894 F.2d 193 (6th Cir. 1990), 89-1418, Regis Associates v. Rank Hotels (Management) Ltd.

Docket Nº:89-1418.
Citation:894 F.2d 193
Party Name:REGIS ASSOCIATES, Plaintiff-Appellee, v. RANK HOTELS (MANAGEMENT) LIMITED, Defendant-Appellant.
Case Date:January 23, 1990
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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894 F.2d 193 (6th Cir. 1990)

REGIS ASSOCIATES, Plaintiff-Appellee,

v.

RANK HOTELS (MANAGEMENT) LIMITED, Defendant-Appellant.

No. 89-1418.

United States Court of Appeals, Sixth Circuit

January 23, 1990

Argued Dec. 5, 1989.

Stephen E. Glazek, argued, Sharon M. Woods, Susan L. Mashour, Barris, Sott, Denn & Driker, Detroit, Mich., for plaintiff-appellee.

Lori L. Tobis, Richard A. Rossman, Pepper, Hamilton & Scheetz, Detroit, Mich., Jon M. Kaufman, argued, New York City, for defendant-appellant.

Before MARTIN, JONES and GUY, Circuit Judges.

RALPH B. GUY, Jr., Circuit Judge.

This appeal presents two questions for review. The first is whether the remand to state court of a removal action on the basis of the district court's interpretation of a forum selection clause results in an appealable order. Since we answer this question in the affirmative, we reach the second question which involves a review of the decision reached by the district court on the interpretation of the forum selection clause. On this issue, we conclude the court erred and we shall reverse.

I.

Plaintiff, Regis Associates (Regis), entered into an agreement with defendant, Rank Hotels Limited (Rank), in which Regis employed Rank to manage the Hotel St. Regis in Detroit, Michigan. Regis is a limited partnership, formed and existing under the laws of the State of Michigan. Rank is a corporation organized under the laws of England whose principal office is in London, England. Although this agreement was entered into in 1986, it was merely an extension of a 1980 agreement among Rank, the 3071 Limited Partnership, and the St. Regis Hotel Company, the predecessor to Regis. When the 1980 agreement was being negotiated, Rank offered as a model agreement one of its standard

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management agreements drafted for Rank's European operations. Consequently, the draft included a paragraph 28 entitled "Proper Law" which read:

The interpretation and application of this Agreement shall be governed by English law and the parties hereby submit to the jurisdiction of the English Courts.

In the course of negotiations, as would be expected, Regis proposed certain changes and modifications to the standard form agreement. James W. Draper, an officer in Regis, a partner in the 3071 Limited Partnership, and an attorney who specializes in property law, sent a two-page memo to Rank in which certain specific changes were requested. Relative to paragraph 28, Draper's memo read:

We would prefer to have the interpretation and application of the agreement governed by Michigan law and not by English law.

Rank later returned a revised draft in which the "Proper Law" clause, then numbered paragraph 30, had been changed to read:

The interpretation and application of this Agreement shall be governed by the law of the State of Michigan and the parties hereby submit to the jurisdiction of the Michigan Courts.

Paragraph 30 of the 1980 contract reads the same as paragraph 30 of the 1986 agreement. In 1988 a disagreement occurred between the parties resulting in Regis' termination of the contract and the institution of this lawsuit in the Wayne County Circuit Court. Rank removed the action to federal court. On November 30, 1988, Regis filed a motion to remand. Regis alleged that the forum selection clause, which provided that "the parties hereby submit to the jurisdiction of the Michigan Courts," constituted a waiver of the right to remove under the federal diversity statute.

On December 14, 1988, following oral argument on Regis' motion to remand, the district judge referred the motion to a magistrate for an evidentiary hearing, which was held on February 6, 1989. On February 23, 1989, in a written opinion, the magistrate recommended that Regis' motion to remand be granted. The magistrate determined that, in order to preserve its statutory right to remove, Rank should have inserted an explicit provision designating the federal court as an appropriate forum in which to file suit. Additionally, the magistrate concluded that Rank was the draftsman of the forum selection clause.

On March 22, 1989, at the end of a de novo hearing on Rank's objections to the magistrate's report and recommendation, the district judge accepted the magistrate's report and recommendation, and granted Regis' motion to remand.

II.

Upon the filing of this appeal, Regis filed a motion to dismiss alleging that the court has no jurisdiction to hear an appeal from an order of remand. This argument is predicated upon 28 U.S.C. Sec. 1447(d), which provides in pertinent part: "An order...

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