United States District Court, D. New Jersey
MICHAEL A. HAMMER, UNITED STATES MAGISTRATE JUDGE.
matter comes before the Court on Defendant Citibank
N.A.'s motion to transfer. Def. Mot. to Transfer, June
26, 2019, D.E. 16. The Court has considered the parties'
submissions and their arguments raised in Court on October 9,
2019. For the reasons set forth below, the Court will grant
Defendant's motion to transfer this case to the United
States District Court for the District of South Dakota.
& Associates, LLC (“Plaintiff”) is a law firm
located in Fairfield, New Jersey. Notice of Removal, Apr. 10,
2019, D.E. 1, Exh. 1, Compl., ¶ 1. Defendant, a national
bank, is licensed to operate in and regularly does business
in New Jersey. Id. ¶ 2. Plaintiff collected
delinquent debts on second mortgages on behalf of Defendant
pursuant to a contract between the parties which originated
in as early as April 2009, and was renewable each year
thereafter. Id. ¶¶ 2-4. Plaintiff alleges
that the “Attorney Collection Services Master
Agreement” (“the 2013 Master Agreement”),
effective January 1, 2013, provided that Plaintiff “was
to receive a nineteen percent (19%) fee on any and all
amounts collected on the 2nd mortgages.”
Id. ¶ 5. In January 2013, Citibank received a
credit from the Federal Government for more than $40 million
dollars on some of the mortgages placed with it for
collection. Id. ¶ 6. Based on that credit,
Plaintiff contends that it is entitled to its nineteen
percent fee in the amount of $8, 021, 002.05. Id.
Plaintiff maintains that it billed Defendant for this amount,
but that Defendant failed to pay Plaintiff. Id.
March 7, 2019, Plaintiff its complaint in the Superior Court
of New Jersey, Essex County, Law Division, alleging Breach of
Contract (Count I), Promissory Estoppel (Count II), Unjust
Enrichment (Count III), and Account Stated (Count IV).
Id., ¶¶ 8-24. Notice of Removal, D.E. 1,
at 11. In Count V, Plaintiff avers that it is owed $21,
002.50 for additional work that it did on behalf of Defendant
that was not included in the 2013 Master Agreement.
Id., ¶¶ 25-31. Defendant timely removed
this matter to this Court on the basis of diversity
jurisdiction pursuant to 28 U.S.C. § 1332(a)(1).
Id. at 1.
now seeks to transfer this case to the United States District
Court for the District of South Dakota pursuant to a forum
selection clause within the 2013 Master Agreement. Master
Agreement, D.E. 16, Ex. A, at 3. The forum selection clause
stated, inter alia, “[b]oth parties agree to
be subject to the jurisdiction of South Dakota courts and
that any and all claims arising from this Agreement shall be
litigated if at all in the United States District Court for
the District of South Dakota.” Id. at 4.
Defendant argues that the forum selection clause is valid and
enforceable, Counts I-IV of Plaintiff's Complaint fall
within the scope of the forum selection clause, the relevant
factors under a 28 U.S.C. § 1404(a) analysis support
transfer to South Dakota, and Count V should also be
transferred to South Dakota in the interest of judicial
economy. Def. Mot. to Transfer, June 26, 2019, D.E. 16, at
opposes the motion, initially arguing that Defendant had
failed to provide a signed copy of the 2013 Master Agreement
between the parties; other contracts existed between the
parties; and even if this Court finds that the forum
selection clause in the 2013 Master Agreement is enforceable,
the Court should decline to transfer this matter to South
Dakota based on various equitable considerations. Memorandum
of Law in Opposition, July 22, 2019, D.E. 18, at 1-6. In
reply, Defendant attached a signed copy of the 2013 Master
Agreement. Reply, July 29, 2019, D.E. 19, Exh. A, at 3-4. At
the oral argument on October 9, 2019, the parties agreed that
the signed 2013 Master Agreement is the operative and
controlling agreement pertaining to the claims currently
before the Court.
28 Section 1404(a) of the United States Code provides that
for the “convenience of the parties and witnesses, in
the interest of justice, a district court may transfer any
civil action to any other district or division where it might
have been brought.” Section 1404(a) exists to
“prevent the waste of time, energy and money and to
protect litigants, witnesses and the public against
unnecessary inconvenience and expense.” Ricoh Co.
v. Honeywell, Inc., 817 F.Supp. 473, 479 (D.N.J. 1993)
(internal citations and quotations omitted). The moving party
bears the burden of establishing the propriety of the
transfer “with any affidavits, depositions,
stipulations, or other documents containing facts that would
tend to establish the necessary elements for a transfer under
28 U.S.C. § 1404(a).” Plum Tree, Inc. v.
Stockment, 488 F.2d 754, 756-57 (3d Cir. 1973).
contract contains a valid forum selection clause, then the
court must “transfer the case unless extraordinary
circumstances unrelated to the convenience of parties clearly
disfavor a transfer.” Atl. Marine Constr. Co. v.
U.S. Dist. Ct. for the W. Dist. of Texas, 571 U.S. 49,
52 (2013). “Although a forum-selection clause does not
render venue in a court ‘wrong' or
‘improper' under § 1406(a) or Rule 12(b)(3),
the clause may be enforced through a motion to transfer under
§ 1404(a).” Id. at 59. “[Because]
the overarching consideration under § 1404(a) is whether
a transfer would promote ‘the interest of justice,'
a valid forum selection clause [should be] given controlling
weight in all but the most exceptional cases.”
Id. at 63 (citations omitted). Accordingly, this
Court will first examine the enforceability of the forum
selection clause, and if enforceable, determine whether
transfer is warranted under § 1404(a).
Validity of the Forum Selection Clause
Court must determine whether the clause itself is valid.
Federal law governs the enforceability of a forum selection
clause in a diversity case like this one. See Cadapult
Graphic Systems, Inc. v. Tektronix Inc., 98 F.Supp.2d
560, 563 (D.N.J. 2000). “It is well established that a
forum selection clause is prima facie valid and
should be enforced unless enforcement is shown by the
resisting party to be ‘unreasonable' under the
circumstances.” Gen. Eng'g Corp. v. Martin
Marietta Alumina, Inc., 783 F.2d 352, 356 (3d Cir. 1986)
(quoting The Bremen v. Zapatha Off-Shore Co., 407
U.S. 1, 10 (1972)). A forum selection clause is unenforceable
only if a party establishes: “(1) that it is the result
of fraud or overreaching, (2) that enforcement would violate
a strong public policy of the forum, or (3) that enforcement
would in the particular circumstances of the case result in
litigation in a jurisdiction so seriously inconvenient as to
be unreasonable.” Ramada Worldwide Inc. v. SB Hotel
Mgmt. Inc., No. 14-2186, 2015 WL 758536, at *3 (D.N.J.
Feb. 23, 2015) (citations omitted). Accordingly, courts
enforce forum selection clauses “unless the resisting
party makes a strong showing that the clause is
unenforceable.” Cadapult, 98 F.Supp.2d at 564
(citations and quotations omitted).
primary arguments as to why the forum selection clause is
invalid are that Defendant failed to provide a signed copy of
the contract between the parties, and that there were
multiple contracts between the parties, of which Defendant
only provided one. However, Defendant's reply papers
cured this defect by including a signed copy ...