Servewell Plumbing, LLC v. Summit Contractors, Inc.

210 S.W.3d 101, 362 Ark. 598
Supreme Court of Arkansas·Decided June 16, 2005·No. 04-1306·Published·Cited by 50 cases

Opinion

Tom Glaze, Justice.

This case arose out of a contract dispute between Servewell Plumbing, LLC, and the general contractor and owner of a development project. The Gables of Maumelle (“the Gables”), one of the appellees in this case, was developing an apartment complex in Maumelle. Appellee Summit Contractors was the prime contractor for the job, and Summit hired Servewell as the plumbing subcontractor on the project. On February 10, 2003, Servewell filed a complaint in Pulaski County Circuit Court, alleging that Summit and the Gables had breached the contract with Servewell by refusing to pay for work done on the project. Servewell asserted that the property on which it had completed work was subject to a materialmen’s lien, although Servewell had not yet perfected the Hen. Servewell also alleged that the Gables had been unjusdy enriched by Servewell’s performance. 1

In its answer, Summit objected to jurisdiction and venue, and moved to dismiss the complaint on the basis of a forum-selection clause in the contract designating Duval County, Florida, as the exclusive venue for any judicial proceedings. The Gables later filed an amended answer incorporating a motion to dismiss on the pleadings, asserting that Servewell’s lien was untimely and void.

On June 12, 2003, while still disputing the validity of the lien, Summit posted a Labor and Material Payment Bond with the Pulaski County Circuit Court in the amount of $5,847,000, well over twice the amount Servewell’s complaint sought. Later in June, Summit filed a motion to dismiss pursuant to Ark. R. Civ. P. 12(b)(3), contending that the forum-selection clause rendered venue improper in the Pulaski County Circuit Court. Servewell responded, arguing that the forum-selection clause was unenforceable under either Florida or Arkansas law.

On July 11, 2003, Summit filed a motion seeking to dismiss the Gables from the suit, arguing that Servewell’s alleged lien was filed outside of the statutory time period, and that the bond posted by Summit caused Servewell’s lien to be discharged. Servewell responded that, regardless of the bond, it still had an unjust enrichment claim against the Gables.

The trial court held a hearing on the motions to dismiss and on the Gables’ motion for judgment on the pleadings on December 2, 2003. After the hearing, the trial court granted Summit’s motion to dismiss on venue grounds, citing the forum-selection clause in the contract. In addition, the court granted the Gables’ motion for judgment on the pleadings, finding that Servewell had defaulted by not filing a separate response to the motion, and alternatively finding that the posting of the bond mooted the lien claim. The court, however, reserved ruling on Servewell’s unjust enrichment claim.

Servewell filed a second amended complaint on January 7, 2004, specifically alleging that the lien was timely because its affidavit of account had been filed within 120 days of the last date Servewell supplied labor and material. The Gables and Summit again moved to dismiss the complaint; Summit once more raised the issue of the forum-selection clause. The trial court granted Summit’s motion to dismiss Servewell’s second amended complaint on May 11, 2004. 2 On appeal, Servewell raises four points for reversal.

In its first argument on appeal, Servewell argues that the trial court erred in granting Summit’s motion to dismiss and enforcing the choice-of-forum clause. Servewell asserts that the clause was unenforceable under either Arkansas or Florida law, and that the court erred in failing to apply Florida law. The clause at issue in the contract between Servewell and Summit provided as follows:

ARTICLE 23: CHOICE OF LAW AND VENUE
This Subcontract shall be construed in accordance with the laws of the State of Florida. [Servewell] expressly agrees to be subject to personal jurisdiction in the State of Florida and further waives any right to venue in any action brought under this Subcontract Agreement or against any bond posted by [Summit]. [Servewell] acknowledges that [Summit’s] bonding company is an intended third-party beneficiary of this jurisdiction and venue provision. [Summit] has the sole option to select venue in Duval County, Florida, or the site of this project, for any action it brings under the Subcontract Agreement. In any action brought against [Summit] or its bonding company under this Subcontract Agreement, jurisdiction and venue shall be in Duval County, Florida, unless and until [Summit] stipulates to jurisdiction and venue at the site of the project.

Despite the forum-selection clause, Servewell filed suit in Pulaski County, Arkansas. In its answer, Summit specifically objected to venue in Pulaski County on the basis of the forum-selection clause, and affirmatively stated that Servewell’s complaint should be dismissed for improper venue and lack of personal and subject matter jurisdiction. As noted above, the trial court granted Summit’s motion to dismiss. In reviewing a trial court’s decision on a motion to dismiss under Ark. R. Civ. P. 12(b), this court treats the facts alleged in the complaint as true and views them in the light most favorable to the Plaintiff. Wilmans v. Sears, Roebuck and Co., 355 Ark. 668, 144 S.W.3d 245 (2004). In testing the sufficiency of the complaint on a motion to dismiss, all reasonable inferences must be resolved in favor of the complaint, and the pleadings are to be liberally construed. Id.

Servewell first argues that the trial court erred in applying Arkansas law in determining whether to enforce the forum-selection clause. This court has generally held that choice-of-forum clauses in contracts are binding, unless it can be shown that the enforcement of the clause would be unreasonable and unfair. RMP Rentals v. Metroplex, Inc., 356 Ark. 76, 146 S.W.3d 861 (2004); Nelms v. Morgan Portable Bldg. Corp., 305 Ark. 284, 808 S.W.2d 314 (1991); SD Leasing, Inc. v. Al Spain & Assoc., Inc., 277 Ark. 178, 640 S.W.2d 451 (1982). Nonetheless, the determination of subject-matter jurisdiction is paramount. Parties may by agreement consent to personal jurisdiction in a given court, but subject-matter jurisdiction cannot be conferred merely by agreement of the parties. See Hardy Construction Co., Inc. v. Arkansas State Highway & Transportation Dept., 324 Ark. 496, 922 S.W.2d 705 (1996). While a forum-selection clause implies consent as to personal jurisdiction, see SD Leasing, Inc., supra, it cannot confer subject-matter jurisdiction over in rem proceedings. Publix Super Markets, Inc. v. Cheesbro Roofing, Inc., 502 So.2d 484 (Fla. Dist. Ct. App. 1987).

In connection with this latter point, Servewell relies heavily on RMP Rentals, supra, a case involving a materialmen’s lien. RMP was a general contractor with its corporate office in Louisiana; it subcontracted with Metroplex, Inc., an electrical engineering firm located in Arkansas, to install electrical services in a post office. The contract was executed in Louisiana, and contained a forum-selection clause providing that Rapides Parish, Louisiana, would be the forum for any civil suit arising out of the contract.

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Servewell Plumbing, LLC v. Summit Contractors, Inc., 210 S.W.3d 101, 362 Ark. 598 (Ark. 2005).

210 S.W.3d 101 (Servewell Plumbing, LLC v. Summit Contractors, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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