Emerald Grande, Inc. v. Clatus Junkin ( 2009 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
________________________ JUNE 24, 2009
THOMAS K. KAHN
CLERK
No. 08-14599
Non-Argument Calendar
________________________
D. C. Docket No. 07-00364-CV-3-MCR-EMT
EMERALD GRANDE, INC.,
a Florida corporation,
Plaintiff-Appellee,
versus
CLATUS JUNKIN,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Florida
_________________________
(June 24, 2009)
Before EDMONDSON, CARNES and WILSON, Circuit Judges.
PER CURIAM:
Defendant-Appellant Clatus Junkin appeals an order of the district court
granting the motion of Plaintiff-Appellant Emerald Grande, Inc. (“Emerald”) to
remand to state court based upon enforcement of a forum-selection clause. No
reversible error has been shown;1 we affirm.
Emerald, a condominium developer, entered into three contracts with
Junkin. Two of the three contracts were for the purchase and sale of condominium
units (the “Condominium Contracts”); one of the Condominium Contracts was
only for a fractional ownership interest and, according to Junkin, was governed by
the Florida Vacation Plan and Timesharing Act, Fla. Stat. Ann. § 721.01 et seq.
(“Timeshare Act”). The third contract was for furnishings for one of the
Condominium Contract units (the “Furnishing Contract”). Junkin canceled all
three contracts before closing;2 Emerald sued Junkin on the three contracts in the
Circuit Court of the First Judicial Circuit, in and for Okaloosa County, Florida.
Junkin then removed the lawsuit to the federal district court for the northern district
1
The order of remand was not based on a lack of federal jurisdiction or defective removal
procedure; appellate review of a remand order enforcing a forum-selection clause is not barred
by 28 U.S.C. § 1447(d). See Global Satellite Communication Co. v. Starmill U.K. Ltd., 378 F.3d
1269, 1271 (11th Cir. 2004).
2
Junkin maintains that the Timeshare Act allowed him to cancel the purchase of the
fractional interest in a condominium unit; and Junkin maintains further that the cancellation of
the fractional interest contract canceled the other two contracts. Before us is the remand order;
we do not consider the underlying contract claims.
2
of Florida.
The Condominium Contracts contain two separate clauses that address
forum selection. Article IX, Section Y, contained in each of the Condominium
Contracts, provides:
[T]o the extent not prohibited by Article VIII, the Circuit
and County Courts of the 1st Judicial Circuit, in and for
Okaloosa County, Florida (“Okaloosa Courts”) will be
the venue for any dispute, proceeding, suit or legal action
concerning the interpretation, construction, validity,
enforcement, performance of, or related in any way to,
this Contract or any other agreement or instrument
executed in connection with this Contract. In the event
any such suit or legal action is commenced by any party
and is not otherwise prohibited by Article VIII, the other
parties agree, consent and submit to the personal
jurisdiction of the Okaloosa Courts with respect to such
suit or legal action. In such event, each party waives any
and all rights under applicable law or in equity to object
to jurisdiction or venue of the Okaloosa Courts.
Article VIII of each of the Condominium Contracts, entitled
“Arbitration,” provides:
Any post-closing disputes between Purchaser and Seller
relating to the purchase of the Unit, including the
marketing, sale, design, construction, condition or
conveyance of the Unit, shall be resolved exclusively
through binding arbitration.
...
Nevertheless, in the event for any reason any litigation is
filed other than to enforce the decision of the arbitration
3
proceeding, the parties accept the jurisdiction of the
State, Federal and local courts located in Okaloosa
County, Florida as having exclusive jurisdiction over
controversies arising from or relating to this Agreement
and agree that Florida has sufficient contacts with the
subject matter of this Agreement and agree that any
litigation arising out of this Agreement will take place
only in such courts, and both parties hereto consent to the
personal jurisdiction of such courts and do hereby waive
any objection to such courts based on the forum not
being convenient or otherwise.
The Furnishings Contract contains language very similar to that in Article VIII of
the Condominium Contracts; it includes no clause comparable to that of Article IX.
The district court determined that remand was due to be granted: Article VIII
pertains solely to arbitration of post-closing disputes; and Article IX is a
mandatory forum selection clause. Because the claims at issue in the lawsuit were
not post-closing and were not subject to binding arbitration, the district court
concluded Article VIII had no application and permitted no removal, especially in
the light of the language in Article IX. We agree.
The enforcability of a forum-selection clause in a diversity jurisdiction case
is governed by federal law; see P&S Business Machines, Inc. v. Canon USA, Inc.,
331 F.3d 804, 807 (11th Cir. 2003); and ordinary principles of contract
interpretation apply. See Global Satellite Communication Co. v. Starmill U.K.
Ltd., 378 F.3d 1269, 1271 (11th Cir. 2004). A forum-selection clause may validly
4
and effectively waive the right to remove. See id. at 1272. When a contract
contains a valid forum selection clause -- here, neither party argues invalidity --
courts typically classify the clause as permissive or mandatory. See Florida Polk
County v. Prison Health Services, Inc., 170 F.3d 1081, 1083 n.8 (11 th Cir. 1999).
“A permissive clause authorizes jurisdiction in a designated forum but does not
prohibit litigation elsewhere. A mandatory clause, in contrast, dictates an
exclusive forum for litigation under the contract.” Global Satellite, 378 F.3d at
1272 (internal quotation and citation omitted).
At issue is whether Article VIII applies to this suit and, if it applies, whether,
in the light of Article IX, it allows Junkin to remove from the Okaloosa County
state court where suit was filed to the federal district court serving Okaloosa
County. Junkin’s reliance on the language in Article VIII that provides for the
exclusive jurisdiction of the state, federal and local courts in Okaloosa County over
controversies arising from or relating to the Purchase Contracts is wrenched out of
context: the context makes clear that the jurisdiction provisions of Article VIII
relate to post-closing arbitrable disputes. Reading the Purchase Contracts in their
entirety, we agree with the district court that Article VIII has no application: its
application is limited to post-closing disputes and it mandates binding arbitration
of those disputes.
5
But even if we were to accept Junkin’s argument that Article VIII has
application to a pre-closing non-arbitrable dispute, we again agree with the district
court that Article IX is a mandatory forum selection clause. Unless prohibited by
Article VIII -- which this suit is not -- Article IX mandates that the “Okaloosa
Courts” “will be the venue for any dispute, proceeding, suit or legal action
concerning the interpretation, construction, validity, enforcement, performance of,
or related in any way to this Contract or any other agreement or instrument
executed in connection with this Contract.” And Article IX provides further that
“each party waives any and all rights ... to object to jurisdiction or venue of the
Okaloosa Courts.” In contrast, the language in Article VIII is permissive: it
mandates no specific forum. Article VIII is a general consent to personal
jurisdiction.3
Junkin makes much of the absence of a clause equivalent to Article IX in the
Furnishings Contract. Because the Furnishings Contract does have a forum
selection clause that tracks Article VIII, and because Emerald was also seeking
specific performance of that agreement, Junkin argues that removal must be proper
for claims arising under the Furnishing Contract. But the Purchase Contracts and
Furnishing Contract were executed together and should be read together. See
3
And, as also noted by the district court, the forum mandated in Article IX is included
within the courts listed in Article VIII.
6
Hopfenspirger v. West, 949 So. 2d 1050, 1053 (Fla.Dist.Ct.App. 2006). And
Article IX of the Condominium Contracts selects the Okaloosa Courts as the venue
for disputes related to the Condominium Contracts or “any other agreement or
instrument executed in connection” with the Condominium Contracts.
Remand of all claims relating to the Condominium Contracts and the
Furnishings Contract is due to be affirmed.
AFFIRMED.
7