William Noble Rare Jewels v. Christie's Inc.

231 F.R.D. 488, 2005 U.S. Dist. LEXIS 24601, 2005 WL 2738307
CourtDistrict Court, N.D. Texas
DecidedOctober 24, 2005
DocketNo. Civ.A.3:05CV1607-D
StatusPublished
Cited by2 cases

This text of 231 F.R.D. 488 (William Noble Rare Jewels v. Christie's Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
William Noble Rare Jewels v. Christie's Inc., 231 F.R.D. 488, 2005 U.S. Dist. LEXIS 24601, 2005 WL 2738307 (N.D. Tex. 2005).

Opinion

MEMORANDUM OPINION AND ORDER

FITZWATER, District Judge.

In this motion to dismiss under Fed. R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a) based on a mandatory contractual forum selection clause (“FSC”), the sole question presented is whether plaintiffs claims fall within the scope of the FSC. Concluding that they do, the court grants the motion and dismisses without prejudice plaintiffs action against the moving defendant.1

I

This is an action by plaintiff William Noble Rare Jewels (“Noble”) against defendant Christie’s Inc. d/b/a Christie’s Fine Art Auctioneers, Inc. (“Christie’s”) and John Doe (“Doe”) arising from the consignment sale of a sapphire and diamond ring (“Ring”) under the terms of a Consignment Agreement (“Agreement”). Noble filed suit in Texas state court, and Christie’s removed the case to this court based on diversity of citizenship. Noble sues Christie’s for breach of fiduciary duty, and it seeks declaratory relief concerning Christie’s fiduciary obligations to Noble.2 Noble sues Doe to recover for breach of the contract under which he agreed to purchase the Ring at auction.

According to Noble’s state-court petition,3 Christie’s agreed to sell the Ring at auction. Noble furnished Christie’s an opinion as to the Ring’s origin. Before the sale, Christie’s sought its own opinion from the American Gemological Laboratory (“AGL”). The opinions that Noble and Christie’s obtained both stated that the origin of the Ring was Kashmir, which increased the value of the sapphire content of the Ring. Christie’s sold the Ring to Doe at a May 2005 auction.

Despite the sale and assurances from Christie’s that payment would be forthcoming, Noble has not received its part of the proceeds. Christie’s released the Ring to Doe without first advising Noble, obtaining its approval, or securing payment from Doe. Christie’s has represented to Noble that Doe took the Ring to several locations in Europe and purportedly obtained four opinions concerning the Ring’s origin. Two were purportedly inconclusive; the other two purportedly opined that the origin is Ceylon. Sapphires originating from Ceylon are worth significantly less than those from Kashmir. Christie’s either does not have the opinions or refuses to disclose them to Noble. On information and belief, Doe sought the questionable opinions to avoid his promise to purchase the Ring at auction. Christie’s maintains that Doe has relied on the opinions to rescind the sale, but it has declined Noble’s requests to provide copies of the reports. Christie’s allegedly agreed, without Noble’s consent, to rescind the sale. Under the Conditions of Sale that Christie’s follows, buyers such as Doe are obligated before they bid to satisfy themselves concerning the condition of property sold, and all property is sold “as is,” without representation or warranty of any kind by Christie’s or the [490]*490seller. A successful bidder accepts personal responsibility to pay the purchase price and all applicable charges. Doe agreed to these terms and had the opportunity to inspect the Ring before the auction. Christie’s ignored the terms of its Conditions of Sale, thereby preventing the sale of the Ring to Doe or any legitimate underbidders.

Acting contrary to its duties to Noble, Christie’s insists that it will include the four opinions that Doe allegedly obtained in any subsequent offer of sale of the Ring. Christie’s is doing so despite Doe’s clear motivation, the unknown reputation of the organizations that purportedly gave their opinions to Doe, the AGL’s opinion, and the uncertainty whether the opinions Doe obtained were even based on an examination of the Ring. Christie’s apparently has readily accepted the questionable opinions that Doe obtained and has refused to acknowledge the opinion that Noble obtained, and the one that Christie’s procured from AGL, that show Kashmir as the true origin of the sapphire.

Noble alleges, based on the foregoing factual allegations, that Christie’s is liable for breaching its fiduciary duty to Noble. It also seeks declaratory relief, contending that, pursuant to Christie’s fiduciary obligations, it must reveal Doe’s identity, tender copies of the opinions he purportedly obtained, and reject the opinions and sell the Ring with reference only to the opinion Christie’s obtained from AGL and/or the one Noble obtained.

II

Christie’s moves to dismiss Noble’s lawsuit based on the Agreement’s mandatory FSC. The Agreement contains the following relevant provision:

10. OTHER MATTERS
* sjs * * sH *
(b). This Agreement shall be governed by and construed in accordance with the laws of the State of New York. In the event of any dispute hereunder, (i) the parties hereby consent to the exclusive jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in the Southern District of New York and (ii) neither party shall be liable to the other for any special, consequential or incidental damages.
* * * * * *

D.App. 24 (emphasis added).

Noble maintains that the FSC is narrow and inapplicable to its claims. It contends that it is suing Christie’s for breaching its fiduciary duty by (1) refusing to reveal Doe’s identity so that Noble can pursue claims against him, as Christie’s has suggested, (2) by releasing the Ring to Doe, especially without payment or security, and (3) accepting the opinions that Doe obtained. Noble posits that it seeks declaratory relief that Christie’s must (1) reveal Doe’s identity, (2) tender to Noble all so-called opinions Doe obtained regarding the sapphire, and (3) disavow the questionable opinions that Doe obtained. Noble characterizes its claims as basically alleging that Christie’s allowed Doe to damage Noble’s property by seeking to discredit the origin of the sapphire and then, despite criticizing Doe’s actions, purporting blindly to accept the opinions Doe says he obtained and ignoring the AGL opinion that Christie’s secured pre-sale.

Noble posits on several grounds that its claims against Christie’s fall outside the scope of the FSC. Among its various arguments, however, it concedes that the FSC applies if its claims pertain to matters of Christie’s performance under the Agreement. Christie’s maintains on several bases that the FSC applies to Noble’s causes of action.

Ill

A

The court need not discuss at length the law of forum selection clauses. It is undisputed that the FSC is a mandatory provision, and Noble does not argue against enforcement on the basis that the clause is unenforceable, i.e., that the FSC is unreasonable under the circumstances. The single question presented is whether Noble’s claims for breach of fiduciary duty and declaratory relief fall within the scope of the FSC.

[491]*491Noble implicitly maintains,4 and Christie’s does not dispute in its reply brief,5 that federal law governs the interpretation of the scope of the FSC. Accordingly, the court will assume not only that “[f]ederal law governs the determination of whether an enforceable forum selection clause exists[,]”

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Cite This Page — Counsel Stack

Bluebook (online)
231 F.R.D. 488, 2005 U.S. Dist. LEXIS 24601, 2005 WL 2738307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/william-noble-rare-jewels-v-christies-inc-txnd-2005.