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MacDonald v. Cushman

Decided: May 4, 1992.

WILFRED MACDONALD INC., A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT,
v.
CUSHMAN INC., DEFENDANT-APPELLANT, AND STEVEN WILLAND, INC., DEFENDANT



On appeal from Superior Court of New Jersey, Chancery Division, Passaic County.

Michels, Havey and Conley. The opinion of the court was delivered by Conley, J.s.c. (temporarily assigned).

Conley

CONLEY, J.S.C. (teporarily assigned).

By leave granted defendant Cushman Inc. (Cushman) appeals a preliminary injunction restraining it from terminating a portion of its "Master Dealership Agreement" with plaintiff Wilfred MacDonald Inc. (MacDonald) and denying its motion to dismiss MacDonald's complaint based upon a forum selection clause in the agreement. We reverse the denial of the motion to dismiss and thus need not reach issues relating to the grant of injunctive relief.

MacDonald is a retailer of turf maintenance equipment and supplies, selling to golf clubs, individuals, and governmental agencies. Incorporated in 1972, MacDonald's gross sales revenue for 1990 was over 5.5 million dollars. It began selling Cushman products in 1975 pursuant to a dealership agreement.

The agreement was renewed annually. In addition to Cushman products, MacDonald sells products of a number of other manufacturers including Jacobsen, Smitho, Giant Vac, Mitsubishi, Howard and National. Since 1963 Jacobsen products have been the primary line MacDonald has sold. In 1990 Jacobsen sales accounted for approximately 35% of MacDonald's gross sales; Cushman sales accounted for approximately 21.5%, and other product lines individually accounted for substantially less. Jacobsen is a Cushman competitor and has product lines similar to those that would be affected by the partial termination,*fn1 albeit not identical.

Following notification from Cushman that it intended to terminate part of MacDonald's Dealership Agreement, MacDonald filed an order to show cause and verified complaint on August 15, 1991 seeking temporary injunctive relief. The complaint alleges a violation of the Franchise Practices Act, N.J.S.A. 56:10-1 et seq., as well as bad faith on the part of Cushman. A third count alleges tortious interference with contractual rights and seeks injunctive relief against defendant Steven Willand Inc. (Willand). Cushman has entered into a Dealership Agreement with Willand permitting it to sell the "Cushman Turf" and "Cushman Front Line" products.

Although the complaint was filed in the New Jersey Superior Court, the Dealership Agreement contains in bold print a forum selection clause which states in part:

ANY CAUSE OF ACTION, CLAIM, SUIT OR DEMAND BY DEALER, ALLEGEDLY ARISING FROM OR RELATED TO THE TERMS OF THIS AGREEMENT OR THE RELATIONSHIP OF THE PARTIES SHALL BE

BROUGHT IN THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF NEBRASKA IN LINCOLN, NEBRASKA, OR IN THE DISTRICT COURT FOR THIRD DISTRICT OF THE STATE OF NEBRASKA. BOTH PARTIES HERETO IRREVOCABLY ADMIT THEMSELVES TO, AND CONSENT TO, THE JURISDICTION OF EITHER OR BOTH OF SAID COURTS.

Since inception of its relationship with Cushman, MacDonald has executed a Dealership Agreement yearly. The forum selection clause has been in each of the agreements and appears immediately above the signature line. Indeed, MacDonald's president, James Pelrine admitted he read and understood the forum selection clause before signing the agreement. Although he said he had no choice but to sign the agreement, he admitted never questioning or complaining about it or in any ...


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