Boland v. George S. May International Co.

Citations: 81 Mass. App. Ct. 817; 969 N.E.2d 166Docket: No. 11-P-1300

Court: Massachusetts Appeals Court; June 7, 2012; Massachusetts; State Appellate Court

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The parties entered into a management services contract that included a forum selection clause designating Illinois as the jurisdiction for disputes. Massachusetts law considers such clauses presumptively valid, but their enforcement depends on fairness and reasonableness. The clause in question was permissive, allowing litigation in Illinois without mandating it. Consequently, dismissing the plaintiff’s complaint was deemed erroneous.

Louise Boland, the plaintiff, owns 'Focus On Fitness' in Framingham. The defendant, George S. May International Co., a Delaware management consulting firm based in Illinois, contacted Boland in November 2008, offering to analyze her business for a fee. The defendant's agents made claims about the company's ethical reputation, omitting that it had lost its Better Business Bureau endorsement and faced multiple complaints. Boland provided financial documents, and the May Co. promised to develop strategies to increase her profits through undefined "profit engineering."

On November 7, 2008, Boland signed a contract prepared by the May Co., specifying terms, responsibilities, and payment methods, including $250 per hour for services plus additional expenses. The contract allowed Boland to terminate it at any business day's end, with payments due up to that point. The contract emphasized that it represented the entire agreement, including the jurisdiction clause in Illinois. Boland alleged she terminated the contract three days post-signature after incurring $32,000 in costs due to the May Co.'s failure to fulfill its promises.

The enforcement of forum selection clauses has evolved in Massachusetts law, notably influenced by Jacobson v. Mailboxes Etc. U.S.A. Inc., where the Supreme Judicial Court acknowledged the need to align with modern legal standards that permit enforcement of such clauses if deemed fair and reasonable. In Jacobson, the court emphasized that the agreed venue and applicable law should be upheld unless a party can prove that litigating in the chosen forum would deprive them of a fair opportunity to present their case. Subsequent cases, such as Karty v. Mid-America Energy, Inc. and Cambridge Biotech Corp. v. Pasteur Sanofi Diagnostics, further reinforced this position by validating forum selection clauses, even in fraud claims, unless the resisting party demonstrates the clause was procured through fraud, duress, or other unconscionable means. The overarching principle is the respect for the contracting parties' intentions, with courts maintaining a presumption of validity toward forum selection clauses and enforcing them in various contexts, including international transactions.

Mandatory and exclusive forum selection clauses require parties to litigate disputes in a designated jurisdiction. Several cases illustrate this principle: in *The Bremen*, disputes were to be handled in the London Court of Justice; *Jacobson* specified San Diego, California; *Cambridge Biotech* indicated proceedings in the defendant's country; *Karty* required arbitration in Kentucky; and *Baby Furniture Warehouse* mandated jurisdiction in Quebec. The excerpt contrasts these with a case involving a permissive forum selection clause. In *Hunt Wesson Foods, Inc. v. Supreme Oil Co.*, the Ninth Circuit considered a clause that stated California courts would have jurisdiction but did not specify exclusivity. The court ruled that the language indicated consent to California's jurisdiction without excluding other jurisdictions. Thus, while "shall" indicates a mandatory term, it did not establish exclusive jurisdiction in this context. The Ninth Circuit reversed the lower court's determination, emphasizing that the interpretation of the clause required a legal analysis of its language.

Supreme cannot challenge the Orange County Superior Court's jurisdiction based on personal jurisdiction grounds. The forum selection clause in this case is permissive, meaning it allows litigation in other courts and does not impose exclusive jurisdiction in a specific forum. Established case law indicates that a forum selection clause specifying only jurisdiction typically does not create exclusive enforcement without additional language confirming such intent. Permissive clauses, or "consent to jurisdiction" clauses, authorize litigation in a designated forum without prohibiting litigation elsewhere, unlike mandatory clauses that clearly restrict jurisdiction and venue to one specific forum. Even with a permissive clause, if a party chooses to litigate in the specified forum, the other party cannot object to personal jurisdiction. The presence of a permissive clause contributes to jurisdictional analysis by offering an alternative basis for jurisdiction beyond traditional minimum contacts. Courts interpret written contracts based on their plain terms and give effect to the parties' intentions, adhering to the principle that clear language should be understood in its ordinary sense.

The forum selection clause in question states that jurisdiction is vested in Illinois without explicitly designating it as exclusive. Comparisons are made to previous cases that clarify the difference between exclusive and permissive forum selection clauses. The current clause is categorized as a jurisdiction-granting or permissive clause, lacking choice of law provisions that would indicate exclusivity. Courts typically honor the expressed intent of the parties regarding jurisdiction, and no universal rule applies to determine the exclusivity of such clauses. If a clause is ambiguous, courts may interpret it against the drafter's position, aligning with established legal principles of contract interpretation. In this case, the absence of exclusive jurisdiction language and choice of law designation contributes to the ambiguity, which could lead to differing interpretations among reasonable individuals.

The forum selection clause in the May Co. contract allows for either exclusive jurisdiction in Illinois or concurrent jurisdiction in both Illinois and Massachusetts. The contract lacks explicit intent from the parties regarding this clause. Generally, ambiguous language in a contract is interpreted against the drafter, leading to the conclusion that the clause grants concurrent jurisdiction in both states. The court determined that it was erroneous to dismiss the plaintiff's complaint based on the defendant's assertion of exclusive jurisdiction in Illinois, as the clause is permissive, allowing the plaintiff to bring her action in Massachusetts. The court emphasized that a motion to dismiss for lack of jurisdiction due to a forum selection clause should be made under Mass. R.Civ. P. 12(b)(6). The plaintiff's complaint includes allegations of breach of contract, violation of good faith, fraud, and unfair practices. The plaintiff successfully argued that the clause was ambiguous and should therefore be construed against the defendant. The court's review assumes the truth of the complaint's allegations and draws favorable inferences for the plaintiff. Historically, American courts have been hesitant to enforce forum selection clauses, but the Supreme Court in *The Bremen* upheld their validity unless enforcement is shown to be unreasonable. Interpretative principles dictate that the ordinary meaning of contract language prevails unless a special meaning is established.

The interpretation of contracts follows a rule where ambiguous language is construed against the drafter, as established in Snider v. Deban and supported by multiple Federal Circuit Courts of Appeal, including Keaty v. Freeport Indonesia, Inc. and Citro Fla. Inc. v. Citrovale, S.A. There is a potential argument that referring to Illinois law could imply an exclusive application based on the principle of "expressio unius est exclusio alterius." However, this principle is not absolute and has been described as a potentially fallible aid in decision-making, as noted in Sellers’s Case and Mailhot v. Travelers Ins. Co. The interpretation of a choice of law clause in Telco highlighted that while Massachusetts law was indicated as governing, it did not establish Massachusetts as the exclusive legal forum. This illustrates that forum selection clauses, while generally valid, do not inherently imply exclusivity unless explicitly stated or clearly intended by the parties. An example is provided where a combination of a choice of law clause and a forum selection clause can indicate exclusive jurisdiction without the explicit use of the term "exclusive jurisdiction," as illustrated in Baby Furniture Warehouse.