Lease America.Org, Inc. v. Rowe International Corp.
Docket: Civil Action No. 13-40015-TSH
Court: District Court, D. Massachusetts; March 31, 2015; Federal District Court
Lease America Org. Inc. filed an Amended Complaint against Rowe International Corporation, AMI Entertainment Network, Inc., and the Amusement and Music Operators Association, alleging violations of the Sherman Act and Chapter 93A. The court is addressing AMI and Rowe's motion to transfer the case to the Western District of Michigan based on a forum selection clause in the Master Operator Agreement. Lease America contests the validity of this clause and argues against the transfer.
The court notes that when a forum selection clause is present and valid, it typically overrides the plaintiff's choice of forum, and public interest factors are the only considerations, which rarely affect transfer motions. The distinction between permissive and mandatory clauses is also highlighted, with mandatory clauses requiring litigation exclusively in the specified forum. The court grants the motion to transfer but does not rule on the motion to dismiss.
The Master Agreement includes a Choice of Law and Venue provision specifying that it is governed by Michigan law and mandates jurisdiction in Michigan courts, including the U.S. District Court for the Northern District of Michigan. The clause indicates that both parties waive any objections to this exclusive jurisdiction, suggesting an intention for the clause to be mandatory despite its initial permissive language. Lease America does not contest the clause's mandatory nature but instead argues the overall enforceability of the Master Agreement. The court concludes that the clause reflects an exclusive jurisdiction intent, affirming its mandatory status.
Key facts relevant to enforceability include a transaction in August 2005 where Charles Pietrewiez, the plaintiffs' president, purchased jukeboxes from Beston Enterprises. AMI requires agreement to the Master Agreement and the AMI Network Operation Guide to activate the jukeboxes. Pietrewiez signed the Master Agreement and the Operation Guide, adding "with conditions" next to his signature. However, the meaning of this notation is unclear. Prior correspondence from John Margold, AMI's Senior VP, outlines specific terms regarding invoicing and payment for the jukeboxes, addressing Pietrewiez's concerns and indicating a side agreement to amend the terms.
After AMI received executed documents from Pietrewicz, it connected the purchased jukeboxes to the AMI Network and began invoicing Future Video for royalties per the Master Agreement, which is effective until five years after the final unit listed in appendix “A” is connected. The Master Agreement incorporates the AMI Operation Guide. On April 11, 2008, Pietrewicz contacted Mike Maas to confirm their agreement on several points, including that Lease America may enforce any agreement terms in Massachusetts, and that AMI would provide executed copies of agreements. Additional points included:
1. AMI would not require Lease America to accept new or modified agreements for continued access to equipment.
2. The February 2008 "click-through" amendment would not bind Lease America.
3. AMI acknowledged Lease America's ownership of the jukeboxes, assuring no restrictions on their use.
4. Both parties agreed to refrain from disparaging one another.
Pietrewicz requested Margold to sign the terms to indicate agreement. Maas responded on July 14, 2008, expressing a desire to avoid legal consultations and confirmed the removal of the click wrap requirement specifically for Lease America, thereby reinstating the prior operational guidelines for their machines without the new click wrap conditions.
Pietrewicz responded to Maas, expressing agreement with Maas's previous email and affirming the importance of confidentiality regarding their discussions. Lease America contends that the Master Agreement is not binding due to the absence of a signed signature page from the Defendant, Pietrewicz’s conditional signature, and a counterproposal on the forum selection clause, suggesting a lack of mutual agreement. Conversely, AMI maintains that the Master Agreement is binding irrespective of a signed page, asserting that Lease America accepted the terms, evidenced by actions such as Future Video's use of AMI Network jukeboxes and subsequent royalty payments. The case law indicates that a contract can be binding even with only one signature if acceptance is shown by the non-signing party. Notably, the validity challenge arises from the signing party, which is atypical but does not alter the outcome. Evidence shows both parties accepted the Master Agreement around August 2005. By 2008, tensions arose; Pietrewicz sought to clarify agreements made in an earlier meeting, including provisions for executed copies of agreements and Lease America’s non-acceptance of new terms. This letter, contrary to Lease America's claims, indicates ongoing operations under the Master Agreement, as Pietrewicz's requests reflect modifications rather than a lack of agreement. Maas later indicated that legal involvement would be necessary to implement Pietrewicz’s proposals, further supporting the existence of an ongoing contractual relationship.
A counter proposal was made addressing Pietrewicz's primary concern, stating it would apply to existing machines and any machines acquired by Future Video before any modifications to the contracts and guidelines preceding the February 2008 Amendment. Pietrewicz agreed to this proposal via email, indicating both parties accepted a change in one aspect of their relationship while maintaining their existing agreements' status quo, specifically referring to the Master Agreement and AMI Operation Guide as they existed before the February 2008 Amendment.
The forum selection clause within the Master Agreement is deemed valid and binding on Lease America, which has not demonstrated extraordinary circumstances that would make enforcement unreasonable. The scope of the forum selection clause encompasses all matters relating to the Master Agreement and AMI Operation Guide, interpreted broadly to include claims associated with them. Lease America’s allegations under the Sherman Act and Chapter 93A, which concern anti-competitive behavior by AMOA and AMI/Rowe, potentially relate to the Master Agreement, as resolution of these claims would require interpretation of the agreements. Consequently, the claims fall within the forum selection clause’s purview.
The court grants the defendants' motion to transfer the case to the Western District of Michigan and will not address the motion to dismiss the amended complaint.
AMI Defendants’ motion to transfer venue to the Western District of Michigan is granted, while the ruling on the Defendants’ Joint Motion to Dismiss the First Amended Complaint is reserved for the transferee court. AMI's principal place of business is in Pennsylvania, and it is the parent company of AMI Entertainment, Inc., which is based in Grand Rapids, Michigan and is the signatory to the agreement. The court notes that the enforceability of the forum selection clause regarding AMI Entertainment, which is not a party to the suit, has not been challenged by either party, so it will not be addressed. The Master Agreement and AMI Operation Guide can be assigned by AMI Entertainment, suggesting it may have transferred rights to AMI, although this is not documented in the record. The forum selection clause incorrectly states jurisdiction in the non-existent U.S. District Court of the Northern District of Michigan. AMI seeks transfer to the Western District, and this discrepancy is not discussed by either party. The choice of law clause indicates exclusive jurisdiction where AMI is located, rendering the error likely immaterial. Pietrewicz signed the agreements for Future Video, Inc., but for clarity, he is sometimes referred to directly. The court suggests that involving legal counsel may have clarified these issues. The court has paraphrased Maas’s language from the factual section of the document.
