Altium did not offer evidence supporting an argument that

the parties’ intent in adopting the venue clause was contrary to the District Court’s

conclusion holding the forum selection clause to be permissive. Because we hold that the

language supported, indeed required, the Court to read the clause as it did, we cannot find

any error in the Court’s conclusion that it was permissive.

       Directly addressing the forum non conveniens issue, we conclude that the District

Court did not abuse its discretion when it declined to dismiss the case on the basis of that

doctrine. The Court conducted the proper balancing test in making its ruling, giving due

deference to the Walls’ choice of forum. See Bhatnagar v. Surrendra Overseas Ltd., 52

F.3d 1220, 1226 n.4 (3d Cir. 1995) (“Ordinarily, a plaintiff's choice of forum is entitled

to great deference[.]”). “The forum non conveniens determination is committed to the

       4
         Altium cites to our non-precedential decision in Wall St. Aubrey Golf, LLC v.
Aubrey, 189 F. App’x 82, 85-86 (3d Cir. 2006), for the proposition that a forum selection
clause need not use words explicitly denoting exclusivity to be considered mandatory.
Though we do not disagree with that proposition, the Wall Street opinion does not
constitute binding authority. I.O.P. 5.7. In any event, the clause in Wall Street was
materially different than the forum selection clause here. The clause in Wall Street stated
that “[t]his Lease shall be construed in accordance with the laws of the Commonwealth of
Pennsylvania, with venue laid in Butler County, Pennsylvania.” 189 F. App’x at 85. We
held that the mandatory term “shall” applied to both the choice-of-law provision and the
subordinate forum selection provision in the same clause. Id. at 86. In our case,
however, the choice-of-law and the forum selection provisions were separate and
independent—indeed, the forum selection clause began in a new sentence with the phrase
“[i]n the event of a dispute concerning this agreement,” signifying that the phrase stood
on its own. We conclude that the contractual language supported the District Court’s
understanding of the venue provision as permissive and was in full accord with the
applicable language in the master agreement.

                                             8
sound discretion of the trial court.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 102

S.Ct. 252, 266 (1981). “[T]he district court is accorded substantial flexibility in

evaluating a forum non conveniens motion, and ‘[e]ach case turns on its facts.’” Van

Cauwenberghe v. Biard, 486 U.S. 517, 529, 108 S.Ct. 1945, 1953 (1988) (quoting

Williams v. Green Bay & Western R. Co., 326 U.S. 549, 557, 66 S.Ct. 284, 288 (1946)).

Accordingly, we will affirm the Court’s denial of Altium’s motion to dismiss on forum

non conveniens grounds.

       B. Summary Judgment

       Altium also challenges the District Court’s grant of summary judgment to the

Walls on the merits of the case. In granting summary judgment, the Court held that the

contract between Altium and the Walls for transfer of the Stevens annuity promised the

Walls “60 monthly payments of $3,000.00 from 6/1/2014 to 5/1/2019 with 3% annual

increase in payments” in exchange for a lump-sum price of $152,833.37. Wall II, 2017

WL 1169725, at *3. As such, the Court found that “as a matter of law, Altium breached

its duty under the Agreement because the Walls never received the 60 monthly payments

or their $152,833.37 returned from Altium.” Id. at *4.

       Though the District Court’s factual conclusions were accurate, we reject its legal

conclusions. The Court misconstrued the transaction between Altium and the Walls. We

recognize that the master agreement between Altium and the Walls recited that the

parties’ intent was “to establish the terms and conditions under which [Altium] will

convey such streams of payment to [the Walls,] and [the Walls] will purchase such

streams of payment from Altium.” App. 376. But the contract for the transfer of the

                                              9
Stevens annuity listed the issuer of the annuity as New York Life. Therefore, the Walls

knew or should have known that they had to look to New York Life and not Altium for

the monthly payments. Altium merely sold the rights to the underlying financial asset, a

structured settlement annuity providing for a stream of payments, to the Walls. The

underwriter and guarantor of the annuity was New York Life, not Altium. It is not the

same thing to sell a stream of payments and to agree to make a stream of payments.

       The asset purportedly was transferred from its original owner, Stevens, to Corona,

then to Altium, and ultimately to the Walls. In these transactions, Altium did not breach

a contract with the Walls because it fulfilled the terms of its contract, the delivery to the

Walls of the rights to the annuity payments guaranteed by New York Life. It satisfied

that obligation and we have no reason to believe that if Stevens had not challenged the

original transfer New York Life would not have made the monthly annuity payments to

the Walls. Moreover, a Florida state court authorized the original transfer of the annuity.

Furthermore, for all we know New York Life is still making the annuity payments as the

Florida state court directed and will continue to do so until the maturity date of the

annuity on May 1, 2019. Further, it is clear that Altium did not make any promise or

guarantee of the future performance of the financial asset, and, indeed, in our review of

the Altium-Walls documents we could not find any such promise or guarantee.

       The contract language is instead consistent with that of a true sale without

recourse: (1) it states that the Distributor desires to “sell” the right to receive; (2) the

Walls are labeled a “Purchaser”; (3) Altium is labeled a “Distributor”; (4) the contract is

titled “Contract to Purchase Payment Rights”; and (5) the parties defined a “purchase

                                               10
price.” App. 381 (emphasis added). See, e.g., Reaves Brokerage Co. v. Sunbelt Fruit &

Vegetable Co., 336 F.3d 410, 414-15 (3d Cir. 2003) (explaining that certain language in

contract at issue referring to “sell[ing]” accounts and defining a “purchase” price was

“characteristic of a sale of accounts” without recourse instead of a sale with recourse).

And there are no indicia of a guarantee here. For instance, there is no language expressly

giving the Walls recourse against Altium, and there is nothing in the contract indicating

that the parties intended for Altium to bear the risk of nonpayment of the annuity

payments which can be regarded as the same as receivables under a contract. See, e.g.,

Classic Harvest LLC v. Freshworks LLC, 158 F. Supp. 3d 1317, 1326-27 (N.D. Ga.

2015) (explaining that assumption of “less than the full risk of loss” on the receivables is

inconsistent with a “true sale” of receivables). Altium sold a structured settlement

annuity to the Walls in a contract without a provision by which Altium promised or

guaranteed that the annuity payments would be made.

       The problem for the Walls, of course, was that even assuming that the Walls

received title to the annuity, a reasonable assumption if we accept, as we do, that Altium,

as the Walls claim, previously had held title to the annuity, the validity of the title was

not guaranteed. The original seller of the asset, presumably Stevens’ wife, transferred the

annuity to Corona pursuant to a court order obtained through fraud so the transfer could

not survive Stevens’ claim even if New York Life would have made all the annuity

payments to the Walls if Stevens had not challenged the original transfer. We make this

statement with respect to New York Life making the payments even though “a bona fide

purchaser of personal property taken tortiously or wrongfully, as by trespass or theft,

                                              11
does not acquire a title good against the true owner.” Kutner Buick, Inc. v. Strelecki, 267

A.2d 549, 554 (N.J. Super. Ct. Ch. Div. 1970); see Shaw v. Railroad Co., 101 U.S. 557,

564-65 (1879); O’Keeffe v. Snyder, 416 A.2d 862, 867 (N.J. 1980) (“[T]he thief

acquired no title and could not transfer good title to others regardless of their good faith

and ignorance of the theft.”). Fraud in the initial transfer was the underlying reason the

Florida state court rescinded its order approving the transfer to the Walls. App. 455-57.

       The District Court suggested that Altium may be liable because its attorney had an

opportunity to review the transfer of title to the annuity from Corona to Altium. Wall II,

2017 WL 1169725, at *4. In this regard, we realize that in the Altium-Walls agreement,

Altium represented to the Walls that it “has obtained its own independent professional

due diligence review and approval of the transaction.” App. 378. But we do not see how

this clause can change our result because the Walls do not charge that Altium did not

obtain that review and approval just as it represented. Moreover, whatever the extent of

Stevens’ wife’s deceit, it was enough to convince a state court in Florida to approve the

transfer. The District Court did not explain why Altium’s attorney was in a better

position to uncover the fraud than the state court.

                                        IV. CONCLUSION

       We do not address the question of whether the Walls may have recourse against

any individual or entity not a party to this appeal or even against Altium on the unjust

enrichment claim that we are reinstating and remanding for disposition. Our decision

today is limited to holding that the District Court did not err when it rejected the forum

non conveniens motion to dismiss but did err in determining that Altium is liable to the

                                             12
Walls for breach of contract. Thus, we will affirm the Court’s order of November 22,

2016, denying the motion to dismiss this action on forum non veniens grounds, but will

reverse its order of March 28, 2017, granting the Walls’ motion for summary judgment

and denying Altium’s motion for summary judgment on the breach of contract claim.

We will dismiss the Walls’ cross-appeal as moot and will remand the case to the District

Court for further proceedings on the Walls’ unjust enrichment claim. We also will vacate

the Court’s subsequent orders entered on April 19, 2017, and May 10, 2017, clarifying

the judgment amount and awarding attorney’s fees, costs, and prejudgment interest. The

parties will bear their costs on this appeal.

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