Mary Baker and Janet Thornton v. Economic Research Services, Inc. , 242 So. 3d 450 ( 2018 )

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D16-4139
_____________________________
MARY BAKER and JANET
THORNTON,
Appellants,
v.
ECONOMIC RESEARCH SERVICES,
INC.,
Appellee.
_____________________________
On appeal from the Circuit Court for Leon County.
Charles W. Dodson, Judge.
March 22, 2018
PER CURIAM.
Economic Research Services, Inc., (ERS) sued former
employees Mary Baker and Janet Thornton. Baker and Thornton
moved to dismiss, arguing they were sued in the wrong venue. The
trial court denied their motion, and Baker and Thornton appeal.
We reverse because of an agreement that venue for certain claims
would lie only in Delaware.
I.
Baker and Thornton once worked for ERS. In 2015, they
resigned and started working for an ERS competitor, Berkley
Research Group, LLC (BRG). Soon after, ERS sued Baker,
Thornton, and BRG in Leon County Circuit Court, alleging that
the three engaged in “predatory acts” designed to harm ERS’s
Tallahassee office. The complaint asserted both contract and tort
claims. It alleged Baker and Thornton violated non-compete
provisions and restrictive covenants contained in the parties’
written agreements. There were three agreements at issue: a 2007
Members Agreement, a 2011 Stockholder Agreement, and a 2015
compensation plan. 1 The 2007 and 2011 agreements had forum-
selection clauses, but ERS argued those clauses were no longer in
force and that their enforcement would be “unjust, unreasonable
and violative of the express terms of the agreements.”
The defendants moved to dismiss. They contended the claims
against Baker and Thornton based on the 2007 and 2011
agreements failed because the 2015 compensation plan superseded
those agreements, rendering them void. Alternatively, the
defendants contended that if the 2007 and 2011 agreements
remained in force, the forum-selection clauses precluded litigation
in Florida. In response, ERS presented three arguments. First,
ERS argued the forum-selection clauses had not survived the
termination of the agreements. Second, ERS claimed that the
venue issue was not yet ripe because if the 2015 compensation plan
controlled (as the defendants alleged), it superseded the 2007 and
2011 agreements altogether, including their forum-selection
clauses. Finally, ERS argued that its complaint raised claims
unrelated to the 2007 and 2011 agreements, meaning the forum-
selection clauses would not apply even if they remained in force.
1 ERS was not a signatory to either the 2007 or 2011
agreement. The 2007 agreement lists the contracting company as
CorpSource Finance Holdings, LLC, and the 2011 agreement lists
SourceHOV Holdings, Inc. The amended complaint alleged that
SourceHOV acquired CorpSource, and that ERS was a subsidiary
of SourceHOV. Regardless, both sides have relied on the
agreements as though ERS were a signatory: ERS by suing for
breach, and Baker and Thornton by seeking to enforce the venue
provisions. Neither side has raised ERS’s nonsignatory status as
an issue, and we will not address it.
2
The trial court issued a short order denying the motion to
dismiss. The court said it accepted all the complaint’s allegations
as true, but it offered no discussion of the forum-selection clause
issue. Baker and Thornton appeal.
II.
Contracting parties have the right to select the forum for
prospective disputes. Land O’Sun Mgmt. Corp. v. Commerce &
Industr. Ins. Co., 961 So. 2d 1078, 1080 (Fla. 1st DCA 2007) (citing
Mgmt. Comput. Controls, Inc. v. Charles Perry Constr., Inc., 743
So. 2d 627, 631 (Fla. 1st DCA 1999)). And courts must enforce
forum-selection agreements unless they are “shown to be
unreasonable or unjust.” Id. (citing Manrique v. Fabbri, 493 So. 2d
437, 440 (Fla. 1986)). Aggrieved parties may appeal nonfinal
orders that concern venue, Fla. R. App. P. 9.130(a)(3)(A), so they
can avoid being “forced to litigate the entire controversy in the
wrong forum.” Mgmt. Comput. Controls, Inc., 743 So. 2d at 630.
Everyone agrees that the 2007 and 2011 agreements
contained mandatory forum-selection clauses, in which the parties
“irrevocably and unconditionally consent[ed]” to “exclusive
jurisdiction” in Delaware courts for any litigation “arising out of or
relating” to the agreements. And everyone agrees that the 2007
and 2011 agreements are no longer in force. The principal question
on appeal is whether the forum-selection clauses survived after the
agreements terminated. We conclude that they did.
Unlike the substantive rights and obligations in a contract, a
forum-selection clause is a structural provision that addresses the
procedural requirements for dispute resolution. See Silverpop Sys.,
Inc. v. Leading Mkt. Techs., Inc., 641 F. App’x 849, 857 (11th Cir.
2016) (“While contractual obligations may expire upon the
termination of a contract, provisions that are structural (e.g.,
relating to remedies and the resolution of disputes) may survive
that termination.”). “Generally, dispute-related provisions, such as
forum-selection clauses, are enforceable beyond the expiration of
the contract if they are otherwise applicable to the disputed issue
and the parties have not agreed otherwise.” U.S. Smoke & Fire
Curtain, LLC v. Bradley Lomas Electrolok, Ltd., 612 F. App’x 671,
672-73 (4th Cir. 2015).
3
This court has held that an arbitration provision does not
require any type of “savings clause” to survive termination of the
contract. Auchter Co. v. Zagloul, 949 So. 2d 1189, 1194 (Fla. 1st
DCA 2007). The Auchter holding is applicable to forum-selection
clauses as well. 2 If the parties wanted the forum-selection clauses
to apply only during the life of the contracts, they could have
explicitly stated so. See id. (“Because post-termination disputes
are not expressly excluded from the scope of the dispute resolution
provisions of the contract, we must construe them as intended to
be included.”). Instead, the clauses note that the parties
“irrevocably and unconditionally” consent to submit to Delaware
jurisdiction for “any” actions, suits, proceedings, or litigation
arising out of or relating to the agreements. Because “any” means
“all,” Anders v. Hometown Mortg. Servs., Inc., 346 F.3d 1024, 1028
(11th Cir. 2003) (citing Merritt v. Dillard Paper Co., 120 F.3d 1181,
1186 (11th Cir. 1997)), the forum-selection clauses apply to all
disputes related to the contracts, whether those disputes arose
before or after termination of the contracts. See Nolde Bros., Inc.
v. Local No. 358, Bakery & Confectionery Workers Union, AFL-
CIO, 430 U.S. 243, 255 (1977) (“[T]he parties’ failure to exclude
from arbitrability contract disputes arising after termination, far
from manifesting an intent to have arbitration obligations cease
with the agreement, affords a basis for concluding that they
intended to arbitrate all grievances arising out of the contractual
relationship.”).
In arguing that the forum-selection clauses terminated when
the rest of the contracts did, ERS relies on the Third District’s
2 “Courts have often compared forum selection clauses to
arbitration clauses and have applied a similar enforceability
analysis to both.” Carnival Corp. v. Booth, 946 So. 2d 1112, 1115
(Fla. 3d DCA 2006) (quoting Thunder Marine, Inc. v. Brunswick
Corp., No. 8:06-CV-384-T17 EAJ, 2006 WL 1877093, at *8
(M.D.Fla. July 6, 2006)); accord Scherk v. Alberto-Culver Co., 417
U.S. 506, 519 (1974) (noting that an agreement to arbitrate before
a specific tribunal is “in effect, a specialized kind of forum-selection
clause”). We reject ERS’s argument that the pro-arbitration public-
policy rationale included in Auchter means we should not follow it
in a forum-selection case.
4
opinion in DVDPlay, Inc. v. DVD 123 LLC, 930 So. 2d 816 (Fla. 3d
DCA 2006). In that case, contracting parties agreed their disputes
would be litigated in California. Id. at 817. One party nonetheless
sued in Florida, and the other party invoked the forum-selection
clause. Id. The trial court found the defendant’s repudiation of the
agreement meant it could not enforce the forum-selection clause.
Id. The Third District reversed, finding that the forum-selection
clause “clearly was intended to survive the termination of the
contract.” Id. at 819. In doing so, the court noted the agreement’s
survival provision, which specifically stated the forum-selection
clause would survive the expiration and/or termination of the
agreement. Id. Based on that, ERS argues that a forum-selection
clause will not survive the agreement’s termination unless the
agreement specifically says so. But that argument overstates
DVDPlay’s holding. The Third District did not create a per se rule;
it merely found that the forum-selection clause survived
termination, citing the survival provision as clear evidence of the
parties’ intent. A forum-selection clause can survive an
agreement’s termination even without an explicit survival
provision. See TriState HVAC Equip., LLP v. Big Belly Solar, Inc.,
752 F. Supp. 2d 517, 536 (E.D. Pa. 2010) amended on other ground
on reconsideration, No. 10-1054, 2011 WL 204738 (E.D. Pa. Jan.
21, 2011) (“The exclusion of the forum-selection clause from the
‘survival’ clause—which, as a general matter, is intended to ensure
the survival of certain contractual provisions that might otherwise
be extinguished upon termination of the agreement—simply does
not evidence a clear intent that, upon termination of the
agreement, the forum-selection clause would cease to apply to
claims arising under the agreement.”). 3
3 ERS also briefly argues that the forum-selection clauses are
unenforceable because they are unjust and unreasonable, that
“[f]orcing piecemeal litigation” of some claims against some
defendants in Delaware and other claims against other defendants
in Florida would burden all parties and waste judicial resources.
(Ans. Br. at 17). This is insufficient to invalidate a forum-selection
clause. See Manrique, 493 So. 2d at 440 n.4 (“We emphasize that
the test of unreasonableness is not mere inconvenience or
additional expense.”); Ill. Union Ins. Co. v. Co-Free, Inc., 128 So.
5
 III.
Having determined that the forum-selection clauses survived
the agreements’ terminations, we must next decide whether the
clauses covered the disputes at issue. In its complaint, ERS sought
declaratory relief as to what governed Baker and Thornton’s post-
employment obligations: the 2007 and 2011 agreements or the
2015 compensation plan. ERS now argues that we should affirm
because there is a live dispute as to which agreement governs the
parties’ relationship. ERS contends that if the 2015 compensation
plan controls, as Baker and Thornton maintain, then the forum-
selection clauses in the 2007 and 2011 agreements would be
inapplicable. ERS therefore suggests that before the case could be
dismissed for improper venue, the trial court must first determine
which contract applies. We disagree.
The 2007 and 2011 agreements required that any dispute
arising out of or relating to the agreements be resolved in
Delaware. The declaratory-judgment action seeks to determine if
the 2007 and 2011 agreements remain in force, an action that
unquestionably relates to or arises out of those agreements. The
declaratory-judgment count therefore falls within the scope of the
forum-selection clauses. The trial court should have dismissed that
count for improper venue.
IV.
The remaining issue is whether the trial court also should
have dismissed the rest of ERS’s claims. In addition to the
declaratory-judgment claim, ERS raised breach-of-contract claims
relating to the 2007 and 2011 agreements, along with claims for
breach of common law fiduciary duty, breach of duty of good faith
3d 820, 820 (Fla. 1st DCA 2013) (“[I]t should be incumbent on the
party seeking to escape his contract to show that trial in the
contractual forum will be so gravely difficult and inconvenient that
he will for all practical purposes be deprived of his day in court.
Absent that, there is no basis for concluding that it would be
unfair, unjust, or unreasonable to hold that party to his bargain.”
(quoting Manrique, 128 So. 2d at 440 n.4 (quoting M/S Breman v.
Zapata Off-Shore Co., 407 U.S. 1, 18 (1972)))).
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and loyalty, unfair competition, intentional interference, and civil
conspiracy. ERS argues that even if the forum-selection clauses
remain enforceable, its entire complaint against Baker and
Thornton should not be dismissed because the complaint raises
claims independent from the contractual claims—claims that do
not arise out of or relate to the contracts.
When determining whether an agreement’s forum-selection
clause applies to non-contractual claims, courts have considered
whether there is a “significant and obvious nexus” between the
claims and the agreement. Farmers Grp., Inc. v. Madio & Co., Inc.,
869 So. 2d 581, 582 (Fla. 4th DCA 2004). In Jackson v. Shakespeare
Foundation, Inc., 108 So. 3d 587 (Fla. 2013), the supreme court
considered this issue in the context of arbitration clauses, noting
that:
A “significant relationship” between a claim and an
arbitration provision does not necessarily exist merely
because the parties in the dispute have a contractual
relationship. Rather, a significant relationship is
described to exist between an arbitration provision and a
claim if there is a “contractual nexus” between the claim
and the contract. A contractual nexus exists between a
claim and a contract if the claim presents circumstances
in which the resolution of the disputed issue requires
either reference to, or construction of, a portion of the
contract. More specifically, a claim has a nexus to a
contract and arises from the terms of the contract if it
emanates from an inimitable duty created by the parties’
unique contractual relationship. In contrast, a claim does
not have a nexus to a contract if it pertains to the breach
of a duty otherwise imposed by law or in recognition of
public policy, such as a duty under the general common
law owed not only to the contracting parties but also to
third parties and the public.
Id. at 593 (citations omitted).
Because the trial court never determined whether the breach
of common law fiduciary duty, breach of duty of good faith and
loyalty, unfair competition, intentional interference, and civil
conspiracy claims arose out of or related to the agreements, we
7
conclude we should remand for the trial court’s determination in
the first instance. If the court concludes that any of the above
claims are not significantly related to the 2007 or 2011 agreement,
those claims may proceed below. See Seifert v. U.S. Home Corp.,
750 So. 2d 633, 642 (Fla. 1999) (concluding common law negligence
action did not bear a significant relationship to a contractual
agreement and, therefore, the agreement’s arbitration provision
did not require the tort claim be arbitrated). Any remaining claims
(along with the breach-of-contract claims and declaratory
judgment action) may not.
REVERSED and REMANDED.
WINSOR, J., and BROWN, JOHN T., ASSOCIATE JUDGE, concur;
MAKAR, J., concurs in part and dissents in part with opinion.
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
MAKAR, J., concurring in part, dissenting in part.
I agree with much of the court’s analysis, but I would allow
the trial court to adjudicate ERS’s declaratory judgment claim,
which seeks to determine whether the 2015 agreements govern the
post-employment obligations of Baker and Thornton. See United
Services General Life Co. v. Bauer, 568 So. 2d 1321 (Fla. 2d DCA
1990). If the 2015 agreements supersede their prior agreements,
the forum selection issue becomes academic. Whether the parties
have chosen independently to displace their prior agreements is an
issue separate and apart from issues that might arise from or
relate to those prior agreements. If the parties intended to
abandon or forego their prior agreements, and enter the new ones,
they should have that narrow issue adjudicated where all the
witnesses, evidence, and alleged conduct occurred, which is in
Leon County, rather than in Delaware. Absent the ability to show
that they’ve superseded their prior agreements, or enter a
novation that effectively does so, parties and their potential
assignees become permanently shackled to forum-selection clauses
8
they may no longer desire or intend, resulting in needless and
costly litigation in far-away fora. For these reasons, the trial court
ought to decide this threshold issue in the pending declaratory
judgment claim.
_____________________________
Christopher C. Marquardt of Alston & Bird LLP, Atlanta, Georgia,
and Claire A. Duchemin of Claire A. Duchemin PA, Tallahassee,
for Appellants.
Albert T. Gimbel and Robert J. Telfer III of Messer Caparello PA,
Tallahassee, and John P. Leonard and Alfred R. Brunetti of
McElroy, Deutsch, Mulvaney & Carpenter, LLP, Morristown, New
Jersey, pro hac vice, for Appellee.
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