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.

Ex parte United Propane Gas, Inc.

Supreme Court of Alabama

February 2, 2018

Ex parte United Propane Gas, Inc.
v.
United Propane Gas, Inc. In re: Cullman Security Services, Inc., on behalf of itself and other similarly situated entities

         Cullman Circuit Court, CV-17-900061

          PETITION FOR WRIT OF MANDAMUS

          BOLIN, Justice.

         United Propane Gas, Inc. ("United Propane"), seeks a writ of mandamus compelling the Cullman Circuit Court to vacate its order denying United Propane's motion to dismiss an action filed by Cullman Security Services, Inc. ("CSS"), and to enter an order dismissing the action. The trial court denied the motion to dismiss on the ground that "the outbound forum-selection clause contained in the parties' contract is unfair or unreasonable because it deprives [CSS] of the ability to file a class action in contravention of a recognized Alabama public policy" and found that the parties' contract was a contract of adhesion. We grant the petition and issue the writ.

         Facts and Procedural History

         United Propane, a Kentucky corporation, offers pre-purchase contracts to its customers, pursuant to which the customers agree to purchase their anticipated fuel usage for a season based upon a fixed price per gallon of gas. A pre-purchase contract gives the customer the advantage of locking in the price of the gas to be supplied for a determined time and gives the supplier of propane and propane accessories the advantage of receiving payment for a known purchase of a supply of gas from the customer for that period.

         CSS, a corporation with its principal place of business in Cullman, Alabama, was a customer of Golden Propane Gas, Inc., an affiliate and agent of United Propane.[1] On September 30, 2013, CSS entered into a pre-purchase contract with United Propane. CSS agreed to purchase 550 gallons of propane at the fixed price of $1.6990 per gallon between October 1, 2013, through March 31, 2014. The contract also included the following outbound forum-selection clause:

"Customer agrees to pay all costs incurred by Corporation if it must enforce any of the terms of this Agreement, including but not limited to, reasonable attorneys fees, and further agrees to pay all applicable delivery, finance, system check and motor fuel charges. This agreement shall be governed by the laws of Kentucky and the parties agree that the state courts sitting in McCracken County, Kentucky have exclusive jurisdiction and venue of any dispute arising hereunder."

(Emphasis added.)

         Upon signing the contract, CSS paid an outstanding bill for $607.82 and also paid $1, 382.52[2] to guarantee the delivery of 550 gallons of propane gas during the upcoming 2013-2014 winter season. In October 2013, United Propane delivered 200 gallons of propane gas to CSS. When CSS requested the delivery of additional propane gas in January 2014, United Propane advised that the only way CSS could acquire the gas would be to purchase it at the rate of $3.599 per gallon. Consequently, CSS purchased gas from another distributor at the higher market rate.

         In April 2014, CSS, on its behalf and on behalf of other similarly situated gas consumers, filed a class-action lawsuit against United Propane in the circuit court in McCracken County, Kentucky. Kentucky circuit courts have jurisdiction in civil cases when the amount in controversy exceeds $5, 000, exclusive of interest and costs, in matters affecting title to real estate, and in matters of equity. See Ky. Rev. Stat. §§ 23A.010(1)and 24A.120(1). Kentucky law provides, however, that a class action based on breach of contract cannot be maintained in a state circuit court where none of the individual claims is equal to the statutory jurisdictional amount. See Lamar v. Office of Sheriff Daviess Cty., 669 S.W.2d 27 (Ky. Ct. App. 1984). Consequently, the Kentucky court dismissed the complaint without prejudice because "no claim in [CSS's] amended complaint alleges an amount in controversy over $5, 000; [CSS's] claims do not affect title to real estate; and [CSS] has not asserted a valid claim for equitable relief." The Kentucky Court of Appeals affirmed the circuit court's dismissal.

         On February 11, 2017, CSS filed in the Cullman Circuit Court a "nationwide class action, on behalf of itself and all other commercial entities and business associations similarly situated, " seeking redress for "[United Propane]'s policy and practice to breach uniform written pre-paid contracts, and to systematically violate its duty of good faith and fair dealing by uniformly raising prices on pre-paid commercial contracts and failing to honor the contracts." The complaint sought damages, a declaratory judgment, and injunctive relief.

         On April 11, 2017, United Propane filed a Rule 12(b)(3), Ala. R. Civ. P., motion to dismiss CSS's action as having been filed in an improper venue. United Propane argued that the outbound forum-selection clause in the pre-purchase contract required CSS to bring the action in Kentucky and that the case had been previously dismissed by the Kentucky circuit court for failing to meet the statutory jurisdictional amount. In response, CSS argued that both it and the class it seeks to represent were denied the ability to seek any practical relief in the designated forum because Kentucky, unlike Alabama, does not allow a class to aggregate damages to meet the threshold jurisdictional amount. CSS asserted that it was not economically feasible to litigate smaller individual claims in a Kentucky small-claims court, especially given that the court is located a considerable distance from Cullman, Alabama.

         Following a hearing on the Rule 12(b)(3) motion, the trial court denied United Propane's motion to dismiss. United Propane timely filed a petition for writ of mandamus.

         Standard of Review

"'Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of ...

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.