Ohm Hotel Grp., LLC v. Dewberry Consultants, LLC, 4:15-CV-1705 CAS
| Decision Date | 04 February 2016 |
| Docket Number | No. 4:15-CV-1705 CAS,4:15-CV-1705 CAS |
| Parties | OHM HOTEL GROUP, LLC, Plaintiff, v. DEWBERRY CONSULTANTS, LLC, Defendant/Third-Party Plaintiff, v. WILLIAM L. WOOD, Third-Party Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This removed diversity matter is before the Court on plaintiff OHM Hotel Group, LLC's motion to remand. Defendant Dewberry Consultants, LLC opposes the motion and it is fully briefed. For the following reasons, the motion will be granted and this case will be remanded to state court.
Plaintiff initially filed suit in the Circuit Court of St. Louis County, State of Missouri, on August 26, 2015. The petition alleges a state law claim for breach of contract. Plaintiff alleges it entered into a contract with defendant dated November 12, 2014 (the "Contract"), whereby defendant agreed to act as the Construction Manager for the construction of a new Holiday Inn hotel in Creve Coeur, Missouri, but after plaintiff notified defendant that financing had been obtained and construction work under the Contract should proceed, defendant repudiated or wrongfully terminated the contract and refused to perform thereunder.
Defendant removed the action to this Court on October 7, 2015, based on diversity of citizenship pursuant to 28 U.S.C. §§ 1332(a), 1441(b) and 1446. OHM Hotel Group, LLC v. Dewberry Consultants, LLC, No. 4:15-CV-1541 CAS (E.D. Mo.). The Court issued an Order Concerning Removal stating that defendant's Notice of Removal was procedurally defective because it did not allege sufficient facts to establish the citizenship of either party. Defendant was granted seven days to file an amended notice of removal. Defendant responded that it was then unable to do so, and the case was remanded to state court.
Following jurisdictional discovery in state court, defendant filed its second Notice of Removal on November 13, 2015 and again removed the case to this Court on the basis of diversity of citizenship pursuant to 28 U.S.C. §§ 1332(a), 1441(b) and 1446. Plaintiff filed the instant motion to remand ten days later, asserting that defendant waived its right to removal based on a forum selection clause in the Contract. Defendant opposes remand, asserting that plaintiff has failed to prove the existence of the Contract, which is a prerequisite to the enforcement of any of its provisions. Assuming the existence of the putative Contract, defendant disputes that the forum selection clause constitutes a waiver of its right to remove, and asserts that plaintiff is estopped from enforcing the forum selection clause because it failed to comply with contractual conditions precedent to filing suit.
In removal cases, the district court reviews the petition pending at the time of removal to determine the existence of jurisdiction. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938). The district court may also look to the notice of removal to determine its jurisdiction. 28 U.S.C. § 1446(c)(2)(A)(ii); Ratermann v. Cellco P'ship, 2009 WL 1139232, at *3 (E.D. Mo. Apr. 28, 2009). The removing defendant, as the party invoking jurisdiction, bears the burden of provingthat all prerequisites to jurisdiction are satisfied. Central Iowa Power Co-op. v. Midwest Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 912 (8th Cir. 2009). "[A]ll doubts about federal jurisdiction must be resolved in favor of remand[.]" Id.
Plaintiff moves to remand on the basis that the Contract's forum selection clause designates the Circuit Court for St. Louis County, Missouri as the "sole and exclusive venue" for any litigation arising out of or relating to the agreement. Defendant asserts that it never entered into the Contract with plaintiff and that its former employee who signed the Contract, third-party defendant William L. Wood, was not authorized to do so. Defendant argues that before the Court can enforce a contract term such as the forum selection clause, it must first determine there is a valid contract between the parties, citing Volker Court, LLC v. Santa Fe Apts., LLC, 130 S.W.3d 607, 611 (Mo. Ct. App. 2004) (); and Evolution Online Sys., Inc. v. Koninklijke PTT Nederland N.V., 145 F.3d 505, 509 (2d Cir. 1998) ().
Plaintiff counters that the Court must accept as true the Petition's allegations that the parties entered into the Contract, citing Smith v. National Football League Players Ass'n, 2014 WL 6776306, at *1 (E.D. Mo. Dec. 2, 2014), Crosby v. Paul Hardeman, Inc., 414 F.2d 1, 3 (8th Cir. 1969), and Pullman v. Jenkins, 305 U.S. 534, 537-38 (1939). Plaintiff misinterprets these decisions. In Crosby, the Eighth Circuit stated that a "party seeking removal [to federal court] must show that he comes within the provisions of the [federal removal] statute." 414 F.2d 1, 3 (8th Cir. 1968) (cited case omitted). In that context, the Court stated, "The allegations of the complaint as set forth at the time the petition for removal was filed are controlling." Id. (citing Pullman Co. v. Jenkins, 305 U.S.534, 537-38 (1939)). The import of this statement is not that the allegations of the petition must be accepted as true, as plaintiff argues, but rather that the federal court must examine the petition pending at the time of removal, and not any subsequent petitions, in determining whether removal was proper. This is confirmed by Pullman, in which the Supreme Court stated the Ninth Circuit erred when it held that even if it did not sufficiently appear from the petition pending at the time of removal that the case was removable, it did so appear when a second amended complaint was filed. 305 U.S. at 537. The Court stated, "The second amended complaint should not have been considered in determining the right to remove, which in a case like the present one was to be determined according to the plaintiffs' pleading at the time of the petition for removal." Id.1
The Court concludes that before it can determine whether the forum selection clause should be enforced, it must make a threshold determination whether the Petition sufficiently alleges anessential element of a claim for breach of contract, the existence of a legally valid contract.2 See Evolution Online, 145 F.3d at 509; see also Langley v. Prudential Mortg. Capital Co., LLC, 546 F.3d 365, 368 (6th Cir. 2008) (); see also Olathe Millwork Co. v. Dulin, 189 S.W.3d 199, 203 (Mo. Ct. App. 2006) ().
A federal district court sitting in diversity applies the law of the forum to the determination whether there is a valid contract with a forum selection clause. Langley, 546 F.3d at 368; see also Orion Fin. Corp. of S. Dak. v. American Foods Group, Inc., 281 F.3d 733, 738 (8th Cir. 2002) (). The parties do not dispute that Missouri law governs this action. In determining the scope of Missouri law, this Court is bound by the decisions of the Supreme Court of Missouri. Taylor v. St. Louis County Bd. of Election Comm'rs, 625 F.3d 1025, 1027 (8th Cir. 2010). Decisions from the Missouri Court of Appeals are also relevant, and "must be followed when they are the best evidence of Missouri law." Id. at 1028, n.2.
Under Missouri law, the essential elements of a breach of contract action are: "(1) the existence and terms of a contract; (2) that plaintiff performed or tendered performance pursuant to the contract; (3) breach of the contract by the defendant; and (4) damages suffered by the plaintiff."Keveney v. Missouri Military Acad., 304 S.W.3d 98, 104 (Mo. 2010) (en banc). The essential elements of an enforceable contract under Missouri law are: "(1) competency of the parties to contract; (2) subject matter; (3) legal consideration; (4) mutuality of agreement; and (5) mutuality of obligation." White v. Pruiett, 39 S.W.3d 857, 862 (Mo. Ct. App. 2001).
The issue here is whether plaintiff meets its burden to establish the existence of a contract with defendant, such that the forum selection clause may be enforced. The Petition alleges that plaintiff and defendant entered into the Contract and attaches a copy of the Contract as an exhibit thereto.3 The Contract is signed by plaintiff as "Owner" through its member Vinod Patel, and by defendant as "Construction Manager" through William Wood, PE, CQCM, Program Manager, Dewberry Consultants, LLC. As stated above, defendant asserts that Mr. Wood had no authority to enter into any contract on its behalf.
In the Notice of Removal, defendant asserts that it did not enter into the Contract and was unaware of its existence prior to receiving communications from plaintiff's counsel in August 2015, and states that if Mr. Wood actually signed the Contract he had no authority to do so. Attached to the Notice of Removal is an unauthenticated copy of correspondence from defendant's Virginia counsel to plaintiff's counsel dated August 21, 2015, which denies any authority on the part of Mr. Wood to enter into the Contract.
Plaintiff responds that the Court must accept the allegations of its Petition as true, a proposition the Court has rejected. Plaintiff adds that if the Court is inclined to consider evidence, defendant offers no affidavit or other competent evidence to support its argument that Mr. Wood lacked the authority to bind it to the Contract, and argues this...
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