North American Elite Insurance Company v. Stewart & Stevenson FDDA LLC

CourtDistrict Court, S.D. Florida
DecidedJune 7, 2023
Docket1:22-cv-21705
StatusUnknown

This text of North American Elite Insurance Company v. Stewart & Stevenson FDDA LLC (North American Elite Insurance Company v. Stewart & Stevenson FDDA LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
North American Elite Insurance Company v. Stewart & Stevenson FDDA LLC, (S.D. Fla. 2023).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

CASE NO. 22-CV-21705-RAR

NORTH AMERICAN ELITE INSURANCE COMPANY, as subrogee of EdgeConneX, Inc.,

Plaintiff,

v.

STEWART & STEVENSON FDDA LLC, d/b/a Florida Detroit Diesel-Allison,

Defendant. __________________________________________/

ORDER GRANTING MOTION TO TRANSFER VENUE

THIS CAUSE comes before the Court upon Defendant Stewart & Stevenson FDDA LLC’s (Stewart & Stevenson) Renewed Motion to Transfer to the Southern District of Texas Pursuant to Mandatory Forum-Selection Clause (“Motion”), filed on February 21, 2023. [ECF No. 26]. Plaintiff North American Elite Insurance Company (“North American”) filed a Response in Opposition on March 7, 2023, [ECF No. 27], and Defendant filed a Reply on March 21, 2023, [ECF No. 31]. The Court having carefully considered the relevant submissions and applicable law, it is hereby ORDERED AND ADJUDGED that the Motion [ECF No. 26] is GRANTED for the reasons set forth herein. BACKGROUND North American brings this action as the subrogee of EdgeConneX, Inc. (“EdgeConneX”) against Stewart & Stevenson for its allegedly faulty maintenance work performed on two of EdgeConneX’s generators: GENSET AA and GENSET AB.1 Mot. at 2. EdgeConneX had hired an entity called Facility Gateway Corp “to provide maintenance to the generators.” See Resp. at 11, 12 (citing Gerena Decl. [ECF No. 26–1] ¶ 6).2 Facility Gateway then hired Defendant Stewart & Stevenson to service the generators. See Mot. at 3.

On or about November 29, 2018, Stewart & Stevenson performed annual maintenance on the two generators. Compl. ¶ 8. On or about December 4, 2018, GENSET AA allegedly failed while Stewart & Stevenson was performing maintenance. Id. ¶ 9. On or about January 2, 2019, GENSET AB failed as well, with both generator’s failures allegedly attributable to Stewart & Stevenson’s faulty maintenance work. Id. ¶¶ 10–12. As a result, EdgeConneX submitted insurance claims for the two generators, and North American paid insurance proceeds to EdgeConneX pursuant to the terms of their insurance policy. Id. ¶¶ 13–14. As subrogee of EdgeConneX, North American now sues Stewart & Stevenson to recoup the insurance proceeds it paid to EdgeConneX for the repairs to the two generators, valued at $526,260.08 and $483,025.07, respectively. Id. ¶¶ 15, 24, 33. North American first brought suit

in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida. See [ECF No. 1–2] Ex. 1. Defendant removed this action to the Southern District of Florida on June 3, 2022. [ECF No. 1].

1 An insurer stands in the shoes of its subrogor and has no greater rights than that of its subrogor. See Cincinnati Ins. Co. v. Superior Guaranty Ins. Co., 441 F. Supp. 3d 1271, 1275 (M.D. Fla. 2020) (quotation marks omitted).

2 “A court may consider affidavits when ruling on a motion to transfer venue under section 1404(a).” Soffin v. eChannel Network, Inc., No. 12-cv-81279, 2014 WL 2938347, at *1 (S.D. Fla. June 20, 2014) (citing Marbury-Pattillo Const. Co., Inc. v. Bayside Warehouse Co., 490 F.2d 155, 158 (5th Cir. 1974); Piper Aircraft Co. v. Reyno, 454 U.S. 235, 259 n.26 (1981)). Accordingly, the Court may consider the Gerena Declaration. Defendant filed its Motion to Transfer Venue on February 21, 2023. [ECF No. 26]. Defendant contends that the services it provided to Facility Gateway were governed by the Additional Terms of Sale attached to the Invoices, which Facility Gateway had repeatedly paid over the course of their “longstanding business relationship”. See Mot. at 3; Reply at 4; Gerena

Decl. ¶¶ 11–13. Defendant argues that Plaintiff’s negligence-based Complaint should actually be pled as a breach of contract action because North American’s rights are derived from the Additional Terms of Sale. See Reply at 6. Moreover, the Additional Terms of Sale in the Invoices all contained a mandatory forum selection clause, stating in relevant part that: The laws of the State of Texas (without giving effect to its conflict of laws principles) govern all matters arising out of or relating to this Agreement, including without limitation, its validity, interpretation, construction, performance and enforcement. Venue for any action arising out of or relating to this Agreement shall be in Harris County, Texas; and the parties waive any claim of an inconvenient forum.

Gerena Decl. at 9, 13, 17. Thus, Defendant requests the Court transfer this action to the Houston Division of the Southern District of Texas pursuant to 28 U.S.C. § 124(b)(2). Plaintiff counters that no contractual privity exists between its subrogor, EdgeConneX, and Defendant Stewart & Stevenson. Resp. at 3. Plaintiff argues that EdgeConneX is not “closely related” to Facility Gateway sufficient to bind them as non-parties to the Additional Terms of Sale contained in the invoices exchanged between Facility Gateway and Stewart & Stevenson. Id. at 5. With no valid contract, there cannot be an enforceable forum selection clause, Plaintiff argues, and therefore Defendant cannot meet the factors required for a motion to transfer venue. Resp. at 4. The Motion is ripe for review. LEGAL STANDARD Federal law, specifically 28 U.S.C. § 1404(a), governs venue disputes. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 28 (1988). In the absence of a mandatory forum selection clause governing the parties, “a district court considering a § 1404(a) motion [to transfer venue] must

evaluate both the convenience of the parties and various public interest considerations.” Atl. Marine Const. Co., Inc. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49, 63 (2013). A movant has to first establish that the cause could be transferred to another “district where the action might have been brought,” 28 U.S.C. § 1404(a); Tingley Sys., Inc. v. Bay State HMO Mgmt., Inc., 833 F. Supp. 882, 885 (M.D. Fla. 1993), and then show that transfer is warranted on grounds of convenience and interests of justice, Van Dusen v. Barrack, 376 U.S. 612, 616 (1964); Windmere Corp. v. Remington Products, Inc., 617 F. Supp. 8, 10 (S.D. Fla. 1985). When a mandatory forum selection clause governs the parties’ dispute, however, “this analysis changes dramatically.” See Trump v. Twitter, Inc., No. 21-22441, 2021 WL 8202673, at *2 (S.D. Fla. Oct. 26, 2021) (citing Atl. Marine, 571 U.S. at 60). The presence of a valid forum-

selection clause requires district courts to adjust their usual § 1404(a) analysis. Atl. Marine, 571 U.S. at 63. That adjustment, in relevant part, requires courts to disregard plaintiff’s choice of forum and shift the burden to plaintiff to establish that transfer to the forum for which the parties bargained is unwarranted. See id. It also requires courts to ignore arguments about the parties’ private interests and consider only arguments about the public interest factors. Id. The result is that “a valid forum-selection clause [should be] given controlling weight in all but the most exceptional cases.” Id. (citing Stewart, 487 U.S. at 33 (Kennedy, J., concurring)).

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North American Elite Insurance Company v. Stewart & Stevenson FDDA LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/north-american-elite-insurance-company-v-stewart-stevenson-fdda-llc-flsd-2023.