United States District Court, E.D. Michigan, Southern Division
ORDER DENYING DEFENDANTS' MOTIONS TO
Corbett O'Meara, United States District Judge.
case arises out of a franchise agreement entered into by the
parties. Plaintiff MTR Capital, LLC (“MTR”)
alleges in its complaint that Defendants, LaVida Massage
Franchise Development, Inc. (“LaVida”), Peggy
Davis, and Duane Goodwin, induced MTR to open a franchised
spa through the use of affirmative misrepresentations and
fraudulent omissions. In addition, MTR alleges that
franchisor LaVida breached the Franchise Agreement by failing
to provide support, services and guidance as required. In
lieu of answering the complaint, Defendants filed motions to
dismiss asserting that jurisdiction and venue are
improper in the United States District Court for the Eastern
District of Michigan pursuant to the Franchise
Agreement's forum selection clause. Alternatively,
Defendants argue that that the matter should be dismissed
pursuant to the doctrine of forum non conveniens.
addressing a Rule 12(b)(1) motion to dismiss for lack of
subject matter jurisdiction that attacks the plaintiff's
complaint on its face, a court is required to consider the
allegations of the complaint as true. RMI Titanium Co. v.
Westinghouse Electric Corp., 78 F.3d 1125, 1134 (6th
jurisdiction is properly conferred upon the court through a
forum selection clause is a matter of contract distinct from
the issue of whether venue is proper. Kerobo v.
Southwestern Clan Fuels, Corp., 285 F.3d 531, 535 (6th
defendant invoking forum non conveniens bears a
heavy burden in opposing the plaintiff's chosen forum.
Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping
Corp., 549 U.S. 422, 430 (2007). When the parties have
contractually agreed in advance as to the proper forum for
adjudicating any dispute, that forum selection clause
represents their agreement as to the most proper location for
adjudication of the dispute and “should be ‘given
controlling weight in all but the most exceptional
cases.'” Atl. Marine Const. Co. v. U.S. Dist.
Court for W. Dist. of Texas, 134 S.Ct. 568, 574 (2013)
(quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S.
22, 23 (1988)).
a Florida limited liability company with its principal place
of business in Miami-Dade County, Florida. LaVida is a
Michigan corporation with its principal place of business in
Livingston County, Michigan. Mr. Goodwin is a Master Area
Developer responsible for new franchisees in the southeastern
region of the United States, and is an agent of LaVida who
resides in Georgia. Ms. Davis is the President and CEO for
LaVida and resides in Michigan. The parties are completely
diverse and the amount in controversy is alleged to exceed
$75, 000. Therefore, this court has subject-matter
jurisdiction over the dispute.
is also proper in this court pursuant to 28 U.S.C. §
1391 because one or more defendants reside in this judicial
district and a substantial part of the events or omissions
giving rise to the claim occurred in this judicial district.
Defendants do not disagree that subject-matter jurisdiction
and venue are proper, rather they argue that the parties
contractually agreed to litigate any disputes arising out of
the Franchise Agreement in Livingston County.
case, the Franchise Agreement entered into by the parties,
which was attached to the complaint, contains a clause that
discusses exclusive jurisdiction and forum selection.
Therefore, in order to determine whether this action was
properly brought in the United States District Court for the
Eastern District of Michigan, the court refers to the
parties' agreement. Section XXI provides:
E. Exclusive Venue. Franchisor and Franchisee (and their
respective owners and guarantors, if applicable) each agree
to submit to the exclusive jurisdiction of the state and
federal courts of Michigan with respect to any litigation
pertaining to this Agreement or to any aspect of the business
relationship between the parties, even if additional persons
are named as parties to such litigation (unless the courts of
Michigan would have no jurisdiction over such additional
parties). No action or proceeding involving this Agreement or
any aspect of the relationship between the parties or their
agents or affiliates shall be commenced by any party except
in Livingston County, Michigan, nor shall any such action be
transferred to any other venue. Notwithstanding the
foregoing, if we are permitted to seek injunctive relief
under this Agreement, we may, at our option, bring such
action in the county in which any of the Centers is located.
Michigan, the interpretation of a contract is a matter of
law. Davis v. LaFontaine Motors, Inc., 271 Mich.App.
68, 73 (2006). A contract is to be construed based on is
plain and ordinary meaning. Wilie v. Auto-Owners Ins.
Co., 469 Mich. 41, 47 (2003). If a contract is
unambiguous, it reflects the parties' intent as a matter
of law and must be enforced as written. Holland v.
Trinity Health Care Corp., 287 Mich.App. 524
(2010). Courts must avoid an interpretation that would render
any part of a contract surplusage or nugatory. Lapp v.
United Ins. Group Agency, Inc., 468 Mich. 459
first sentence of the forum selection clause addresses
jurisdiction: the parties “agree to submit to the
exclusive jurisdiction of the state and federal courts of
Michigan.” The agreement does not merely allow the
parties to submit their case to a court of Michigan, but
rather requires the parties to do so. Furthermore, the use of
the conjunction “and” preceding “federal
courts of Michigan” denotes “in addition
to” rather than “as an alternative to.”
That is, the parties agreed that any litigation pertaining to
the Franchise Agreement would have jurisdiction in the state
and federal courts of Michigan. The second sentence of
Section XXI(E) addresses venue and provides that “[n]o
action or proceeding involving this Agreement or any aspect
of the relationship between the parties . . . shall be
commenced by any party except in Livingston County, Michigan,
nor shall any such action be transferred to any other
venue.” Defendants argue that the plain and ordinary
language of the word “commence” is to begin, and
in the case of litigation it means to file a complaint.
Therefore, defendant contends that the sentence means that
plaintiff's complaint had to be filed in Livingston
County rather than in Wayne County, where this federal court
sentence does not state where the court must be physically
located, only that the action be commenced in Livingston
County. Plaintiff argues the sentence should be construed as
setting forth a geographic region of all available courts
whose territorial limitations include Livingston County.
Indeed, if one were to commence an action in state court in
Livingston County, one would do so in the Livingston County
Circuit Court. Similarly, if one were to commence an action
in federal court in Livingston County, one would do so in the