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D. Landstrom Associates, Inc. v. Mirama Enterprises, Inc.

United States District Court, D. Minnesota

February 3, 2014


John P. Boyle and Timothy R. Franzen, MOSS & BARNETT, P.A., for plaintiff.

Erin K. Fogarty Lisle and Barbara P. Berens, BERENS & MILLER, P.A., for defendant.


PATRICK J. SCHILTZ, District Judge.

Plaintiff Darryl Landstrom and Associates, Inc.[1] ("DLA") is a sales representative. Defendant Mirama Enterprises, Inc. ("Mirama") is a manufacturer and importer of household goods. From 2003 until 2013, DLA sold Mirama products to retail stores and was paid a commission by Mirama. The relationship between DLA and Mirama was governed by a series of written contracts, although there were periods during which no written contract was in place. It appears that, during those interim periods, the parties acted consistently with the terms of the most recently expired contract.

Mirama and DLA entered into the last of their series of written contracts in April 2012. See Mamao Aff. Ex. 1 [ECF No. 7-1] ("Contract"). That contract provided that it would terminate on March 31, 2013, but also provided that Mirama could terminate the contract earlier by giving 30 days written notice to DLA. Id. § 9. The contract also provided that the parties could renew it for an additional year "by mutual agreement." Id.

March 31, 2013 came and went, the written contract expired, but neither party said a word to the other party about the fact that they no longer had a written contract in place. Instead, DLA continued selling Mirama products as it had under the expired written contract, and Mirama said nothing. On May 31, 2013, however, Mirama notified DLA that it was terminating the parties' business relationship, effective immediately. See Compl. ¶ 13 [ECF No. 1-1].

Soon thereafter, DLA sued Mirama in state court. DLA alleged in its complaint that, after the parties' written contract expired on March 31, 2013, the parties entered into an unwritten contract - an unwritten contract that obligated DLA to continue selling Mirama products and that obligated Mirama to continue paying commissions on those sales. DLA alleged that Mirama breached the unwritten agreement by failing to pay commissions on sales made after March 31, 2013. DLA also alleged that Mirama violated Minnesota law, both by failing to pay those commissions and by failing to provide adequate notice before terminating the unwritten agreement. See Minn. Stat. § 325E.37; Minn. Stat. § 181.145.

Mirama removed the case to federal court, see 28 U.S.C. § 1441(a), and now moves to transfer this lawsuit to the United States District Court for the Southern District of California pursuant to the written contract's forum-selection clause.[2] Alternatively, Mirama argues that, even if this case is not transferred pursuant to the forum-selection clause in the written contract, the Court should nevertheless transfer the case to California "[f]or the convenience of [the] parties and witnesses...." 28 U.S.C. § 1404(a).

Parties may agree to litigate disputes in a particular forum. The last written contract between Mirama and DLA included the following forum-selection clause:

All actions or proceedings in any way, manner or respect arising out of or from or related to this Agreement shall be litigated only in courts having sites within the City of San Diego, State of California as to state court actions or federal court actions, which courts shall have exclusive jurisdiction over all such actions or proceedings, and all parties and their transferees hereby consent and submit to the jurisdiction of any local, state or federal court located within said city and state, and all parties and their transferees hereby waive any and all rights that they may have or obtain to transfer or change the venue of any litigation brought by any party hereto against any other party hereto.

Contract § 12.

Forum-selection clauses "are prima facie valid and are enforced unless they are unjust or unreasonable or invalid." Servewell Plumbing, LLC v. Fed. Ins. Co., 439 F.3d 786, 789 (8th Cir. 2006) (quotation omitted). DLA does not argue that forum-selection clause in its last written contract with Mirama was "unjust or unreasonable or invalid." Id. Instead, DLA argues that the forum-selection clause does not apply to this lawsuit, because this lawsuit does not "aris[e] out of or from or relate[] to" the written contract. Contract § 12.

DLA concedes that Mirama paid all commissions due on sales made before the written contract terminated on March 31, 2013. In fact, DLA takes pains to stress that it is not alleging in this lawsuit that Mirama violated any provision of the written contract. Instead, says DLA, it is alleging only that Mirama violated an unwritten contract that came into being on or shortly after April 1, 2013. See Webb Candy, Inc. v. Walmart Stores, Inc., No. 09-CV-2056, 2010 WL 2301461, at *8 (D. Minn. June 7, 2010) ("[W]hen parties continue to perform under an expired contract, their conduct can give rise to a new, implied-in-fact contract."). DLA is vague about the terms of that unwritten contract, except that DLA alleges that the unwritten contract authorized it to continue to sell Mirama products and obligated Mirama to continue to pay commissions on those sales. According to DLA, however, the unwritten contract did not contain a forum-selection clause.

Mirama disagrees with DLA on all points. First, Mirama argues that the forum-selection clause in the written contract is indeed broad enough to cover the claims asserted by DLA in this lawsuit. Second, Mirama argues that no unwritten contract ever arose between the parties after the written contract expired. And finally, Mirama argues that, even if an unwritten contract arose, that unwritten contract was identical to the ...

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