One on One Basketball, Inc. v. Global Payments Direct, Inc.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ONE ON ONE BASKETBALL, INC.,
Plaintiff,
v. Civil Action No. 13-2020 (CKK)
GLOBAL PAYMENTS DIRECT, INC.,
Defendant.
MEMORANDUM OPINION
(April 23, 2014)
Plaintiff One on One Basketball, Inc. brings this action against Defendant Global
Payments Direct, Inc. 1 alleging breach of contract, breach of implied contract, and negligence.
Presently before the Court is Defendant’s [9] Motion to Transfer and Partial Motion to Dismiss
for Failure to State a Claim Upon Which Relief Can be Granted. Upon consideration of the
parties’ submissions, 2 the applicable authorities, and the entire record, the Court shall GRANT
IN PART Defendant’s motion. Accordingly, this action is transferred to the United States
District Court for the Northern District of Georgia. The Court does not address the portion of
Defendant’s motion seeking dismissal of Plaintiff’s negligence claim, leaving a decision on this
1
The case caption in Plaintiff’s Complaint incorrectly identifies Defendant as Global
Payment Direct, Inc. Subsequent filings in this case from both parties make clear that Defendant
is named Global Payments Direct, Inc.
2
While the Court renders its decision on the record as a whole, its consideration has
focused on the following documents: Complaint, ECF No. [1] (“Compl.”); Def.’s Mot. to
Transfer and Partial Mot. to Dismiss for Failure to State a Claim Upon Which Relief Can be
Granted, ECF No. [9] (“Def.’s Mot.”); Pl.’s Resp. to Def.’s Mot. to Transfer and Partial Mot. to
Dismiss, ECF No. [12] (“Pl.’s Opp’n”); Def.’s Reply Brief in Supp. of its Mot. to Transfer and
Partial Mot. to Dismiss, ECF No. [13] (“Def.’s Reply”). In an exercise of its discretion, the
Court finds that holding oral argument on the instant motion would not be of assistance in
rendering a decision. See LCvR 7(f).
issue to the court to which this case is transferred.
I. BACKGROUND
A. Factual Background
Plaintiff One on One Basketball, Inc. is a District of Columbia corporation that provides
basketball training services. Compl. ¶¶ 1-2. Although Plaintiff is headquartered in Washington,
D.C., it also has eight regional offices throughout the country. Id. ¶ 3. Each office has its own
bank account into which funds are deposited. Id. ¶ 8. The regional offices provide a percentage
of their income to the D.C. headquarters. Id. ¶ 9. In 2007, each of Plaintiff’s offices began
accepting credit card transactions and processing these transactions through the D.C.
headquarters. Id. ¶¶ 10, 12.
Defendant Global Payments Direct, Inc. is a Georgia corporation which processes
electronic transactions, including credit card transactions for merchants, multinational
corporations, financial institutions, and consumers to facilitate payment for the purchase of
goods and services. Id. ¶ 4. According to an affidavit submitted by Plaintiff’s President, Arthur
Jackson, Jackson met Stanley Shields, a representative of Defendant, at a March 2008 conference
on Search Engine Optimization. Pl.’s Opp’n, Ex. 1 (Affidavit of Arthur Jackson) ¶ 3. According
to Jackson, he and Shields discussed a potential credit card payment processing relationship
between Plaintiff and Defendant. Id.
In April 2008, Plaintiff and Defendant entered into an agreement under which Defendant
agreed to process all of Plaintiff’s credit card payments in exchange for a fixed percentage of
these payments. Id. ¶ 4. Jackson’s affidavit states that, after several conversations, on April 14,
2008, Shields sent him the Global Payments Merchant Application (“Merchant Application”).
Id. Shields also apparently provided Jackson with a related document referenced by the
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Merchant Application entitled “Card Services Terms & Conditions.” 3 In his affidavit, Jackson
states he signed page three of the Merchant Application under the section “Personal Guaranty.”
Id. ¶ 4. He then returned the Merchant Application along with a copy of the Card Services
Terms & Conditions to Shields. Id. The signed section of the Merchant Application provided by
Jackson reads, in relevant part: “I/We have read, understand, and agree to be bound by the Card
Services Terms & Conditions provided to Merchant and those terms and conditions contained in
this Merchant Application.” Id., Ex. A at 3. Although Jackson acknowledges his signature on
this document in his affidavit, in its Complaint, Plaintiff characterizes its relationship with
Defendant as an oral contract arising out of conversations between Jackson and Shields under
which Defendant agreed to process Plaintiff’s credit card transactions in exchange for a fixed
percentage of the payments. Compl. ¶ 13. Jackson’s affidavit also refers to his April 14, 2008
“oral agreement” with Shields. Pl.’s Opp’n, Ex. 1 ¶ 4.
As relevant here, the Card Services Terms & Conditions mentioned in the Merchant
Application contains the following forum-selection clause: “Global, Member, and Merchant
agree that all actions arising out, relating to, or in connection with (a) this Card Services
Agreement, (b) the relationships which result from this Card Services Agreement, or (c) the
validity, scope, interpretation, or enforceability of the choice of law and venue provisions of the
Card Services Agreement shall be brought in either the courts of the State of Georgia sitting in
Fulton County or the United States District Court for the Northern District of Georgia, and
3
As an exhibit to his affidavit, Jackson attaches the materials he returned by fax to
Shields, which include a copy of the Card Services Terms & Conditions. Id., Ex. A (Jackson Fax
Documents). Therefore, the Court understands that Jackson both received a copy of the Card
Services Terms & Conditions and returned these materials to Shields along with a signed copy of
the Merchant Application.
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expressly agree to the exclusive jurisdiction of such courts.” 4 Pl.’s Opp’n, Ex. 1, Ex. A at 8. In
addition, this document also contains the following language addressing choice of law in
disputes arising under the agreement: “Global, Member, and Merchant agree that any and all
disputes or controversies of any nature whatsoever (whether in contract, tort, or otherwise)
arising out, relating to, or in connection with (a) this Card Services Agreement, (b) the
relationships which result from this Card Services Agreement, or (c) the validity, scope,
interpretation or enforceability of the choice of law and venue provisions of this Card Services
Agreement, shall be governed by the laws of the State of Georgia, notwithstanding any conflicts
of laws rules . . . .” Id. Finally, the Card Services Terms and Conditions also contains a Merger
Clause consisting of the following: “This Card Services Agreement, including these Card
Services Terms & Conditions and the Merchant Application, constitutes the entire agreement
between Merchant, Global Direct, and Member and supersedes all prior memoranda or
agreements relating thereto, whether oral or in writing.” Id. at 9.
Defendant began processing Plaintiff’s credit card payments in May 2008. Compl. ¶ 15.
According to Plaintiff, in June 2012, it discovered that its customers’ American Express credit
card payments were not being deposited into its bank accounts, but rather had been misdirected
to another client of Defendant due to a switched account number. Id. ¶¶ 18-19. Plaintiff alleges
that due to Defendant’s misallocation of funds, Plaintiff has been deprived of more than
$400,000 of its revenue. Id. ¶ 21.
B. Procedural History
Plaintiff filed suit in this Court on December 19, 2013, asserting three claims: (1) Breach
4
The Card Services Terms & Conditions explains that the “Card Services Agreement”
consists of the Card Services Terms & Conditions and the Merchant Application. Pl.’s Opp’n,
Ex. 1, Ex. A at 5.
4
of Contract, (2) Breach of Implied Contract, and (3) Negligence. Id. ¶¶ 26-33. On February 12,
2014, Defendant filed the present Motion to Transfer, and Partial Motion to Dismiss for Failure
to State a Claim Upon Which Relief Can Be Granted. Pursuant to 28 U.S.C. § 1404(a) and the
forum-selection clause contained in the Card Services Terms & Conditions, Defendant seeks the
transfer of this action to the United States District Court for the Northern District of Georgia.
Defendant also requests that the Court dismiss Plaintiff’s negligence claim pursuant to Rule
12(b)(6). Plaintiff subsequently filed its opposition and Defendant filed its reply. Accordingly,
Defendant’s motion is now ripe for review.
II. LEGAL STANDARD
Under 28 U.S.C. § 1404(a), “for the convenience of parties and witnesses, in the interest
of justice, a district court may transfer any civil action to any other district or division where it
might have been brought . . . .” A party seeking transfer pursuant to § 1404(a) bears the burden
of establishing that transfer is proper. S. Utah Wilderness Alliance v. Lewis, 845 F. Supp. 2d 231,
234 (D.D.C. 2012). In addition, when evaluating motions to transfer under § 1404(a), a court
should only consider undisputed facts supported by affidavits, depositions, stipulations, or other
relevant documents. See Bederson v. United States, 756 F. Supp. 2d 38, 50 n. 6 (D.D.C. 2010)
(citing Midwest Precision Servs. Inc. v. PTM Indus. Corp., 574 F. Supp. 657, 659 (N.D. Ill.
1983)); Cooper v. Farmers New Century Ins. Co., 593 F. Supp. 2d 14, 18-19 (D.D.C. 2008).
In considering whether transfer would be proper, the court ordinarily considers the
following factors:
(1) the plaintiffs’ choice of forum, unless the balance of convenience is strongly
in favor of the defendants; (2) the defendants’ choice of forum; (3) whether the
claim arose elsewhere; (4) the convenience of the parties; (5) the convenience of
the witnesses of the plaintiff and defendant, but only to the extent that the
witnesses may actually be unavailable for trial in one of the fora; and (6) the ease
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of access to sources of proof.
Greater Yellowstone Coalition v. Bosworth, 180 F. Supp. 2d 124, 127 (D.D.C. 2001). The Court
may also weigh public interest considerations such as (1) the transferee court’s familiarity with
the governing laws and the pendency of the related actions in the transferee’s forum; (2) the
relative congestion of the calendars of the potential transferee and transferor courts; and (3) the
local interest in deciding local controversies at home. Id. at 128.
However, the presence of a valid forum-selection clause substantially changes the
analysis under § 1404(a). As the Supreme Court recently clarified, §1404(a) “provides a
mechanism for enforcement of forum-selection clauses that point to a particular federal district.”
Atl. Marine Constr. Co. v. U.S. Dist. Court for the W. Dist. of Tex., 134 S. Ct. 568, 579 (2013).
And as the Court stated, “[w]hen the parties have agreed to a valid forum-selection clause, a
district court should ordinarily transfer the case to the forum specified in that clause.” Id. at 581.
In this context, “the plaintiff’s choice of forum merits no weight.” Id. “[W]hen a plaintiff agrees
by contract to bring suit only in a specified forum – presumably in exchange for other binding
promises by the defendant – the plaintiff has effectively exercised its ‘venue privilege’ before a
dispute arises.” Id. at 582. Furthermore, “a court evaluating a defendant’s § 1404(a) motion to
transfer based on a forum-selection clause should not consider arguments about the parties’
private interests” because “[w]hen the parties agree to a forum-selection clause, they waive the
right to challenge the preselected forum as inconvenient or less convenient for themselves or
their witnesses, or for their pursuit of the litigation.” Id. Consequently, when a valid forum-
selection clause is present, “[o]nly under extraordinary circumstances unrelated to the
convenience of the parties should a § 1404(a) motion be denied.” Id. at 581.
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III. DISCUSSION
In seeking a transfer pursuant to §1404(a), Defendant argues that this case should be
transferred to the United States District Court for the Northern District of Georgia based on the
forum-selection clause contained in the Card Services Terms & Conditions. Plaintiff does not
attempt to override this forum-selection clause by pointing to any “extraordinary circumstances
unrelated to the convenience of the parties.” Atl. Marine Constr. Co., 134 S. Ct. at 581. Rather,
Plaintiff argues that the forum-selection clause is inapplicable here, because (1) Jackson’s
signature on portions of the Merchant Application is a forgery, and (2) the parties are bound by
an oral contract, not the written contract represented by the Merchant Application that
incorporates the forum-selection clause. Pl.’s Opp’n at 1-2. Both of these arguments are
unavailing.
First, Plaintiff’s forgery argument is irrelevant to the applicability of the forum-selection
clause. Plaintiff claims portions of the version of the Merchant Application provided by
Defendant as an exhibit to its motion are fraudulent. Id. See also Def.’s Mot, Ex. 1 (Decl. of
Kurt Schaeffer), Ex. A (Merchant Application). Specifically, Plaintiff alleges that Jackson’s
signature on page two of the Merchant Application provided by Defendant is a forgery. In
support of this contention, Plaintiff provides a report from a forensic document examiner stating
that the signature on page two of Defendant’s version does not belong to Jackson. Pl.’s Opp’n,
Ex. 2 (Affidavit of Gideon Epstein), Ex. B (Forensic Handwriting Examination Report) at 5. Yet
Plaintiff does not contest, and indeed Jackson affirmatively states in his affidavit, that he did sign
page three of the Merchant Application, in the section entitled “Personal Guaranty.” Pl.’s Opp’n,
Ex. 1 ¶ 4. As noted, by signing this portion of the document, Jackson, on behalf of Plaintiff,
“agree[d] to be bound by the Card Services Terms & Conditions provided to Merchant and those
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terms and conditions contained in this Merchant Application.” Id., Ex. 1, Ex. A at 3. These
Terms and Conditions contain a forum-selection clause requiring that all actions arising out of
the agreement “be brought in either the courts of the State of Georgia sitting in Fulton County or
the United States District Court for the Northern District of Georgia . . . .” Id. at 8. Defendant’s
alleged forgery of Jackson’s signature on other portions of the document is therefore immaterial
to the application of the Card Services Terms & Conditions and the forum-selection clause
contained therein.
Similarly, the Court is unpersuaded that an oral contract based on the conversations
between Jackson and Shields governs the parties’ relationship and renders the Merchant
Application inapplicable. As noted, when considering motions to transfer under § 1404(a), the
Court must rely on undisputed facts supported by affidavits, depositions, stipulations, or other
relevant documents. See Bederson, 756 F. Supp. 2d at 50 n. 6; Cooper v. Farmers New Century
Ins. Co., 593 F. Supp. 2d at 18-19. Here, the parties agree, and provide supporting evidence to
confirm, that Jackson signed page three of the Merchant Application under the section entitled
“Personal Guaranty.” As discussed, by signing the “Personal Guaranty” portion of the
document, Jackson, on behalf of Plaintiff, “agree[d] to be bound by the Card Services Terms &
Conditions provided to Merchant and those terms and conditions contained in this Merchant
Application.” Pl.’s Opp’n, Ex. 1, Ex. A at 3. The Card Services Terms & Conditions include a
merger clause stating that the written agreement “supersedes all prior memoranda or agreements
relating thereto, whether oral or in writing.” Id. at 9. Accordingly, the undisputed evidence
supports the conclusion that the Merchant Application, and not preceding oral communications,
governs here.
Indeed, it bears noting that Plaintiff’s naked assertion of an oral contract is a legal
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conclusion, not an issue of fact. See Steven R. Perles, P.C. v. Kagy, 473 F.3d 1244, 1254 (D.C.
Cir. 2007) (finding that no oral contract existed “as a matter of law”). Even under the standards
of review most deferential to a plaintiff, the Court is not bound to accept legal conclusions in a
plaintiff’s complaint. See, e.g., Darby v. U.S. Dept. of Energy, 231 F. Supp. 2d 274, 276-77
(D.D.C. 2002) (stating that under a Rule 12(b)(3) motion, “the court accepts the plaintiff’s well-
pled factual allegations regarding venue as true, draws all reasonable inferences from those
allegations in the plaintiff’s favor, and resolves any factual conflicts in the plaintiff’s favor” but
“need not accept the plaintiff’s legal conclusions as true.”). And here, even in the absence of the
merger clause, Plaintiff has failed to establish, as a matter of law, that an oral contract governs its
relationship with Defendant. See New Econ. Capital, LLC v. New Mkts. Capital Group, 881
A.2d 1087, 1094 (D.C. 2005) (party asserting the existence of an oral contract bears the burden
of proving its existence). In order “[t]o create an enforceable oral contract, both parties must
intend to be bound by their oral representations alone.” Perles, 473 F.3d at 1249. Consequently,
“[a]n otherwise valid oral agreement does not constitute a contract if ‘either party knows or has
reason to know that the other party regards the agreement as incomplete and intends that no
obligation shall exist . . . until the whole has been reduced to . . . written form.’” Id. (quoting
RESTATEMENT (SECOND) OF CONTRACTS § 27, cmt. b (1981)).
Here, Jackson states in his affidavit that as part of his oral conversations with Shields,
Shields sent him a copy of the Merchant Application and asked him to sign portions of it. Pl.’s
Opp’n, Ex. 1 ¶ 4. “The fact that the parties contemplated a written agreement suggests that the
parties did not intend to be bound by oral representations alone.” Perles, 473 F.3d at 1250. See
also Jack Baker, Inc. v. Office Space Dev. Corp., 664 A.2d 1236, 1240 (D.C. 1995) (finding no
oral contract where “[i]t was unquestioned that a written contract was contemplated as part of the
9
transaction”); Edmund J. Flynn Co. v. LaVay, 431 A.2d 543, 547 (D.C. 1981) (parties did not
intend to be bound by preliminary oral representations where, inter alia, a “written contract
embodying the completed contract was contemplated”). The Court’s conclusion that no oral
contract exists here is further supported by the large amount of money involved. See Jack Baker,
Inc., 664 A.2d at 1240 (“whether the amount involved is large or small” is one factor to consider
in determining whether the parties entered into an enforceable oral agreement); 1 CORBIN ON
CONTRACTS § 2.9 (“The greater the . . . importance of the transaction, the more likely it is that
the informal communications are intended to be preliminary only.”). In this litigation, Plaintiff is
asserting losses in excess of $400,000 under its contract with Defendant and “[i]t strains
credulity to suggest” that the parties intended several telephone conversations, in the absence of
a written agreement, to give rise to a payment processing relationship involving such large sums
of money. Perles, 473 F.3d at 1251. 5 Therefore, in light of these considerations, even in the
absence of the merger clause, the Court would still not adopt Plaintiff’s legal conclusion that an
oral contract – and not the Merchant Application – governs its relationship with Defendant.
Accordingly, based on the undisputed evidence contained in the parties’ submissions, the
Court finds that the forum-selection clause referenced in the Merchant Application governs.
Plaintiff makes no effort to show why applying this forum-selection clause here would be
inappropriate. Therefore, the Court grants Defendant’s request that this action be transferred to
the United States District Court for the Northern District of Georgia.
In light of the decision to transfer this case, the Court does not address the portion of
5
“Another factor in determining intent to be bound is the parties’ conduct after they reach
an alleged oral agreement.” Perles, 473 F.3d at 1249 (emphasis in original). Here, however, this
factor sheds little light on the existence or absence of an oral contract, as the parties do not point
to post-formation evidence that strongly supports either position and the Court finds none.
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Defendant’s motion seeking dismissal of Plaintiff’s negligence claim. Pursuant to the choice of
law provision in the Merchant Application, this issue depends on questions of Georgia law. Pl.’s
Opp’n, Ex. 1, Ex. A at 8. Accordingly, it is more appropriately resolved by the Georgia district
court than this Court. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n. 6 (1981) (noting
“the interest in having the trial of a diversity case in a forum that is at home with the law that
must govern the action”).
IV. CONCLUSION
For the foregoing reasons, Defendant’s [9] Motion to Transfer and Partial Motion to
Dismiss for Failure to State a Claim Upon Which Relief Can be Granted is GRANTED IN
PART. Specifically, the Court grants Defendant’s request that this action be transferred to the
United States District Court for the Northern District of Georgia. The Court does not address the
portion of Defendant’s motion seeking dismissal of Plaintiff’s negligence claim, as this issue is
more appropriately resolved by the court to which this case is transferred. An appropriate Order
accompanies this Memorandum Opinion.
/s/
COLLEEN KOLLAR-KOTELLY
UNITED STATES DISTRICT JUDGE
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