Dunne v. Libbra
| Decision Date | 06 June 2003 |
| Docket Number | No. 02-3840.,02-3840. |
| Citation | 330 F.3d 1062 |
| Parties | Gerald M. DUNNE, Appellant, v. Peter E. LIBBRA, Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Chad M. Deroode, argued, St. Louis, MO, for appellant.
Joel A. Benoit, argued, Springfield, IL, for appellee.
Before MELLOY, FAGG, and SMITH, Circuit Judges.
Dunne appeals the district court's dismissal of his diversity action under a contract's forum selection clause. We reverse.
In the fall of 2000, Libbra and his attorney solicited Dunne in Missouri to discuss Dunne's possible purchase of Libbra's fifty-one percent ownership interest in Prairieland Construction, Inc., a Delaware Corporation with its headquarters in Illinois. Communication, meetings, and due diligence reviews concerning the possible purchase continued through the fall of 2001, at which time the parties executed a series of documents to consummate the sale. One of the documents, a stock purchase agreement, contained a forum selection clause that lies at the center of the present dispute.
Over the course of the next year, Dunne fell behind in his payments to Libbra. Eventually, Libbra sent Dunne a default notice. Dunne responded by filing the present diversity action alleging misrepresentation and seeking a declaratory judgment, permanent injunction, and damages. Libbra, in turn, filed an action in Illinois state court alleging that Dunne breached each of the separate contracts related to the sale. Libbra, relying on the forum selection clause from the stock purchase agreement, moved to dismiss Dunne's diversity action based on lack of personal jurisdiction and/or improper venue.
The forum selection clause provides, "[t]his agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois, and the parties consent to jurisdiction to [sic] the state courts of the State of Illinois." The only issue on appeal is a legal issue of contract construction, namely, whether the forum selection clause is mandatory such that an action on the contract may be maintained only in Illinois state court, or whether the clause is merely permissive such that an action on the contract may be maintained in other reasonably convenient forums where personal jurisdiction exists. Our review on this legal issue of contract construction is de novo. Terra Int'l, Inc. v. Mississippi Chem. Corp., 119 F.3d 688, 692 (8th Cir.1997).
The district court found the forum selection clause ambiguous, neither clearly permissive nor clearly mandatory. Applying the general principle of contract construction that no provision of a contract should be interpreted in a manner that would render it surplusage, the district court concluded that, because personal jurisdiction in Illinois existed even without the forum selection clause, treatment of the forum selection clause as merely permissive would render the forum selection clause wholly redundant and therefore mere surplusage. Accordingly, the district court held the forum selection clause mandatory rather than permissive. We disagree.
As an initial matter, we note that neither forum is inconvenient for either party. In addition, we assume for the purpose of this decision that Missouri and Illinois enjoy personal jurisdiction over the parties even without the forum selection clause.1 Libbra is an Illinois resident. Libbra maintained extensive contacts within the state of Missouri related to the formation and performance of the contract. Libbra repeatedly met with Dunne in Missouri and repeatedly directed communications to Dunne in Missouri. Further, the contract at issue involved the sale of a fifty-one percent ownership interest in a construction firm that was formed under Delaware law, headquartered in Illinois, and involved with numerous ongoing construction projects throughout the state of Missouri.
Dunne is a Missouri resident and an attorney licensed in Illinois and Missouri. He has substantial, general contacts with Illinois by virtue of his role as a licensed attorney who appears regularly in the courts of Illinois. He has substantial contacts with Illinois that are specific to the subject matter of this dispute. It appears that his contract with Libbra is substantially connected with Illinois and concerns the transfer of ownership of a thing of value that is present in Illinois, as required to satisfy the requirements of Illinois' long-arm statute. See 735 Ill. Comp....
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