Gaskin v. Stumm Handel GmbH

390 F. Supp. 361, 1975 U.S. Dist. LEXIS 13586
CourtDistrict Court, S.D. New York
DecidedFebruary 28, 1975
Docket75 Civ. 161 (JMC)
StatusPublished
Cited by55 cases

This text of 390 F. Supp. 361 (Gaskin v. Stumm Handel GmbH) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gaskin v. Stumm Handel GmbH, 390 F. Supp. 361, 1975 U.S. Dist. LEXIS 13586 (S.D.N.Y. 1975).

Opinion

MEMORANDUM DECISION

CANNELLA, District Judge:

On the instant motion the defendant, Stumm Handel GmbH, seeks the dismissal of this diversity action (originally commenced in the New York Supreme Court, New York County) upon the ground that the contract now in dispute between the parties contains a forum selection clause requiring the litigation of this dispute in the courts of West Germany. This forum selection clause immediately precedes plaintiff’s signature on the involved employment contract and provides that:

Any controversies arising out of this contract shall be settled by means of negotiations with the Management and, if necessary, with the remaining partners.
In case of failure of such negotiations it is agreed that Essen [the Republic of West Germany] shall be the forum to which any controversy must be submitted.

(Contract of August 1973 at ¶lO, as translated.) In addition to seeking the dismissal of this cause for the reason above stated, the defendant also seeks a declaration by this Court that an order of attachment dated October 31, 1974 which was obtained by the plaintiff in the New York Supreme Court prior to the removal of this case is invalid under the provisions of CPLR 6213 and that, pursuant to CPLR 6212(b), it be awarded “all legal costs and damages which [have been] sustained by reason of the attachment,” if we determine “that the plaintiff was not entitled to an attachment of the defendant’s property.” As the Court finds that the forum selection clause contained in the parties’ contract of August 1973 should be enforced, the motion to dismiss is hereby granted. In addition, upon the submission of an appropriate order, we will vacate the order of attachment obtained by plaintiff on October 31, 1974 and award to the defendant such costs and damages as it may be entitled to according to law. 1

A forum selection clause contained in an international agreement of the type now before the Court will be enforced according to its terms when the criteria established by the Supreme Court in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), have been complied with. See also, Scherk v. Alberto-Culver Co., 417 U.S. 506, 518-19, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974); National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 84 S.Ct. 411, 11 L.Ed.2d 354 (1964); Fireman’s Fund American Ins. Companies v. Puerto Rican Forwarding Cos., Inc., 492 F.2d 1294, 1296-97 (1 Cir. 1974); In-Flight Devices Corp. v. Van Dusen Air, Inc., 466 F.2d 220, 234 n. 24 (6 Cir. 1972); National Equipment Rental, Ltd. v. Reagin, 338 F.2d 759 (2 Cir. 1964); Spatz v. Nascone, 364 F.Supp. 967, 974-79 (W.D.Pa.), supplemented, 368 F.Supp. 352, 355-56 (W.D.Pa.1973); Roach v. Hapag-Lloyd, A.G., 358 F.Supp. 481, 483 (N.D.Cal.1973); Restatement (Second) of the Conflict of Laws § 80 (1971); cf., Ringers’ Dutchochs, Inc. v. S.S.S.L. 180, 494 F.2d 678, 681 (2 Cir. 1974). 2 In the *364 Fireman's Fund case, 492 F.2d at 1296-97, the First Circuit summarized the Bremen v. Zapata holding in the following terms:

The normal rule with respect to choice-of-forum clauses is that they should be enforced unless enforcement is shown by the resisting party to be “unreasonable” under the circumstances. (Citations omitted). To establish that a particular choice-of-forum clause is unreasonable, a resisting party must present evidence of fraud, undue influence, overweening bargaining power or such serious inconvenience in litigating in the selected forum that it is effectively deprived of its day in court (citation omitted).

In similar fashion, the New York courts now march to a tune like that played by the Court in Bremen and leave the “enforcement of a forum selection clause to the sound discretion of the court.” Davis v. Pro Basketball, Inc., 381 F.Supp. 1, 3 (S.D.N.Y.1974). Accord, Hodom v. Stearns, 32 A.D.2d 234, 236, 301 N.Y.S. 2d 146, 148 (4th Dept.), appeal dismissed, 25 N.Y.2d 722, 307 N.Y.S.2d 225, 255 N.E.2d 564 (1969); Export Ins. Co. v. Mitsui S.S. Co., 26 A.D.2d 436, 438, 274 N.Y.S.2d 977, 980 (1st Dept. 1966). 3

In Bremen, the Court, after first recognizing that “in. the light of present-day commercial realities and expanding international trade [a] forum clause should control absent a strong showing that it should be set aside” (407 U.S. at 15, 92 S.Ct. at 1916), promulgated a two-pronged test under which a resisting party (who satisfies his burden on either prong) may secure avoidance of the contractual forum provision: one must “clearly show that enforcement would be unreasonable and unjust, or that the clause [is] invalid for such reasons as fraud or overreaching.” Id. This standard will guide the Court’s exercise of discretion in this matter, the resisting party having the burden of convincing us that, notwithstanding its prima facie validity, the forum clause should not be enforced.

While the standard promulgated in Bremen, supra, continues to place primary emphasis upon a determination of “reasonableness” vis-a-vis enforcement, 4 two clearly discernible alternatives under which the resisting party can challenge the enforcement of a choiee-of-forum clause are suggested by the Court. *365 First, he may invoke the ordinary principles of contract law in an effort to obtain a ruling from the court that the involved contract or the forum clause at bar is void or voidable, hence unenforceable. This approach involves the allegation of “fraud or overreaching” suggested by the Court, as well as the invocation of such contract doctrines as mistake, coercion, want of consideration, unconscionability and the like. See, e.g., Collins, supra, n. 2, 22 Int’l & Comp.L. Q. at 338-40; Note, supra, n. 2, 11 Col-um.J.Transnat’l L. at 455. In short form, this may be referred to as the “invalidity” test. Second, the resisting party may prove that under the particular circumstances then extant deference to the contractually chosen forum would be “unreasonable and unjust.” Such proof will, in most instances, go to the equities of the matter and, as the Court suggested in Bremen,

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Bluebook (online)
390 F. Supp. 361, 1975 U.S. Dist. LEXIS 13586, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gaskin-v-stumm-handel-gmbh-nysd-1975.