J.D. Fields & Co. v. Eng'rs
J.D. Fields & Co. v. Eng'rs
Opinion of the Court
Pending before this court is defendant Shoring Engineers's ("Shoring") motion to dismiss for lack of personal jurisdiction and improper venue (Dkt. 5). Plaintiff J.D. Fields and Company, Inc. ("J.D. Fields") responded. Dkt. 12. Shoring replied, and J.D. Fields filed a sur-reply. Dkt. 14 (Shoring's reply); Dkt. 15-1 (J.D. Field's sur-reply). Having considered the motions, responses, replies, and applicable law, the court is of the opinion that the motion to dismiss (Dkt. 5) should be DENIED.
*701I. BACKGROUND
This is a breach of contract case. Shoring is incorporated and has its principal place of business in California, while J.D. Fields is incorporated and has its principle place of business in Texas. Dkt. 1 at 2. In January 2017, Shoring requested that J.D. Fields locate and supply specially fabricated steel piling for a project at the Los Angeles International Airport. Dkt. 1-1 at 3; Dkt. 5 at 5. J.D. Fields subsequently sent Shoring a price quote for the piling on company letterhead, which included J.D. Fields's Houston office address. Dkt. 1-1 at 4; Dkt. 5 at 5. The price quote expressly stated that "[o]nly a fully executed purchase agreement shall be binding." Dkt. 12-4 at 2.
On March 20, 2017, a Shoring representative emailed J.D. Fields and asked what Shoring would need to do for J.D. Fields to "hold that pipe." Dkt. 12-3 at 3. A J.D. Fields representative responded that if Shoring replied to the quote with a signature, J.D. Fields would hold the piling until Shoring produced a formal purchase order. Id. A Shoring representative signed the quote, wrote "ACCEPTED" on the document, and sent the document back to J.D. Fields. Dkt. 12-4. However, Shoring never executed a formal purchase order.
Shortly after receiving the signed quote, J.D. Fields sent Shoring a credit application. Id. Shoring executed the credit application, also on J.D. Fields letterhead, and returned the application to J.D. Fields. Dkt. 5 at 27. On March 24, J.D. Fields notified Shoring that Shoring's credit application had been approved. Dkt. 12-5 at 2. The credit notification included J.D. Fields's General Terms and Conditions of Sale ("GTCs"). Id. The GTCs expressly provided, in bold type, that "every sale by [J.D. Fields] shall in every case be subject to these terms and conditions to the exclusion of any other terms." Id. at 3. The GTCs also included the following forum-selection clause:
2.1 CHOICE OF FORUM
All actions or proceedings either directly or indirectly arising from or related to this contract or transaction, regardless of whether grounded in contract, tort, or any other legal theory, shall be brought only in State or Federal Court in Harris County in the State of Texas , and Buyer hereby consents and submits to the exclusive jurisdiction and venue of such courts for the purpose of such actions or proceedings.
Id. (emphasis added). On April 13, a J.D. Fields representative emailed Shoring on same email chain that Shoring used to send the March 20 signed quote. Dkt. 24-8 at 2. J.D. Fields asked if Shoring was "still good on" the pipe for which Shoring had previously signed. Dkt. 12-2 at 4; Dkt. 24-8 at 2. Shoring replied that "[y]es, the other pipe is still good." Dkt. 12-2 at 4; Dkt. 24-8 at 2. On April 19, J.D. Fields paid a third-party distributor, JCD International Services ("JCD"), approximately $193,000 as a partial up-front payment to fill Shoring's order. Dkt. 12-2 at 5; Dkt. 24-2 at 4.
In the following months, Shoring made multiple requests for changes to the order and provided fabrication instructions in furtherance of the contract. Dkt. 12 at 11. However, in July 2017, Shoring informed J.D. Fields that Shoring was repudiating the contract and would not take delivery of the pilings as previously agreed. Id. To date, Shoring has paid J.D. Fields $50,019 in damages. Dkt. 12-2 at 5. J.D. Fields alleges that this payment only covers a "fraction" of its damages. Id.
J.D. Fields filed suit in the 269th Judicial District Court of Harris County, Texas, alleging breach of contract and promissory estoppel. Dkt. 1. Shoring removed the action to this court. Id. Shoring then filed *702a Rule 12(b) motion to dismiss for lack of personal jurisdiction and improper venue. Dkt. 5.
II. STANDARD OF REVIEW
A. Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction
A court must dismiss an action when it lacks personal jurisdiction over the defendant. Fed. R. Civ. P. 12(b)(2). When a non-resident defendant moves to dismiss for lack of personal jurisdiction, the resident plaintiff has the burden of establishing personal jurisdiction over the non-resident. Lewis v. Fresne ,
B. Rule 12(b)(3) Motion to Dismiss for Improper Venue
The Federal Rules of Civil Procedure authorize a court to dismiss an action when venue in that court is improper. See Fed. R. Civ. P. 12(b)(3). Once a defendant challenges venue, the plaintiff has the burden to prove that venue in that court is proper. Clemons v. WPRJ, LLC ,
III. ANALYSIS
A. Contract Formation and Interpretation
As a threshold matter, the parties disagree as to whether the GTCs-and therefore the forum-selection clause-became part of the contract. Shoring contends that it never agreed to the GTCs, and that therefore the forum-selection clause does not function as Shoring's consent to jurisdiction in Texas. Dkt. 5 at 7. Without the forum-selection clause, Shoring argues that this court lacks personal jurisdiction and is an improper venue. Id. at 1. Accordingly, Shoring requests that the court dismiss the case entirely or transfer the case to the Central District of California. Id. at 10.
1. Whether the Clause Became Part of the Contract
The parties agree that a contract existed. Dkt. 5 at 7; Dkt. 12 at 14. However, the parties disagree as to whether the GTCs were part of the contract. Shoring argues that the parties entered into a binding contract on March 20, when Shoring signed and returned J.D. Fields's price *703quote. Dkt. 14 at 3. Thus, Shoring contends that the GTCs-sent March 24-were merely proposals for alterations to the contract under UCC § 2-207. Dkt. 5 at 6-7;
Here, because the court is sitting in diversity, state substantive law applies; because the contract at issue is for the sale of goods, the Uniform Commercial Code ("UCC") applies.
A price quote, such as the one Shoring signed on March 20, can sometimes operate as an offer. U.S. Steel Int'l ,
The earliest communication that could have been an offer occurred on April 13, when J.D. Fields followed up with Shoring to confirm that Shoring was still "good" for the pipe. Dkt. 12-2 at 4; Dkt. 24-8 at 2. J.D. Fields's April 13 email, unlike its previous communications, did not require a purchase order or otherwise limit acceptance to a particular method. See U.S. Steel Int'l ,
Further, the GTCs were part of J.D. Fields's offer. Shoring received the GTCs on March 24, well before the parties entered the contract. Dkt. 12-5. The GTCs expressly stated that "every sale by [J.D. Fields] shall in every case be subject to these terms and conditions" and that they displaced any previously offered terms. Id. at 3. The GTCs also expressly objected to any additional terms proposed by the buyer under UCC § 2-207. Id. Thus, J.D. Fields made clear to Shoring that any offer from J.D. Fields would be subject to the GTCs. However, Shoring failed to object to the GTCs and unqualifiedly accepted J.D. Fields's April 13 offer. Dkt. 12-2 at 4; Dkt. 24-8 at 2. Taking the record as a whole, the court concludes that the parties' communications demonstrate an objective "meeting of the minds" with regard to GTCs, regardless of whether Shoring subjectively assented. See Omni USA, Inc. ,
2. Whether the Clause Is Mandatory
Second, Shoring contends that even if the GTCs apply, the forum-selection clause is only permissive and does not mandate exclusive jurisdiction in Texas. Dkt. 14 at 3-4. However, the forum-selection clause states that suit "shall be brought only in State or Federal Court in Harris County in the State of Texas."
*705Dkt. 12-5 at 3 (emphasis added). The clause also provides that buyers consent to the "exclusive jurisdiction and venue" of the selected courts.
B. Personal Jurisdiction and Venue
Although the mandatory forum-selection clause is part of the parties' contract, the question of its enforceability remains.
Constitutional due process requires a court to have personal jurisdiction over the parties before it. Int'l Shoe Co. v. Wash. ,
Venue, unlike personal jurisdiction, is a statutory requirement. See
In the Fifth Circuit, a forum-selection clause in a written contract is "prima facie valid and enforceable unless the opposing party shows that enforcement would be unreasonable." Kevlin Servs., Inc. v. Lexington State Bank ,
(1) the incorporation of the forum selection clause into the agreement was the product of fraud or overreaching; (2) the party seeking to escape enforcement "will for all practical purposes be deprived of his day in court" because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy; or (4) enforcement *706of the forum selection clause would contravene a strong public policy of the forum state.
Haynsworth v. The Corporation ,
Here, Shoring has failed to carry its heavy burden of showing that the forum-selection clause is unreasonable. Shoring does not address any of the Haynsworth factors.
IV. CONCLUSION
Shoring's motion to dismiss for lack of personal jurisdiction and improper venue (Dkt. 5) is DENIED. J.D. Fields's pending motion for leave to file a sur-reply (Dkt. 15) is GRANTED.
Both parties cite Texas contract law in their briefing, but Shoring does not directly concede that Texas law applies. See, e.g. , Dkt. 5 at 6; Dkt. 12 at 14. However, because the Texas UCC is very similar to the California UCC, the court will apply Texas law. Compare
The parties' contract is also within the statute of frauds because it is for the sale of goods for the price of $500 or more. See
It appears that Shoring also subjectively believed that the deal had been concluded. Although Shoring was extensively involved in the pipe's production from April to July, Shoring never issued a formal purchase order in accordance with the terms of the March 20 price quote. See Dkt. 12 at 11.
Shoring's primary argument is that forum-selection clauses are material, and therefore require express assent to become part of a contract under UCC § 2-207. Dkt. 5 at 6;
In a diversity case, federal law governs whether a forum-selection clause is enforceable. Haynsworth v. The Corporation ,
Shoring appears to argue that the Haynsworth decision no longer governs after the Supreme Court's subsequent ruling in Atlantic Marine ,
Reference
- Full Case Name
- J.D. FIELDS & CO., INC. v. SHORING ENGINEERS
- Cited By
- 10 cases
- Status
- Published