Opinion
No. HHB CV07 4015231
February 25, 2008
MEMORANDUM OF DECISION ON MOTION TO DISMISS
The plaintiff Colemont Insurance Brokers of Connecticut, LLC, is the former employer of the defendant Mary Byrne. The second defendant AmWins Brokerage of New York, Inc., is the current employer of Mary Byrne. Before leaving her employment with the plaintiff, Byrne signed an agreement that she would not manage the office of any business competitor for a two year "non-interference period," and would not attempt to hire away any of the plaintiff's employees for a one year period. The plaintiff has filed this action against the defendant and her new employer in four counts, alleging breach of contract, tortious interference with contract, violation of the Connecticut Unfair Trade Practice Act ("CUTPA"), Conn. Gen. Stat. § 42-110a et seq., and unjust enrichment.
The defendant Byrne has filed a Motion to Dismiss (#106), alleging that as a result of a forum selection clause in the agreement, this court has no jurisdiction to hear this matter. The plaintiff opposes the motion.
THE AGREEMENT CONTAINING THE FORUM SELECTION CLAUSE
The agreement that contains the forum selection clause is titled Branch Equity Participation Agreement. It grants to the defendant a percentage of the annual equity in the affiliate for which the defendant worked. The affiliate for which the defendant worked is listed in the agreement as Colemont Insurance Brokers of Connecticut, LLC, the plaintiff here.
The forum selection clause reads:
Section 18.9 Governing Law. The agreement shall be construed, administered, and governed in all respects in accordance with the laws of the State of Texas to the extent not preempted by ERISA or other federal law. Any legal action or proceedings shall be held in the then current county in which the Company has its principal place of business.
THE LOCATION OF THE PARTIES
This action was commenced by service of process on September 4, 2007, in the Connecticut Superior Court, Judicial District of New Britain. The plaintiff describes itself as a Delaware corporation, registered to do business in Connecticut, with an office in Farmington, CT. It states that it is an affiliate of Colemont Brokerage Group, Inc. The complaint describes the defendant Byrne as a resident of Wethersfield, CT, making venue proper in the Judicial District of New Britain. The defendant AmWins is described as a New York corporation doing business in Connecticut with an office in Farmington, CT. All of the conduct described in the lawsuit appears to have taken place solely in Connecticut.
Under the agreement, any required notices or demands directed to the plaintiff were to be mailed to "Colemont Brokerage Group, Inc.," at an address in Dallas, Texas. The agreement allowed a party to make a change of address by mailing notice to the other. After the commencement of this lawsuit, Colemont Brokerage Group, Inc., executed an Assignment, transferring all its interest in the Branch Equity Participation Agreement to the plaintiff Colemont Insurance Brokers of Connecticut, LLC.
THE ARGUMENTS OF THE PARTIES
Given that the defendant is an individual living in Connecticut whose former and current employment, the subjects of this dispute, are in Connecticut, it is curious that she seeks to have the plaintiff litigate this matter in the State of Texas. She claims that the Texas forum was part of the bargain struck by the parties with which the parties now must abide.
The plaintiff argues that the Branch Equity Participation Agreement, read as a whole, contemplates that the selected forum would be the county in which was located the principal place of business of the branch in which the employee was to share the equity. The plaintiff also argues that the court is not bound by the forum selection clause if there are reasons to reject its enforcement. The plaintiff points to the fact that all of the parties and all of the principal witnesses are located in Connecticut; the causes of action arose in Connecticut; and the second defendant AmWins is located in Connecticut and may not be amenable to suit in any other forum.
THE LAW OF FORUM SELECTION CLAUSES
Historically, forum selection clauses were disfavored by both federal and state courts. See, Bremen Unterweser Reederei v. Zapata Off-Shore Co., 407 U.S. 1, 9, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). Courts acted under the "presumption that enforcing such clauses would be contrary to public policy" or an attempt to "oust the jurisdiction" of the court. Id. However, in Bremen, supra, the court held that a forum selection clause was valid and would be enforced by courts, unless some compelling reason made enforcement of such a clause unreasonable under the circumstances. Id. at 10.
Connecticut courts adopted the Bremen rationale. In United States Trust Co. v. Bohart, 197 Conn. 34, 41-43, 495 A.2d 1034, 1039-40 (1985), the Connecticut Supreme Court rejected the argument that the due process rights of the nonresident defendants would be violated if suit in Connecticut were permitted based on a forum selection clause. The court embraced the rule of Bremen and its progeny, stating that "[a]bsent a showing of fraud or overreaching, such forum clauses will be enforced by the courts." United States Trust Co. v. Bohart, supra, at 42.
But a forum selection clause does not operate to strip the court of jurisdiction when jurisdiction is otherwise proper. See Reiner, Reiner Bendett, P.C. v. Cadle Co., 278 Conn. 92, 897 A.2d 58 (2006). Rather, such a clause presents the question of whether it is reasonable for the court to exercise its jurisdiction in the particular circumstances of the case. See Bremen, supra, 407 U.S. at 12, and Reiner, supra, at 103.
In Bremen the court held that enforcement of a forum-selection clause is unreasonable if the binding contract was made through the use of fraud, undue influence, or overweening bargaining power; or if a strong public policy in the forum in which suit is brought finds forum selection clauses unenforceable, either by statute or judicial decision. Bremen, supra, at 12, 15. The forum-selection clause can also be found unenforceable if the moving party can "clearly" show that enforcing the clause "would he unreasonable or unjust." Id. at 15. In its claim of unreasonableness, the asserting party must show the court that litigating in the selected forum is so inconvenient and difficult that it would be denied its day in court. Id. at 18.
THE CIRCUMSTANCES OF THIS LAWSUIT CT Page 3115
In the matter at hand, while no party has asserted that the Branch Equity Participation Agreement was reached through the use of fraud, undue influence, or overweening bargaining power, the court finds that the plaintiff has carried its burden of showing that enforcing the forum selection clause to decline jurisdiction in Connecticut is unreasonable and unjust. As the circumstances present themselves, it is clear that all parties are present in Connecticut, that the most significant witnesses are in Connecticut, and that the alleged tortious conduct occurred in Connecticut. Most importantly, for a full resolution of the case, the second defendant is located in Connecticut. If the plaintiff were forced to litigate, in Texas or elsewhere, against the defendant Byrne without the amenability of AmWins to suit in the other forum, the plaintiff would be deprived of its cause of action and, if its claim is meritorious, its effective remedies against both defendants.Current Texas law embodies the same jurisprudential concerns and does not demand a different analysis or yield a different result. An otherwise valid forum selection clause would not bind a Texas court "if the interests of witnesses and public policy strongly favored that the suit be maintained in a forum other than the one to which the parties had agreed." Phoenix Network Technologies, Ltd. v. Neon Systems Inc., 177 S.W.3d 605, 612 (2005); accord, My Cafe-CCC. Ltd. v. Lunchstop, Inc., 107 S.W.3d 860, 865 (Tex.App. Dallas 2003).
CONCLUSION
Although forum selection clauses are generally enforceable, the court is authorized to use its discretion to decline enforcement when the facts warrant. Reiner, supra, at 99. Enforcement of the forum selection clause is not reasonable in this case and will create an injustice to the plaintiff. Litigating this matter in Connecticut, as opposed to Texas or elsewhere, causes no hardship for any party. Moreover the interests of judicial economy and the goal of a complete resolution of the disputes among these parties are served by declining to enforce the forum selection clause.
Accordingly, the Motion to Dismiss filed by the defendant is denied.