Dane Construction & Co. v. Travelers Casualty & Surety Co. of America
Docket: Case No. 16-61096-Civ-DIMITROULEAS
Court: District Court, S.D. Florida; September 19, 2016; Federal District Court
The Court denied the Defendants' motion to dismiss the complaint on the grounds of forum non conveniens. The Defendants, which include Travelers Casualty and Surety Company of America, Liberty Mutual Insurance Company, Federal Insurance Company, and Fidelity and Deposit Company of Maryland, argued that the case should be dismissed so that the Plaintiff, Dane Construction and Company, Inc., could re-file in the Seventeenth Judicial Circuit in Broward County, Florida.
The case arose from a contract between Tutor Perini Fort Lauderdale-Hollywood Venture and the Board of County Commissioners of Broward County for a construction project. Sureties issued a payment bond for Tutor Perini, which was governed by Florida law but did not specify venue for litigation. Dane filed a complaint against the Sureties for breach of the payment bond, asserting that the Sureties are obligated to pay despite any disputes between Dane and Tutor Perini.
In evaluating the motion, the Court considered three prongs necessary for dismissal on forum non conveniens grounds: 1) the existence of an adequate alternative forum, 2) whether public and private factors favor dismissal, and 3) whether Dane could refile without undue inconvenience or prejudice. The Court found that an adequate alternative forum exists, as the action could have been originally filed in state court. However, it noted potential complications regarding the statute of limitations that could hinder Dane's ability to refile, leading to the denial of the motion to dismiss.
Sureties address the statute of limitations, indicating no objection to the court tolling it from May 23, 2016, for a reasonable period post-dismissal. The court will assess whether public and private factors favor dismissal, considering: (1) convenience of witnesses, (2) location and accessibility of documents, (3) convenience of parties, (4) locus of operative facts, (5) availability of process for unwilling witnesses, (6) parties' relative means, (7) forum’s familiarity with governing law, (8) weight of plaintiff's chosen forum, and (9) trial efficiency and justice interests. No single factor is decisive; courts may weigh these factors differently, with the final decision resting in the court's discretion.
The Sureties assert that venue and forum selection clauses in the Owner’s Agreement and Subcontract mandate jurisdiction in the State courts of Broward County, Florida. The Supreme Court in Atlantic Marine Construction Co. v. U.S. District Court established that such clauses are typically controlling unless exceptional circumstances arise, with parties waiving the right to contest the designated forum’s convenience. The Owner’s Agreement specifies jurisdiction in Broward County for disputes, and further stipulates that the Subcontractor must adhere to the Owner's Agreement provisions, including those related to dispute resolution and jurisdiction.
Claims and disputes between the Subcontractor and Contractor are to be resolved through litigation in Florida courts, specifically in Broward County. Both parties agree to submit to Florida's jurisdiction and waive any venue rights under Florida Statutes Chapter 47. The Subcontractor is bound to file any action against the Contractor or its sureties exclusively in Broward County and cannot contest the venue chosen by the Contractor for its claims against the Subcontractor.
In this case, the only claim involves a dispute between the Subcontractor and the Sureties concerning a claim against the Bond, with no claims under the Owner’s Agreement or between the Subcontractor and Contractor. The Subcontractor alleges that despite a demand for payment under the Bond, the Sureties have failed to fulfill their obligation.
While the Sureties argue that the Bond incorporates the Owner’s Agreement provisions regarding venue and forum, the Court finds no such incorporation exists, as the Bond does not reference the Subcontract. Therefore, any venue clauses in the Subcontract are deemed irrelevant. The Court will instead consider the forum-selection clause from the Owner’s Agreement, which specifies that disputes should be resolved in Broward County courts. However, even if this provision were applicable, the Court concludes that the current claim against the Sureties does not arise from the Owner’s Agreement, but rather directly from the Bond itself.
The Court agrees with the Plaintiff that Defendants cannot incorporate venue and forum provisions from the Owner’s Agreement or Subcontract into the Bond, as Section 255.05(1)(a), Fla. Stat. 2011, prohibits such restrictions on venue in bonds. The Bond must ensure the contractor performs as stipulated in the contract and pays all parties defined in s. 713.01 who contribute labor or materials. Any claimant has the right to obtain copies of the contract and bond from the relevant governmental entity and can sue the contractor and surety for amounts owed, without incurring public authority expenses. Provisions in a payment bond that limit protected classes or venue are unenforceable. The Sureties' reliance on Ins. Co. of N. Am. v. Jetstar Dev. Inc. is misplaced, as that case involved subcontracts that explicitly mentioned the surety in the venue provision, unlike the current situation. Here, the relevant provisions do not reference the surety and specify that actions against the contractor and sureties are to be held in Broward County. Consequently, the Court finds no enforceable venue provision exists that would support the Sureties' motion to dismiss on grounds of forum non conveniens, leading to the denial of their motion. Additionally, the Court grants Defendants an extension until September 30, 2016, to respond to the Complaint. The Court may consider this document when reviewing future motions to dismiss based on forum non conveniens. The Bond preceded the Subcontract by nearly two years, raising further considerations regarding its incorporation.
