Brown v. Gingiss International, Inc., Civ. A. No. 73-C-33.

• Citation: 360 F. Supp. 1042
• Decision Date: 01 August 1973
• Docket Number: Civ. A. No. 73-C-33.
• Parties: Jerome H. BROWN et al., Plaintiffs, v. GINGISS INTERNATIONAL, INC., a Delaware corporation, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

360 F. Supp. 1042

Jerome H. BROWN et al., Plaintiffs, v. GINGISS INTERNATIONAL, INC., a Delaware corporation, Defendant.

Civ. A. No. 73-C-33.

United States District Court, E. D. Wisconsin.

August 1, 1973.

Kenneth F. Hostak, Racine, Wis., for plaintiffs.

Victor M. Harding, Milwaukee, Wis., for defendant; Calvin P. Sawyier, Chicago, Ill., of counsel.

DECISION AND ORDER

REYNOLDS, Chief Judge.

The plaintiff corporation and the individual plaintiffs, the corporation's chief officers, attempted to operate a now insolvent franchise of the defendant, a well-known company specializing in the rental of formal clothing. Plaintiffs contend that defendant made certain verbal misrepresentations to induce plaintiffs to enter the business. They seek by this action to have declared unenforceable the original franchise agreement, an installment sales contract, a promissory note given when the franchise was launched, and other promissory notes given two years later to keep the franchise alive. They also seek $60,000 in damages. Jurisdiction is based on diversity of citizenship. The matter is now before me on defendant's motion, pursuant to 28 U.S.C. § 1404(a), for a change of venue to the Northern District of Illinois. The motion is granted.

Defendant's motion is based not only on the customary considerations of convenience called for by § 1404(a) but also on a written provision in the franchise agreement providing that plaintiffs shall bring all actions, such as this, in the federal or state courts located in Cook County, Illinois:

"* * * The Franchisee agrees that he will not commence any action, whether in law or equity, against International because of any matter whatsoever including, but not limited to any matter arising out of the alleged breach or performance of this Franchise Agreement, in any Courts other than those Federal and State courts located with the County of Cook, State of Illinois. * * *" Part N, paragraph 8, of the Franchise Agreement at 16.

Of course, the provision does not deprive this court of jurisdiction. It should, however, be one factor affecting the discretionary determination required by § 1404(a), as no less an authority than the United States Supreme Court has recently held. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972).

The individual plaintiffs contend the provision does not apply to them since the formal party to the contract was the corporation, and they signed the contract only as guarantors. But as defendant points out, the operation of the franchise, and paragraph 4, part B, of the contract itself manifests the parties' intention that the individual plaintiffs would be bound by the contract's provisions. Even if the individual plaintiffs are considered mere guarantors, their contemporaneous signing of the agreement and the absence of any separate guaranty contract suggest this was a single transaction under which the guarantors' liability may be coextensive with the principal's. Hence, the venue provision applies to both. Marco Milling Co. v. Commercial Services of Texas, Inc., 346 S.W.2d 495 (Tex.Ci...