Dayton Outpatient Ctr., Inc. v. OMRI of Pensacola, Inc. ( 2014 )

[Cite as Dayton Outpatient Ctr., Inc. v. OMRI of Pensacola, Inc., 2014-Ohio-4105.]
IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO
DAYTON OUTPATIENT CENTER, INC. :
Plaintiff-Appellant : C.A. CASE NO. 26169
v. : T.C. NO. 14CV103
OMRI OF PENSACOLA, INC., et al. : (Civil appeal from
Common Pleas Court)
Defendants-Appellees :
:
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OPINION
Rendered on the 19th day of September , 2014.
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MATTHEW D. DiCICCO, Atty. Reg. No. 0072889, Fifth Third Center, 1 S. Main Street,
Suite 1800, Dayton, Ohio 45402
Attorney for Plaintiff-Appellant
R. MARK HENRY, Atty. Reg. No. 0062546, 130 W. Second Street, Suite 1818, Dayton,
Ohio 45402
Attorney for Defendants-Appellees
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DONOVAN, J.
{¶ 1} This matter is before the Court on the Notice of Appeal of the Dayton
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Outpatient Center, Inc. (“DOC”). DOC appeals from the trial court’s March 13, 2014
“Decision, Order and Entry Sustaining Defendants’ Motion to Transfer Venue.” We hereby
affirm the judgment of the trial court.
{¶ 2} On January 8, 2014, DOC filed a complaint against OMRI of Pensacola,
Inc., and OMRI, Inc. (together, “OMRI”), asserting claims of negligence/negligence per se,
fraud/fraud in the inducement, and punitive damages. According to DOC, OMRI installed a
high field open MRI machine at DOC’s facility in the fall of 2013. DOC’s complaint alleges
that after the installation, the “ * * * open MRI machine was damaged when components of
the machine ruptured,” allegedly due to OMRI’s “failure to follow the manufacturer’s
installation directions, thereby causing an error in the installation of the cooling lines of the
machine.” DOC further alleges that OMRI “made material representations that they
possessed the education, training, experience, expertise and skill to competently and
properly install” the MRI machine, and that DOC relied upon those representations. DOC
alleges that OMRI’s representations were false.
{¶ 3} On February 13, 2014, OMRI filed “Defendant’s Motion to Transfer
Venue,” in which it asserted that “as a matter of Ohio law, the parties’ contract clearly
governs the subject matter of this dispute and includes a forum selection clause mandating
the agreed venue for hearing it - Escambia County, Florida. As a result, the Court should
stay this action pending its transfer under Ohio Civ.R. 3(D).” Attached to the motion is the
parties’ June 10, 2013 “Agreement to Complete Installation of MRI Scanner.”
(“Agreement”).
{¶ 4} The Agreement provides in relevant part as follows:
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***
2. Scope of Installation and Installation Price * * * Both OMRI and
[DOC] agree that the MRI unit will be installed in a good and workmanlike
manner, in accordance with the applicable standard of industry practice. * * * .
***
8. Choice of forum Both OMRI and [DOC] agree that any legal
proceeding brought to enforce any provision of this Agreement must be filed in a
court of competent jurisdiction located in Escambia[] County, Florida.
9. Choice of Law This Agreement shall be construed, interpreted and
applied in accordance with the laws of the State of Florida.
* * *.
{¶ 5} On February 27, 2014, DOC opposed OMRI’s motion, asserting that the forum
selection clause in the Agreement “is permissive and not mandatory. Although the forum
selection clause authorizes jurisdiction in Escambia, Florida, the forum selection clause does not
prohibit litigation elsewhere. Additionally, the allegations unquestionably demonstrate that no
part of the action occurred in Escambia, Florida and instead transpired in Montgomery County,
Ohio.” On March 7, 2014, OMRI filed a reply, asserting that the forum selection clause in the
Agreement is not permissive, and that the “Ohio Supreme Court has made it clear that a valid
forum selection clause is not invalidated by the sort of factors which would otherwise determine
proper venue in the absence of such a clause. [DOC] has made no showing of fraud in how the
parties reached the Agreement, nor has it demonstrated that enforcement of the clause would
deprive [DOC] of its day in court.”
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{¶ 6} In its decision sustaining OMRI’s motion, the trial court concluded as follows:
Initially, the court finds that Montgomery County, Ohio is a proper venue
for this suit under Civ.R. 3(B), as it is undisputed that Montgomery County, Ohio
is the county in which [OMRI] conducted the installation activity pursuant to the
Agreement that gave rise to this action. Nevertheless, [OMRI] assert[s] that the
parties agreed to a different venue for any action arising from the Agreement, and,
thus, at issue herein is the language within the forum selection clause of that
Agreement. Here, the subject forum selection clause is within a commercial
contract executed between business entities, namely [DOC] and [OMRI],and
agreed upon apparently without fraud or overreaching. Unlike the forum
selection clause in EI UK Holdings, Inc. [v. Cinergy UK, Inc., 9th Dist. Summit
No. 22326, 2005-Ohio-1271], the clause cited by [OMRI] in this case specifically
references venue, contains words of exclusivity, and prohibits suit elsewhere by
stating that any legal proceeding arising from the Agreement must be filed in a
court of competent jurisdiction located in Escambia County, Florida. Thus, the
court finds that the language of the subject clause is mandatory by using the
words, “must be filed”; the plain language of the clause requires jurisdiction and
venue in a court of competent jurisdiction in Escambia County, Florida; and the
clause clearly displays the intent of the contracting parties to choose a particular
forum, namely a court in Escambia County, Florida, to the exclusion of all others
by stating that any proceeding “must be filed” there. Moreover, the court finds
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that, in reading the Agreement in its entirety, it was the parties’ intention that any
claims arising from the Agreement were to be filed in Escambia County, Florida,
and that the Agreement was to be construed, interpreted, and applied in
accordance with the laws in the State of Florida. The court further finds that the
subject clause is valid and enforceable and fails to find that enforcement of the
clause would be unreasonable or unjust under the circumstances. Although
[DOC] knew that the MRI machine would be located and maintained in
Montgomery County, Ohio, [DOC] nevertheless agreed to the terms of the
Agreement, including the forum selection clause. Therefore, [OMRI’s] Motion to
Transfer Venue is SUSTAINED, and this action is STAYED until the court
receives notice by affidavit that Plaintiff has recommenced the action in the
out-of-state forum within sixty days after the effective date of the order staying
this action. If [DOC] fails to recommence the action in the out-of-state forum
within the sixty day period, the court shall dismiss the action without prejudice.
{¶ 7} We initially note that in its brief, DOC erroneously identifies itself as the
Appellee herein. DOC asserts one assignment of error as follows:
“THE TRIAL COURT ERRED IN HOLDING THAT THE FORUM SELECTION
CLAUSE IS MANDATORY.”
{¶ 8} As noted by the Eighth District:
The enforceability of a forum-selection clause is a question of law that we
review de novo. Baker v. LeBoeuf, Lamb, Leiby & Macrae (C.A.6, 1997), 105
F.3d 1102, 1104, citing Shell v. R.W. Sturge, Ltd. (C.A.6, 1995), 55 F.3d 1227.
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The party challenging the forum-selection clause bears a heavy burden of
establishing that it should not be enforced. Discount Bridal Serv., Inc. v. Kovacs
(1998), 127 Ohio App.3d 373, 376-377, 713 N.E.2d 30, citing The Bremen v.
Zapata Off-Shore Co. (1972), 407 U.S. 1, 9-12, 92 S.Ct. 1907, 32 L.Ed.2d 513,
Barrett v. Picker Internatl. (1990), 68 Ohio App.3d 820, 589 N.E.2d 1372.
Original Pizza Pan v. CWC Sports Group, Inc., 194 Ohio App.3d 50,
2011-Ohio-1684, 954 N.E.2d 1220, ¶ 10 (8th Dist.).
{¶ 9} Civ.R. 3(B) provides in part:
Any action may be venued, commenced, and decided in any court in any
county. When applied to county and municipal courts, “county,” as used in this
rule, shall be construed, where appropriate, as the territorial limits of those courts.
Proper venue lies in any one or more of the following counties:
***
(3) A county in which the defendant conducted activity that gave rise to the
claim for relief;
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(6) The county in which all or part of the claim for relief arose;
{¶ 10} Civ.R. 3(D) provides:
When a court, upon motion of any party or upon its own motion,
determines: (1) that the county in which the action is brought is not a proper
forum; (2) that there is no other proper forum for trial within this state; and (3)
that there exists a proper forum for trial in another jurisdiction outside this state,
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the court shall stay the action upon condition that all defendants consent to the
jurisdiction, waive venue, and agree that the date of commencement of the action
in Ohio shall be the date of commencement for the application of the statute of
limitations to the action in that forum in another jurisdiction which the court
deems to be the proper forum. If all defendants agree to the conditions, the court
shall not dismiss the action, but the action shall be stayed until the court receives
notice by affidavit that plaintiff has recommenced the action in the out-of-state
forum within sixty days after the effective date of the order staying the original
action. If the plaintiff fails to recommence the action in the out-of-state forum
within the sixty day period, the court shall dismiss the action without prejudice. If
all defendants do not agree to or comply with the conditions, the court shall hear
the action.
***
{¶ 11} Regarding the forum selection clause at issue herein, as noted by the Ninth
District:
The Supreme Court of Ohio has concluded that a forum selection clause
contained in a commercial contract between business entities will be deemed valid
and enforceable absent fraud or overreaching, unless it can be demonstrated that
enforcement of the clause would be unreasonable and unjust. Preferred Capital,
Inc. v. Sturgil, 9th Dist. No. 21787, 2004-Ohio-4453, at ¶ 23, citing Kennecorp
Mtge. Brokers, Inc. v. Country Club Convalescent Hosp., Inc. (1993), 66 Ohio
St.3d 173, 610 N.E.2d 987, syllabus. EI UK Holding, Inc., ¶ 15.
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{¶ 12} DOC asserts that the Agreement “specifically references venue,” but it “does not
contain words of exclusivity and does not specifically prohibit lawsuits elsewhere. Therefore,
this is not mandatory merely because it contains a venue provision.”
{¶ 13} As this Court has previously noted:
The answer to a question about what specific contract language means lies
in the contracting parties' intent - what did they intend the language to mean? It is
the court's task to determine the parties' intended meaning. St. Marys v. Auglaize
Cty. Bd. of Commrs., 115 Ohio St.3d 387, 2007-Ohio-5026, 875 N.E.2d 561, ¶ 18
(“The role of courts in examining contracts is to ascertain the intent of the
parties.” (Citation omitted.)). The search for the parties' intended meaning begins
with the contract itself. Their intent is presumed to reside in the language they
used. Graham v. Drydock Coal Co., 76 Ohio St.3d 311, 313, 667 N.E.2d 949(1996); Blair v. McDonagh, 177 Ohio App.3d 262, 2008-Ohio-3698, 894 N.E.2d
377, ¶ 49 (1st Dist.) (“In the construction of a written instrument, a court's primary
objective is to give effect to the parties' intent, which can be found in the language
they chose to employ.”).
A stumbling block in the search for intended meaning is ambiguity.
“Contractual language is ambiguous ‘ * * * where its meaning cannot be
determined from the four corners of the agreement or where the language is
susceptible of two or more reasonable interpretations.’” Savedoff v. Access
Group, Inc., 524 F.3d 754, 763 (6th Cir.2008), quoting Covington v. Lucia, 151
Ohio App.3d 409, 784 N.E.2d 186 (10th Dist.2003). But there is no ambiguity if
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the subject language's meaning can be determined by considering the language in
the context of other contractual language. See id. (“In determining whether
contractual language is ambiguous, the contract ‘must be construed as a whole’ *
* *.”), quoting Tri-State Group, Inc. v. Ohio Edison Co., 151 Ohio App.3d 1,
2002-Ohio-7297, 782 N.E.2d 1240, ¶ 38 (7th Dist.). Often, the intended meaning
of a word or phrase may be clear when that word or phrase is considered in the
context of other words or phrases in the contract. See 18 Ohio Jurisprudence 3d,
Contracts, Section 123 (2012) (“A term that would otherwise cause ambiguity can
be construed in the context of other terms in the contract to resolve the
ambiguity.”), citing Seringetti Const. Co. v. City of Cincinnati, 51 Ohio App.3d 1,
553 N.E.2d 1371 (1st Dist.1988). Thus the intended meaning of any part of the
parties' contract should be determined in light of the whole contract. Foster
Wheeler Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth., 78 Ohio
St.3d 353, 361, 678 N.E.2d 519 (1997) (“The court should read the contract as a
whole and gather the intent of each part from the whole.”).
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Ohio's rules of contract construction raise the presumption that the parties'
intended their forum-selection clause to be permissive unless there is “‘some
further language indicating the parties' intent to make jurisdiction exclusive.’” EI
UK Holdings, Inc. v. Cinergy UK, Inc., 9th Dist. Summit No. 22326,
2005-Ohio-1271, 2005 WL 662921, ¶ 21, quoting John Boutari & Son Wines &
Spirits, S.A. v. Attiki Importers & Dist. Inc., 22 F.3d 51, 52 (2d Cir.1994). EnQuip
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Technologies Group v. Tycon Technoglass, 2012-Ohio-6181, 986 N.E.2d 469, ¶
15-17 (2d Dist.).
{¶ 14} In EnQuip Technologies Group, this Court noted that a “permissive clause means
simply that the parties have waived any right to object to the exercise of personal jurisdiction by
the identified court. Valmac Indus., Inc. v. Ecotech Machinery, Inc., 137 Ohio App.3d 408, 413,
738 N.E.2d 873 (2d Dist.2000). It does not mean that they waived their right to commence an
action in another court that has jurisdiction. Id.” Id., ¶ 14. In contrast, an “exclusive
forum-selection clause means that the identified court is the only court with jurisdiction - the
parties must commence any action in the identified court.” Id.
{¶ 15} In EI UK Holding, Inc., the Ninth District found the following forum selection
clause to be permissive:
“11.10 Jurisdiction; Venue; Waiver of Jury Trial
“(a) Each of the Parties hereby irrevocably and unconditionally submits to
the non-exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or for the recognition or enforcement of any judgment, and hereby
irrevocably and unconditionally agrees that all claims in respect of any such action
or proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each Party agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other matter
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provided by law.
“(b) Each of the Parties hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it may
now or thereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court. Each Party hereby irrevocably waives, to the fullest extent permitted by law,
the defense of any inconvenient forum to the maintenance of such action or
proceeding in any such court.” Id., ¶ 4. (Emphasis added).
The Agreement at issue further specified that it was to be governed by the laws of the State of
New York. Id.
{¶ 16} It was significant to the Ninth District that the “clause provides no reference
whatsoever to venue,” that the clause “does not contain any language to indicate an intent on
behalf of the parties to make jurisdiction exclusive; rather, the clause explicitly provides just the
opposite,” and that the clause “does not contain any language that indicates that a suit elsewhere
is forbidden.” Id., ¶ 22.
{¶ 17} In Valmac Indus., this Court construed the following clause on a sales invoice:
“‘For all disputes or controversies which may arise in connection with this Contract, the parties
hereby consent to the jurisdiction and venue of the Courts of the State of Georgia, and of the
Federal Court sitting in the State of Georgia.’” Id., 411. This Court concluded that the “clause
plainly waives any right that either party has to object to personal jurisdiction in Georgia. It does
not, however, clearly provide that they also waived their right to commence an action on the
contract in Ohio, if Ohio has jurisdiction. Because the clause is ambiguous in that regard, the
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intent of the parties in that respect must be determined by a trier of fact. Lelux v. Chernick
(1997), 119 Ohio App.3d 6, 694 N.E.2d 471.” Id., 413.
{¶ 18} We agree with the trial court that, pursuant to Civ.R. 3(B), Montgomery County
is a proper venue for this matter, since OMRI installed the MRI machine pursuant to the
Agreement in Montgomery County. The forum selection clause, however, as the trial court
stated, “specifically references venue, contains words of exclusivity, and prohibits suit elsewhere
by stating that [both OMRI and DOC agree that] any legal proceeding arising from the
Agreement must be filed in a court of competent jurisdiction located in Escambia County,
Florida.” In other words, the intent of the parties is clear, and the clause is neither ambiguous nor
permissive, but rather it is mandatory. This conclusion is supported by further considering the
forum selection clause in the context of other contractual language, namely the choice of law
clause, which provides that the Agreement “shall be construed, interpreted and applied in
accordance with the laws of the State of Florida.” DOC acknowledges in its brief that the parties
“agreed to the forum selection clause in the Agreement,” and since it is valid and enforceable,
DOC’s sole assigned error lacks merit and is overruled. The judgment of the trial court is
affirmed.
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FROELICH, P.J. and WELBAUM, J., concur.
Copies mailed to:
Matthew D. DiCicco
R. Mark Henry
Hon. Mary Katherine Huffman
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