United States District Court, D. Utah, Central Division
MEMORANDUM DECISION AND ORDER
A. KIMBALL JUDGE
matter is before the court on Defendants' Motion to
Change Venue and Stay the Filing of Its Answer. The motion is
fully briefed, and the court concludes that a hearing would
not significantly aid in the court's determination of the
motion. The court has considered carefully the memoranda and
other materials submitted by the parties, as well as the law
and facts relating to the motion. Now being fully advised,
the court issues the following Memorandum Decision and Order.
The Money Source is a New York corporation that employed
Plaintiff Maygen Richardson, who lives in Salt Lake City,
Utah. On or about June 7, 2018, the parties entered an
employment contract, including a letter regarding the terms
of her employment, a Confidentiality and Non-Solicitation
Agreement, and a background investigation acknowledgment. The
Confidentiality and Non-Solicitation Agreement contains a
forum selection provision providing that “Any action or
proceeding by either of the parties to enforce this Agreement
shall be brought in a state of federal court located in the
state of New York, in the counties of Nassau or
Suffolk.” Plaintiff has filed the instant action in
this court, alleging causes of action for breach of contract
and breach of the implied covenant of good faith and fair
dealing in connection with the Employment Agreement.
Defendant responded by filing the motion to transfer venue
that is now before the court.
Motion to Transfer Venue
Defendant seeks to enforce the forum selection clause in the
Employment Agreement pursuant to Federal Rule of Civil
Procedure 12(b)(3) and 28 U.S.C. § 1404(a) and have this
action transferred to the United States District Court for
the Eastern District of New York. Forum selection clauses are
prima facie valid and will be enforced by a court if the
forum selection clause is (1) mandatory, and (2) not invalid
due to fraud or overreaching. See Riley v. Underwriting
Agencies, Ltd., 969 F.2d 953, 957 (10th Cir. 1992),
cert. denied, 506 U.S. 1021 (1992).
forum selection clause to be considered mandatory, it must
contain “clear language showing that jurisdiction is
appropriate only in the designated forum.” Excell,
Inc. v. Sterling Boler & Mechanical, Inc., 106 F.3d
318, 321 (10th Cir. 1997). The Tenth Circuit has recognized
that “[t]he use of the word ‘shall' indicates
a mandatory intent unless a convincing argument to the
contrary is made.” Milk ‘n' More,
963 F.2d at 1346. In Excell, Inc. v. Sterling Boler &
Mechanical, Inc., 106 F.3d 318 (10th Cir. 1997), the
Tenth Circuit found that a clause stating that “venue
shall lie in the County of El Paso, Colorado” was
mandatory. Id. at 321. The clause in this case is
nearly identical to the clause found mandatory in Excell.
addition, as to whether issues of fraud or unreasonableness
prevent enforcement of the forum selection clause, Plaintiff
must demonstrate that the “(1) forum selection clause
is invalid for fraud or overreaching or (2) forcing [her] to
proceed in the selected forum will be so gravely difficult or
inconvenient that the clause, for all practical purposes,
will deprive [her] of [her] day in court.” Zions
First National Bank v. Allen, 688 F.Supp. 1495, 1498 (D.
Utah 1988).Plaintiff does not argue that there was any
fraud or overreaching in connection with the provision.
Plaintiff argues that the Eastern District of New York will
be inconvenient for witnesses but does not address the
difficulty of litigating in the forum. Therefore, the clause
is enforceable under Tenth Circuit law.
Plaintiff contends that Defendant rescinded the employment
contract and, thus, nullified the forum selection clause.
Rescission is a legal term of art. “Rescission is the
unmaking of a contract which not only terminates the contract
but abrogates it and undoes it from the beginning.”
Derma Pen, LLC v. 4Ever Young Ltd., 2014 U.S. Dist.
LEXIS 108355, *15 (D. Utah Aug. 4, 2014). Plaintiff's
only two causes of action in this case-breach of contract and
breach of the implied covenant of good faith and fair
dealing-depend upon the existence of the agreement. Defendant
terminated Plaintiff's employment under the Employment
Agreement, it did not rescind the existence of the agreement.
Otherwise, Plaintiff would not have an agreement to serve as
the basis of her causes of action. Plaintiff cannot sue to
enforce the terms of the agreement against Defendant without
being subject to the terms of the agreement. Accordingly, the
court concludes that the forum selection clause is valid and
must be enforced in this situation. Therefore, pursuant to
the terms of the forum selection clause, the court grants
Defendant's motion to transfer the action to the Eastern
District of New York.
Motion to Change Venue [Dkt. No. 7] is GRANTED, and this
action is transferred to the Eastern District of New York
pursuant to 28 U.S.C. § 1404(a). Defendant's request
for a stay of the deadline for answering the Complaint is
moot. Defendant shall answer Plaintiffs Complaint within
fourteen days of the date of this Order.