United States District Court, D. Connecticut
ORDER DENYING MOTION TO DISMISS AND MOTION TO
JEFFREY ALKER MEYER, UNITED STATES DISTRICT JUDGE
Nymbus, Inc. is a software development company that used to
employ defendant Scott Sharp as its chief operating officer
until they had a falling out and Sharp left his employment
there. Plaintiff now alleges claims against defendant for
breach of fiduciary duty and breach of contract. Defendant
moves to dismiss this action on grounds of lack of personal
jurisdiction and improper venue or, alternatively, to have
this action transferred to the Northern District of Texas.
Plaintiff counters that this action should proceed in the
District of Connecticut pursuant to plaintiff's choice of
forum in accordance with the parties' forum selection
clause. I agree with plaintiff and will deny defendant's
is a software company incorporated in Delaware and
headquartered in Florida that develops software platforms for
various industries. Around January 2015, plaintiff began
working on a new core processing platform for financial
institutions including community banks and credit unions.
of its expansion into the financial industry, plaintiff
sought to partner with a business that had an established
technical competency in core processing systems in the
financial industry. To that end, plaintiff acquired a core
processing platform known as Sharp Banc Systems (SBS) from
four banks owned by defendant and his family members by way
of a stock purchase and sale agreement dated January 8, 2016.
Pursuant to the agreement, plaintiff acquired all of the
issued and outstanding stock of SBS from defendant's
banks. Relying on defendant's representation that he
possessed competency in the field of core processing platform
development and operation, plaintiff hired defendant to serve
as plaintiff's chief operating officer (COO). Plaintiff
and defendant entered into an employment agreement (the
“Agreement”) dated December 31, 2015.
Agreement sets forth the terms and conditions of employment,
including defendant's duties and his salary and benefits.
The parties agreed that defendant would work out of an office
in the Dallas/Fort Worth area in Texas. The Agreement limited
how much time defendant would be required to spend working
outside of his home area in Texas. The Agreement is governed
by Texas law. Critical to the resolution of this motion is
the following clause in the Agreement under the heading
“Governing Law: Submission to Jurisdiction and Waiver
of Jury Trial”:
ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED
UPON THIS AGREEMENT . . . MAY BE INSTITUTED IN THE FEDERAL
COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE
STATE OF TEXAS, AND EACH PARTY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT,
ACTION OR PROCEEDING. . . . THE PARTIES IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF
ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND
IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
Doc. #2 at 21.
alleges that defendant failed in a number of ways to carry
out his primary responsibilities as COO. Consequently, on
April 12, 2017, plaintiff placed defendant on paid
administrative leave. On June 16, 2017, defendant purported
to give plaintiff a “Notice of Termination Employment
with Good Reason.” Plaintiff responded on July 5, 2017,
by sending defendant a “Notice of Termination of
Employment For Cause” and separately responding to
defendant's notice disputing that defendant had the
requisite “Good Reason” to terminate his
employment. Plaintiff filed this lawsuit on the same date.
Defendant soon filed a lawsuit against plaintiff in Texas
state court on or about July 14, 2017, which was removed to
the U.S. District Court for the Northern District of Texas on
July 24, 2017.
has moved to dismiss this action under Fed.R.Civ.P. 12(b)(2)
& (3), arguing that this Court lacks personal
jurisdiction over him and that venue is improper. In the
alternative, defendant moves to transfer this case to the
Northern District of Texas pursuant to 28 U.S.C. § 1404
or the “first-filed rule.” Plaintiff argues that
the above-quoted forum selection clause contained in the
Agreement constitutes a waiver of any challenge to
plaintiff's decision to litigate this matter in this
first consider the parties' arguments concerning the
interpretation of the forum selection clause. Next I will
consider whether the clause as applied is enforceable.
of the Forum Selection Clause
the meaning of a forum selection clause is a “matter of
contract interpretation.” Yakin v. Tyler Hill
Corp., 566 F.3d 72, 75 (2d Cir. 2009). The parties agree
that the interpretation of the forum selection clause is
governed by Texas law as set forth in the Agreement.
“To ensure that the meaning given to a forum selection
clause corresponds with the parties' legitimate
expectations, courts must apply the law ...