Fornaro v. RMC/Resource Management Co.

Not For Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 04-2622
REX FORNARO,
Plaintiff, Appellant,
v.
RMC/RESOURCE MANAGEMENT COMPANY,
Defendant, Appellee.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge]
Before
Selya, Lynch, and Howard, Circuit Judges.
Rex Fornaro, on brief pro se.
Eugene Sullivan, III, on brief for defendant, appellee.
October 6, 2006
Per Curiam. Rex Fornaro has appealed a district court
judgment dismissing his complaint on the basis of a forum selection
clause in a contract (hereinafter, the "Purchase Agreement"). "We
review a district court's dismissal based on a forum-selection
clause de novo." Silva v. Encyclopedia Britannica, Inc., 239 F.3d
385, 387 (1st Cir. 2001). Upon de novo review, we conclude that
the motion to dismiss was properly granted and we affirm.1
The forum selection clause stated, in relevant part:
Both parties agree that New
Hampshire law should, does, and will
control the interpretation of this
contract. The jurisdiction of any
lawsuits related to or arising out
of this contract will be in the
courts of Carroll County, New
Hampshire.
On appeal, Fornaro argues that the district court mistakenly
construed this forum selection clause as providing for exclusive
jurisdiction in the state courts located in Carroll County, New
Hampshire. However, unlike the example described in Stafford
Tech., Inc. v. Camcar Div. of Textron, Inc., 784 A.2d 1198, 1200-01
(N.H. 2001), on which Fornaro relies, the clause at issue in the
Purchase Agreement was not a simple permissive grant of authority
to the courts of Carroll County. Rather, the clause provided both
jurisdictional authority and venue. It stated that "[t]he
1
Our resolution of this appeal does not require us to resolve
the request of Benjamin C. Riggs, Jr. that a sole proprietorship be
substituted as the appellee.
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jurisdiction of any lawsuits related to or arising out of this
contract will be in the courts of Carroll County, New Hampshire."
(Emphasis added).
In contrast to jurisdictional
authority, forum selection is
necessarily exclusive. In other
words, when parties agree that they
"will submit" their dispute to a
specified forum, they do so to the
exclusion of all other forums.
Summit Packaging Sys. Inc. v. Kenyon & Kenyon, 273 F.3d 9, 13 (1st
Cir. 2001). (This statement was made in a diversity case arising
out of New Hampshire, reviewing an arbitration clause that required
the parties to choose one of the named fora.)
Fornaro raises an additional argument. He argues that
the clause's reference to "courts" in the plural encompasses the
federal district court of New Hampshire because, says Fornaro, that
court "clearly has jurisdiction over matters in Carroll County, New
Hampshire." This is, at best, a strained way to describe the
federal court and one that we do not accept as a reasonable
interpretation. It is far more likely that the parties intended
the phrase "courts of Carroll County, New Hampshire" to mean the
courts that trace their origin to the state, i.e., the Carroll
County, New Hampshire state courts, of which there are the Carroll
County Superior Court and two District Courts (Northern Carroll
County District Court and Southern Carroll County District Court).
See LFC Lessors, Inc. v. Pacific Sewer Maintenance Corp., 739 F.2d
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4, 7 (1st Cir. 1984) (opining that the phrase "courts of
Massachusetts" was more likely to have been intended by the parties
to mean the courts that trace their origin to the state, i.e., the
Massachusetts state courts, rather than a reference to all the
courts physically within the state).
Finally, Fornaro rests on this court's own statement.
"We emphasize, however, that even a mandatory forum-selection
clause does not in fact divest a court of jurisdiction that it
otherwise retains." Silva, 239 F.3d at 388 n.6. But, the cases
cited in the remainder of footnote 6 in Silva actually reinforce
the result in the instant case. The district court was not
divested of its subject matter jurisdiction (based on diversity) as
a result of the forum selection clause. Rather, the forum
selection clause "merely constitutes a stipulation in which the
parties join in asking the court to give effect to their agreement
by declining to exercise its jurisdiction." LFC Lessors, 739 F.2d
at 6. As we stated, "'Exclusive jurisdiction' in this context thus
refers to the intent of the parties rather than the actual power of
the court." Silva, 239 F.3d at 388 n.6. And that, in fact, is
what the district court did in the instant case. It did not
dismiss Fornaro's complaint for lack of subject matter
jurisdiction.2 It declined to exercise jurisdiction and dismissed
2
For this reason, Fornaro's repeated reliance on the
magistrate judge's Order of April 12, 2004 is misplaced. That
Order, issued shortly after the case was filed, simply determined,
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on the basis of the forum selection clause, thus giving effect to
the parties' agreement to litigate their dispute related to or
arising out of the Purchase Agreement in the state courts of
Carroll County, New Hampshire.
The district court judgment entered on October 15, 2004
is affirmed.
based solely on the complaint, that the requisites for diversity
jurisdiction had been alleged, thus establishing, on a preliminary
review, the appearance of subject matter jurisdiction. The
district court's later dismissal based on the forum selection
clause did not conflict with any determination that subject matter
jurisdiction based on diversity existed.
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