Cont'l Glass Sales & Inv. Corp v. First Finish, LLC

• Docket Number: 21-cv-6734
• Decision Date: 23 May 2022
• Citation: Cont'l Glass Sales & Inv. Corp v. First Finish, LLC, 21-cv-6734 (N.D. Ill. May 23, 2022)
• Parties: CONTINENTAL GLASS SALES & INVESTMENT CORP., Plaintiff, v. FIRST FINISH, LLC, Defendant.
• Court: U.S. District Court — Northern District of Illinois

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CONTINENTAL GLASS SALES & INVESTMENT CORP., Plaintiff, v. FIRST FINISH, LLC, Defendant.

No. 21-cv-6734

United States District Court, N.D. Illinois, Eastern Division

May 23, 2022

MEMORANDUM OPINION AND ORDER

MARVIN E. ASPEN, DISTRICT JUDGE:

Plaintiff Continental Glass Sales & Investment Corp. (“Continental”) brought this lawsuit against Defendant First Finish, LLC (“First Finish”) seeking declaratory relief in connection with a dispute over construction work it performed as a subcontractor for First Finish. Four days later, First Finish sued Continental in the District of Maryland over the same dispute. Continental then moved for an order enjoining First Finish from prosecuting the suit it filed in Maryland. (Plaintiff's Motion for an Antisuit Injunction (“Pl.'s Mot.”) (Dkt. No 14); Plaintif f's Memorandum in Support of Motion for an Antisuit Injunction (“Pl.'s Mem.”) (Dkt. No 15).)^[1] First Finish countered by asking us to dismiss Continental's Complaint or abstain from hearing the case before us. (First Finish, LLC's Motion to Dismiss Complaint for Declaratory Judgment or Abstain (“Def.'s Mot.”) (Dkt. No. 18); First Finish LLC's Memorandum in Support of Motion to Dismiss Complaint, Abstain, or Transf er Action (“Def.'s Mem.”) (Dkt. No. 19).) For the following reasons, both motions are denied.

BACKGROUND

Continental is an Ohio corporation with its principal place of business in Ohio. (Complaint for Declaratory Relief (“Compl.”) (Dkt. No. 1) ¶ 5.) First Finish is a Maryland limited liability company with its principal place of business in Maryland. (Id. ¶ 3; Case No. 21-cv-3238 (D. Md.), Complaint for Indemnity and Equitable Relief (“Maryland Compl.”) (Dkt. No. 1) ¶¶ 1-2.) Continental alleges, upon information and belief, that “none of First Finish's members are citizens of either Illinois or Ohio.” (Compl. ¶ 4.)

First Finish, as general contractor, contracted with CP/IPERS Rosemont Hotel, LLC (the “Owner”) to perform guest room renovations at the Westin O'Hare in Rosemont, Illinois (the “Project”). (Dec. 10, 2021 Letter from C. Rodgers-Waire to M. Kessler (“Demand Letter”) (D k t. No. 1-3) at 2.) The parties refer to this contract as the “Prime Contract.” (Id.; Compl. ¶ 9.) First Finish also subcontracted with Continental. (Subcontract Agreement (“Subcontract”) (Dkt. No. 19-1); Compl. ¶ 9.) The Subcontract incorporates the Prime Contract by reference. (Compl. ¶ 9; Def.'s Mem. at 3.)

Pursuant to the Subcontract, Continental agreed to furnish and install glass barn door and glass shower door assembly units f or the Project. (Subcontract ¶ 4.1 & Ex. A; Compl. ¶ 14; Demand Letter at 2.) According to Continental, however, the defective construction of the hotel's guest rooms prevented it from properly installing its units. (See Compl. ¶¶ 15-17, 19.) Continental further alleges that it reasonably attempted to install its units in the defectively constructed rooms. (Id. ¶ 23.) Ultimately, though, several doors installed by Continental came off their tracks or shattered. (Demand Letter at 4-7.) First Finish decided to repair Continental's work using another contractor. (Id. at 7-8 .)

On December 10, 2021, First Finish sent a letter to Continental demanding payment of $358, 307 to cover the estimated cost of these repairs. (Id. at 8.) In the letter, First Finish listed several provisions from the Prime Contract under the heading “Operative Contract Terms and Obligations, ” noted that the Prime Contract is one of the Contract Documents that “govern[ed] all work to be performed by Continental, ” and identified a contractual obligation that bound Continental “[i]n addition to the terms of the Prime Contract[.]” (Id. at 2-4.) Later in the letter, First Finish asserted that Continental's argument that it was not responsible for the defective installation was not a defense “given the clear terms of the Prime Contract and Subcontract . . . .” (Id. at 7.) First Finish concluded the letter by informing Continental that if it did not pay the demanded amount by December 20, First Finish would file suit against Continental in Maryland. (Id. at 8.)

On December 17, Continental sued First Finish in this Court (the “Illinois Lawsuit”) based on diversity jurisdiction. (Compl. ¶¶ 3-7 .) In the Illinois Lawsuit, Continental seeks a judgment declaring that it is not responsible for the guest rooms' defective construction or any associated repair costs, that it fulfilled all its responsibilities and obligations under the Subcontract and the Prime Contract, and that First Finish failed to fulfill its contractual obligation to provide a worksite free from defective construction. (Id. ¶¶ 1, 2, 35.) Four days after Continental filed the Illinois Lawsuit, First Finish sued Continental in the District of Maryland for breach of contract (the “Maryland Lawsuit”). (See generally Maryland Compl.)

Before asking us to issue an antisuit injunction, Continental moved in the District of Maryland to dismiss, stay, or transfer the Maryland Lawsuit. (Case No. 21-cv-3238 (D. Md.), Dkt. Nos. 13, 13-1.) On May 12, 2022, the Maryland district court denied Continental's motion to dismiss or transfer the Maryland Lawsuit. (Case No. 21-cv-32 38 (D. Md.), Dkt. No. 26.) In light of the proceedings in the Illinois Lawsuit, however, the court stayed the Maryland Lawsuit until June 30, 2022. (Id.)

ANALYSIS

I. First Finish's Motion to Dismiss or Abstain

First Finish makes two arguments in its motion to dismiss or abstain. It first argues that we should dismiss the Illinois Lawsuit based on the applicable forum-selection clause in the Subcontract. (Def.'s Mem. at 2, 5-11.) Alternatively, First Finish argues that we should abstain from exercising jurisdiction over the Illinois Lawsuit under the Wilton/Brillhart doctrine. (Id. at 2, 11-14.) We address each argument in turn.

A. The Subcontract's Forum-Selection Clause

First Finish contends that we should dismiss the Illinois Lawsuit because paragraph 13.4 of the Subcontract gives First Finish sole discretion over choosing the forum for the parties' dispute, and First Finish chose the District of Maryland. (Def.'s Mem. at 1-3, 11.) We construe First Finish's request f or dismissal based on a forum-selection clause as a request to transf er the Illinois Lawsuit under 28 U.S.C. § 1404(a). See Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49, 52, 59-61, 134 S.Ct. 568, 575, 579-80 (2013) (holding that a motion to transfer under § 1404(a) is the appropriate mechanism for enforcing a forum-selection clause that points to a federal forum).

To resolve this aspect of First Finish's motion, we must determine whether the forum-selection clause upon which First Finish relies, paragraph 13.4, is valid and applicable to the dispute at hand. See Evoqua Water Techs., LLC v. AFAM Concept Inc., No. 21 C 4708, 2022 WL 117769, at *1, *3 (N.D. Ill. Jan. 12, 2022) (denying motion to dismiss based on a forum-selection clause because the clause was invalid); Luk is v. Whitepages Inc., 535 F.Supp.3d 775, 792 (N.D. Ill. 2021) (“[T]ransfer under § 1404(a) is warranted only if the [forum-selection] clause applies to the suit in question.”). At the outset, the parties disagree about which state's law governs these determinations.^[2] First Finish says Maryland law governs because paragraph 14.11 of the Subcontract states that the agreement “shall be interpreted and enforced in accordance with the laws of the State of Maryland.” (Def.'s Mem. at 3, 5, 9; Subcontract ¶ 14.11.) Continental disagrees; it says Illinois law governs because a different provision, paragraph 13.3, states that for disputes involving the Prime Contract, the Subcontract “shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to any choice or conflict of laws provisions.” (Plaintif f Continental Glass Sales & Investment Corp.'s Opposition to Defendant's Motion to Dismiss Complaint, Abstain or Transfer Action (“Pl.'s Opp'n”) (Dkt. No. 23) at 3, 7-8; Subcontract ¶ 13.3.) Continental also contends that Illinois's Building and Construction Contract Act, 815 Ill. Comp. Stat. 665/1 et seq. (the “Construction Act”), renders paragraph 14.11 invalid. (Pl.'s Opp'n at 8-9.)

Our jurisdiction is based on diversity of citizenship, so we look to the substantive law of the forum state, including its choice-of-law rules, “to determine which state's law applies to the issues before” us. Sosa v. Onfido, 8 F.4th 631, 637 (7th Cir. 2021) (quotation marks omitted); Great W. Cas. Co. v. Robbins, 833 F.3d 711, 715 (7th Cir. 2016). Relevant here, Illinois's choice-of-law rules direct us to apply forum law unless the party seeking the choice-of-law determination demonstrates an actual conflict with another state's law. Sosa, 8 F.4th at 637. This remains true even when a choice-of-law clause identifies the law of a state other than the forum state-the party seeking to invoke that clause still must demonstrate an actual conflict between that state's law and the forum state's law. See Id. at 637-38 .

First Finish is the party seeking to invoke paragraph 14.11's choice of Maryland law. Yet First Finish's opening brief does not discuss whether Maryland law conflicts with Illinois law; it simply assumes that paragraph 14.11 requires us to apply Maryland law. (See, e.g., Def.'s Me m . at 3-5, 9.) What is more, First Finish's reply f ails to address any conflicts between Maryland and Illinois law even though Continental's opposition asserts that Illinois law governs. (See generally First Finish's Reply in Support of Motion to Dismiss (“Def.'s Reply”) (Dkt. No. 24).) First Finish simply makes no attempt to establish an actual conflict between Maryland and Illinois law. This failure alone justifies applying Illinois law to...