Court Opinion

ID: 9375044
Source: CourtListenerOpinion
Date Created: 2023-02-24 18:03:43.654281+00
Date Added: 2024-06-11T17:16:55.237489
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

BACO HOLDINGS, INC.,                      )
a Delaware Corporation,                   )
                                          )
               Plaintiff,                 )
                                          )     Case No.: N22C-08-445 FJJ
   v.                                     )
                                          )
ARRIA DATA2TEXT, LIMITED,                 )
a Scottish Limited Company,               )
                                          )
               Defendant.                 )

                            Submitted: February 10, 2023
                             Decided: February 24, 2023

                  MEMORANDUM OPINION AND ORDER

              Upon Consideration of Defendant’s Motion to Dismiss:
                                   DENIED

Andrew Silverman, Esquire, of MACELREE HARVEY, LTD., Centreville, Delaware,
Attorney for Plaintiff BACO Holdings, Inc.

Scott Czerwonka, Esquire, of the WILKS LAW FIRM, LLC, Wilmington, Delaware,
Attorney for Defendant Arria Data2Text, Limited.

JONES, J.
                                     INTRODUCTION
         This matter involves a contractual scheme for delivery of a centralized call

    routing prototype (the “Prototype”) on the Amazon Web Services Connect

    Platform.1 The contract at issue was meant to safeguard payment to Plaintiff BACO

    Holdings, Inc. (“BACO”) after BACO allegedly scaled the Prototype to connect

    over 1,100 users to Defendant Arria Data2Text Limited (“Arria”)’s service

    offerings.2 But as it turned out, per BACO, Arria never paid for the services BACO

    rendered in August of 2022, as the contract allegedly requires.3 Thus, this action

    seeks to impose liability on Arria for breach of contract.4

         For present purposes, the issue before the Court is jurisdictional: can Arria be

    haled into a Delaware court to answer for a contract-related claim, despite having

    no relationship with Delaware other than its status as a party to a contract with a

    Delaware forum selection clause? Arria answers in the negative, and has moved to

    dismiss the complaint on these grounds under Superior Court Civil Rule 12(b)(2).

         This opinion addresses, and ultimately DENIES, Arria’s motion. The Court’s

    reasoning follows.

                       FACTUAL AND PROCEDURAL OVERVIEW
         BACO, a Delaware corporation, initially contracted to make the Prototype

    available to Arria, a Scotland-based company, in April 2021.5 After a number of

1
  Pl.’s Compl. at 2.
2
  Id.
3
  Id.
4
  Id. at 4.
5
  Id. at 2.
                                                 2
    mutually-approved amendments to the contract,6 Arria ultimately agreed to provide

    BACO with $1,050,000.00 in exchange for the Prototype.7 BACO’s obligations

    under the contract were outlined in a Statement of Work, and Arria agreed to tender

    payment to BACO pursuant to a Payment Schedule the parties last revised in

    December 2021.8

        As described in the Statement of Work, “invoicing [from BACO would] be on

    the 1st and 15th of each month with payment due [from Arria] on the 15th and 30th of

    each month.”9 But, according to BACO, Arria failed to tender the $515,000.000 it

    owed in August 2022 payments.10

        BACO initiated this action shortly thereafter, and Arria filed the motion to

    dismiss before the Court in December 2022.11 BACO responded on February 10,

    2023.12 The motion is now fully briefed and ripe for consideration.

                                      STANDARD OF REVIEW
        “A non-resident defendant may move to dismiss for lack of personal jurisdiction

    under Rule 12(b)(2).”13 “Generally, a plaintiff does not have the burden to plead in

    its complaint facts establishing a court’s personal jurisdiction over [a non-resident]

6
  Id. The first amendment came in May 2021, when BACO and Arria amended the contract to a Statement of Work.
Through the Statement of Work, BACO agreed to scale the Prototype “to connect over 1,100 users to Arria’s service
offerings.” Id. Then, in December 2021, the Statement of work was ratified and amended to revise the payment
schedule for BACO’s services. Id. Arria’s alleged failure to perform under the Revised Payment Schedule has led to
the action presently before the Court.
7
  Id.
8
  Id. at 2-3.
9
  Id. at 3.
10
   Id.
11
   D.I. 5.
12
   D.I. 10.
13
   Green Am. Recycling, LLC v. Clean Earth, Inc., 2021 WL 2211696, at *3 (Del. Super. June 1, 2021) (citing Del.
Super. Ct. Civ. R. 12(b)(2)).
                                                           3
     defendant.”14 But when Rule 12(b)(2) is invoked, the plaintiff does carry this

     burden.15

         Where no discovery has been conducted, plaintiff’s burden is a prima facie

     one.16 As such, “the Court ‘is not limited to the pleadings and can consider

     affidavits, briefs of the parties,’ and the record as a whole.”17                         “Still, unless

     contradicted by affidavit, the Court must (1) accept as true all well-pleaded

     allegations in the complaint; and (2) construe the record in the light most favorable

     to the plaintiff.”18

                                                  ANALYSIS
         As presented above, Arria submits the Court lacks personal jurisdiction to hear

     this matter pursuant to the forum selection clause in the parties’ contract. The forum

     selection provision reads, in relevant part:

                  Any action arising out of or relating to this Agreement shall be
                  brought exclusively in a court of competent jurisdiction in New
                  Castle, Delaware, unless prohibited by applicable law.19

         Delaware law favors the enforcement of forum selection clauses,20 which are

     presumptively valid and should be specifically enforced unless the resisting party

     clearly shows that enforcement would be unreasonable and unjust, or that the clause

14
   Focus Fin. P’rs, LLC v. Holsopple, 241 A.3d 784, 800 (Del. Ch. 2020) (internal quotation marks and citation
omitted). Precedent resolving dismissal motions filed under the Court of Chancery’s analogous rules is usually of
equal influence when addressing those filed under this Court’s. See, e.g., CLP Toxicology, Inc. v. Casla Bio Holdings
LLC, 2020 WL 3564622, at *9 n.65 (Del. Ch. June 29, 2020) (finding no difference in the Rule 12(b)(2) context and
collecting authority); see also Green Am. Recycling, 2021 WL 2211696, at *3 n.40.
15
   Green Am. Recycling, 2021 WL 2211696, at *3 (citing AeroGlobal Capital Mgmt, LLC v. Cirrus Indus., Inc., 871
A.2d 428, 437-38 (Del. 2005)).
16
   Id.; see also id. at *3 n.42.
17
   Id. at *3.
18
   Id. (internal quotation marks and citations omitted); see also id. at *3 ns.44-45.
19
   Pl.’s Compl., Ex. A, at ¶ 16.
20
   Plaze, Inc. v. Callas, 2019 WL 1028110, at *3 (Del. Ch. Feb. 28, 2019).
                                                             4
     is invalid for reasons such as fraud or overreaching.21 Delaware courts routinely

     defer to forum selection clauses and “give effect to the terms of private agreements

     to resolve disputes in a designated judicial forum out of respect for the parties’

     contractual designation.”22 If the forum selection clause is freely negotiated, then

     Delaware courts are to presume the clause is prima facia valid and does not violate

     due process.23

        Through its motion, Arria does not argue the invalidity, unreasonableness,

     fraudulence, or overreach of the forum selection provision. Nor does it dispute that

     the contract was freely negotiated. Instead, Arria argues this Court is not a “court

     of competent jurisdiction,” as provided in the forum selection clause, and the

     Court’s hearing of the dispute is “prohibited by applicable law” because the Court

     lacks independent grounds for personal jurisdiction over Arria beyond the

     provision.24

        It is well-settled that Delaware law permits a defendant to contractually agree to

     a court’s exercise of personal jurisdiction.25 As the United States Supreme Court

     has recognized, “the personal jurisdiction requirement is a waivable right [and] there

     are a ‘variety of legal arrangements’ by which a litigant may give express or implied

     consent to the personal jurisdiction of the court.’”26 The Delaware Supreme Court

     has expressed similar sentiments: “Where the parties to the forum selection clause

21
   Id. (citing Ingres Corp. v. CA, Inc., 8 A.3d 1143, 1146 (Del. 2010).
22
   Id. (citing Ashall Homes Ltd. V. ROK Entm’t Gp., 992 A.2d 1239, 1245 (Del. Ch. 2010)).
23
   Id.
24
   D.I. 5 at ¶ 5.
25
   In re Pilgrim’s Pride Corp. Derivative Litig., 2019 WL 1224556, at *1 (Del. Ch. Mar. 15, 2019).
26
   Burger King. Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985) (citations omitted).
                                                            5
     have consented freely and knowingly to the court’s exercise of jurisdiction, the

     clause is sufficient to confer personal jurisdiction on a court.”27

         Finally, as the Court of Chancery recently noted, “[w]here a party commits to

     the jurisdiction of a particular court by forum or contract, such as through a forum

     selection clause, a minimum contacts analysis is not required; the Court’s analysis

     [instead] focuses on the contractual language.”28 When the language is clear and

     unambiguous, the Court will give effect to the plain meaning of the contract’s terms

     and provisions.29 Language is ambiguous if it is susceptible to more than one

     reasonable interpretation,30 and an interpretation is unreasonable if it “produces an

     absurd result” or a result “that no reasonable person would have accepted when

     entering the contract.”31

          Here, the plain meaning of the clause states that the parties consent to the

     exclusive jurisdiction of the courts of New Castle County, Delaware. Those courts,

     obviously, include this Court. Arria’s argument, which asks the Court to assume

     the phrase “unless prohibited by applicable law” nullifies, a priori, the forum

27
   Nat’l Indus. Gp. (Hldg.) v. Carlyle Inv. Mgmt., LLC, 67 A.3d 373, 381 (Del. 2013).
28
   ActiGraph Holdings, LLC v. Cyntech, Inc., 2023 WL 1989141, at *1 (Del. Ch. Feb. 14, 2023) (internal citations and
quotations omitted).
29
   Seidensticker v. Gasparilla Inn, Inc., 2007 WL 4054472, at *1 n.1 (Del. Ch. Nov. 8, 2007) (“Under Delaware law,
courts interpret contracts to mean what they objectively say. This approach is longstanding and is motivated by grave
concerns of judicial fairness and efficiency.”).
30
   Osborn ex rel Osborn v. Kemp, 991 A.2d 1153, 1160 (Del. 2010).
31
    Id. (citations omitted). Arria’s motion, which misapplies the Delaware Supreme Court’s holding in
Germaninvestments AG v. Alloment Corp., produces an absurd result. See Germaninvestments AG v. Alloment Corp.,
225 A.3d 316. In sum, Arria submits Germaninvestments requires the forum selection clause to be stated in
“crystalline” terms before the Court can exercise personal jurisdiction. There are two issues with this position. First,
the Court is satisfied the forum selection clause here is expressed in “crystalline” terms. Second, Germaninvestments
stands for the proposition that Delaware jurisdiction can be retained if a permissive forum selection clause selects
jurisdictions outside of Delaware. See id. at 331. If anything, the holding permits jurisdiction in Delaware as well as
proper jurisdiction elsewhere. Id. So, Germaninvestments, at best, is inapposite to Arria’s argument, and, at worst,
directly contradicts it.

                                                              6
selection the parties had just agreed to in the same sentence, is wholly unreasonable.

If the Court were to accept this line of reasoning, then the entire clause would be

superfluous.

      Because Arria consented to litigate the case in Delaware by contract, the Court

need not, and will not, reach a traditional due process inquiry.

                                     CONCLUSION
      For the foregoing reasons, Arria’s motion to dismiss pursuant to Rule 12(b)(2)

is DENIED.

      IT IS SO ORDERED.

                                                       /s/ Francis J. Jones, Jr.
                                                      Francis J. Jones, Jr., Judge

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