Liles v. Ginn–la West End

• Decision Date: 28 January 2011
• Docket Number: No. 10–11943.,10–11943.
• Citation: 631 F.3d 1242
• Parties: Kenneth W. LILES, Patricia M. Liles, Edward R. Webb, James Josephson, William J. Andrews, Jr., Mark R. Roodvoets, Jon D. Andrews, Charles B. Lesesne, Jerry A. Cicolani, Jr., Kris Breneman, Dana F. Ballinger, Susan Kherkher, Thomas E. Lammertse, Mary L. Sipski, Ronald P. Van, as trustee of the Ronald P. Van Jr. Revocable Trust, Kathy Jo Van, as trustee of the Kathy Jo Van Revocable Trust, Plaintiffs–Appellants,v.GINN–LA WEST END, LIMITED, Robert F. Master, II, Edward R. Ginn, III, Defendants–Appellees,Ginn Financial Services, et al., Defendants.
• Court: U.S. Court of Appeals — Eleventh Circuit

631 F.3d 1242

22 Fla. L. Weekly Fed. C 1719

Kenneth W. LILES, Patricia M. Liles, Edward R. Webb, James Josephson, William J. Andrews, Jr., Mark R. Roodvoets, Jon D. Andrews, Charles B. Lesesne, Jerry A. Cicolani, Jr., Kris Breneman, Dana F. Ballinger, Susan Kherkher, Thomas E. Lammertse, Mary L. Sipski, Ronald P. Van, as trustee of the Ronald P. Van Jr. Revocable Trust, Kathy Jo Van, as trustee of the Kathy Jo Van Revocable Trust, Plaintiffs–Appellants,

v.GINN–LA WEST END, LIMITED, Robert F. Master, II, Edward R. Ginn, III, Defendants–Appellees,Ginn Financial Services, et al., Defendants.

No. 10–11943.

United States Court of Appeals, Eleventh Circuit.

Jan. 28, 2011.

OPINION TEXT STARTS HEREDana Louise Ballinger, Ballinger Law Office, Sanibel, FL, for Plaintiffs–Appellants.Lawrence Hugh Kunin, Robert P. Alpert, John P. MacNaughton, Morris, Manning & Martin, LLP, Atlanta, GA, for Defendants–Appellees.Appeal from the United States District Court for the Middle District of Florida (No. 3:08-cv-01217-MMH-JRK); Marcia M. Howard, Judge.Before TJOFLAT, CARNES and HILL, Circuit Judges.PER CURIAM:

This appeal involves the interaction of the specific terms in a series of land purchase contracts and the anti-waiver and venue provisions of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701 et seq. (“ILSA”). The plaintiffs, individually and collectively, purchased undeveloped land in the proposed Versailles Sur Mer subdivision on Grand Bahamas Island from Ginn–La West End, Ltd. (“Ginn–La”), a Bahamas corporation with its principal place of business in Florida. Before the district court, the plaintiffs sought rescission of those purchase contracts and damages, all pursuant to ILSA, as well as common law relief, claiming that Ginn–La and its principals had either failed to disclose or affirmatively concealed material facts relating to the individual properties' titles and the likelihood of the subdivision's completion.

The defendants moved the district court to dismiss the plaintiffs' complaint ¹ pursuant to Federal Rules of Civil Procedure 12(b)(3), for improper venue, and 12(b)(6), for failure to state a claim for which relief may be granted. At the core of the defendants' motion to dismiss was a paragraph in the purchase contracts containing a forum-selection clause designating the Bahamas as the exclusive venue for any litigation “concerning the interpretation, construction, validity, enforcement, performance of, or related in any way to, this Contract or any other agreement or instrument executed in connection with this Contract,” and a choice of law provision identifying Bahamian law as controlling.

The district court considered the forum-selection clause, found venue was foreclosed in the Middle District of Florida, and granted the appellees' motion pursuant to Federal Rule of Civil Procedure 12(b)(3).² The plaintiffs appeal the district court's ruling. Their principal contention is that the district court's enforcement of the forum selection clause deprived them of their right to chose the venue for their ILSA claims and is contrary to public policy as announced in M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), and Lipcon v. Underwriters at Lloyd's, London, 148 F.3d 1285 (11th Cir.1998). We disagree and therefore affirm the court's judgment for the reasons stated in its dispositive order, which is annexed as an Appendix.

AFFIRMED.

APPENDIX

ORDER

THIS CAUSE is before the Court on Defendants Ginn–La West End, Limited, Ginn Financial Services, Robert F. Masters II, and Edward R. Ginn, Ill's (collectively Ginn Defendants²) Motion to Dismiss Plaintiffs' Second Amended Complaint and Incorporated Memorandum of Law in Support (Doc. No. 77; Motion), filed on August 17, 2009. On July 29, 2009, Plaintiffs filed an eleven-count Second Amended Complaint and Demand for Jury Trial (Doc. No. 71; Complaint). Plaintiffs' claims stem from their respective contracts to purchase undeveloped parcels of real property in the Versailles Sur Mer subdivision on Grand Bahama Island (VSM subdivision) from Defendant Ginn–La West End, Limited (Ginn–La), a Bahamian Corporation with its principal place of business in Florida. See Complaint at 2–5; see also Contracts, attached as Exhibits C–K to Complaint. In counts one through three and five through seven of the Complaint, all Plaintiffs assert claims under the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701 et seq. (ILSA) against all Ginn Defendants except Defendant Ginn Financial Services (Ginn Financial). ³ In count four, all Plaintiffs except Plaintiffs Thomas E. Lammertse and Mary L. Sipski assert an ILSA claim against all Ginn Defendants except for Ginn Financial. In count eight, Plaintiff Dana L. Ballinger (Ballinger) asserts an ILSA claim against all Ginn Defendants except for Ginn Financial. In count nine, Plaintiffs Ballinger and James Josephson (Josephson) assert an ILSA claim against all Ginn Defendants except Ginn Financial. Finally, in count ten, all Plaintiffs assert a claim for conspiracy to defraud against all Ginn Defendants.⁴ In the instant Motion, the Ginn Defendants move to dismiss all claims against them. The Ginn Defendants first seek dismissal of the Complaint for improper venue under Rule 12(b)(3), Federal Rules of Civil Procedure (Rule(s)), arguing that the Plaintiffs' contracts contain enforceable forum-selection clauses designating the exclusive venue for the instant litigation to be in the Bahamas. See Motion at 5–8. Alternatively, the Ginn Defendants argue that one or more of Plaintiffs' claims should be dismissed under Rule 12(b)(6) for failure to state a claim entitling them to relief, that one or more of Plaintiffs' claims sound in fraud but are not plead with particularity as required by Rule 9(b), and that Plaintiffs contractually released all Ginn Defendants except Ginn–La from liability. See Motion at 8–25. Plaintiffs oppose all of the requested for relief set forth in the Motion, see Plaintiffs' Opposition to Motion to Dismiss Filed by Ginn–La West End, Limited; Ginn Financial Services; Stewart Title Guaranty Company; Robert F. Masters, II; and Edward R. Ginn, III (Doc. No. 78; Response), and have filed numerous declarations in support of their position, see Doc. Nos. 79–94. ⁵ Thus, the issues in the Motion are now fully briefed and ripe for resolution. Because the venue issue is dispositive, the Court need not address the Ginn Defendants' remaining arguments for dismissal.

I. Background⁶

Ginn–La engaged in the development and sale of lots in the VSM subdivision. See Complaint at 5.⁷ Plaintiffs reside in various states throughout the United States. See id. at 2–4. Between 2006 and 2007 Plaintiffs purchased lots within the VSM subdivision from Ginn-La.⁸ Paragraph twenty-two of each sales contract contains an identical forum-selection clause purporting to designate the Bahamas as the exclusive venue for any legal action “concerning the interpretation, construction, validity, enforcement, performance of, or related in any way to, this Contract or any other agreement or instrument executed in connection with this Contract.” See Contracts, attached as Exhibits C–K to Complaint, at ¶ 22. The enforceability and applicability of this forum-selection clause dictates whether venue is proper in this Court.

II. Applicable Law

“Motions to dismiss upon the basis of choice-of-forum and choice-of-law clauses” that purport to require litigation in a foreign county are properly analyzed as motions to dismiss for improper venue under Rule 12(b)(3). See Lipcon v. Underwriters at Lloyd's, London, 148 F.3d 1285, 1290 (11th Cir.1998); see also Hollis v. Fla. State Univ., 259 F.3d 1295, 1300 n. 5 (11th Cir.2001). “Because ‘[w]e cannot have trade and commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in our courts,’ ” the Eleventh Circuit Court of Appeals has recognized that “forum-selection and choice-of-law clauses ‘are presumptively valid where the underlying transaction is fundamentally international in character.’ ” Lipcon, 148 F.3d at 1291, 1295 (quotations omitted). The party seeking to avoid the forum-selection clause bears “a heavy burden of proof.” M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 17, 19, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). Nevertheless, this presumption of validity may be overcome “by a clear showing that the clauses are unreasonable under the circumstances.” Lipcon, 148 F.3d at 1295 (quotation and internal quotation marks omitted). As such, forum-selection clauses are unenforceable as “ ‘unreasonable under the circumstances' ” only where:

(1) their formation was induced by fraud or overreaching; (2) the plaintiff effectively would be deprived of its day in court because of the inconvenience or unfairness of the chosen forum; (3) the fundamental unfairness of the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of such provisions would contravene a strong public policy.

Id. at 1296 (citation omitted). Developed from the Supreme Court's decision in Bremen, this four-factored framework for determining whether a choice clause is unenforceable is known as “the Bremen test.” See Lipcon, 148 F.3d at 1292, 1295–96.

III. Analysis

1. The forum-selection clauses are enforceable

At the outset, the Court finds that the contracts and underlying transactions in this case are “truly” and “fundamentally” international. See id. at 1293 n. 14, 1295. Plaintiffs, the buyers in the respective contracts, are all American residents, see Complaint at 2–4, whereas Defendant Ginn–La, the seller in each contract, is a Bahamian corporation, see id. at 5, 24–27; see also Contracts, attached as Exhibits C–K to Complaint. The contracts were negotiated in the United States, but the closings apparently took place partially in the United States and partially in the Bahamas. See Complaint at 23. Finally, and perhaps most importantly, the subject...