John C. McArthur v. Kerzner International Bahamas Limited ( 2015 )

Case: 14-13889 Date Filed: 03/30/2015 Page: 1 of 8
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-13889
Non-Argument Calendar
________________________
D.C. Docket No. 1:14-cv-21033-UU
JOHN C. MCARTHUR,
SANDRA S. MCARTHUR,
his wife,
Plaintiffs - Appellants,
versus
KERZNER INTERNATIONAL
BAHAMAS LIMITED,
a Bahamian company,
KERZNER INTERNATIONAL LIMITED,
a Bahamian company,
ISLAND HOTEL COMPANY LIMITED,
a Bahamian company,
PARADISE ISLAND LIMITED,
a Bahamian company,
Defendants - Appellees.
Case: 14-13889 Date Filed: 03/30/2015 Page: 2 of 8
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(March 30, 2015)
Before JULIE CARNES, FAY and DUBINA, Circuit Judges.
PER CURIAM:
Appellants John C. McArthur and his wife, Sandra S. McArthur, appeal the
district court’s order dismissing their civil action under forum non conveniens.
After reviewing the record and reading the parties’ briefs, we affirm the order
dismissing appellants’ complaint.
I. BACKGROUND
The McArthurs were part of a group of guests who traveled to the Atlantis
Resort in The Bahamas with the University of Kansas (“KU”) for a basketball
tournament. Travel agent Cate and Mason Travel Partners (“travel agent”) made
KU’s reservations and contracted with Atlantis. The contract includes two
provisions in which the travel agent agrees to notify their clients that when they
book their reservation through the travel agent, they are subject to certain terms
and conditions governing their stay at Atlantis. A section of the contract indicates
that the additional terms and conditions are available on the Atlantis website.
[Doc. DE-16-1, Ex. 1 ¶ 5, ¶ 8.] The terms and conditions provide that the guest
2
Case: 14-13889 Date Filed: 03/30/2015 Page: 3 of 8
will be asked to sign a form agreeing to certain terms related to any claims the
guest may have as a result of the guest’s stay at the Atlantis Resort. It specifically
states that “I agree that any claim I may have against [several named defendants
and others], along with their parent, related and affiliated companies at every tier, .
. . resulting from any events occurring in The Bahamas shall be governed by and
construed in accordance with the laws of the Commonwealth of The Bahamas, and
further, irrevocably agree to the Supreme Court of The Bahamas as the exclusive
venue for any such proceedings whatsoever.” [Id. ¶ 8.]
Upon their arrival at Atlantis, the McArthurs signed a written registration
card entitled “Acknowledgement, Agreement and Release” that includes a choice
of law provision and forum selection clause:
I agree that any claims I may have against the Resort Parties
resulting from any events occurring in The Bahamas shall be
governed by and constructed in accordance with the laws of the
Commonwealth of The Bahamas, and further, I irrevocably
agree to the Supreme Court of The Bahamas as the exclusive
venue for such proceedings whatsoever. . . .
[Id. ¶ 10 & Exh. 4.]
During his stay at the Atlantis Resort, John McArthur slipped and fell on a
sidewalk adjacent to the water park attraction known as the Rapid River. In March
2014, the McArthurs filed an amended complaint in federal district court, alleging
negligence in connection with John McArthur’s fall. The amended complaint also
alleged that as a result of John McArthur’s injuries, his wife suffered the
3
Case: 14-13889 Date Filed: 03/30/2015 Page: 4 of 8
diminishment of her husband’s companionship and consortium. The amended
complaint invoked the district court’s diversity based subject-matter jurisdiction
under 28 U.S.C. § 1332. It alleged that the McArthurs were domiciled in Kansas,
defendant Kerzner International was a Bahamian company with its principal place
of business in Florida, defendant Kerzner Bahamas was a Bahamian company with
its principal place of business in Florida, defendant Island Hotel was a Bahamian
company and a subsidiary of Kerzner International and Kerzner Bahamas, and
defendant Paradise Island was a Bahamian company and a subsidiary of Kerzner
International and Kerzner Bahamas.
The defendants moved to dismiss the amended complaint on the basis of
forum non conveniens. The district court granted the motion. The McArthurs then
perfected this appeal. 1
1
This court issued a jurisdictional question asking the parties to address whether the
pleadings sufficiently alleged the citizenship of the parties, in particular, Island Hotel and
Paradise Island, to establish the district court’s subject-matter jurisdiction over the case. See
Mallory & Evans Contractors & Eng’rs, LLC v. Tuskegee Univ., 663 F.3d 1304, 1304‒05 (11th
Cir. 2011) (stating that the court must sua sponte raise its concerns regarding subject-matter
jurisdiction). The McArthurs concede that the amended complaint failed to allege sufficiently
the citizenship of Island Hotel and Paradise Island, but move to amend the amended complaint to
add the allegations that both defendants were Bahamian Companies with their principal places of
business in the Bahamas. The party invoking the court’s jurisdiction bears the burden of
establishing federal jurisdiction, and when the pleadings’ allegations of citizenship and
jurisdiction are insufficient, a party may amend them in this court. See 28 U.S.C. § 1653;
Mallory, 663 F.3d at 1305. The McArthurs’ allegations cure the pleading deficiencies as to
Island Hotel and Paradise Island, and the amended complaint sufficiently alleges that the other
defendants are Bahamian companies with their principal places of business in Florida. Because
the proposed amendments show that no defendant is a citizen of Kansas, where the McArthurs
are domiciled, the district court’s subject-matter jurisdiction is satisfied. Thus, we grant the
McArthur’s motion to amend the amended complaint and entertain the instant appeal.
4
Case: 14-13889 Date Filed: 03/30/2015 Page: 5 of 8
II. DISCUSSION
This court reviews a district court’s order of dismissal based on forum non
conveniens for an abuse of discretion. Aldana v. Del Monte Fresh Produce N.A.,
578 F.3d 1283, 1288 (11th Cir. 2009). In addition, we review de novo a district
court’s construction of a contractual forum selection clause. Global Satellite
Commc’n Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1271 (11th Cir. 2004).
As a preliminary matter, forum selection clauses “are presumptively valid
and enforceable unless the plaintiff makes a ‘strong showing’ that enforcement
would be unfair or unreasonable under the circumstances.” Pappas v. Kerzner
Int’l Bahamas Ltd., 585 F. App’x 962, 965 (11th Cir. 2014) (quoting Krenkel v.
Kerzner Int’l Hotels Ltd., 579 F.3d 1279, 1281 (11th Cir. 2009)). The party
seeking to avoid the forum selection clause bears the burden of showing
exceptional circumstances, predicated on public interest considerations to justify
disturbing the forum selection clause. Atl. Marine Const. v. U.S. Dist. Court, ___
U.S. ___, ___, 134 S. Ct. 568, 581 (2013).
A forum selection clause will be invalidated where “(1) its formation was
induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in
court because of inconvenience or unfairness; (3) the chosen law would deprive the
plaintiff of a remedy; or (4) enforcement of the clause would contravene public
policy.” Krenkel v. Kerzner Int’l Hotels Ltd., 579 F.3d 1279, 1281 (11th Cir.
5
Case: 14-13889 Date Filed: 03/30/2015 Page: 6 of 8
2009). To determine whether there was fraud or overreaching in a non-negotiated
forum selection clause, the court looks to “whether the clause was reasonably
communicated to the consumer. A useful two-part test of ‘reasonable
communicativeness’ takes into account the clause’s physical characteristics and
whether the plaintiffs had the ability to become meaningfully informed of the
clause and to reject its terms.” Id.
The McArthurs contend that the forum selection clause is invalid because
the contents of the forum selection clause were not reasonably communicated to
them, and the travel agent never informed them about the forum selection clause.
However, as the district court found, the McArthurs had constructive notice of the
Atlantis Resort’s terms and conditions that the travel agent received. The travel
agent, via its contract with the resort, knew that the attendees at the resort were
subject to certain additional terms and conditions, agreed to notify their clients
regarding the terms and conditions, and knew where to obtain the specific terms
and conditions. Thus, because the McArthurs’ trip involved travel arrangements
made by the travel agent, they are charged with constructive notice of the terms
and conditions in the contract the travel agent had with the Atlantis Resort.
Moreover, upon their arrival at the resort, the McArthurs signed a written
registration form that read, in part, that the guest agrees that any claims he may
have against the resort shall be governed by the laws of The Bahamas and that the
6
Case: 14-13889 Date Filed: 03/30/2015 Page: 7 of 8
Supreme Court of The Bahamas is the exclusive venue. [R. DE 16-5.] By signing
this form, the McArthurs agreed to the forum selection clause. Hence, we
conclude that the forum selection clause is valid. 2
In addition, The Bahamas is an adequate alternative forum, and the public
interest factors weigh in favor of transfer. See Atl. Marine, ___ U.S. at ___, 134 S.
Ct. at 582 (discussing forum selection clauses in the 28 U.S.C. § 1404(a) transfer
context). First, the McArthurs do not contest that The Bahamas provides an
adequate alternative forum, and they do not assert that they could not reinstate their
lawsuit in The Bahamas without undue inconvenience or prejudice. Second, the
McArthurs fail to meet their burden to show that this case is exceptional and that
the forum selection clause should not apply. Their brief is devoid of any claims as
to court congestion, the burden of jury duty, or the difficulties in resolving conflict
of law problems and applying foreign law. Third, the McArthurs fail to challenge
the substantial interests of The Bahamas. In sum, the McArthurs cannot show that
enforcement of the forum selection clause “would be unfair or unreasonable under
the circumstances.” Krenkel, 579 F.3d at 1281. Accordingly, we conclude that the
2
The McArthurs also argue that the forum selection clause is invalid because it was
obtained through fraud. Their argument centers on their claim that the defendants have a policy
that allows guests to delete portions of the guest registration card but they do not inform the
guests of that right, and therefore, the defendants obtain the signatures on the cards through
fraud. This contention is meritless because they cannot show that the forum selection clause
itself was included in the contract due to fraud. See Rucker v. Oasis Legal Fin., L.L.C., 632 F.3d
1231, 1236 (11th Cir. 2011 ) (noting that in order for a forum selection clause to be invalidated
on the basis of fraud or overreaching, a plaintiff must specifically allege that the clause was
included in the contract because of fraud).
7
Case: 14-13889 Date Filed: 03/30/2015 Page: 8 of 8
district court properly gave effect to the forum selection clause and granted the
defendants’ motion to dismiss.3
III. CONCLUSION
For the foregoing reasons, we affirm the district court’s order granting
defendants’ motion to dismiss based on forum non conveniens. We also grant the
McArthurs’ motion for leave to amend the amended complaint to cure the
deficiency in the pleadings.
AFFIRMED and Motion for leave to amend GRANTED.
3
The McArthurs also take issue with the district court’s order denying their motion for
leave to amend the complaint to add Brookfield Asset Management, Inc., the new owner of the
Atlantis Resort, as a defendant. The district court did not abuse its discretion in denying the
motion because the language of the forum selection clause applies equally to any entity that has
owned, operated, or marketed the Atlantis Resort. [R. DE 16-1, Ex. 4 & 16-3.] See Garfield v.
NDC Health Corp., 466 F.3d 1255, 1270 (11th Cir. 2006) (stating that court reviews for abuse of
discretion a district court’s decision to grant or deny leave to amend a pleading).
8