Crane Construction Co. v. JKC Construction, Inc.

Citations: 793 F. Supp. 2d 1104; 2010 U.S. Dist. LEXIS 143460; 2010 WL 6815823Docket: 10-6103-CV-SJ-DW

Court: District Court, W.D. Missouri; November 22, 2010; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Crane Construction Co. filed a Motion to Remand after Defendant JKC Construction, Inc. removed the case to federal court based on diversity jurisdiction. The dispute originated from two subcontract agreements for renovations at Kohl's department stores, with Crane alleging breaches by JKC concerning contract compliance, and JKC counterclaiming for payment with claims of Crane's material breach. 

Crane argued for remand based on forum selection clauses in the contracts that designated the Circuit Court of Andrew County, Missouri, as the exclusive jurisdiction. JKC contested this, claiming the clauses were invalid due to lack of discussion and inadequate waiver of removal rights. The court found that the forum selection clauses were valid, rejecting JKC's arguments. It emphasized that such clauses are generally enforceable unless proven unjust or unreasonable, and the mere presence of boilerplate language does not invalidate them. The court noted that both parties were sophisticated entities with equal bargaining power and had entered into multiple contracts with identical clauses, indicating that JKC was aware of and had the opportunity to contest the forum selection provisions. Hence, Crane's motion to remand was granted, affirming the validity of the forum selection clauses.

Defendant is bound by the forum selection clause and cannot contest its validity due to a failure to negotiate an alternative provision. The Court affirms that the clause, which mandates that any legal proceedings between the parties occur exclusively in Andrew County, Missouri, is valid. The clause explicitly states that any references to other venues or jurisdictions are unenforceable, and the Subcontractor must include similar language in related agreements. 

A forum selection clause may waive a defendant's right to remove a case to federal court, but this waiver must be clear and unequivocal. Mere agreement on venue does not suffice; however, language that indicates a waiver of objections to venue can constitute a waiver of removal rights. The Court references relevant case law, noting that clear waivers involve specific language that relinquishes objections to jurisdiction and venue. Distinctions are made with examples where courts found clear waivers versus cases where they did not. The excerpt concludes with the statement that the defendants in the Mihlfeld case were allowed to remove the action to federal court due to the absence of waiver language in their agreement.

In the event of a breach of the Agreement by the Customer, legal action must be initiated in the Circuit Court of Greene County, Missouri. A precedent from Xgel Tech. LLC established that a forum selection clause, which designated Phelps County as the venue for disputes, did not constitute a waiver of removal rights but was merely a geographical limitation. In contrast, the current forum selection clause is deemed a clear waiver of removal rights, despite lacking the explicit terms "waiver" or "object." The clause specifies that disputes are to be resolved "solely and exclusively" in the Circuit Court of Andrew County, Missouri, indicating a definitive intent by the Plaintiff to restrict litigation to that venue. The Court concludes that to interpret this clause as not waiving removal rights would undermine its purpose. Consequently, the forum selection clauses in the contracts are upheld, and the Defendant's removal to a different court is deemed improper, leading to a remand of the case to the Circuit Court of Andrew County, Missouri.