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Integrated Health Resources, LLC v. Rossi Psychological Group

January 31, 2008

INTEGRATED HEALTH RESOURCES, LLC, PLAINTIFFS,
v.
ROSSI PSYCHOLOGICAL GROUP, P.A., DEFENDANT.
ROSSI PSYCHOLOGICAL GROUP, P.A., PLAINTIFF,
v.
INTEGRATED HEALTH RESOURCES, LLC, DEFENDANT.



The opinion of the court was delivered by: Wolfson, District Judge

OPINION

In these breach-of-contract cases, Rossi Psychological Group ("Rossi") seeks a dismissal of claims in Civil Action No. 07-4813, filed by Integrated Health Resourch, LLC ("IHR"), based upon a contractual forum selection clause. In Civil Action No. 07-5557, a related case, Rossi for the same reasons seeks a remand of the action originally brought against IHR in New Jersey Superior Court and removed to this Court by IHR. IHR essentially argues that this Court should exercise jurisdiction in these cases because the contractual clause at issue does not confer exclusive jurisdiction over these claims in the state court of New Jersey. For reasons detailed herein, the Court finds that the pertinent provision is indeed a forum selection clause that unambiguously provides that the proper venue for these two cases should be in the state Superior Court of New Jersey sitting in Somerset County. Accordingly, Rossi's motion to dismiss filed in Civil Action No. 07-4813 is granted; likewise, Rossi's motion for remand filed in Civil Action No. 07-5557 is granted, and the case is remanded to the New Jersey Superior Court, Somerset County, for further proceedings.

STATEMENT OF FACTS

As both suits involve the same parties and arise out of the same set of facts, the Court will recount the relevant facts pertaining to both cases. IHR is a Delaware corporation operating in Great Neck, NY, which provides administrative support services to business clients. In particular, IHR claims to have developed a model for the recruitment, training, and placement of nurse practitioners (the "System"). Included in the System, IHR asserts, are novel and valuable methods for obtaining reimbursement through Medicare/Medicaid for such services. According to IHR, these methods are confidential and proprietary in nature. Rossi is a group practice that provides psychological and behavioral health-care services to individuals, with a focus on nursing home patients. Rossi is a New Jersey corporation with its principal place of business in Somerset, New Jersey.

The parties entered into a License and Service Agreement (the "Agreement") on September 1, 2004, whereby they agreed that IHR would provide Rossi with certain services including procuring nurse practitioners. Additionally, the Agreement, which was drafted by IHR, granted Rossi a license to use IHR's System. See LiCausi Cert. at Exhibit B. Importantly, one provision of the original draft of the Agreement designated "the United States Federal district court residing in the Southern District of New York" as the "jurisdiction" for "all litigation." Id. Rossi represents that during negotiations, it objected to the choice of forum, and subsequently the language of the Agreement was altered to its present form to read "the courts of the State of New Jersey, sitting in Somerset County" as the "jurisdiction" for bringing "all litigation." See LiCasui Cert. at Exhibit A. In July or August of 2006 the parties also entered into an oral contract ("Billing Agreement") in which IHR agreed to perform all of Rossi's billing functions. Both parties later alleged breaches of the Agreement and the Billing Agreement. Specifically, Rossi contends that "IHR failed to provide for contracted-for-services and promised "System," and they otherwise breached the Agreement, as well as their contractual obligation to perform Rossi's billing function." Rossi's State Court Complaint at ¶ 27. In particular, Rossi allege that IHR breached its contractual promise by failing to provide a sufficient number of trained nurse practitioners, and committed "egregious errors" in processing Rossi's billings, resulting in losses totaling in the hundreds of thousands. Rossi's Mot. Remand at 2-3. On the other hand, IHR alleges that Rossi breached the Billing Agreement and the Agreement by failing to remit payment for the services provided.

As a result of their disagreements, on October 4, 2007, IHR filed suit in this Court alleging that Rossi breached the Billing Agreement. IHR later amended its complaint to add additional causes of action based on breach of the Agreement ("Federal Action"). Thereafter, on October 24, 2007, Rossi filed a breach-of-contract action against IHR in state court because Rossi believed that the contractual provision at issue mandates that the exclusive forum to bring suit is in state superior court of New Jersey in Somerset County ("State Action"). However, on November 19, 2007, IHR removed the State Action to this Court and is seeking to consolidate both actions.

Presently before the Court are Rossi's motions to dismiss the Federal Action and to remand the State Action. Primarily, Rossi argues that this Court should not exercise jurisdiction over these cases because of a forum selection clause in the Agreement which it claims designates the New Jersey Superior Court sitting in Somerset County as the exclusive venue for all litigation arising out of the parties' contractual dealings. Accordingly,. the nature and enforceability of this clause is at the center of this dispute.

DISCUSSION

I. Legal Standard

In reviewing a motion to dismiss on the pleadings, a Court must take all allegations in the Complaint as true, viewed in the light most favorable to the plaintiff. See Gomez v. Toledo, 446 U.S. 635, 636 n. 3 (1980); Robb v. Philadelphia, 733 F.2d 274, 277 (3d Cir.1984). If no relief could be granted under any set of facts that could prove consistent with the allegations in the Complaint, the Court may dismiss the Complaint for failure to state a claim. See Hishon v. Spalding, 467 U.S. 69, 73 (1984); Bartholomew v. Fischl, 782 F.2d 1148, 1152 (3d Cir.1986). Recently, in Bell Atlantic Corporation v. Twombly, the Supreme Court instructed that "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id. at 1965. Thus, while a complaint does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 127 S.Ct. at 1964-65. The Third Circuit has held that dismissal under Fed. R. Civ. P. 12(b)(6) is proper where a forum selection clause designates another court as the exclusive venue for litigation. Salovaara v. Jackson Nat. Life Ins. Co., 246 F.3d 289, 298-299 (3d Cir. 2001). Similarly, remand is proper if a court declines to adjudicate a matter governed by a mandatory forum selection clause that vests authority in a different jurisdiction. See Foster v. Chesapeake Insurance Co., 933 F.2d 1207, 1213 (3d Cir. 1991); International Business Software Solutions, Inc. v. Sail Labs Technology, AG, 440 F.Supp. 2d. 357, 361 (D.N.J. 2006).

II. Forum Selection Clause

Forum selection clauses are generally treated as ordinary contract provisions and are subject to ordinary rules of contract interpretation. John Wyeth & Bro. Ltd. v. Cigna Int'l Corp., 119 F.3d 1070, 1074 (3d Cir. 1997); Intermetals Corp. v. Hanover Int'l, 188 F.Supp.2d 454, 460 (3d Cir. 2001); Foster v. Chesapeake Ins. Comp. Ltd., 933 F.2d 1207, 1218 (1991). In any contract "a court's paramount consideration is the intent of the parties." Mellon Bank, N.A. v. Aetna Business Credit, Inc., 619 F.2d 1001, 1009 (3d Cir., 1980). Ideally, the clearest indication of the parties' intent is the language of the contract itself. Id. Thus, when the language of the contract is unambiguous, that is, when the contract is "reasonably capable of only one construction", Wyeth, 119 F.3d at 1074, the inquiry ends and the court must enforce the contract as written. However, when the language in a contract is capable of more than one reasonable construction as determined by "objective indicia . . . [viewed] from the linguistic reference point of the parties," the contract is ambiguous and the court should look beyond the four corners of the contract to extrinsic evidence, such as party negotiations, to discern and give meaning to the intent of the parties. Mellon, 619 F.2d at 1009; Sumitomo Machinery Corp. v. Allied Signal, Inc., 81 F.3d 328, 332 (3d Cir. 1996). However, the Court should "avoid ambiguities if the plain language of the contract permits . . . [and] should not torture the language . . . to create ambiguities." Wall Street Aubrey Golf v. Aubrey, 189 Fed. Appx. 82, 85 (3d Cir. 2006) citing First State Underwriters Agency of New England Reinsurance Corp. v. Travelers Ins. Co., 803 F.2d 1308, 1311 (3d Cir. 1986). The parties at all times remain bound by the "appropriate objective definition" of the words contained in the contract. Mellon, 619 F.2d at 1013. Thus, to resolve a dispute concerning an ambiguity in a contract, the parties must present objective evidence demonstrating that the ambiguity is genuine and reasonable. Mellon, 619 F.2d at 1011.

In the present case, the provision at issue reads in ...


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