United States District Court, W.D. Missouri, Western Division
SERVICE TEAM OF PROFESSIONALS, INC. Plaintiff,
WILLIAM C. FOLKS, et al., Defendants.
ORDER AND OPINION (1) CONCLUDING THAT THE COURT LACKS
PERSONAL JURIDICTION OVER DEFENDANTS AND (2) DIRECTING
PLAINTIFF TO INDICATE WHETHER IT DESIRES FOR THE CASE TO BE
filed this suit, alleging Defendants breached a contract.
Defendants have filed a Motion to Dismiss, contending that
they are not subject to personal jurisdiction in Missouri.
Alternatively, Defendants ask that the case be transferred to
the Middle District of Louisiana for the convenience of the
parties pursuant to 28 U.S.C. § 1404(a). The Court
concludes that it does not have personal jurisdiction over
Defendants, so the Court cannot consider transferring the
case based on § 1404(a). The Court will defer taking any
further action, however, to allow Plaintiff an opportunity to
indicate whether it would like the case transferred to the
Middle District of Louisiana pursuant to 28 U.S.C. §
is in the business of granting franchises to businesses
engaged in providing cleaning and restoration services. (Doc.
1, ¶ 7.) Defendants entered into a Franchise Agreement
with Plaintiff for the operation of a franchise in Baton
Rouge, Louisiana. (Doc. 1, ¶¶ 10-11.) Section 26 of
the Franchise Agreement contained a forum selection clause
stating that “[p]roper venue for any action shall be in
Kansas City, Missouri.” (Doc. 1, ¶ 6; Doc. 8, p.
The Franchise Agreement was due to expire on July 31, 2016.
(Doc. 8-1, p. 2.)
dispute arose between the parties, and in April 2016 they
entered into a Mutual Settlement and General Release
Agreement, (“the Settlement Agreement”). (Doc. 1,
¶ 14; Doc. 1-1; Doc. 14-4, pp. 39-43.) The Settlement
Agreement provides that the Franchise Agreement was deemed to
have been terminated as of January 1, 2016, and that
“none of the Settling Parties shall have any remaining
obligations or rights thereunder, except for those
post termination obligations and rights described within
Section 13a through Section 13d and Section 13f through
Section 13h of the Franchise Agreement.” (Doc. 1-1, p.
1 (emphasis supplied).) Generally, these specified sections
(hereafter “Section 13”) describe the
franchisee's obligation to stop using Plaintiff's
service marks, refrain from divulging trade secrets, return
certain materials to Plaintiff, and cancel or abandon all
fictitious names, service marks, advertising, and business
listings incorporating or related to Plaintiff's name or
mark. (Doc. 1, ¶ 16.) However, with the exception of
Section 13, the Settlement Agreement specifies that
“the Settling Parties are relieved from all of the
terms and conditions” of the Franchise Agreement. (Doc.
1-1, p. 1.)
dispute arose between the parties, this time over whether
Defendant had breached the Settlement Agreement. Plaintiff
filed suit in the District of Nevada, contending that
Defendants had breached the Settlement Agreement by
continuing to use Plaintiff's promotional videos, service
marks, and other materials. (Doc. 8-4, ¶¶ 17-19,
23.) Defendants moved to dismiss the suit, arguing that they
were not subject to personal jurisdiction in Nevada. (Doc.
14-4.) The District of Nevada agreed that Defendants lacked
minimum contacts with that state, and granted Defendants'
Motion to Dismiss in January 2018. (Doc. 8-5.) Plaintiff then
filed this suit, which is essentially the same as the one it
filed in Nevada.
contend that the case must be dismissed because (1) the forum
selection clause did not survive the Franchise
Agreement's termination, and (2) they do not have the
minimum contacts with Missouri necessary to satisfy the Due
Process Clause. Alternatively, they ask that the case be
transferred to the Middle District of Louisiana for the
convenience of the parties pursuant to 28 U.S.C. §
1404(a). Plaintiff opposes Defendants' Motion. As
discussed more fully below, the Court concludes that
Defendants are not subject to personal jurisdiction in this
forum, but the Court defers further action so that Plaintiff
can indicate whether it wants the case transferred to a
The Forum Selection Clause
process is satisfied when a defendant 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) (citing Burger King v. Rudzewicz, 471 U.S.
462, 472 n.14 (1985) and M/S Bremen v. Zapata Off-Shore
Co., 407 U.S. 1, 15 (1972)); see also St. Paul Fire
& Marine Ins. Co. v. Courtney Enterprises, Inc., 270
F.3d 621, 624 (8th Cir. 2001). Plaintiff contends that the
Franchise Agreement's forum selection clause was valid
and that it survived the Franchise Agreement's
termination. Defendants do not dispute that the forum
selection clause was valid; they only contend that it is no
longer in effect because in the Settlement Agreement the
parties agreed to no longer be bound by that provision. The
Court agrees with Defendants.
the parties' obligations expire when a contract
terminates, but provisions related to the manner in which
disputes are resolved generally survive the contract's
termination. Such provisions govern disputes that (1) accrued
before the agreement's termination or (2) relate to
post-termination obligations specified in the contract.
E.g, Silverpop Sys., Inc. v. Leading Market Tech.,
Inc., 641 Fed. App'x 849, 857 (11th Cir. 2016); 13
Corbin on Contracts § 67.2 (2003). Courts have applied
this general principle to forum selection clauses and
concluded that such clauses generally survive the termination
of the agreement and apply to pre-termination disputes and to
post-termination obligations specified in the agreement.
E.g., United States Smoke & Fire Curtain,
LLC v. Bradley Lomas Electrolok, Ltd., 612 Fed.
App'x 671, 672-73 (4th Cir. 2015); Tristate HVAC
Equipment, LLP v. Big Belly Solar, Inc., 752 F.Supp.2d
517, 534-35 (E.D. Pa. 2010); AGR Fin., LLC v. Ready
Staffing, Inc., 99 F.Supp.2d 399, 401 (S.D.N.Y. 2000);
Allied Sound, Inc. v. Dukane Corp., 934 F.Supp. 272,
275 (M.D. Tenn. 1996); Baker v. Economic Research Servs.,
Inc., 2018 WL 1415501, *2 (Fla. Dist. Ct. App. 2018).
However, the common law rule assumes that the contract
containing the contract has expired by its terms or that the
parties have merely agreed to terminate the contract. The
parties are free to negotiate a different outcome.
question before the Court is whether the Settlement Agreement
terminated the parties' agreement to litigate disputes in
Kansas City, Missouri. When interpreting the Settlement
Agreement, the Court's objective is to ascertain and give
effect to the parties' intent. E.g., Armbruster v.
Mercy Med. Grp., 465 S.W.3d 67, 71 (Mo.Ct.App.
2015). The parties' intent is to be gleaned
solely from the contract if the contract's terms are
unambiguous, e.g, . id., and in conducting this
inquiry “the terms of a contract should be read as a
whole.” State ex rel. Vincent v. Schneider,
194 S.W.3d 853, 858 (Mo. 2006) (en banc).
Settlement Agreement does not contain a forum selection
clause or choice of law provision. The parties discussed the
issue during negotiations but were unable to agree. (Doc.
8-2, ¶¶ 4-5.) However, they were able to agree
that, with the exception of certain obligations in Section
13, “the Settling Parties are relieved from all of
the terms and conditions” of the Franchise
Agreement. (Doc. 1-1, p. 1 (emphasis supplied).) This
language is unambiguous, and the only possible interpretation
is that the parties agreed that all of the Franchise
Agreement's provisions ended effective January 1, 2016,
except for the specified provisions in Section 13. This means
that the parties were relieved of obligations contained in
Section 26, including the obligation to resolve disputes in
Kansas City, Missouri.
opposes this conclusion by relying on the common law
principles referenced earlier. It suggests that the common
law principles apply and a forum selection clause remains
applicable whenever and regardless of how a contract ends.
However, there can be no doubt that the parties retain the
ability to agree to terminate a forum selection clause; the
question in a given case is whether they did so. For the
reasons set forth in ...