Mak Marketing, Inc. v. Kalapos

620 F. Supp. 2d 295, 2009 U.S. Dist. LEXIS 48097, 2009 WL 1563085
CourtDistrict Court, D. Connecticut
DecidedMay 8, 2009
Docket3:08-cv-01008
StatusPublished
Cited by15 cases

This text of 620 F. Supp. 2d 295 (Mak Marketing, Inc. v. Kalapos) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mak Marketing, Inc. v. Kalapos, 620 F. Supp. 2d 295, 2009 U.S. Dist. LEXIS 48097, 2009 WL 1563085 (D. Conn. 2009).

Opinion

RULING RE: DEFENDANTS’ MOTION TO DISMISS (DOC. NO. 16) AND MOTION TO TRANSFER VENUE (DOC. NO. 18)

JANET C. HALL, District Judge.

I. INTRODUCTION

Plaintiff MAK Marketing, Inc. (“MAK”) brings this suit against defendants Steven Kalapos, Kevin Smith, Secure Eco Shred America, LLC (“SES America”), Secure Eco Shred, LLC (“SES”), and Better Shredder Solutions, LLC (“BSS”) (collectively “defendants”). MAK is a Connecticut corporation with a principal place of business in Brookfield, Connecticut. Kalapos and Smith are residents of Michigan. SES America is a limited liability company organized under the laws of Delaware. SES and BSS are limited liability companies organized under the laws of Michigan.

In its Complaint, MAK asserts nine causes of action based on its dealings with defendants during the initiation and operation of a paper shredding business. Defendants have moved to dismiss the suit for improper venue pursuant to Fed. R.Civ.P. 12(b)(3), or, alternatively, to transfer venue pursuant to 28 U.S.C. § 1404(a). They claim that two binding forum-selection clauses preclude MAK from litigating in Connecticut, and further, that Michigan is a more convenient and just forum in which to adjudicate this dispute. In response, MAK argues that the forum-selection clauses in question are either non-binding or inapplicable, and that convenience and justice favor resolving its claims in Connecticut. For the reasons stated herein, defendants’ Motion to Dismiss is granted in part and denied in part, and defendants’ Motion to Transfer Venue is denied.

II. STANDARD OF REVIEW

A. Motion to Dismiss

Although defendants have specified that they are seeking dismissal based on improper venue under Fed. R. Civ P. 12(b)(3), when considering motions to dismiss based on the existence of a binding forum-selection clause, the Second Circuit has “refused to pigeon-hole” these claims into a particular clause of Rule 12(b). Asoma Corp. v. SK Shipping Co., Ltd., 467 *298 F.3d 817, 822 (2d Cir.2006). The Second Circuit simply requires that, “where one party has shown an apparently governing forum-selection clause, the party opposing litigation in the so designated forum must make a strong showing to defeat that contractual commitment.” Id.

B. Motion to Transfer Venue

Under 28 U.S.C. § 1404(a), “[flor the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). The objectives of section 1404(a) are “to prevent the waste of time, energy and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense.” Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) (internal quotations omitted). The movant bears the burden of establishing the propriety of transfer by a clear and convincing showing. Excelsior Designs, Inc. v. Sheres, 291 F.Supp.2d 181, 185 (E.D.N.Y.2003) (citing Ford Motor Co. v. Ryan, 182 F.2d 329, 330 (2d Cir.1950)); see also United Rentals, Inc. v. Pruett, 296 F.Supp.2d 220, 228 (D.Conn.2003) (placing burden on movant despite presence of forum-selection clause); O’Brien v. Okemo Mountain, Inc., 17 F.Supp.2d 98, 102 (D.Conn.1998) (same). “Section 1404(a) reposes considerable discretion in the district court to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness.” Red Bull Associates v. Best Western Int’l, 862 F.2d 963, 967 (2d Cir.1988) (internal quotation omitted).

III. BACKGROUND

According to MAK’s Complaint, around April 2000, Kalapos and Smith started a paper shredding business in Detroit, Michigan. See Complaint (Doc. No. 1) at ¶¶ 10, 20. They operated the business through various entities, including defendants SES and SES America, until January 8, 2007. See id. On October 31, 2001, Secure Safe Ecoshred (an assumed name of defendant SES) registered the mark SECURE ECO SHRED and design (“the Marks”) in the United States Patent and Trademark Office for services of destruction of confidential information. See id. at ¶¶ 13,14.

Secure Eco Shred businesses provide document shredding and recycling services for customers through the use of large trucks with built-in shredders. See id. at ¶ 17. The trucks permit Secure Eco Shred businesses to shred documents at a customer’s location and then transfer the shredded product to a recycling plant. See id. Kalapos and Smith formed defendant BSS to manufacture these trucks and distribute them to Secure Eco Shred businesses. See id. at ¶ 18.

Around September 21, 2004, Kalapos and Smith formed defendant SES America for the purpose of franchising Secure Eco Shred businesses. See id. at ¶ 22. Kalapos and Smith successfully promoted the sale of a Secure Eco Shred franchise business in Illinois in 2004, although the Illinois franchise operated without a written franchise agreement. See id. at ¶ 21.

Kalapos and Smith individually, and on behalf of SES and SES America, also took steps to develop a Secure Eco Shred franchise in Connecticut. See id. at ¶ 23. Specifically, Kalapos and Smith promoted the concept of a Secure Eco Shred franchise to Smith’s brother, Michael Smith, as well as to Theodore Rosen and Richard Koffman. See id. at ¶ 24. They did so during both in-person meetings and telephone conversations. See id. According to MAK, Kalapos and Smith used deceptive practices and made various misrepresentations and omissions in the course of promoting the franchise investment to Michael Smith, Rosen, and Koffman. See id. at ¶ 31. *299 This deception included omissions as to the risky nature of the franchise investment, omissions and deliberate misrepresentations as to realistic projected earnings of the franchise, deliberate misrepresentations as to the forecasting of franchisee profit based on the earnings of the franchisor, and misrepresentations about the profits and expenses the franchisee would face during its first three to five years of operation. See id. at ¶¶ 32, 33.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
620 F. Supp. 2d 295, 2009 U.S. Dist. LEXIS 48097, 2009 WL 1563085, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mak-marketing-inc-v-kalapos-ctd-2009.