Corel Corp. v. Ferrellgas Partners, L.P.

• Decision Date: 05 October 2021
• Docket Number: No. ED 109259,ED 109259
• Parties: COREL CORPORATION, Appellant, v. FERRELLGAS PARTNERS, L.P., Respondent.
• Court: Missouri Court of Appeals

633 S.W.3d 849

COREL CORPORATION, Appellant,

v.FERRELLGAS PARTNERS, L.P., Respondent.

No. ED 109259

Missouri Court of Appeals, Eastern District, DIVISION ONE.

Filed: October 5, 2021

FOR APPELLANT: Randall E. Gusdorf, Gusdorf Law Firm, LLC, 9666 Olive Boulevard, Suite 211, St. Louis, Missouri 63132.

FOR RESPONDENT: Bryan E. Mouber, Baker Sterchi Cowden & Rice, LLC, 2400 Pershing Road, Suite 500, Kansas City, Missouri 64108, Robert F. Chandler, Baker Sterchi Cowden & Rice, LLC, 100 North Broadway, 21^st Floor, St. Louis, Missouri 63102.

Kelly C. Broniec, Judge

I. Introduction

Corel Corporation ("Corel") appeals the circuit court's judgment granting Ferrellgas Partners, L.P.’s ("Ferrellgas") motion to dismiss. Corel brings four points on appeal. First, Corel argues that the trial court erred in dismissing its petition for lack of subject matter jurisdiction. Second, Corel argues that the trial court erred in holding that it did not have personal jurisdiction over Ferrellgas. Third, Corel argues that the circuit court erred in holding that the claims in Corel's First Amended Petition were precluded under the doctrines of collateral estoppel and res judicata. Finally, Corel argues that the circuit court erred in holding that Corel could not waive its unilateral outbound forum selection clause.

We affirm.

II. Factual and Procedural Background

On December 19, 2019, Corel, a Canadian corporation, filed a petition against Ferrellgas, a Delaware limited partnership, in the St. Louis County Circuit Court, alleging breach of contract, unjust enrichment, and conversion, and seeking injunctive relief and a declaratory judgment in addition to damages. Corel, a software company, alleged that Ferrellgas, a propane supplier, purchased numerous computers from Dell, Inc., with pre-loaded software programs, including software from Corel. According to Corel, after Ferrellgas purchased the computers, it "created ‘mirror images’ of the pre-loaded software sold with those computers and installed the imaged software on unlicensed Lenovo computers and other equipment, without authorization from Corel, without payment of license and maintenance fees to Corel, and in violation of Corel's EULAs." Corel asserts that it demanded Ferrellgas pay the license and maintenance fees for its software, but Ferrellgas refused and continues to refuse any payments. Corel believes that Ferrellgas continues to use its software. Importantly, Ferrellgas's alleged conduct "occurred, in part, in Missouri."

Ferrellgas moved to dismiss Corel's petition on February 14, 2020, first arguing that a valid forum selection clause requires Corel to bring its claims exclusively in the state and federal courts in California. The forum selection clause, found in Corel's End User License Agreement ("EULA"), reads:

[T]his EULA is governed by the laws of the United States and the State of California, without reference to conflict of laws principles. Any dispute between You and Corel regarding this EULA will be subject to the exclusive venue of the state and federal courts in the State of California.

Additionally, Ferrellgas argued that Corel did not show that the circuit court could exercise personal jurisdiction over Ferrellgas for this dispute.

The circuit court granted Ferrellgas's motion on April 22, 2020, stating that "Ferrellgas has made a prima facie case for lack of subject matter jurisdiction by showing that the [EULA] contained a forum selection clause requiring litigation between the parties to take place in California," and finding that Corel has not demonstrated that enforcement of the forum selection clause would be "unjust or unreasonable." In addition, the circuit court determined that the clear language of the forum selection clause in Corel's EULA does not permit Corel to unilaterally waive it. Lastly, the circuit court also ruled that Corel failed to plead adequate facts for the circuit court to invoke either general or specific personal jurisdiction over Ferrellgas. Corel was then granted thirty-days leave by the circuit court to amend its petition.

On May 22, 2020, Corel filed an amended petition to include more facts demonstrating Ferrellgas's connections with Missouri. Ferrellgas moved to dismiss Corel's First Amended Petition on June 1, 2020, again arguing that the forum selection clause requires this dispute to be heard in the state or federal courts in California and that Corel failed to plead facts sufficient for the circuit court to invoke personal jurisdiction over Ferrellgas. Ferrellgas also invoked collateral estoppel and res judicata , arguing that these doctrines preclude Corel from filing an amended petition.

The circuit court again agreed with Ferrellgas and dismissed Corel's First Amended Petition without prejudice, although this time without leave to amend. The circuit court found that the allegations contained in the First Amended Petition "do[ ] not defeat the forum selection clause or the lack of subject matter jurisdiction pursuant to the [EULA] at issue," that Corel has not pled facts to demonstrate personal jurisdiction over Ferrellgas, and that the doctrines of collateral estoppel and res judicata preclude the amended petition as filed.

This appeal follows.

III. Standard of Review

"Review of a circuit court's order granting a motion to dismiss is de novo. " Reed v. Reilly Co., LLC , 534 S.W.3d 809, 811 (Mo. banc 2017) (quoting Gibbons v. J. Nuckolls, Inc. , 216 S.W.3d 667, 669 (Mo. banc 2007) ). "The judgment of the circuit court will be affirmed if the dismissal is justified on any ground alleged in the motion." Id. (quoting Armstrong-Trotwood, LLC v. State Tax Comm'n , 516 S.W.3d 830, 835 (Mo. banc 2017) ).

IV. Discussion

Corel argues in its fourth point on appeal that the circuit court erred in holding that it could not waive its "unilateral outbound forum selection clause" because enforcement of the forum selection clause would be unfair and unreasonable in that the conduct at issue took place in Missouri, the witnesses are in Missouri, and it can properly waive its outbound forum selection clause. We disagree, and because our disposition on Point IV resolves this appeal, we decline to address Corel's other points. Id.

Corel placed a forum selection clause in its EULA stating that "[a]ny dispute ... regarding this EULA will be subject to the exclusive venue of the state and federal courts in the State of California." Forum selection clauses are contractual agreements designating the appropriate venue for a claim to be brought. GP&W Inc. v. Daibes Oil, LLC , 497 S.W.3d 866, 869 (Mo. App. E.D. 2016). Outbound forum selection clauses—like the one in Corel's EULA—provide for venue outside of Missouri, while inbound forum selection clauses provide for venue within Missouri. Burke v. Goodman , 114 S.W.3d 276, 279 (Mo. App. E.D. 2003) (citing High Life Sales Co. v. Brown–Forman Corp. , 823 S.W.2d 493, 495 (Mo. banc 1992) ). Under Missouri law,¹ forum selection clauses are prima facie valid. Cygnus SBL Loans, LLC. v. Hejna , 584 S.W.3d 324, 330 (Mo. App. W.D. 2019). "Freely negotiated" forum selection clauses will be enforced, "so long as doing so is neither unfair nor unreasonable." High Life , 823 S.W.2d at 497 ; accord M/S Bremen v. Zapata Off-Shore Co. , 407 U.S. 1, 18, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). "The party resisting enforcement of the forum selection clause bears a heavy burden in convincing the court that he or she should not be held to the bargain because it is unfair or unreasonable." GP&W , 497 S.W.3d at 869 (emphasis added); accord Cygnus , 584 S.W.3d at 330 ; Major v. McCallister , 302 S.W.3d 227, 229 (Mo. App. S.D. 2009).

A. Waiver

Corel argues that it can unilaterally waive the forum selection clause it put in its EULA and bring this suit in St. Louis County. According to Corel, the Western District's holdings in Seals v. Callis , 848 S.W.2d 5 (Mo. App. W.D. 1992), and Peoples Bank v. Carter , 132 S.W.3d 302 (Mo. App. W.D. 2004), permit a party to unilaterally waive a forum selection clause. Therefore, Corel maintains, Ferrellgas must first demonstrate that it relied on the forum selection clause, then establish that waiver of the clause would cause it to suffer prejudice as a result. Yet Corel's reliance on these cases overlooks important differences that render them inapplicable here.

First, as noted above, forum selection clauses are contractual agreements regarding venue. GP&W , 497 S.W.3d at 869. "In Missouri, a party may waive any condition of a contract in the party's favor. " Bellos v. Winkles , 14 S.W.3d 653, 655 (Mo. App. E.D. 2000) (emphasis added) (citing Campbell v. Richards , 352 Mo. 272, 176 S.W.2d 504, 505 (1944) ). "However, a ‘party cannot by his waiver affect the rights of the other party to the contract.’ " Id. (quoting Campbell , 176 S.W.2d at 505 ). So, while a forum selection clause can be waived, it must have been placed in the agreement for the benefit of the waiving party. However, nothing in the record shows us that Corel alone benefits from the forum selection clause in the EULA. In contrast to the forum selection clauses in Seals and Peoples Bank , which provided for venue in the home counties of the plaintiffs, Seals , 848 S.W.2d at 6 (Tennessee); Peoples Bank , 132 S.W.3d at 303, 307 (Kansas), the forum selection clause in Corel's EULA provides for venue exclusively in California, a neutral forum for both companies. These sorts of agreements are particularly important in the business world because "[t]he elimination of ... uncertainties by agreeing in advance on a forum acceptable to both parties is an indispensable element in international trade, commerce, and contracting." M/S Bremen , 407 U.S. at 13–14, 92 S.Ct. 1907. Furthermore, the forum selection clause in Peoples Bank explicitly provided the plaintiff with "the unilateral authority to designate a different ... forum in writing." 132 S.W.3d at 305. No similar provision in the EULA grants Corel the unilateral right to do the same. In fact,...