Brandt v. Millercoors, LLC

• Decision Date: 18 June 2013
• Docket Number: Docket No. 1–12–0431.
• Citation: 2013 IL App (1st) 120431,993 N.E.2d 116,373 Ill.Dec. 116
• Parties: William BRANDT, Jr., as Assignee for the Benefit of Creditors of Entec International NA, LLC, Plaintiff–Appellant, v. MILLERCOORS, LLC, Defendant–Appellee.
• Court: United States Appellate Court of Illinois

2013 IL App (1st) 120431

993 N.E.2d 116

373 Ill.Dec. 116

William BRANDT, Jr., as Assignee for the Benefit of Creditors of Entec International NA, LLC, Plaintiff–Appellant,

v.MILLERCOORS, LLC, Defendant–Appellee.

Docket No. 1–12–0431.

Appellate Court of Illinois, First District, Second Division.

June 18, 2013.

Scott A. Morgan & Associates, Ltd. (Scott A. Morgan, of counsel), and Bischoff Partners, LLC (Monica A. Forte, of counsel), both of Chicago, for appellant.

McGuire Woods LLP, of Chicago (Richard T. Greenberg and Andrew R. Woltman, of counsel), for appellee.

OPINION

Presiding Justice HARRIS delivered the judgment of the court, with opinion.

[373 Ill.Dec. 117]¶ 1 In this appeal, we are called upon to determine whether a contractual forum selectionclause requires the parties to litigate an allegedly “fraudulently induced contract” in Colorado as opposed to Illinois, where both parties are headquartered. We conclude that the forum selection clause is valid and for the reasons stated hereafter affirm the trial court.

¶ 2 Plaintiff, William Brandt, Jr., as assignee for the benefit of creditors of Entec International NA, LLC (Entec), appeals the order of the trial court dismissing his breach of contract, fraudulent scheme, unjust enrichment, and commercial disparagement claims against defendant, MillerCoors, LLC (MillerCoors), pursuant to section 2–619 of the Code of Civil Procedure (735 ILCS 5/2–619 (West 2010)). On appeal, plaintiff contends the forum selection clause of his contract with MillerCoors should not be enforced because (1) it effectively denies Entec its day in court; (2) Entec had no opportunity to negotiate the forum selection clause; and (3) MillerCoors fraudulently induced Entec to enter into the contract containing the forum selection clause.

¶ 3 JURISDICTION

¶ 4 The trial court granted MillerCoors' motion to dismiss on January 12, 2012. Plaintiff filed a notice of appeal on February 10, 2012. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rules 301 and 303 governing appeals from final judgments entered below. Ill. S.Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff. May 30, 2008).

¶ 5 BACKGROUND

¶ 6 Entec is an Illinois limited liability company providing professional parts procurement and management services. MillerCoors is a Delaware limited liability company headquartered in Chicago, Illinois. It is the second largest brewer in the United States with approximately 30% of the market share. In 2007, MillerCoors sought to reduce its costs and began discussions with Entec about its services. From July 2009 to early 2010, decision-makers from both companies met at several locations to discuss a possible agreement between Entec and MillerCoors. The meetings took place in Chicago, Illinois; Milwaukee, Wisconsin; and Golden, Colorado. Three of the five meetings occurred in Colorado, where MillerCoors' strategic sourcing and procurement operations are based.

¶ 7 On March 1, 2010, Entec and MillerCoors entered into a contract in which Entec agreed to provide parts procurement and other services for MillerCoors' breweries located in Georgia, North Carolina, Virginia, and Ohio. Pursuant to the agreement, Entec made capital investments and hired personnel. The agreement required Entec to assign two agents to each of the four breweries and provide, from its base in Illinois, administrative and logistical support to those agents. MillerCoors' administration of the agreement would take place primarily in Colorado, as well as in Wisconsin and North Carolina. None of MillerCoors' employees responsible for implementing the agreement with Entec were located in Illinois.

¶ 8 The agreement was one of MillerCoors' standard contracts, and the parties did not discuss or negotiate either the forum selection clause or the choice of law clause, contained therein. The clause states as follows:

“This Agreement is governed by the laws of the state of Colorado without regard to its conflicts of law provisions. COMPANY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING FROM OR RELATED TO THIS AGREEMENT. Any litigation or enforcement of an arbitration award must be brought in DistrictCourt, Jefferson County, State of Colorado or the U.S. District Court for the District of Colorado, as appropriate. Each party consents to personal and subject matter jurisdiction and venue in such courts and waives the right to change venue. The parties acknowledge that all directions issued by the forum court, including injunctions and other decrees, will be binding and enforceable in all jurisdictions and countries.”

¶ 9 After execution of the agreement, Entec commenced performance under the agreement. MillerCoors soon heard from certain suppliers that Entec failed to pay them even after MillerCoors had remitted specific payments to Entec for the monies owed. MillerCoors began receiving complaints and notices of mechanics liens from suppliers as a result. Certain suppliers threatened to cease providing necessary supplies for MillerCoors' brewing operations. Therefore, in December of 2010, MillerCoors informed Entec that it was cancelling the agreement.

¶ 10 On March 30, 2011, Entec filed a complaint against MillerCoors alleging breach of contract, fraudulent scheme, unjust enrichment, and commercial disparagement. Although the agreement expressly provides that Entec file such claims in Colorado, Entec filed its claim in Illinois. MillerCoors filed a section 2–619 motion to dismiss the claim which the trial court initially denied. However, on January 12, 2012, upon MillerCoors' motion, the trial court reconsidered its decision and granted the motion to dismiss based on the forum selection clause of the parties' agreement. Plaintiff, as assignee for the benefit of creditors of Entec, filed this timely appeal.

¶ 11 ANALYSIS

¶ 12 Plaintiff contends the trial court, upon reconsideration, erred in dismissing the complaint based on the forum selection clause of the parties' agreement. A section 2–619 motion to dismiss admits the sufficiency of the claim but asserts affirmative matter that defeats the claim. Patrick Engineering, Inc. v. City of Naperville, 2012 IL 113148, ¶ 3 1, 364 Ill.Dec. 40, 976 N.E.2d 318. The motion takes as true all well-pleaded facts and all reasonable inferences taken from those facts. Calloway v. Kinkelaar, 168 Ill.2d 312, 325, 213 Ill.Dec. 675, 659 N.E.2d 1322 (1995). Furthermore, the court views all pleadings and supporting documents in the light most favorable to the nonmoving party. DeSmet v. County of Rock Island, 219 Ill.2d 497, 504, 302 Ill.Dec. 466, 848 N.E.2d 1030 (2006). We review the trial court's grant of a section 2–619 motion to dismiss de novo. DeLuna v. Burciaga, 223 Ill.2d 49, 59, 306 Ill.Dec. 136, 857 N.E.2d 229 (2006).

¶ 13 The forum selection clause in a contract is prima facie valid and courts should enforce it unless the opposing party demonstrates that enforcement “ ‘will be so gravely difficult and inconvenient that [the opposing party] will for all practical purposes be deprived of [its] day in court.’ ” Calanca v. D & S Manufacturing Co., 157 Ill.App.3d 85, 87–88, 109 Ill.Dec. 400, 510 N.E.2d 21 (1987) (quoting The Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 18, S.Ct. 1907, 32 L.Ed.2d 513 (1972)). Courts consider the following factors in determining whether a forum selection clause is unreasonable: (1) the law governing the formation and construction of the contract; (2) residency of the parties; (3) location of execution/performance of the contract; (4) location of the parties and witnesses; (5) the inconvenience to the parties of any particular location; and (6) whether the parties bargained for the clause. Calanca, 157 Ill.App.3d at 88, 109 Ill.Dec. 400, 510 N.E.2d 21. [373 Ill.Dec. 120]¶ 14 In the case at bar we find that the first factor, the governing law, favors Colorado. The agreement explicitly states that Colorado law governs without regard to conflicts of law. See Calanca, 157 Ill.App.3d at 88, 109 Ill.Dec. 400, 510 N.E.2d 21 (governing law is the state's law specified in the contract as the governing law of the contract); see also IFC Credit Corp. v. Rieker Shoe Corp., 378 Ill.App.3d 77, 86, 317 Ill.Dec. 214, 881 N.E.2d 382 (2007). Plaintiff disagrees, arguing that Illinois law should apply despite the express choice of law clause in the contract. As support, plaintiff cites Maher & Associates, Inc. v. Quality Cabinets, 267 Ill.App.3d 69, 203 Ill.Dec. 850, 640 N.E.2d 1000 (1994).

¶ 15 The contract at issue in Maher contained a similar clause stating that “any claim or cause of action arising out of the agreement must be brought in Dallas County, Texas, and that Texas law governs the contract.” Id. at 72, 203 Ill.Dec. 850, 640 N.E.2d 1000. The court in Maher, however, recognized that forum selection and choice of law are separate issues requiring separate analysis. Id. at 76, 203 Ill.Dec. 850, 640 N.E.2d 1000. It found the forum selection clause void as against Illinois public policy to protect the bargaining power and commissions of sales representatives working in Illinois. Id. at 75–76, 203 Ill.Dec. 850, 640 N.E.2d 1000. The court then concluded “that this case must be determined under Illinois law in order to avoid the absurd result of permitting this litigation to be brought in Illinois because of the public policy concerns incorporated in the Sales Act and then requiring the application of Texas law, which has no statute or case law comparable to our Sales Act.” Id. at 76, 203 Ill.Dec. 850, 640 N.E.2d 1000. The issue before us is one of forum selection, not choice of law, and plaintiff does not argue that the forum selection clause of the agreement with MillerCoors violates Illinois public policy. Therefore, Maher is not relevant here.¹

¶ 16 We determine the remaining Calanca factors as follows: both parties are headquartered in Illinois; the record does not show where the parties executed the contract, but performance under the...