Dayton Outpatient Ctr., Inc. v. OMRI of Pensacola, Inc.

2014 Ohio 4105

• Court: Ohio Court of Appeals
• Decided: September 19, 2014
• Docket: 26169
• Status: Published

Opinion

[Cite as Dayton Outpatient Ctr., Inc. v. OMRI of Pensacola, Inc., 2014-Ohio-4105.]

IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO

DAYTON OUTPATIENT CENTER, INC. :

Plaintiff-Appellant : C.A. CASE NO. 26169

v. : T.C. NO. 14CV103

OMRI OF PENSACOLA, INC., et al. : (Civil appeal from Common Pleas Court) Defendants-Appellees :

:

..........

OPINION

Rendered on the 19th day of September , 2014.

MATTHEW D. DiCICCO, Atty. Reg. No. 0072889, Fifth Third Center, 1 S. Main Street, Suite 1800, Dayton, Ohio 45402 Attorney for Plaintiff-Appellant

R. MARK HENRY, Atty. Reg. No. 0062546, 130 W. Second Street, Suite 1818, Dayton, Ohio 45402 Attorney for Defendants-Appellees

DONOVAN, J.

{¶ 1} This matter is before the Court on the Notice of Appeal of the Dayton 2

Outpatient Center, Inc. (“DOC”). DOC appeals from the trial court’s March 13, 2014

“Decision, Order and Entry Sustaining Defendants’ Motion to Transfer Venue.” We hereby

affirm the judgment of the trial court.

{¶ 2} On January 8, 2014, DOC filed a complaint against OMRI of Pensacola,

Inc., and OMRI, Inc. (together, “OMRI”), asserting claims of negligence/negligence per se,

fraud/fraud in the inducement, and punitive damages. According to DOC, OMRI installed a

high field open MRI machine at DOC’s facility in the fall of 2013. DOC’s complaint alleges

that after the installation, the “ * * * open MRI machine was damaged when components of

the machine ruptured,” allegedly due to OMRI’s “failure to follow the manufacturer’s

installation directions, thereby causing an error in the installation of the cooling lines of the

machine.” DOC further alleges that OMRI “made material representations that they

possessed the education, training, experience, expertise and skill to competently and

properly install” the MRI machine, and that DOC relied upon those representations. DOC

alleges that OMRI’s representations were false.

{¶ 3} On February 13, 2014, OMRI filed “Defendant’s Motion to Transfer

Venue,” in which it asserted that “as a matter of Ohio law, the parties’ contract clearly

governs the subject matter of this dispute and includes a forum selection clause mandating

the agreed venue for hearing it - Escambia County, Florida. As a result, the Court should

stay this action pending its transfer under Ohio Civ.R. 3(D).” Attached to the motion is the

parties’ June 10, 2013 “Agreement to Complete Installation of MRI Scanner.”

(“Agreement”).

{¶ 4} The Agreement provides in relevant part as follows: 3

***

2. Scope of Installation and Installation Price * * * Both OMRI and

[DOC] agree that the MRI unit will be installed in a good and workmanlike

manner, in accordance with the applicable standard of industry practice. * * * .

8. Choice of forum Both OMRI and [DOC] agree that any legal

proceeding brought to enforce any provision of this Agreement must be filed in a

court of competent jurisdiction located in Escambia[] County, Florida.

9. Choice of Law This Agreement shall be construed, interpreted and

applied in accordance with the laws of the State of Florida.

* * *.

{¶ 5} On February 27, 2014, DOC opposed OMRI’s motion, asserting that the forum

selection clause in the Agreement “is permissive and not mandatory. Although the forum

selection clause authorizes jurisdiction in Escambia, Florida, the forum selection clause does not

prohibit litigation elsewhere. Additionally, the allegations unquestionably demonstrate that no

part of the action occurred in Escambia, Florida and instead transpired in Montgomery County,

Ohio.” On March 7, 2014, OMRI filed a reply, asserting that the forum selection clause in the

Agreement is not permissive, and that the “Ohio Supreme Court has made it clear that a valid

forum selection clause is not invalidated by the sort of factors which would otherwise determine

proper venue in the absence of such a clause. [DOC] has made no showing of fraud in how the

parties reached the Agreement, nor has it demonstrated that enforcement of the clause would

deprive [DOC] of its day in court.” 4

{¶ 6} In its decision sustaining OMRI’s motion, the trial court concluded as follows:

Initially, the court finds that Montgomery County, Ohio is a proper venue

for this suit under Civ.R. 3(B), as it is undisputed that Montgomery County, Ohio

is the county in which [OMRI] conducted the installation activity pursuant to the

Agreement that gave rise to this action. Nevertheless, [OMRI] assert[s] that the

parties agreed to a different venue for any action arising from the Agreement, and,

thus, at issue herein is the language within the forum selection clause of that

Agreement. Here, the subject forum selection clause is within a commercial

contract executed between business entities, namely [DOC] and [OMRI],and

agreed upon apparently without fraud or overreaching. Unlike the forum

selection clause in EI UK Holdings, Inc. [v. Cinergy UK, Inc., 9th Dist. Summit

No. 22326, 2005-Ohio-1271], the clause cited by [OMRI] in this case specifically

references venue, contains words of exclusivity, and prohibits suit elsewhere by

stating that any legal proceeding arising from the Agreement must be filed in a

court of competent jurisdiction located in Escambia County, Florida. Thus, the

court finds that the language of the subject clause is mandatory by using the

words, “must be filed”; the plain language of the clause requires jurisdiction and

venue in a court of competent jurisdiction in Escambia County, Florida; and the

clause clearly displays the intent of the contracting parties to choose a particular

forum, namely a court in Escambia County, Florida, to the exclusion of all others

by stating that any proceeding “must be filed” there. Moreover, the court finds 5

that, in reading the Agreement in its entirety, it was the parties’ intention that any

claims arising from the Agreement were to be filed in Escambia County, Florida,

and that the Agreement was to be construed, interpreted, and applied in

accordance with the laws in the State of Florida. The court further finds that the

subject clause is valid and enforceable and fails to find that enforcement of the

clause would be unreasonable or unjust under the circumstances. Although

[DOC] knew that the MRI machine would be located and maintained in

Montgomery County, Ohio, [DOC] nevertheless agreed to the terms of the

Agreement, including the forum selection clause. Therefore, [OMRI’s] Motion to

Transfer Venue is SUSTAINED, and this action is STAYED until the court

receives notice by affidavit that Plaintiff has recommenced the action in the

out-of-state forum within sixty days after the effective date of the order staying

this action. If [DOC] fails to recommence the action in the out-of-state forum

within the sixty day period, the court shall dismiss the action without prejudice.

{¶ 7} We initially note that in its brief, DOC erroneously identifies itself as the

Appellee herein. DOC asserts one assignment of error as follows:

“THE TRIAL COURT ERRED IN HOLDING THAT THE FORUM SELECTION

CLAUSE IS MANDATORY.”

{¶ 8} As noted by the Eighth District:

The enforceability of a forum-selection clause is a question of law that we

review de novo. Baker v. LeBoeuf, Lamb, Leiby & Macrae (C.A.6, 1997), 105

F.3d 1102, 1104, citing Shell v. R.W. Sturge, Ltd. (C.A.6, 1995), 55 F.3d 1227. 6

The party challenging the forum-selection clause bears a heavy burden of

establishing that it should not be enforced. Discount Bridal Serv., Inc. v. Kovacs

(1998), 127 Ohio App.3d 373, 376-377, 713 N.E.2d 30, citing The Bremen v.

Zapata Off-Shore Co. (1972), 407 U.S. 1, 9-12, 92 S.Ct. 1907, 32 L.Ed.2d 513,

Barrett v. Picker Internatl. (1990), 68 Ohio App.3d 820, 589 N.E.2d 1372.

Original Pizza Pan v. CWC Sports Group, Inc., 194 Ohio App.3d 50,

2011-Ohio-1684, 954 N.E.2d 1220, ¶ 10 (8th Dist.).

{¶ 9} Civ.R. 3(B) provides in part:

Any action may be venued, commenced, and decided in any court in any

county. When applied to county and municipal courts, “county,” as used in this

rule, shall be construed, where appropriate, as the territorial limits of those courts.

Proper venue lies in any one or more of the following counties:

(3) A county in which the defendant conducted activity that gave rise to the

claim for relief;

(6) The county in which all or part of the claim for relief arose;

{¶ 10} Civ.R. 3(D) provides:

When a court, upon motion of any party or upon its own motion,

determines: (1) that the county in which the action is brought is not a proper

forum; (2) that there is no other proper forum for trial within this state; and (3)

that there exists a proper forum for trial in another jurisdiction outside this state, 7

the court shall stay the action upon condition that all defendants consent to the

jurisdiction, waive venue, and agree that the date of commencement of the action

in Ohio shall be the date of commencement for the application of the statute of

limitations to the action in that forum in another jurisdiction which the court

deems to be the proper forum. If all defendants agree to the conditions, the court

shall not dismiss the action, but the action shall be stayed until the court receives

notice by affidavit that plaintiff has recommenced the action in the out-of-state

forum within sixty days after the effective date of the order staying the original

action. If the plaintiff fails to recommence the action in the out-of-state forum

within the sixty day period, the court shall dismiss the action without prejudice. If

all defendants do not agree to or comply with the conditions, the court shall hear

the action.

{¶ 11} Regarding the forum selection clause at issue herein, as noted by the Ninth

District:

The Supreme Court of Ohio has concluded that a forum selection clause

contained in a commercial contract between business entities will be deemed valid

and enforceable absent fraud or overreaching, unless it can be demonstrated that

enforcement of the clause would be unreasonable and unjust. Preferred Capital,

Inc. v. Sturgil, 9th Dist. No. 21787, 2004-Ohio-4453, at ¶ 23, citing Kennecorp

Mtge. Brokers, Inc. v. Country Club Convalescent Hosp., Inc. (1993), 66 Ohio

St.3d 173, 610 N.E.2d 987, syllabus. EI UK Holding, Inc., ¶ 15. 8

{¶ 12} DOC asserts that the Agreement “specifically references venue,” but it “does not

contain words of exclusivity and does not specifically prohibit lawsuits elsewhere. Therefore,

this is not mandatory merely because it contains a venue provision.”

{¶ 13} As this Court has previously noted:

The answer to a question about what specific contract language means lies

in the contracting parties' intent - what did they intend the language to mean? It is

the court's task to determine the parties' intended meaning. St. Marys v. Auglaize

Cty. Bd. of Commrs., 115 Ohio St.3d 387, 2007-Ohio-5026, 875 N.E.2d 561, ¶ 18

(“The role of courts in examining contracts is to ascertain the intent of the

parties.” (Citation omitted.)). The search for the parties' intended meaning begins

with the contract itself. Their intent is presumed to reside in the language they

used. Graham v. Drydock Coal Co., 76 Ohio St.3d 311, 313, 667 N.E.2d 949

(1996); Blair v. McDonagh, 177 Ohio App.3d 262, 2008-Ohio-3698, 894 N.E.2d

377, ¶ 49 (1st Dist.) (“In the construction of a written instrument, a court's primary

objective is to give effect to the parties' intent, which can be found in the language

they chose to employ.”).

A stumbling block in the search for intended meaning is ambiguity.

“Contractual language is ambiguous ‘ * * * where its meaning cannot be

determined from the four corners of the agreement or where the language is

susceptible of two or more reasonable interpretations.’” Savedoff v. Access

Group, Inc., 524 F.3d 754, 763 (6th Cir.2008), quoting Covington v. Lucia, 151

Ohio App.3d 409, 784 N.E.2d 186 (10th Dist.2003). But there is no ambiguity if 9

the subject language's meaning can be determined by considering the language in

the context of other contractual language. See id. (“In determining whether

contractual language is ambiguous, the contract ‘must be construed as a whole’ *

* *.”), quoting Tri-State Group, Inc. v. Ohio Edison Co., 151 Ohio App.3d 1,

2002-Ohio-7297, 782 N.E.2d 1240, ¶ 38 (7th Dist.). Often, the intended meaning

of a word or phrase may be clear when that word or phrase is considered in the

context of other words or phrases in the contract. See 18 Ohio Jurisprudence 3d,

Contracts, Section 123 (2012) (“A term that would otherwise cause ambiguity can

be construed in the context of other terms in the contract to resolve the

ambiguity.”), citing Seringetti Const. Co. v. City of Cincinnati, 51 Ohio App.3d 1,

553 N.E.2d 1371 (1st Dist.1988). Thus the intended meaning of any part of the

parties' contract should be determined in light of the whole contract. Foster

Wheeler Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth., 78 Ohio

St.3d 353, 361, 678 N.E.2d 519 (1997) (“The court should read the contract as a

whole and gather the intent of each part from the whole.”).

Ohio's rules of contract construction raise the presumption that the parties'

intended their forum-selection clause to be permissive unless there is “‘some

further language indicating the parties' intent to make jurisdiction exclusive.’” EI

UK Holdings, Inc. v. Cinergy UK, Inc., 9th Dist. Summit No. 22326,

2005-Ohio-1271, 2005 WL 662921, ¶ 21, quoting John Boutari & Son Wines &

Spirits, S.A. v. Attiki Importers & Dist. Inc., 22 F.3d 51, 52 (2d Cir.1994). EnQuip 10

Technologies Group v. Tycon Technoglass, 2012-Ohio-6181, 986 N.E.2d 469, ¶

15-17 (2d Dist.).

{¶ 14} In EnQuip Technologies Group, this Court noted that a “permissive clause means

simply that the parties have waived any right to object to the exercise of personal jurisdiction by

the identified court. Valmac Indus., Inc. v. Ecotech Machinery, Inc., 137 Ohio App.3d 408, 413,

738 N.E.2d 873 (2d Dist.2000). It does not mean that they waived their right to commence an

action in another court that has jurisdiction. Id.” Id., ¶ 14. In contrast, an “exclusive

forum-selection clause means that the identified court is the only court with jurisdiction - the

parties must commence any action in the identified court.” Id.

{¶ 15} In EI UK Holding, Inc., the Ninth District found the following forum selection

clause to be permissive:

“11.10 Jurisdiction; Venue; Waiver of Jury Trial

“(a) Each of the Parties hereby irrevocably and unconditionally submits to

the non-exclusive jurisdiction of any New York State court or Federal court of the

United States of America sitting in New York City, and any appellate court from

any thereof, in any action or proceeding arising out of or relating to this

Agreement or for the recognition or enforcement of any judgment, and hereby

irrevocably and unconditionally agrees that all claims in respect of any such action

or proceeding may be heard and determined in such New York State or, to the

extent permitted by law, in such Federal court. Each Party agrees that a final

judgment in any such action or proceeding shall be conclusive and may be

enforced in other jurisdictions by suit on the judgment or in any other matter 11

provided by law.

“(b) Each of the Parties hereby irrevocably and unconditionally waives, to

the fullest extent it may legally and effectively do so, any objection which it may

now or thereafter have to the laying of venue of any suit, action or proceeding

arising out of or relating to this Agreement in any New York State or Federal

court. Each Party hereby irrevocably waives, to the fullest extent permitted by law,

the defense of any inconvenient forum to the maintenance of such action or

proceeding in any such court.” Id., ¶ 4. (Emphasis added).

The Agreement at issue further specified that it was to be governed by the laws of the State of

New York. Id.

{¶ 16} It was significant to the Ninth District that the “clause provides no reference

whatsoever to venue,” that the clause “does not contain any language to indicate an intent on

behalf of the parties to make jurisdiction exclusive; rather, the clause explicitly provides just the

opposite,” and that the clause “does not contain any language that indicates that a suit elsewhere

is forbidden.” Id., ¶ 22.

{¶ 17} In Valmac Indus., this Court construed the following clause on a sales invoice:

“‘For all disputes or controversies which may arise in connection with this Contract, the parties

hereby consent to the jurisdiction and venue of the Courts of the State of Georgia, and of the

Federal Court sitting in the State of Georgia.’” Id., 411. This Court concluded that the “clause

plainly waives any right that either party has to object to personal jurisdiction in Georgia. It does

not, however, clearly provide that they also waived their right to commence an action on the

contract in Ohio, if Ohio has jurisdiction. Because the clause is ambiguous in that regard, the 12

intent of the parties in that respect must be determined by a trier of fact. Lelux v. Chernick

(1997), 119 Ohio App.3d 6, 694 N.E.2d 471.” Id., 413.

{¶ 18} We agree with the trial court that, pursuant to Civ.R. 3(B), Montgomery County

is a proper venue for this matter, since OMRI installed the MRI machine pursuant to the

Agreement in Montgomery County. The forum selection clause, however, as the trial court

stated, “specifically references venue, contains words of exclusivity, and prohibits suit elsewhere

by stating that [both OMRI and DOC agree that] any legal proceeding arising from the

Agreement must be filed in a court of competent jurisdiction located in Escambia County,

Florida.” In other words, the intent of the parties is clear, and the clause is neither ambiguous nor

permissive, but rather it is mandatory. This conclusion is supported by further considering the

forum selection clause in the context of other contractual language, namely the choice of law

clause, which provides that the Agreement “shall be construed, interpreted and applied in

accordance with the laws of the State of Florida.” DOC acknowledges in its brief that the parties

“agreed to the forum selection clause in the Agreement,” and since it is valid and enforceable,

DOC’s sole assigned error lacks merit and is overruled. The judgment of the trial court is

affirmed.

FROELICH, P.J. and WELBAUM, J., concur.

Copies mailed to:

Matthew D. DiCicco R. Mark Henry Hon. Mary Katherine Huffman 13