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Eisaman Contract Assocs., Inc. v. Smith Sys. Mfg., Co.

United States District Court, W.D. Pennsylvania

June 1, 2017

EISAMAN CONTRACT ASSOCS., INC., Plaintiff,
v.
SMITH SYS. MFG., CO., Defendant.

          MEMORANDUM OPINION

          Robert C. Mitchell United States Magistrate Judge.

         I. Introduction

         Presently before the Court is a Rule 12(b)(6) motion (Docket No. 9) brought by Defendant Smith Systems Manufacturing (“Smith”). The Plaintiff, Eisaman Contract Associates (“Eisaman”), filed a breach-of-contract action pursuant to the Court's diversity jurisdiction against Smith. Smith brings his Rule 12(b)(6) motion (Docket No. 9) to enforce a forum-selection clause. This clause requires “any litigation of lawsuits between the parties” to “be filed in Collin County, Texas.” (Docket No. 16-2 ¶ 18.1). After reviewing the parties' materials and the applicable law, the Court finds that Eisaman and Smith agreed to a contract containing a valid forum-selection clause. For the reasons set forth below, Smith's Rule 12(b)(6) motion will be denied as moot and this action will be transferred sua sponte to the United States District Court for the Eastern District of Texas Sherman Division's (“Eastern District Sherman Division”) Plano, Texas courthouse, which sits in Collin County, Texas. 28 U.S.C. § 124(c)(3).

         II. Background

         A. Facts

         Eisaman is a Pennsylvania corporation based in Pittsburgh, Pennsylvania; Smith is a Texas corporation located in Plano, Texas. (Docket No. 1 ¶¶ 4-5). Eisaman, a furniture manufacturer representative, contracted in January 1991 with Smith, a school furniture manufacturer, to represent Smith's products in upstate and western New York, West Virginia, and Pennsylvania. (Id. ¶¶ 6-8). Eisaman and Smith amended the January 1991 contract in January 2007, broadening Eisaman's duties to the metropolitan New York City area (including Long Island, five boroughs, Westchester City) and Northern New Jersey while leaving the January 1991 contract's other terms unaltered. (Id. ¶ 9). Eisaman contends Smith breached their agreement, causing at least $660, 000 in damages for owed and future commissions. (Id. ¶¶ 10- 11, 15-16). Eisaman did not attach a copy of the contract to any of its docket entries.

         Smith provided a copy of this contract. It shows two dates: January 31, 2003 (typed) and November 12, 2006 (appears to be time stamped at the top of each page). (Docket No. 16-1 at 5-15). Smith and Eisaman executed the contract.[1] (Id. at 15). The contract contains a forum-selection clause stating that “[a]ny litigation of lawsuits between the parties hereto shall be filed in Collin County, Texas.” (Docket No. 9-1 ¶ 18.1). The parties agreed “that all prior agreements and arrangements of any kind between [them] . . . are hereby terminated and of no force and effect . . . .” (Id. ¶ 13.1). A merger clause is also present; it states that “this Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof.” (Id. ¶ 17). Texas law applies. (Id. ¶ 18.1).

         B. Procedural Posture

         Smith filed a Rule 12(b)(6) motion to dismiss with a brief in support. (Docket Nos. 9, 10). Eisaman submitted an opposition brief (Docket No. 14) that Smith replied to. (Docket No. 16). Both parties consented to the undersigned's jurisdiction over this action. (Docket Nos. 13, 15).

         III. Standards of Review

         This case presents a non-typical scenario: a defendant moving for dismissal under Rule 12(b)(6) to enforce a forum-selection clause. (Docket No. 10 at 1). Moving for Rule 12(b)(6) dismissal is permissible to enforce a valid forum-selection clause. Salovaara v. Jackson Nat'l Life Ins. Co., 246 F.3d 289, 298 (3d Cir. 2001). “When only a 12(b)(6) motion to dismiss is filed . . . th[e] court has the power to dismiss the action . . . without considering the possibility of transfer to another federal forum.” Kahn v. Am. Heritage Life Ins. Co., No. 06-1832, 2006 WL 1879192, at *7 (E.D. Pa. June 29, 2006) (citing Salovaara, 246 F.3d at 298-99). But the United States Court of Appeals for the Third Circuit (“Third Circuit”) acknowledged that “it makes better sense[] when venue is proper but the parties have agreed upon a not-unreasonable forum[-]selection clause . . . to transfer rather than dismiss.” Salovaara, 246 F.3d at 299.[2]Indeed, a district court is not precluded “from sua sponte considering whether transfer is the better course.” Kahn, 2006 WL 1879192, at *7 (citing Salovaara, 246 F.3d at 299). If a district court sua sponte considers transfer, when venue is proper in the transferor and transferee forums, the district court must apply a factor analysis contained in 28 U.S.C. § 1404(a). Jumara v. State Farm Ins. Co., 55 F.3d 873, 878 (3d Cir. 1995).

         A. Rule 12(b)(6)

         Courts should assume the veracity of well-pleaded factual allegations. Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011) (citing Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). When deciding a Rule 12(b)(6) motion to dismiss, a federal court may consider “only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim.” Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004). “A document forms the basis of a claim if it is ‘integral to or explicitly relied upon in the complaint.'” Gross v. Stryker Corp., 858 F.Supp.2d 466, 477 (W.D. Pa. 2012) (quoting In re Rockefeller Ctr. Props., Inc. Sec. Litig., 184 F.3d 280, 287 (3d Cir. 1999) (emphasis omitted; internal citations and quotations omitted)). The contract between Eisaman and Smith that Smith attached to its motion to dismiss and its reply brief appears to be the one Eisaman's complaint refers to, though the dates are different.[3] (Docket Nos. 1 ¶¶ 6-9; 9-1 at 5-20; 16-1 at 5-15; 16-2 at 3-13). The contract copies Smith attached to its materials will be considered for purposes of this motion.

         The Court “need not accept allegations that are internally inconsistent . . . .” Amelio v. McCabe, Weisberg & Conway, P.C., No. 14-1611, 2015 WL 4545299, at *4 (July 28, 2015); ...


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