Beasley Forest Prods., Inc. v. N. Clearing, Inc.

Decision Date14 January 2021
Docket Number2:20-cv-80
Citation515 F.Supp.3d 1367
CourtU.S. District Court — Southern District of Georgia
Parties BEASLEY FOREST PRODUCTS, INC. and Ashland Mat, LLC, Plaintiffs, v. NORTHERN CLEARING, INC. and OEI, Inc., Defendants.

Lee M. Gillis, Jr., Bruce Daniel Dubberly, IV, James, Bates, Brannan, Groover, LLP, Macon, GA, for Plaintiffs.

Steven P. Bogart, Pro Hac Vice, Reinhart Boerner Van Deuren s.c., Milwaukee, WI, Theresa Davis Beaton, Roberts Tate, LLC, Saint Simons Island, GA, for Defendants.

ORDER

LISA GODBEY WOOD, JUDGE

Before the Court are two motions: the Motion to Dismiss, dkt. no. 4, filed by Defendants Northern Clearing, Inc. ("NCI") and OEI, Inc. ("OEI") (collectively, "Defendants"); and the Motion to Remand, dkt. no. 17, filed by Plaintiffs Beasley Forest Products, Inc. ("Beasley Forest") and Ashland Mat, LLC ("Ashland Mat") (collectively, "Plaintiffs"). For the reasons stated below, PlaintiffsMotion to Remand is GRANTED and DefendantsMotion to Dismiss is DENIED as moot .

I. BACKGROUND

This suit arises from a series of contracts between Plaintiffs and Defendants. Plaintiffs Beasley Forest and Ashland Mat are in the business of producing hardwood mats, lumber, chips, and bark. Dkt. No. 1-1 at 4. Defendants NCI and OEI are in the business of providing clearing, access road construction, vegetation management, and mat services. Id. The principals of Defendant NCI incorporated OEI in 1998 to acquire a sawmill in Ashland, Wisconsin (the "Ashland Sawmill") from a non-party entity. Id. In December 2012, the principals of Plaintiff Beasley Forest organized Ashland Mat to purchase the Ashland Sawmill from OEI. Id. Ashland Mat and OEI executed the Asset Purchase and Sale Agreement (the "Purchase Agreement") on December 31, 2012, to facilitate this purchase. Id. at 5. On the same date, Beasley Forest and NCI entered into two "Ancillary Agreements" in connection with Ashland Mat and OEI's Purchase Agreement. Id. at 6, 82-397. The Ancillary Agreements involved the sale and purchase of timber mats between Beasley Forest and NCI, and the parties included the Ancillary Agreements as attached exhibits to the Purchase Agreement. Id. at 6-7, 62.

Beasley Forest first filed a breach of contract and accounting suit against NCI in state court on April 13, 2020, alleging that NCI breached the Ancillary Agreements. Dkt. No. 1 at 1.1 On May 13, 2020, NCI removed that case to this Court based on diversity jurisdiction, and Beasley Forest thereafter voluntarily dismissed the suit. Id. On June 26, 2020, Beasley Forest filed the present suit in the Superior Court of Jeff Davis County, Georgia. Id. at 2. In this suit, Plaintiffs now include Ashland Mat as a plaintiff and OEI as a defendant, and, in addition to their original breach of contract and accounting claims, Plaintiffs allege promissory estoppel, breach of duty of good faith and fair dealing, and aiding and abetting the breach of duty of good faith and fair dealing claims. Dkt. No. 1-1. On August 4, 2020, Defendants removed the case to this Court, again asserting diversity jurisdiction. Dkt. No. 1.

On August 10, 2020, Defendants filed the present Motion to Dismiss. Dkt. No. 4. In their Motion, Defendants argue that Plaintiffs’ claims fail as a matter of law because the Ancillary Agreements are unenforceable under Georgia law and the Complaint "fails to satisfy federal pleading requirements." Id. at 2. Then, on September 1, 2020, Plaintiffs filed the present Motion to Remand. Dkt. No. 17. In their Motion, Plaintiffs argue that the Court must remand this case back to state court for two reasons: (1) complete diversity is lacking, and (2) the forum-selection clause in the relevant contracts binds the parties to remain in state court. Id. at 2.

II. LEGAL STANDARD

An action filed in state court may be removed to federal court based upon diversity or federal question jurisdiction. 28 U.S.C. § 1441(a). When a case is removed based on diversity jurisdiction, the case must be remanded to state court if there is not complete diversity between the parties, Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267, 2 L.Ed. 435 (1806), or one of the defendants is a citizen of the state in which the suit is filed, 28 U.S.C. § 1441(b). For purposes of diversity jurisdiction, a limited liability company "is a citizen of any state of which a member of the company is a citizen." Mallory & Evans Contractors & Eng'rs, LLC v. Tuskegee Univ., 663 F.3d 1304, 1305 (11th Cir. 2011) (quoting Rolling Greens MHP, LP v. Comcast SCH Holdings, LLC, 374 F.3d 1020, 1022 (11th Cir. 2004) ). A corporation is "a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. § 1332(c)(1). "A corporation's principal place of business is determined by looking at the ‘total activities’ of the corporation." Bel-Bel Int'l Corp. v. Cmty. Bank of Homestead, 162 F.3d 1101, 1106 (11th Cir. 1998) (citing Village Fair Shopping Ctr. Co. v. Sam Broadhead Trust, 588 F.2d 431, 434 (5th Cir. 1979) ).

Additionally, Federal Rule of Civil Procedure 8(a)(2) requires that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief." This pleading standard does not require "detailed factual allegations," but "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In order to withstand a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). A complaint is plausible on its face when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

It is important to note that while the factual allegations set forth in the complaint are to be considered true at the motion to dismiss stage, the same does not apply to legal conclusions set forth in the complaint. Sinaltrainal v. Coca–Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2009) (citing Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. The court need not "accept as true a legal conclusion couched as a factual allegation." Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

Lastly, the Court notes that exhibits attached to pleadings may become part of a pleading. Fed. R. Civ. P. 10(c). Consequently, a court may consider documents attached to a complaint as exhibits in resolving a motion to dismiss without converting the motion to one for summary judgment. Taylor v. Appleton, 30 F.3d 1365, 1368 n.3 (11th Cir. 1994). A court may also consider public records when deciding a motion pursuant to Federal Rule of Civil Procedure 12(b) without converting the motion to a motion for summary judgment. Universal Express, Inc. v. U.S. Sec. & Exch. Comm'n, 177 F. App'x 52, 53 (11th Cir. 2006) ("A district court may take judicial notice of certain facts without converting a motion to dismiss into a motion for summary judgment. Public records are among the permissible facts that a district court may consider.").

III. DISCUSSION

Before addressing DefendantsMotion to Dismiss, the Court must address PlaintiffsMotion to Remand, as it presents a challenge to this Court's jurisdiction to hear this case. Plaintiffs argue that the Court must remand this case back to state court for two reasons: first, because complete diversity is lacking; and second, because the forum-selection clause in the relevant contracts binds the parties to remain in state court. Dkt. No. 17 at 2. The Court begins by addressing Plaintiffs’ complete diversity argument.

A. Complete Diversity of the Parties

Plaintiffs first contend that this case must be remanded back to the Superior Court of Jeff Davis County because complete diversity is lacking. Dkt. No. 17 at 6. Specifically, Plaintiffs argue that Plaintiff Ashland Mat and both Defendants are Wisconsin citizens, which makes the parties nondiverse for the purposes of federal diversity jurisdiction. Id. In support of their argument that Ashland Mat is a Wisconsin citizen, Plaintiffs allege that Ashland Mat's principal place of business is in Ashland, Wisconsin. Id. Defendants respond by arguing that Plaintiffs have failed to sufficiently establish Ashland Mat's Wisconsin citizenship. Dkt. No. 22 at 4.

These arguments, however, are inapposite to the question of whether Ashland Mat is diverse from the Wisconsin citizen Defendants. Ashland Mat is a limited liability company, and "[t]o sufficiently allege the citizenships of these unincorporated business entities, a party must list the citizenships of all the members of the limited liability company." Mallory & Evans Contractors & Eng'rs, LLC, 663 F.3d at 1305 (quoting Rolling Greens MHP, 374 F.3d at 1022 ). Because the parties had not done so previously, the Court issued an order directing the parties to confirm the citizenship of each member of Ashland Mat before ruling upon the subject motions. See Dkt. No. 26. Ashland Mat responded to this order by showing that Ashland Mat's sole member is Beasley-Johnson Holdings, Inc. ("Beasley-Johnson"). Dkt. No. 27 ¶ 2. Ashland Mat states that Beasley-Johnson is a holding company incorporated under the laws of Delaware, and that it "has delegated the operational decision making to those who direct, control, and coordinate the business of Ashland Mat, LLC in Ashland, Wisconsin." Id. ¶¶ 3, 4. Ashland Mat does not argue whether Beasley-Johnson's principal place of business is in Wisconsin or elsewhere. See id. Defendants responded by arguing...

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