United States District Court, W.D. Tennessee, Eastern Division
ORDER DENYING DEFENDANT'S MOTION TO DISMISS AND
GRANTING DEFENDANT'S MOTION TO TRANSFER VENUE AND
TRANSFERRING CASE TO THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS, FORT WORTH DIVISION
THOMAS ANDERSON CHIEF UNITED STATES DISTRICT JUDGE
the Court is Defendant's Motion to Dismiss, or
alternatively to Transfer Venue, which was filed on March 21,
2019. (ECF No. 12.) Plaintiff responded in opposition (ECF
No. 16), to which Defendant replied. (ECF No. 17.) For the
reasons that follow, Defendant's Motion to Dismiss is
DENIED, but its unopposed Motion to Transfer
Industries LLC (“ODES”) is a manufacturer of
utility terrain vehicles and all-terrain vehicles. (ECF No.
12 at 2.) ODES is organized in and has its principal office
in Texas. (Id.) C&S Outdoor Power Equipment,
Inc. (“C&S”) is an outdoor power equipment
dealership in Huntingdon, Tennessee. (Id.; ECF No.
16 at 2.) C&S became an authorized dealer of ODES's
products in 2015. (ECF No. 16 at 2.) The parties voluntarily
agreed to three consecutive dealer franchise agreements,
which have since governed the terms of their relationship.
(See Id. at 2, 4; ECF No. 12-2; ECF No. 12 at 2; ECF
February 14, 2019, Plaintiff filed suit in this Court
pursuant to the Court's diversity jurisdiction. (ECF No.
1.) Plaintiff alleges that Defendant (1) breached the
parties' dealer franchise agreement
(“Agreement”), (2) violated the Tennessee
Motorcycle and Off-Road Vehicle Dealer Fairness Act, and (3)
engaged in unfair or deceptive business practices.
Plaintiff filed its suit in Tennessee-instead of
Texas-Defendant asks the Court to enforce a mandatory
forum-selection clause contained in the parties'
Agreement by dismissing this action, pursuant to Federal Rule
of Procedure (“FRCP”) 12(b)(6). (ECF No. 12 at
3-5.) Alternatively, Defendant asks the Court to transfer
venue, pursuant to 28 U.S.C. § 1404(a), to the
appropriate United States District Court in Texas.
(Id. at 5-10.) The Court, therefore, first looks to
the Agreement between the parties.
March of 2017, the parties signed and entered into their
third Agreement, which is the contract at issue.
(See ECF No. 12-2; ECF No. 12 at 2; ECF No. 16 at
2.) Within the General provisions of the Agreement, Paragraph
H provides that:
This Agreement and any matters that relate to this Agreement
or its performance shall be governed and construed in
accordance with the laws of the State of Texas and the
Parties mutually consent to the jurisdiction of the courts of
the State of Texas and of the Federal District Court, Central
District of Texas. This agreement will be ONLY governed by
the laws of the State of Texas.
(ECF No. 12-2 at ¶ H (emphasis in original).) As the
basis for its Motion, Defendant specifically relies on a
later portion of that paragraph, which dictates:
Each Party agrees that any legal action, litigation, or
proceeding arising from or relating to this Agreement or its
performance, shall exclusively be filed in a State or
District court in (venue) Fort Worth, Texas, and each Party
irrevocably and unconditionally submits to the exclusive
jurisdiction of these courts.
(Id.) The forum-selection clause and Plaintiff's
nonconforming filing in this Court is the subject of
Defendant's Motion to Dismiss and alternative Motion to
Transfer. (See ECF No. 12.)
however, contends that the Agreement's own terms allow
Plaintiff's filing in this Court. (ECF No. 16 at 6-9.)
Plaintiff begins by noting that two sentences after the
clause on which Defendant relies, the Agreement provides that
“[s]ome state laws will vary by state, [so] please
check with your state on its applicable laws and regulations
which might supersede this agreement and or be enforceable by
that state.” (Id. (citing (ECF No. 12-2 at
¶ H).) Plaintiff also relies on paragraph C, which, too,
is within the General provisions of the agreement.
(Id. at 6 (citing ECF No. 12-2 at ¶ C).)
Paragraph C provides:
If any provision herein contravenes the valid laws or
regulations of any state or other jurisdiction wherein this
Agreement is to be performed, or denied [sic] access to the
procedures forums or remedies provided for such laws of [sic]
regulations such provisions shall be deemed to be modified to
conform to such laws or regulations, and all other terms and
provisions shall remain full force and effect.
(ECF No. 12-2 at ¶ C.)
asserts that these two provisions modify the Agreement so as
to conform to state law in Tennessee, where Plaintiff is an
authorized dealer of Defendant's products. (ECF No. 16 at
7.) According to Plaintiff, such a modification incorporates
Tennessee state law, which forbids forum-selection clauses in
matters such as these. (Id.) Specifically, Plaintiff
points to the Tennessee Motorcycle and Off-Read Vehicle
Dealer Fairness Act, which provides, in part, that
“[a]ny contractual term restricting the procedural or
substantive rights of a dealer under this part, including a
choice of law or choice of forum clause, is void.”
Tenn. Code. Ann. § 47-25- 1913(b). Plaintiff contends