MEMORANDUM OPINION AND ORDER
MARK E. FULLER, District Judge.
Before the Court are Defendant Prime Insurance Company's ("Defendant" or "Prime") Motion to Dismiss for Improper Venue, or in the Alternative, for Forum Non Conveniens (Doc. #6) and Motion to Dismiss Amended Complaint (Doc. #12). For the reasons set forth below, the Court
The Court has subject-matter jurisdiction over this lawsuit pursuant to 28 U.S.C. § 1332 (diversity).
II. FACTUAL AND PROCEDURAL BACKGROUND
Wildfire Group, LLC ("Plaintiff" of "Wildfire") sells Vehicle Service Contract Buy Back Agreements on new and used vehicles to automobile dealers in several states. (Doc. #11, ¶ 7.) When a service contract provided by a dealer is not used by the customer during the term of the contract, Wildfire purchases the contract back from the dealer under the Buy Back Agreement. Prime and Wildfire entered into an insurance contract, whereby Prime would insure Wildfire for contractual liability arising out of the Buy Back Agreements between Wildfire and the various automobile dealers. Under the terms of the insurance policy, Prime insured Wildfire's performance under the Vehicle Service Buy Back Agreements.
As per the insurance policy, Prime and Wildfire created a Reserve Funds Trust Agreement ("Trust Agreement"). Under the Trust Agreement, Wildfire would deposit funds into the reserve account on a monthly basis. (Doc. #11, ¶ 15.) The Trust Agreement's purpose was to hold reserve funds to be repaid to dealers in the event that no claims have been made under the service contract and to hold the underwriting profits until the time when they may be distributed to both Wildfire and Prime. (Doc. #11, ¶ 10.) Profit sharing distributions are made to Prime and Wildfire, in accordance with the distribution terms of the trust, when all contracts written within a calendar year expire and there are no unpaid outstanding losses. (Doc. #11, ¶ 12.)
On October 6, 2011, Prime notified Wildfire of its intent to cancel the insurance policy as of December 9, 2011. (Doc. #11, ¶ 13.) Prior to the cancellation date, Prime expressed to Wildfire a desire to continue insuring Wildfire's Buy Back Program but under renegotiated terms. For several months during negotiations, Wildfire continued to deposit monthly funds into the trust to support new Buy Back Agreements entered into by Wildfire under the belief that Prime intended to continue business relationships with Wildfire. (Doc. #11, ¶ 18.) Specifically, Wildfire alleges that the reserve funds deposited from December 9, 2011, through the date of its Complaint (Doc. #11) exceed $278,400.00. The parties were unable to negotiate new terms, resulting in the termination of their relationship.
Wildfire claims that Prime refuses to insure any Buy Back Agreements written by Wildfire after December 9, 2011. Additionally, Wildfire claims that Prime refuses to release the Trust funds, including those deposited by Wildfire after the termination
On August 6, 2012, Prime filed an action for declaratory judgment in Salt Lake County, Utah. Prime requested a declaratory judgment that: (1) the Policy cancelled on December 9, 2011, and Prime no longer has any obligation to Wildfire under the terms and conditions of the Policy; (2) Prime should refund a balance of $20,000.00 to Wildfire because it has no continuing legal obligation under the terms of the Policy; (3) Prime should not negotiate the premium payments made by Wildfire because it has no continuing obligations under the terms of the Policy; and (4) the Trust assets should be administered consistent with the provisions of the Policy and Trust Agreement until all of the relevant contracts have expired.
On October 2, 2012, Wildfire filed its answer and counterclaim in the Utah action. (Doc. #11.) The same day, Wildfire commenced an action against Prime in this Court claiming: (1) breach of the duty of good faith and fair dealing; (2) tortious interference with contractual and business relations; (3) unjust enrichment and breach of fiduciary duty; (4) fraudulent inducement; (5) injunctive relief; and (6) declaratory judgment. Wildfire contends that this Court is a proper venue because the Trust Agreement, which forms the basis of this action, identifies Alabama law as the governing law with respect to construction, validity, and performance.
III. LEGAL STANDARD
In the Eleventh Circuit, a motion to dismiss on the basis of a forum-selection clause is brought pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure as a motion to dismiss for improper venue. Lipcon v. Underwriters at Lloyd's, London, 148 F.3d 1285, 1290 (11th Cir.1998). "A judge may make factual findings necessary to resolve motions to dismiss for ... improper venue," so long as the resolution of the factual disputes is not an adjudication
A court "must accept all allegations of the complaint as true, unless contradicted by the defendants' affidavits, and when an allegation is so challenged the court may examine facts outside of the complaint to determine whether venue is proper." Belcher-Robinson, 699 F.Supp.2d at 1333. A court must draw all reasonable inferences and resolve all factual conflicts in favor of the plaintiff. Id.; see Lawrence v. Dunbar, 919 F.2d 1525, 1530 (11th Cir.1990) (holding that courts should apply the summary judgment standard when ruling on a motion to dismiss which asserts a factual attack on subject matter jurisdiction or a related type of motion, including ones for improper venue); see also Hodgdon Powder Co., Inc. v. Clean Shot Techs., Inc., 92 F.Supp.2d 1170, 1177-72 (D.Kan.2000). "If the court chooses to rely on pleadings and affidavits, the plaintiff need only make a prima facie showing of [venue]." Gulf Ins. Co. v. Glasbrenner, 417 F.3d 353, 355 (2d Cir.2005) (quoting CutCo Indus. v. Naughton, 806 F.2d 361, 364-65 (2d Cir. 1986)).
Prime's extensive briefing in support of its motion contains two principal arguments. First, Prime argues that the forum-selection clause in the insurance contract signed between the parties requires this action to be litigated in the courts of Utah and requires dismissal of the claims against Prime. Second, as an alternative argument, Prime argues that the doctrine of forum non conveniens suggests dismissal of the claims against Prime. Wildfire disagrees on both counts and argues that the forum-selection clause does not govern the current action, and that forum non conveniens presents no challenge to the case continuing in this district. For the reasons set forth below, the Court finds that, under the applicable legal standard, the forum-selection clause in the insurance contract does not apply to the claims Wildfire brings under the Trust Agreement and that forum non conveniens does not compel dismissal of the claims against Prime. Therefore, the motion is due to be DENIED.
A. Forum-selection Clause
The United States Supreme Court has established two separate standards for considering the impact of forum-selection clauses on venue. In M/S Bremen v. Zapata Off-Shore Company, the Court altered the "traditional view of many American courts" that forum-selection clauses removing a case from American courts are against public policy and unenforceable. 407 U.S. 1, 6, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). The Court determined instead that "such clauses are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances." Id. at 10, 92 S.Ct. 1907 (internal quotations omitted). The Court listed "fraud, undue influence, or overweening bargaining power" as conditions that might make enforcement
The Supreme Court in Zapata said its given standard "is the correct doctrine to be followed by federal district courts sitting in admiralty." Zapata, 407 U.S. at 10, 92 S.Ct. 1907. However, some lower courts applied Zapata to forum-selection clauses generally. See, e.g., In re Fireman's Fund Ins. Cos., 588 F.2d 93, 95 (5th Cir.1979) (applying Zapata to a transfer under 28 U.S.C. § 1404(a)).
The Supreme Court made clear in a later case that the Zapata standard did not govern all considerations of forum-selection clauses. In Stewart Organization, Inc. v. Ricoh Corporation, the Court considered "whether a federal court sitting in diversity should apply state or federal law in adjudicating a motion to transfer a case to a venue provided in a contractual forum-selection clause." 487 U.S. 22, 24, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) (emphasis added). After noting that the Eleventh Circuit "applied the standards articulated in the admiralty case of" Zapata, the Supreme Court "affirm[ed] under somewhat different reasoning." Id. at 25, 108 S.Ct. 2239 (emphasis added). The Court found that "the first question for consideration should have been whether [28 U.S.C.] § 1404(a) itself controls respondent's request to give effect to the parties' contractual choice of venue." Id. at 29, 108 S.Ct. 2239. The Court went on to say that a forum-selection clause "will be a significant factor that figures centrally" in a court's consideration of a motion to transfer under § 1404(a). Id. See also 14D Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3803.1, at 79 (3d ed. 2007) ("The combined rule of these cases is that a federal court sitting in admiralty jurisdiction should apply a forum-selection clause if it is `reasonable,' but a federal court sitting in diversity or federal question jurisdiction should take the clause into account only as one element in the balancing test required by Section 1404(a).").
The resolution of the motion to dismiss turns largely on the fact-finding standards applicable to motions to dismiss for improper venue. Applying these standards to the case at bar, the Court finds that Wildfire has produced sufficient facts by which this Court could conclude that they are not bound by the forum selection clause included within the insurance contract because Wildfire's claims arise out of the Trust Agreement, which does not contain a forum-selection clause. Construing the evidence presented in Wildfire's favor, as the Court must under the standard for ruling on this motion to dismiss, the Court finds that the forum-selection clause does not bar Wildfire from litigating their claims relating to the Trust Agreement in this Court. Therefore, the motion is due to be DENIED on the grounds of the forum-selection clause.
Under the doctrine of forum non conveniens, "when an alternative forum has jurisdiction to hear a case, and when trial in the chosen forum would establish oppressiveness and vexation to a defendant out of all proportion to plaintiff's convenience, or when the chosen forum is inappropriate because of considerations affecting the court's own administrative and legal problems, the court may, in the exercise of its sound discretion, dismiss the case." Wilson v. Island Seas Invs., Ltd., 590 F.3d 1264, 1269 (11th Cir.2009) (quoting Am. Dredging Co. v. Miller, 510 U.S. 443, 447-48, 114 S.Ct. 981, 127 L.Ed.2d 285 (1994)). A defendant invoking forum non conveniens "bears a heavy burden in opposing the plaintiff's chosen forum." Wilson, 590 F.3d at 1269 (quoting Sinochem
A court conducting an analysis of whether to dismiss a case pursuant to forum non conveniens must first consider private interest factors. King v. Cessna Aircraft Co., 562 F.3d 1374, 1382 (11th Cir.2009). Private factors the district court should consider when analyzing a forum non conveniens claim include the relative ease of access to sources of proof, access to unwilling and willing witnesses, ability to compel testimony, the possibility of view of premises, and the enforceability of a judgment. Liquidation Comm'n of Banco Intercontinental, S.A. v. Renta, 530 F.3d 1339, 1356 (11th Cir.2008). These factors are not exhaustive, and the district court should be flexible in applying them. King, 562 F.3d at 1381-82. "A trial court will look at the private interests first and then, if the balance of the private interests are found `to be in equipoise or near equipoise,' it will `determine whether or not factors of public interest tip the balance in favor of a trial in a foreign forum.'" Id. at 1382. The Court, therefore, turns first to an analysis of the private interest factors.
Wildfire argues that the private interest factors weigh in favor of resolving the dispute in this Court. They point out, with respect to the sources of evidence and witnesses, that the Trust,
Wildfire contends that the private and public interest factors, together with the strong preference afforded to the plaintiff's chosen forum, defeat Prime's motion to dismiss for forum non conveniens. Balancing the private and public interest factors presented by Wildfire, together with the presumption in favor of the plaintiff's chosen forum, the Court cannot say that trying this case in the Middle District of Alabama would be oppressive, vexatious, or necessarily inconvenient for Prime. Moreover, Wildfire has chosen this forum because it is a convenient one, and the Court should only disturb this choice if the balance strongly favors the defendant, which, in this case, it does not. Wilson, 590 F.3d at 1270.
Prime argues, on the other hand, that the Court should grant the Motion to Dismiss because the same claims are already being litigated in state court in Utah. The Court construes Prime's argument as one of judicial economy. Judicial economy may be considered as a public interest factor courts look to when determining whether to transfer for forum non conveniens. Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 423,
Weighing the public and private interest factors presented by both parties, the Court finds that the strong presumption in favor of Wildfire's choice of forum, coupled with the private and public factors weighing against dismissal, require denial of Prime's Motion to Dismiss for forum non conveniens.
For reasons set forth above, it is hereby ORDERED that Defendant Prime's Motion to Dismiss (Doc. #6) is DENIED AS MOOT, and its Motion to Dismiss Amended Complaint (Doc. #12) is DENIED.