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Sayles v. Knight Transportation Co., Inc.

United States District Court, E.D. Missouri, Eastern Division

December 2, 2016




         This matter is before the Court on Defendant's Motion to Transfer (ECF No. 14). This matter is fully briefed and ready for disposition.[1]


         On April 15, 2016, Plaintiffs filed a lawsuit against Defendant Knight Transportation Company, Inc. ("Knight")[2] in the Circuit Court of St. Louis County, Missouri, styled Jasan Styles and Jamison Stirling d/b/a Sayles Transportation Company v. Knight Transportation Company, Inc., Case No. 16SL-CC1376. Knight removed this action to federal court pursuant to 28 U.S.C. §1332, asserting complete diversity of citizenship exists between Plaintiffs and Knight and that more than $75, 000 is in dispute.

         On August 14, 2014, Sayles Transportation Company ("Sayles") entered into a Transportation Brokerage Agreement with Knight.[3] As part of the Transportation Brokerage Agreement, Plaintiffs agreed that Sayles would provide contract carriage and related services to Knight pursuant to the terms of the Transportation Brokerage Agreement. In turn, Knight agreed to pay Sales for the transportation of property. As part of the Transportation Brokerage Agreement, Sayles agreed to procure and maintain, at its sole cost and expense, minimum insurance coverage, including Commercial Automobile Liability Insurance and Motor Truck Cargo Legal Liability Insurance. Paragraph 19 of the Transportation Brokerage Agreement, entitled, "Resolution of Disputes" provides, in relevant part, "[t]he parties consent and agree to the exclusive jurisdiction of the federal or state courts of Arizona in any action under this Agreement and that any such court in Arizona will be an appropriate forum for such action." The Transpiration Brokerage Agreement is the only written agreement between Knight and Plaintiffs or Sayles, other than load confirmation sheets. In the Complaint, Plaintiffs appear to allege that Knight breached another written contract-a contract for insurance-even though no such written contract for insurance exists between Plaintiffs and Knight. Rather, approximately fifteen months after entering into the Transportation Brokerage Agreement, Sayles' requested Knight's assistance in obtaining insurance. Knight referred Sayles to Transtar Insurance Brokers, Inc. ("Transtar"). Sayles applied to become part of a group insurance policy through Transtar. As part of its application, Sayles also applied to become a member of Avant RPG, Inc., a risk retention group. In conjunction with its application, Sayles signed a Membership Agreement with Avant RPG, Inc. On December 4, 2015, Transtar issued a certificate of insurance to Sayles for the insurance coverage required under the Transportation Brokerage Agreement.


         A. Motion to Transfer

         Knight argues that this Court should enforce the forum-selection clause and transfer this entire action to Arizona.

         In response, Plaintiffs assert that Knight's Motion is untimely and Knight should have removed this action directly to the District of Arizona. Next, Plaintiffs maintain that, even if Defendant is "based" in Arizona, Missouri still has jurisdiction over Plaintiffs' claims under Missouri's Long-Arm Statute, R.S. Mo. 506.500. (ECF No. 22 at 3). Plaintiffs assert that this Court has jurisdiction over Plaintiffs' claims because the relevant contract relates to Plaintiffs and Plaintiffs' business, which were all located in Missouri at the time of formation of the contract. (ECF No. 22 at 3). Plaintiffs assert that their tort claims do not arise of the contract, but arise out of Knight's

negligence in cancelling the contract prematurely and in error, but more significantly, Plaintiffs' tort claims arise out of Defendant's negligence, including defamation and tortuous [sic] interference with business expectancy, when Defendant communicated to unrelated third parties, who in turn relied to Plaintiffs' detriment, on Defendant's defamatory representations, resulting in substantial loss of business to Plaintiffs.

(ECF No. 22 at 5). Finally, Plaintiffs maintain that Knight should be estopped from requesting a change in venue "at this late hour" because Knight failed to seek transfer prior to removal. (ECF No. 22 at 5-6).

         As an initial matter, the Court holds that Knight's Motion to Transfer is not untimely.

         Knight was required to remove this case to this federal court prior to seeking a transfer to the District Court of Arizona. See 28 U.S.C. §1446 ("A defendant or defendants desiring to remove any civil action from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal..."). Knight could not have removed this case directly to the District Court of Arizona.

         Next, the Court holds that the forum selection clause in the Transportation Brokerage Agreement is an enforceable contract. As a general rule, courts enforce valid forum selection clauses. "[W]hen the parties' contract contains a valid forum-selection clause, which represents the parties' agreement as to the most proper forum.'" Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas,134 S.Ct. 568, 581 (2013) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31 (1988)). The "enforcement of valid forum-selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system." Stewart Org., Inc., 487 U.S. at 33. The Court notes that although jurisdiction and venue are appropriate in this forum, personal jurisdiction and venue are also appropriate in Arizona pursuant to the forum selection clause. The Eighth Circuit has held that "[d]ue process is satisfied when a [party] consents to personal jurisdiction by entering into a contract that contains a valid forum selection clause." Dominium Austin Partners, LLC v. Emerson, 248 F.3d 720, 726 (8th Cir. 2001); CIC Grp., Inc. v. Mitchell, No. 4:10CV1789MLM, 2010 WL 5184990, at *3 (E.D. Mo. Dec. 15, 2010). Plaintiffs waived their argument that venue in Arizona is inconvenient to them because they consented to jurisdiction there under the forum selection clause. Nicolais v. Balchem Corp., No. 4:14-CV-1936 CAS, 2015 ...

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