Whelan Sec. Co., Inc. v. Allen

• Decision Date: 03 October 2000
• Docket Number: No. ED 77525.,ED 77525.
• Citation: 26 S.W.3d 592
• Parties: WHELAN SECURITY COMPANY, INC., Plaintiff/Appellant, v. R. Andrew ALLEN, Defendant/Respondent.
• Court: Missouri Court of Appeals

26 S.W.3d 592

WHELAN SECURITY COMPANY, INC., Plaintiff/Appellant, v. R. Andrew ALLEN, Defendant/Respondent.

No. ED 77525.

Missouri Court of Appeals, Eastern District, Division Two.

June 20, 2000.

Motion for Rehearing and/or Transfer Denied August 3, 2000.

Application for Transfer Denied October 3, 2000.

COPYRIGHT MATERIAL OMITTED

Mark W. Weisman, Craig J. Hoefer, Gallop, Johnson & Neuman, L.C., St. Louis, for appellant.

Gerard F. Hempstead, Paul E. Petruska, Brasher Law Firm, L.C., St. Louis, for respondent.

Motion for Rehearing and/or Transfer to Supreme Court Denied August 3, 2000.

CRANE, Presiding Judge.

Plaintiff filed a petition to enforce a non-solicitation and non-competition agreement against a Texas defendant in the Circuit Court of St. Louis County pursuant to a forum selection clause contained in the agreement. The court ordered plaintiff's cause dismissed without prejudice on the grounds that "to enforce the forum selection clause would be `unjust' consistent with High Life Sales v. Brown-Forman, 823 S.W.2d 493 (Mo. banc 1992)." Plaintiff appeals. We reverse and remand for the reason that defendant did not adduce sufficient evidence to support a finding that the inbound forum selection clause in the agreement was "unfair" or "unreasonable."

As alleged in the petition, plaintiff, Whelan Security Company, Inc., is a Missouri corporation engaged in the business of providing guard and security services to businesses and other entities. It maintains its corporate headquarters in St. Louis County, Missouri and has branch offices at various locations, including Dallas and Houston, Texas. Defendant, Richard Andrew Allen, began working for plaintiff in its Texas office in January, 1996 and worked in various capacities in various locations including Dallas and Houston, Texas and Louisiana until he voluntarily resigned in February, 1999. Immediately prior to his resignation, defendant was regional manager for plaintiff at its Dallas, Texas branch office.

In November, 1997 defendant signed an Employee Confidential Information and Non-Solicitation/Non-Competition Agreement (the agreement) which contained a forum selection clause designated "Consent to Jurisdiction." It provided that any litigation arising under or relating to the agreement shall be subject to the jurisdiction and venue of any state or federal court located in the State of Missouri as plaintiff shall designate, and, in the absence of such designation, the situs for jurisdiction and venue shall be any state court located in St. Louis County or in the federal court of the Eastern District of Missouri. The clause also provided that the employee waived any right to contest the jurisdiction and venue of those courts.

Defendant filed a "Motion to Dismiss Plaintiff's Petition for Lack of Personal Jurisdiction or in the Alternative to Dismiss for Improper Venue or in the Alternative to Transfer to Texas Pursuant to Rule 55.27 of the Missouri Rules of Civil Procedure," and his affidavit in support of the motion. In his affidavit, defendant averred:

1. My name is R. Andrew Allen. I am a resident of the State of Texas.

2. I have never resided in the State of Missouri.

3. I did sign the document designated as Employee Confidential Information and Solicitation Agreement in 1996.

4. I was told by my employer to sign a second Employee Confidential Information and Solicitation Agreement in 1997, or else I would be let go.

5. Both Agreements are essentially the same except the second requires me to consent to jurisdiction in Missouri and venue in St. Louis County.

6. I did not receive any additional consideration from Whelan Security Company at the time I was told by my employers to sign the second Agreement.

7. I do not own any property in Missouri.

Plaintiff filed the affidavit of its executive vice president, Gregory Twardowski, in opposition to the motion to dismiss. In his affidavit Twardowski averred that he had signed the agreement on plaintiff's behalf and specifically referred to the forum selection clause. He further averred:

9. During his employment with Whelan, Mr. Allen never indicated to me the thought that the Agreement was unreasonable, unjust, over-reaching or adhesive, or that he had entered into the Agreement under duress. Following his execution of that Agreement, Mr. Allen continued to remain employed by and derive a salary and commissions from Whelan until he voluntarily resigned his employment over a year later on February 25, 1999.

He attached a copy of the agreement, which had also been attached to the petition, to his affidavit. No other evidence was adduced on the motion. After hearing argument on the motion, the trial court dismissed the cause without prejudice. Plaintiff appeals from this order. Because the trial court's dismissal of the cause without prejudice had the practical effect of terminating the litigation in the plaintiff's chosen forum, it is appealable. Chromalloy American Corp. v. Elyria Foundry Co., 955 S.W.2d 1, 3 (Mo. banc 1997).

For its sole point plaintiff asserts that the trial court erred in refusing to enforce the forum selection clause and in dismissing the cause. It argues that defendant failed to adduce sufficient evidence to demonstrate that enforcement of the forum selection clause would be unfair or unreasonable. Defendant responds that the forum selection clause was unjust and unenforceable because it was not freely negotiated and thus did not satisfy due process and was unreasonable under the facts of the case because he would have to bring himself and Texas witnesses to Missouri. Defendant also argues that plaintiff failed to satisfy the minimum contacts requirements of long arm jurisdiction.

When a defendant raises the issue of personal jurisdiction, the burden shifts to the plaintiff to make a prima facie showing of jurisdiction. Conway v. Royalite Plastics, 12 S.W.3d 314, 318 (Mo. banc 2000). Although it is generally necessary to satisfy the Missouri long-arm statute to obtain in personam jurisdiction over a nonresident defendant pursuant to Section 506.500, jurisdiction over the person may be also obtained by consent or by waiver. Chase Third Century Leasing Co. Inc. v. Williams, 782 S.W.2d 408, 411 (Mo.App. 1989). Parties to a contract may agree in advance to submit to personal jurisdiction in a given court by means of a forum selection clause because personal jurisdiction is an individual right capable of being waived. Id. In this case plaintiff made a prima facie showing of jurisdiction by adducing evidence that the parties had signed the agreement containing a forum selection clause placing litigation in Missouri state or federal courts. Accordingly, plaintiff did not have to show minimum contacts.

After plaintiff made a prima facie case by means of the forum selection clause, the burden then shifted to defendant to demonstrate that enforcement of the clause would be unjust or unreasonable. Id. We enforce a forum selection clause unless the party seeking to avoid its application sustains a "heavy burden" to show that the clause is unfair or unreasonable. State ex rel. Marlo v. Hess, 669 S.W.2d 291, 293 (Mo.App.1984). The sufficiency of the evidence to make a showing that enforcement of the clause would be unfair or unreasonable is a question of law which we review independently on appeal. See Stavrides v. Zerjav, 848 S.W.2d 523, 527 (Mo.App.1993).

When a motion raising lack of personal jurisdiction is based on facts not appearing on the record, the trial court may hear it on affidavits presented by the parties, or the court may direct that the matter be heard wholly or partly on oral testimony or...