FOURTH DIVISION DOYLE, P. J., MCFADDEN and BOGGS, JJ.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/
November 15, 2013
In the Court of Appeals of Georgia A13A1560. AIM DMC ONE, LLC et al. v. THE FRANK GATES DO-080 SERVICE CO., et al.
DOYLE , Presiding Judge.
The trial court dismissed AIM DMC One, LLC’s (“DMC”), AIM Disability
Management and Consulting, Inc.’s (“AIM”), and Mark Easler’s (collectively, “the
plaintiffs”) case against The Frank Gates Service Co., Forte, Inc., and Risk
Management Solutions (collectively, “the defendants”) on the grounds of improper
venue and jurisdiction based on a forum selection clause contained in an employment
agreement between some of the parties. The plaintiffs appeal, arguing that the
defendants waived their venue and jurisdiction defenses by failing to raise them at the
earliest possible opportunity. We agree and reverse, for the reasons that follow. The record reflects that Easler owned AIM and was also a member of DMC,
the purpose of which was to purchase and manage an office condominium complex
in Buckhead. In March 2009, DMC leased property in Buckhead to Forte, Inc., which
allowed The Frank Gates Service Co., to use the property, with the acquiescence of
DMC. According to Easler, he later agreed to sell DMC to The Frank Gates Service
Co., and Forte for $750,0001; the parties agreed that he would stay on as vice-
president, and The Frank Gates Service Co., and Forte would continue to lease the
office space. On April 1, 2009, Easler and Risk Management Solutions (“Risk
Management”)2 entered into an employment agreement, which contained a forum
selection clause providing in relevant part:
Any action arising out of or relating in any way to this Agreement, or Employee’s employment relationship with Company, shall be brought and maintained only in the state and federal courts sitting in Franklin County, Ohio. The parties consent to the exclusive jurisdiction and venue in those courts to the greatest extent possible under law, whether or not either of them is now or hereafter becomes a resident of a different jurisdiction.3
1 There is no signed agreement to this effect in the record. 2 Risk Management and Avizent/Forte appear to be used interchangeably. 3 (Emphasis supplied).
2 The plaintiffs allege that the defendants later terminated Easler without cause,
failed to pay him severance as required under the employment agreement, and
stopped paying rent on the Buckhead commercial property in violation of the lease
agreement. On March 5, 2010, Easler filed two separate actions in Fulton Magistrate
Court against The Frank Gates Service Co., d/b/a Avizent/Forte, one for unpaid rent
and the other for breach of an alleged verbal agreement to pay his phone charges;
Easler brought both actions as “Easler d/b/a DMC,” and neither complaint mentioned
the alleged employment agreement. The Frank Gates Service Co., filed answers and
counterclaims in both cases. In the counterclaims, The Frank Gates Service Co.,
alleged that although the employment agreement provided that customers should have
paid it directly for all goods and services beginning April 1, 2009, customers instead
made payments totaling approximately $64,000 directly to Easler, who refused to
forward the money to The Frank Gates Service Co., resulting in conversion of the
funds. The Frank Gates Service Co., also moved to consolidate the cases and remove
them to superior court, and the magistrate court granted the motions.
On July 28, 2010, Easler filed a motion in the instant case to (1) substitute
DMC as the party plaintiff, (2) add Forte, Inc., as a defendant, and (3) amend the
complaint, and the trial court granted the motion. In the amended complaint, DMC
3 sought only damages for breach of the lease agreement and reimbursement for use of
a cell phone account belonging to DMC. DMC subsequently moved for summary
judgment. The trial court denied DMC’s motion for summary judgment, concluding
that issues of fact remained as to the claims for breach of the lease and for
reimbursement of cell phone charges.
On December 8, 2011, the week before trial, the defendants filed a motion to
amend their counterclaims to add Easler as a counterclaim-defendant. On the day trial
was scheduled to begin, the trial court denied the motion, noting (1) that DMC had
repeatedly argued that the counterclaims were improper against DMC and that Easler
was no longer a party to the action; and (2) that any claims arising out of the
employment agreement were required to be litigated in Ohio. During the course of the
ensuing trial, the trial court granted a mistrial. The trial court then orally granted the
defendants’ motion to amend their counterclaim to add AIM and Easler as parties.
On December 22, 2011, DMC filed a motion for leave of court (1) to add Risk
Management and KRG Capital Partners, LLC, as defendants; and (2) to amend the
complaint, noting therein that the trial court had granted the defendants’ motion to
add Easler and AIM as parties and that the counterclaims asserted against DMC
would “require an analysis and resolution of the terms of the purchase/sale of Mr.
4 Easler’s company, as well as Mr. Easler’s employment with Defendants”; DMC
attached a copy of the employment agreement to the motion as an exhibit. On January
19, 2012, the defendants filed a brief in opposition to DMC’s motion to add party
plaintiffs and to amend the complaint, noting that any claims against Risk
Management arose out of the employment agreement and were therefore required to
be litigated in Ohio pursuant to the forum selection clause. The proposed second
amended complaint included a claim for breach of the employment agreement.4
Thereafter, on June 11, 2012, the defendants filed a motion to dismiss based
on lack of personal jurisdiction and improper venue based on the forum selection
clause contained in the employment agreement. On November 5, 2012, the trial court
granted the defendants’ motion to dismiss, concluding that
the claims in . . . Easler’s original petition, Defendants’ counter-claims[,] and the claims in Plaintiffs’ Second Amended Petition all arise out of or relate to the [employment a]greement. . . . Defendants have not waived the forum selection clause by introducing the employment agreement in their counterclaim because the counterclaim was compulsory. The Court notes that while . . . Easler and AIM, Inc. were added as parties by Defendant[s], this was done after . . . [DMC] was substituted as Plaintiff
4 The second amended complaint was not actually filed. The defendants allege on appeal that in a June 8, 2012 telephone conference, the trial court informed counsel that the amended complaint was to be considered filed.
5 instead of the original Plaintiff, . . . Easler d/b/a AIM. . . . Accordingly, at the time of the answer, Defendant[s were] required to bring any claims [they] had arising out of the same transaction against . . . Easler d/b/a . . . [DMC] or their alter egos.
This appeal followed.
It is undisputed that the forum selection clause is enforceable and applies to the
claims alleged in the plaintiffs’ second amended complaint. The plaintiffs, however,
argue that the defendants waived venue and jurisdiction defenses based on the forum
selection clause. We agree.
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FOURTH DIVISION DOYLE, P. J., MCFADDEN and BOGGS, JJ.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/
November 15, 2013
In the Court of Appeals of Georgia A13A1560. AIM DMC ONE, LLC et al. v. THE FRANK GATES DO-080 SERVICE CO., et al.
DOYLE , Presiding Judge.
The trial court dismissed AIM DMC One, LLC’s (“DMC”), AIM Disability
Management and Consulting, Inc.’s (“AIM”), and Mark Easler’s (collectively, “the
plaintiffs”) case against The Frank Gates Service Co., Forte, Inc., and Risk
Management Solutions (collectively, “the defendants”) on the grounds of improper
venue and jurisdiction based on a forum selection clause contained in an employment
agreement between some of the parties. The plaintiffs appeal, arguing that the
defendants waived their venue and jurisdiction defenses by failing to raise them at the
earliest possible opportunity. We agree and reverse, for the reasons that follow. The record reflects that Easler owned AIM and was also a member of DMC,
the purpose of which was to purchase and manage an office condominium complex
in Buckhead. In March 2009, DMC leased property in Buckhead to Forte, Inc., which
allowed The Frank Gates Service Co., to use the property, with the acquiescence of
DMC. According to Easler, he later agreed to sell DMC to The Frank Gates Service
Co., and Forte for $750,0001; the parties agreed that he would stay on as vice-
president, and The Frank Gates Service Co., and Forte would continue to lease the
office space. On April 1, 2009, Easler and Risk Management Solutions (“Risk
Management”)2 entered into an employment agreement, which contained a forum
selection clause providing in relevant part:
Any action arising out of or relating in any way to this Agreement, or Employee’s employment relationship with Company, shall be brought and maintained only in the state and federal courts sitting in Franklin County, Ohio. The parties consent to the exclusive jurisdiction and venue in those courts to the greatest extent possible under law, whether or not either of them is now or hereafter becomes a resident of a different jurisdiction.3
1 There is no signed agreement to this effect in the record. 2 Risk Management and Avizent/Forte appear to be used interchangeably. 3 (Emphasis supplied).
2 The plaintiffs allege that the defendants later terminated Easler without cause,
failed to pay him severance as required under the employment agreement, and
stopped paying rent on the Buckhead commercial property in violation of the lease
agreement. On March 5, 2010, Easler filed two separate actions in Fulton Magistrate
Court against The Frank Gates Service Co., d/b/a Avizent/Forte, one for unpaid rent
and the other for breach of an alleged verbal agreement to pay his phone charges;
Easler brought both actions as “Easler d/b/a DMC,” and neither complaint mentioned
the alleged employment agreement. The Frank Gates Service Co., filed answers and
counterclaims in both cases. In the counterclaims, The Frank Gates Service Co.,
alleged that although the employment agreement provided that customers should have
paid it directly for all goods and services beginning April 1, 2009, customers instead
made payments totaling approximately $64,000 directly to Easler, who refused to
forward the money to The Frank Gates Service Co., resulting in conversion of the
funds. The Frank Gates Service Co., also moved to consolidate the cases and remove
them to superior court, and the magistrate court granted the motions.
On July 28, 2010, Easler filed a motion in the instant case to (1) substitute
DMC as the party plaintiff, (2) add Forte, Inc., as a defendant, and (3) amend the
complaint, and the trial court granted the motion. In the amended complaint, DMC
3 sought only damages for breach of the lease agreement and reimbursement for use of
a cell phone account belonging to DMC. DMC subsequently moved for summary
judgment. The trial court denied DMC’s motion for summary judgment, concluding
that issues of fact remained as to the claims for breach of the lease and for
reimbursement of cell phone charges.
On December 8, 2011, the week before trial, the defendants filed a motion to
amend their counterclaims to add Easler as a counterclaim-defendant. On the day trial
was scheduled to begin, the trial court denied the motion, noting (1) that DMC had
repeatedly argued that the counterclaims were improper against DMC and that Easler
was no longer a party to the action; and (2) that any claims arising out of the
employment agreement were required to be litigated in Ohio. During the course of the
ensuing trial, the trial court granted a mistrial. The trial court then orally granted the
defendants’ motion to amend their counterclaim to add AIM and Easler as parties.
On December 22, 2011, DMC filed a motion for leave of court (1) to add Risk
Management and KRG Capital Partners, LLC, as defendants; and (2) to amend the
complaint, noting therein that the trial court had granted the defendants’ motion to
add Easler and AIM as parties and that the counterclaims asserted against DMC
would “require an analysis and resolution of the terms of the purchase/sale of Mr.
4 Easler’s company, as well as Mr. Easler’s employment with Defendants”; DMC
attached a copy of the employment agreement to the motion as an exhibit. On January
19, 2012, the defendants filed a brief in opposition to DMC’s motion to add party
plaintiffs and to amend the complaint, noting that any claims against Risk
Management arose out of the employment agreement and were therefore required to
be litigated in Ohio pursuant to the forum selection clause. The proposed second
amended complaint included a claim for breach of the employment agreement.4
Thereafter, on June 11, 2012, the defendants filed a motion to dismiss based
on lack of personal jurisdiction and improper venue based on the forum selection
clause contained in the employment agreement. On November 5, 2012, the trial court
granted the defendants’ motion to dismiss, concluding that
the claims in . . . Easler’s original petition, Defendants’ counter-claims[,] and the claims in Plaintiffs’ Second Amended Petition all arise out of or relate to the [employment a]greement. . . . Defendants have not waived the forum selection clause by introducing the employment agreement in their counterclaim because the counterclaim was compulsory. The Court notes that while . . . Easler and AIM, Inc. were added as parties by Defendant[s], this was done after . . . [DMC] was substituted as Plaintiff
4 The second amended complaint was not actually filed. The defendants allege on appeal that in a June 8, 2012 telephone conference, the trial court informed counsel that the amended complaint was to be considered filed.
5 instead of the original Plaintiff, . . . Easler d/b/a AIM. . . . Accordingly, at the time of the answer, Defendant[s were] required to bring any claims [they] had arising out of the same transaction against . . . Easler d/b/a . . . [DMC] or their alter egos.
This appeal followed.
It is undisputed that the forum selection clause is enforceable and applies to the
claims alleged in the plaintiffs’ second amended complaint. The plaintiffs, however,
argue that the defendants waived venue and jurisdiction defenses based on the forum
selection clause. We agree.
In Georgia, although “forum selection clauses are prima facie valid, such
clauses are essentially no more than contractual provisions, and as such may be
waived.”5 It is well-settled that
personal jurisdiction and venue are generally defenses that may be waived if not raised at the proper time. Although a motion to set aside judgment for lack of jurisdiction may be filed at any time pursuant to OCGA § 9-11-60 (f), a waiver of the defenses of lack of personal jurisdiction and venue occurs under OCGA § 9-11-12 (h) (1) (B) when
5 (Citations omitted.) Euler-Siac S.P.A. v. Drama Marble Co., Inc., 274 Ga. App. 252, 254 (1) (617 SE2d 203) (2005). See also Rice v. Champion Bldgs., Inc., 288 Ga. App. 597, 600 (2) (654 SE2d 390) (2007).
6 a Georgia resident who has received service of process fails to raise these defenses at the earliest opportunity.6
Here, The Frank Gates Service Co. specifically alleged in its April 2010
counterclaims in magistrate court that Easler converted funds that should have been
paid directly to The Frank Gates Service Co., in violation of his employment
agreement. The Frank Gates Service Co., however, failed to assert at that time its
venue and jurisdiction defenses based on the forum selection clause in the
employment agreement. Approximately twenty months later, after DMC was
substituted for Easler as plaintiff, the defendants moved on the eve of the December
2011 trial to amend their counterclaims to add Easler as a counterclaim-defendant;
the trial court denied the motion based in part upon a finding that any claims arising
out of the employment agreement would have to be litigated in Ohio. The trial court
subsequently orally granted the defendants’ motion to amend their counterclaim to
assert claims against Easler immediately following the entry of a mistrial in December
2011. Nevertheless, the defendants did not file a motion to dismiss the case on the
grounds of improper venue and jurisdiction until June 2012. Under these
circumstances, we conclude that the defendants waived their venue and jurisdiction
6 (Citations omitted.) Euler-Siac S.P.A., 274 Ga. App. at 254-255 (1).
7 defenses based on the forum selection clause by failing to raise them at the earliest
opportunity.7
For the foregoing reasons, we reverse the trial court’s dismissal of this case.
Judgment reversed. McFadden and Boggs, JJ., concur.
7 See id. at 255 (1). We reject the defendants’ argument that because The Frank Gates Service Co.’s counterclaims were compulsory, it did not waive the forum selection clause by introducing the employment agreement. Contrary to the defendants’ contention, Antec Corp. v. Popcorn Channel, L.P., 225 Ga. App. 1, 3 (3) (482 SE2d 509) (1997), does not stand for the proposition that a defendants’ assertion of a compulsory counterclaim relieves the defendant of its obligation to raise its venue and jurisdiction defenses in its answer or by motion pursuant to OCGA § 9-11- 12 (b) to avoid waiving them. See Riggio v. Lawson, 204 Ga. App. 774, 775 (1) (420 SE2d 613) (1992) (holding that the assertion of a compulsory counterclaim does not waive defenses of improper venue and lack of personal jurisdiction that were raised in the defendant’s answer). Thus, The Frank Gates Service Co. waived its venue and jurisdiction defenses by failing to assert them in its answer and counterclaim or by motion pursuant to OCGA § 9-11-12 (b). We find no merit in the defendants’ argument that its failure to assert them did not constitute a waiver of the defenses simply because the employment agreement was not at issue once DMC was subsequently substituted as plaintiff for Easler.