Cashman Equipment Corp. v. Kimmins Contracting Corp., Civil Action No. 03-10463-DPW (D. Mass. 1/5/2004), Civil Action No. 03-10463-DPW.

CourtUnited States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
PartiesCASHMAN EQUIPMENT CORP., Plaintiff, v. KIMMINS CONTRACTING CORP., Defendant.
Docket NumberCivil Action No. 03-10463-DPW.
Decision Date05 January 2004

Page 1

CASHMAN EQUIPMENT CORP., Plaintiff,
v.
KIMMINS CONTRACTING CORP., Defendant.
Civil Action No. 03-10463-DPW.
United States District Court, D. Massachusetts.
January 5, 2004.
MEMORANDUM AND ORDER

DOUGLAS WOODLOCK, District Judge.


Plaintiff Cashman Equipment Corporation ("Cashman") seeks to compel Kimmins Contracting Corporation ("Kimmins") to arbitrate a dispute arising from the lease of a barge and vessel in Florida. Kimmins challenges the validity of the arbitration clause in the lease agreement to the extent that it requires arbitration in Massachusetts. For the reasons set forth below, I will grant Cashman's motion for summary judgment, and deny Kimmins's renewed motion to dismiss.

I. BACKGROUND

Kimmins is a Florida corporation with its principal place of business in Tampa, Florida. Cashman is a Massachusetts corporation with its principal place of business in Boston, Massachusetts. Cashman does business in Florida, but Kimmins does not do business in Massachusetts.

In May 2002, Kimmins and Cashman entered into a pair of agreements by which Cashman leased a barge and crane to Kimmins. The barge charter agreement ("Charter") specified that Kimmins chartered the barge on a "bare boat" basis. The crane equipment lease ("Equipment Lease") was incorporated into the Charter. Pursuant to the agreement, the barge and the crane (which was on the barge's deck) were delivered to Kimmins in Tampa.

Kimmins's apparent purpose in entering into these agreements was to obtain equipment that would be useful to it for construction work at a public works project for the Tampa Port Authority. However, neither agreement required or even recited this. Under the Charter, Kimmins could use the barge (and, by extension, the crane), within the territorial waters of the United States, for any lawful purpose other than carrying petroleum products, hazardous materials, or cargo requiring a Coast Guard certification that the barge lacked.

After the barge and crane were returned to Cashman, a dispute arose. Cashman maintained, and Kimmins denied, that Kimmins owed both base charter hire and additional charter hire for use of the barge and crane beyond a single shift operation, and also that the barge was damaged during the term of the charter.

To resolve such disputes, the Charter contained an arbitration clause, Paragraph 16, which is reproduced here in its entirety:

Should it become necessary for either party to enforce its rights under the terms of this Agreement, the losing party agrees to make the damaged party whole and to pay reasonable attorney's fees and arbitration costs to the prevailing party. The parties further agree that all disputes concerning the interpretation of this Agreement and the rights and obligations of the parties arising out of this Agreement shall be submitted to binding arbitration. The arbitration shall be conducted within the Commonwealth of Massachusetts, subject to the jurisdiction of its courts, and under any of the applicable general laws of the Commonwealth. The Agreement shall be governed by the American Arbitration Association (AAA) rules of commercial arbitration and shall specifically include the AAA's Optional Rules for Emergency Measures of Protection.

In addition, Paragraph 23 of the Charter provided that "[t]he parties agree that all disputes hereunder shall be decided in accordance with paragraph 16 of this Charter Agreement." (emphasis in original).

In February 2003, pursuant to the arbitration clause, Cashman demanded arbitration in the Port of Boston. In response, Kimmins filed an action in Florida state court later that month, seeking a declaratory judgment that Paragraph 16, to the extent it requires that arbitration be conducted in Massachusetts, is void under Florida law.1

In March 2003, Cashman filed in this Court a petition to compel arbitration under the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1-14. In April 2003, Kimmins moved to dismiss, arguing, inter alia, that this Court lacks personal jurisdiction over Kimmins; that Massachusetts is an improper venue; and that the venue provision of Paragraph 16 violates Florida law. In June 2003, I denied Kimmins's motion, but indicated that I would consider further argument on the propriety of a transfer to the Middle District of Florida. Cashman has now moved for summary judgment. Kimmins responds by opposing Cashman's motion, and also with a renewed motion to dismiss or, alternatively, to transfer or stay.

II. DISCUSSION

Cashman contends that Paragraph 16 is unambiguous and as a matter of law requires that any dispute must be arbitrated in Massachusetts. In its two motions, Kimmins argues, with substantial overlap, that (1) Paragraph 16 is void under Florida law; (2) venue in Massachusetts is improper under 28 U.S.C. § 1391 because (a) Paragraph 16 does not constitute consent to either personal jurisdiction or venue in Massachusetts, and (b) but for Paragraph 16, Kimmins would clearly not be subject to personal jurisdiction here; and (3) this Court should abstain in favor of the pending Florida state court litigation. As relief, Kimmins seeks either dismissal for improper venue, a transfer to the Middle District of Florida under 28 U.S.C. § 1404(a), or a stay until the state court litigation concludes.

A. Standard of Review

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is "material" if it has the "potential to affect the outcome of the suit under the applicable law." Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000), and a "genuine" issue is one that "may reasonably be resolved in favor of either party." Cadle Co. v. Haves, 116 F.3d 957, 960 (1st Cir. 1997).

In this case, Kimmins simultaneously filed, alongside its opposition to Cashman's motion for summary judgment, a renewed motion to dismiss under Fed.R.Civ.P. 12(b)(3) (improper venue) and the abstention doctrine of Colorado River Conservation District v. United States, 424 U.S. 800 (1976). In the First Circuit, the plaintiff has the burden of proving that it has brought the action in a permissible forum. Cordis Corp. v. Cardiac Pacemakers, 599 F.2d 1085, 1086 (1st Cir. 1979); Salisbury Cove Assoc., Inc. v. Indcon Design (1995), Ltd., 211 F. Supp.2d 184, 187 (D. Me. 2002); see also 5A C. Wright & A. Miller, Federal Practice and Procedure § 1352 (1990 & Supp. 2003).2

The procedural analysis for Rule 12(b)(3) challenges is the same as that used for a Rule 12(b)(2) challenge for lack of personal jurisdiction. Salisbury Cove Assoc., 211 F. Supp.2d at 187-88; M.K.C. Equip. Co. v. M.A.I.L. Code, Inc., 843 F. Supp. 679, 682-83 (D. Kan. 1994). The plaintiff must make a prima facie demonstration, employing affirmative proof beyond the pleadings, of every fact necessary to establish proper venue. See Boit v. Gar-Tec Products, Inc., 967 F.2d 671, 675 (1st Cir. 1992) (describing procedure for evaluating motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing); Salisbury Cove Assoc., 211 F. Supp.2d at 187. The court, in evaluating whether the plaintiff has made such a prima facie demonstration, accepts plaintiff's properly supported proffers of evidence as true, and views disputed facts in a light favorable to the plaintiff, but need not credit unsupported allegations in the pleadings. Boit, 967 F.2d at 675.

In this case, there do not appear to be any disputed material facts. Cashman does not contend that Kimmins has any connection with Massachusetts other than what may be found in the Charter and the Equipment Lease, and rests solely on those documents. Therefore, in the absence of any disputed facts, the motions may be considered jointly and resolved as a matter of law without regard to differences between standards of review.

C. Validity of Paragraph 16 Under Florida Law

Kimmins argues that Paragraph 16's venue provision is invalid under a Florida statute voiding certain venue provisions. See Fla. Stat. § 47.025. Before analyzing this contention, I must digress briefly into a choice-of-law analysis.

"`In the absence of a contractual choice-of-law clause, federal courts sitting in admiralty apply federal maritime choice-of-law principles.'" Flores v. Am. Seafoods Co., 335 F.3d 904, 916 (9th Cir. 2003) (quoting Chan v. Soc'y Expeditions, Inc., 123 F.3d 1287, 1296-97 (9th Cir. 1997)). Under those principles, a court examines "(1) the place of the wrongful act, (2) the law of the ship's flag, (3) the domicile of the injured party, (4) the domicile of the shipowner, (5) the place of contract, (6) the inaccessibility of the foreign forum, and (7) the law of the forum." Sundance Cruises Corp. v. Am. Bureau of Shipping, 7 F.3d 1077, 1082 (2d Cir. 1993) (citing Lauritzen v. Larsen, 345 U.S. 571 (1953)).

However, "where the parties specify in their contractual agreement which law will apply, admiralty courts will generally give effect to that choice." Flores, 335 F.3d at 916 (quoting Chan, 123 F.3d at 1296-97); Milanovich v. Costa Crociere, S.p.A., 954 F.2d 763, 767 (D.C. Cir. 1992); Stoot v. Fluor Drilling Servs., Inc., 851 F.2d 1514, 1517 (5th Cir. 1988). Choice-of-law provisions will only be dishonored if "the state has no substantial relationship to the parties or the transaction or the state's law conflicts with the fundamental purposes of maritime law." Stoot, 851 F.2d at 1517; Restatement (Second) of the Conflicts of Laws § 187 (1971). Finally, the court does not apply the choice-of-law principles of the jurisdiction selected, but rather proceeds directly to that jurisdiction's substantive law. Chan, 123 F.3d at 1297; Milanovich, 954 F.2d at 766-67.

Were there no Paragraph 16, a court would probably not apply Massachusetts...

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