Courville Co. v. Coopers & Lybrand

• Court: District Court, D. New Hampshire
• Decided: April 27, 1998
• Docket: CV-97-606-B
• Status: Published

Opinion

Courville Co. v. Coopers & Lybrand CV-97-606-B 04/27/98

UNITED STATE DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

The Courville Company, Inc., et a l .

v. C-97-606-B

Coopers & Lybrand Securities, LLC

MEMORANDUM AND ORDER

The question presented by defendant's motion to dismiss this

diversity-of-citizenship case is whether a forum-selection clause

in the contract on which plaintiffs base their claim is

permissive or mandatory.1

1 The parties overlook two subsidiary issues. First, while defendant characterizes its motion as a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b) (6), a substantial question exists as to whether a mandatory forum- selection clause results in dismissal for failure to state a claim or dismissal for lack of venue. See Northern Laminate Sales, Inc. v. Electra Polymers & Chems., Ltd., No. C-94-598-B, slip op. at 3-6 (D.N.H. Jan. 12, 1996) (copy attached); Trvonics, Inc. v. Hewlett-Packard Co., No. C-95-161-B, slip op. at 3-7 (D.N.H. Apr. 23, 1996) (copy attached). While this distinction may be important in some cases, I would reach the same conclusion in this case under either approach. Accordinqly, I accept the analytical framework suqqested by the parties and analyze the issue under the familiar Rule 12(b) (6) standard. Second, the parties assume that the meaninq of a forum- selection clause in a diversity-of-citizenship case is determined usinq federal common law. I disaqree. I addressed this issue in detail in Trvonics. There, I concluded that state law must be used in interpretinq a forum-selection clause. Trvonics, No. C- 95-161-B, slip op. at 13-16. I also determined that New The choice-of-forum clause at issue in this case provides

that:

The parties hereto submit to the jurisdiction and venue in the Federal and New York State Courts located in the City of New York and waive any right to trial by jury in connection with any dispute, action or proceeding related to their agreement, any Transaction, or any other matters contemplated hereby.

In Dancart Corp. v. St. Albans Rubber Co., 124 N.H. 598

(1984), the New Hampshire Supreme Court was presented with a

choice-of-forum clause providing that: "[t]his Quotation and any

contract arising as a result thereof . . . shall be subject to

the jurisdiction of the English Courts." Id. at 600. Even

though the clause used the mandatory term "shall," the court

determined that the clause was permissive rather than mandatory.

Id. at 604. The case for treating the forum-selection clause at

issue in this case as mandatory is even less compelling. Here,

the clause does not use mandatory language, and defendant does

not point to any extrinsic evidence that would permit, let alone

Hampshire's choice-of-law rules would reguire the use of New Hampshire law to construe a forum-selection clause even when the contract has a choice-of-law clause specifying the use of another state's law. Id. at 16-20. Given this conclusion and the fact that neither side argues that the issue is governed by New York law, I apply New Hampshire law in construing the contract's choice-of-forum clause.

2 require, a finding that the clause is mandatory. See Redondo

Constr. Corp. v. Banco Exterior de Espana, S.A., 11 F.3d 3, 5

(1st Cir. 1993) (agreement stating that parties each "expressly

submit[] to the jurisdiction of all Federal and State courts

located in the State of Florida" is permissive rather than

mandatory). Thus, the only reasonable way to interpret the

clause is to read it as an agreement by the parties that the New

York courts are an acceptable but not required forum for the

litigation of their disputes. Accordingly, I deny the motion to

dismiss (document no. 8).

SO ORDERED.

Paul Barbadoro Chief Judge

April 27, 1998

cc: Glenn R. Milner, Esq. Charles Dougherty, Esq. James Brown, Esq.