Baby Furniture Warehouse v. Meubles D & F

• Decision Date: 21 August 2009
• Docket Number: No. 08-P-646.,08-P-646.
• Citation: 911 N.E.2d 800,75 Mass. App. Ct. 27
• Parties: BABY FURNITURE WAREHOUSE STORE, INC. v. MEUBLES D & F LTÉE.
• Court: Appeals Court of Massachusetts

911 N.E.2d 800

75 Mass. App. Ct. 27

BABY FURNITURE WAREHOUSE STORE, INC. v. MEUBLES D & F LTÉE.

No. 08-P-646.

Appeals Court of Massachusetts, Suffolk.

Argued February 26, 2009.

Decided August 21, 2009.

John Hause, Hopedale, for the plaintiff.

Joseph Lange, Holyoke, for the defendant.

Present: KATZMANN, RUBIN, & FECTEAU, JJ.

KATZMANN, J.

We deal here with the application and interpretation of a choice of law and forum selection clause. On August 17, 2006, Meubles D & F Ltée (Meubles), brought an action against Baby Furniture Warehouse Store, Inc. (BFW), in the Superior Court of the Province of Quebec, Canada (Canadian action), demanding $149,830.11 for goods sold and delivered to BFW, but not paid for by BFW. BFW moved to dismiss for forum non conveniens. Following a hearing, this motion was denied by the Canadian court.

On December 18, 2006, BFW filed its "Defence and Cross-Demand" in the Canadian action. On August 8, 2007, Meubles moved to dismiss BFW's defence and cross-demand. This motion was allowed on August 24, 2007. Final judgment in the Canadian action was entered in favor of Meubles on November 1, 2007.

Meanwhile, on September 26, 2007, BFW filed the present action against Meubles in Superior Court (Massachusetts action). In response, on November 16, 2007, Meubles filed a motion to dismiss pursuant to Mass.R.Civ.P. 12(b)(3) and (6), 365 Mass. 754 (1974). Meubles's motion to dismiss was granted on February 14, 2008. BFW now appeals the judgment of the Superior Court. We affirm.

Background.¹ Meubles is a Canadian company specializing in the manufacture and wholesale of children's furniture under the trade names Ragazzi Furniture and Bambino Reale. BFW is a Massachusetts corporation in the business of selling baby and children's products, including furniture manufactured and sold by Meubles. Prior to this action, BFW had purchased furniture produced by Meubles for over fourteen years.

On November 15, 2002, BFW and Meubles entered into the "D & F Furniture/d.b.a. Ragazzi Furniture Authorized Dealer Policy" (policy). The policy contained a choice of law and forum selection clause, which read:

"Any dispute arising out of or concerning this Policy statement shall be governed by the laws of the province of Quebec; and the Authorized Dealer and Ragazzi agree to submit themselves to the jurisdiction of the provincial courts sitting in the province of Quebec for resolution of any disputes arising out of or related to this Policy or the relationship between the Authorized Dealer and Ragazzi Furniture."

After agreeing to the policy, BFW continued to purchase furniture from Meubles under both the Ragazzi and Bambino trade names. In the Canadian action, Meubles claimed that BFW owed $149,830.11 for goods purchased and received.²

Discussion. A. Standard of review. "The interpretation of an unambiguous written contract constitutes a ruling of law that is subject to plenary review on appeal." President & Fellows of Harvard College v. PECO Energy Co., 57 Mass.App. Ct. 888, 891, 787 N.E.2d 595 (2003). Therefore, this court will review this case de novo.³

Massachusetts, in keeping with Federal practice, has recently articulated a new guiding principle for evaluating motions to dismiss under Mass.R.Civ.P. 12(b). See Iannacchino v. Ford Motor Co., 451 Mass. 623, 636, 888 N.E.2d 879 (2008). "The modified Federal rule is that, to survive a motion to dismiss, a complaint must contain factual allegations `enough to raise a right to relief above the speculative level ... on the assumption that all the allegations in the complaint are true.'" Flomenbaum v. Commonwealth, 451 Mass. 740, 751 n. 12, 889 N.E.2d 423 (2008), quoting from Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).⁴

B. Forum selection clause. Meubles moved for dismissal "on the grounds that the parties agreed to litigate all matters relating to the contract between the parties in the courts of the Province of Quebec." BFW argues on appeal that the forum selection clause contained in the policy is inapplicable to the current dispute mainly because (1) the clause is limited exclusively to policy claims and (2) the clause applies to contract claims only.

1. Policy claims. BFW maintains that "[the policy] did not bind [it] to resolving any and all disputes between the parties exclusively in the Quebec courts." However, this argument is contrary to the plain language of the policy. See Larabee v. Potvin Lumber Co., 390 Mass. 636, 641, 459 N.E.2d 93 (1983), quoting from Sherman v. Employers' Liab. Assurance Corp., 343 Mass. 354, 356, 178 N.E.2d 864 (1961) ("[w]hen ... the words [of a contract] are plain and free from ambiguity they must be construed in their usual and ordinary sense"). BFW asserts that "[n]owhere in the Policy are there any provisions for the handling of disputes arising from allegations of fraudulent misrepresentations by Ragazzi or for the return of non-defective merchandise, which is not marketable because Ragazzi cannot furnish matching or compatible components for the merchandise." However, these claims would fall squarely within the literal language of the forum selection clause, which governs "any disputes arising out of or related to this Policy or the relationship between the Authorized Dealer and Ragazzi Furniture." This language demonstrates that the forum selection clause was designed to cover any and all claims between Meubles and its authorized dealers, and was in no way limited to policy claims only.

2. Contract claims. BFW next argues that the policy's forum selection clause applies only to contract claims. BFW contends that counts IV (fraud) and V (G.L. c. 93A) are torts, and therefore, are outside the scope of the forum selection clause. The case law cited by BFW does little to bolster its position. For example, Stagecoach Transp., Inc. v. Shuttle, Inc., 50 Mass.App.Ct. 812, 741 N.E.2d 862 (2001), is readily distinguishable. First, at issue in that case was a choice of law provision, not a forum selection clause as found in the present case. Id. at 817, 741 N.E.2d 862. The Stagecoach agreement read:

"This Agreement shall be governed and interpreted in accordance with the laws of the State of New York. Without limiting in any way the jurisdiction of the courts of any state, nation or province, or [the defendant's] right to invoke the jurisdiction of such courts, [the plaintiff] hereby submits and consents to the jurisdiction of the courts of the United States of America and the State of New York...."

Ibid. Accordingly, the court held, "In our case, the agreement does not limit enforcement actions to the New York courts." Id. at 818 n. 7, 741 N.E.2d 862. In contrast, here, the policy provides that the courts of Quebec have exclusive jurisdiction over any disputes between the parties. Unlike Stagecoach, where the parties agreed to jurisdiction in both New York State court as well as Federal court, the policy here mandated that all disputes be resolved in the courts of Quebec.

Second, contrary to BFW's assertion, Massachusetts does not apply a presumption that "unless so specified ... forum selection provisions ordinarily apply only to contract claims arising from the agreement and not to the tortious behavior of one of the parties." While this language may be characterized as consistent with that used by the Stagecoach court, BFW fails to acknowledge its context in that case. There, the court was interpreting the scope of a choice of law provision under New York law. See id. at 818, 741 N.E.2d 862. Even assuming that the presumption does apply in the present case, the language used in the policy's forum selection clause is sufficiently broad to overcome that presumption. Meubles's clause was not limited to disputes arising under the agreement.⁵ Rather, it is clear that the alleged torts in the present case stem from BFW's "relationship" with Meubles and are therefore covered by the broad policy language.⁶

BFW alleges that "Meubles knowingly encouraged [BFW] to purchase its products on false pretenses, knowing that it would not be able to service lifetime guarantees or supply [BFW] with accessories and matching furniture as it had done in the past." However, this alleged fraudulent action does not relate to BFW's acceptance of the policy, which contains the forum selection clause, but rather to purchases made pursuant to the policy. See Canal Elec. Co. v. Westinghouse Elec. Corp., 406 Mass. 369, 379, 548 N.E.2d 182 (1990) (c. 93A claim is merely an alternative recovery theory under contract as it arises from breach of warranty claim); Karty v. Mid-America Energy, Inc., 74 Mass.App.Ct. 25, 29-30, 903 N.E.2d 1131 (2009) ("party seeking to avoid a forum-selection clause on grounds of fraud must show that the inclusion of that clause in the contract was the result of fraud"). Accordingly, the forum selection clause applies to counts IV and V as those counts arise from the relationship between BFW and Meubles.⁷

3. Fairness of enforcing forum selection clause. Forum selection clauses shall be enforced when it is fair and reasonable to do so. Jacobson v. Mailboxes Etc. U.S.A., Inc., 419 Mass. 572, 574-575, 646 N.E.2d 741 (1995); Stagecoach Transp., 50 Mass.App.Ct. at 817-818, 741 N.E.2d 862. "[F]or a court to conclude that enforcement of a forum selection clause in a freely negotiated international commercial transaction is unfair or unreasonable, the party who seeks to escape the consequences of the clause must show that `trial in the contractual forum will be so gravely difficult and inconvenient that he will for all practical purposes be deprived of his day in court.'" Cambridge Biotech Corp. v. Pasteur Sanofi Diagnostics, 433 Mass. 122, 130, 740 N.E.2d 195 (2000), quoting from the Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 18, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). Additional factors to consider are whether "(a) [a defendant] will plead statutes of limitations in [the forum...