Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Restaurant Supply, LLC v. Pride Marketing and Procurement, Inc.

United States District Court, D. Connecticut

August 10, 2017

RESTAURANT SUPPLY, LLC Plaintiff,
v.
PRIDE MARKETING AND PROCUREMENT, INC. Defendant.

          MEMORANDUM OF DECISION

          MICHAEL P. SHEA, U.S.D.J.

         I. INTRODUCTION

         On June 28, 2016, Plaintiff Restaurant Supply, LLC (“Restaurant Supply”) brought this action in Connecticut Superior Court against Defendant PRIDE Marketing and Procurement, Inc., and, on July 27, 2016, PRIDE removed the case to this Court. (ECF No. 1.) On August 17, 2016, Restaurant Supply filed an amended complaint. (ECF No. 17.) The amended complaint seeks an equitable accounting from PRIDE and contends that PRIDE is liable for conversion, civil theft, and unjust enrichment due to PRIDE's wrongful withholding of rebates. (Id. at ¶¶ 26-28.) PRIDE moved to dismiss Restaurant Supply's amended complaint for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), or alternatively, to transfer venue under 28 U.S.C. § 1404(a). (ECF No. 18.)

         For the reasons set forth below, the Court GRANTS Defendant's motion to transfer this action to the United States District Court for the Eastern District of Louisiana and DENIES the Rule 12(b)(2) motion as moot.

         II. BACKGROUND

         The complaint states that PRIDE is a Louisiana Corporation with a principal place of business in Metairie, Louisiana (ECF No. 17 at ¶ 2.) PRIDE is a “consortium/buying group made up of separate shareholders engaged in the business of buying and selling food service supplies and equipment products[.]” (Id. at ¶ 4.) “Each shareholder admitted into P[RIDE] received one share of the corporation, which entitled each shareholder to purchase [p]roduct[s] through P[RIDE.]” (Id. at ¶4.) Under PRIDE's shareholder agreement, “P[RIDE] received certain rebates from P[RIDE] vendors directly related to the specific purchase of [p]roduct[s] that [shareholders] made through P[RIDE]. P[RIDE] held these rebates as the agent for [shareholders].” (Id. at ¶ 8.)[1]

         Restaurant Supply alleges that it is a Connecticut limited liability company with a principal place of business in Hartford, Connecticut, and that it was a shareholder of PRIDE for at least ten years prior to May 20, 2016. (ECF No. 17 at ¶3.) PRIDE received rebates from vendors directly related to the specific purchases of products that Restaurant Supply made through PRIDE. (Id. at ¶ 8.) PRIDE was required “to remit the vendor rebates received by P[RIDE] to Restaurant Supply subject to P[RIDE]'s right of setoff against any indebtedness owed to P[RIDE] by Restaurant Supply for any [p]roduct Restaurant Supply purchased through P[RIDE].” (Id. at ¶ 9.)

         The complaint alleges that PRIDE improperly withheld these rebates for more than a year. “[F]or calendar year 2015 through the first quarter of 2016, P[RIDE] owed to Restaurant Supply more than $2, 000, 000 in vendor rebates, even after applying P[RIDE]'s right to setoff for any indebtedness allegedly due to P[RIDE] from Restaurant Supply for any vendor purchases . . . that were guaranteed by P[RIDE].” (Id. at ¶ 10.) Restaurant Supply demanded payment of these outstanding rebates, but PRIDE did not pay them. (Id. at ¶ 11.) After that, on May 20, 2016 at 5:30 p.m. CST, PRIDE's board of directors voted to terminate Restaurant Supply as a shareholder. (Id. at ¶ 12.)

         The complaint alleges that PRIDE kept detailed accountings of the purchases Restaurant Supply made through PRIDE. (ECF No. 17 at ¶ 13.) Further, the complaint details that PRIDE made a substantial payment to a related entity's vendors to honor PRIDE's commitments to them and also pledged shareholder funds and rebates as collateral for its guarantee of that same related entity's bank debt. (Id. at ¶¶17-24.) The related entity filed for Chapter 11 Bankruptcy in the Eastern District of Louisiana the same day that the Board of Directors of PRIDE terminated Restaurant Supply as a shareholder. (Id. at ¶ 25.)

         III. DISCUSSION

         Although PRIDE has moved to dismiss the Amended Complaint for lack of personal jurisdiction and only moved to transfer in the alternative, the Court is permitted to consider venue before personal jurisdiction. Leroy v. Great W. United Corp., 443 U.S. 173, 180 (1979); Open Solutions Imaging Sys., Inc. v. Horn, 3:03-cv-2077, 2004 WL 1683158, *7 n.12 (D. Conn. July 27, 2004) (citing Fort Knox Music, Inc. v. Baptiste, 257 F.3d 108, 111-12 (2d Cir. 2001)). The Court will do so.

         Defendant seeks to transfer this case to the Eastern District of Louisiana under 28 U.S.C. § 1404(a). That statute provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). While the Court does not find that the forum selection clause in the Shareholder Agreement is mandatory, the factors that courts typically consider when making a § 1404(a) decision weigh in favor of transfer. As such, the Court GRANTS the motion to transfer and DENIES as moot the motion to dismiss. (ECF No. 18.)

         A. Forum Selection Clause

         PRIDE argues that the Shareholder Agreement's forum selection clause conclusively determines that the parties are required to file any related suits in Louisiana. The forum selection clause states as follows: “The parties consent that Louisiana shall be a forum where any cause of action arising under [the Shareholder] Agreement may be instituted.” (ECF No. 18-2 at 13.)

         To determine the enforceability of a forum selection clause the Court employs a four-part analysis:

(1) whether the clause was reasonably communicated to the party resisting enforcement; (2) whether the clause is mandatory or permissive, i.e., . . . whether the parties are required to bring any dispute to the designated forum or simply permitted to do so; and (3) whether the claims and parties involved in the suit are subject to the forum selection clause. . . . If the forum clause was communicated to the resisting party, has mandatory force and covers the claims and parties involved in the dispute, it is presumptively enforceable. . . . A party can overcome this presumption only by (4) making a sufficiently strong showing that enforcement would be unreasonable or unjust, or that the clause was invalid for such reasons as fraud or overreaching.

Martinez v. Bloomberg LP, 740 F.3d 211, 217 (2d Cir. 2014) (quoting Phillips v. Audio Active, Ltd., 494 F.3d 378, 383 (2d Cir. 2007)) (emphasis in original) (internal quotation marks and citations omitted). The second factor is at issue here. Restaurant Supply contends that the language in the forum selection clause is permissive rather than mandatory. (ECF No. 25 at 15-18.) Because the Shareholder Agreement is governed by Louisiana law, Louisiana law applies to interpretation of the forum selection clause. Phillips, 494 F.3d at 384-85. “When the words of a contract are clear and explicit and lead to no absurd consequences, no further ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.