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Ex parte Killian Construction Co.

Supreme Court of Alabama

November 2, 2018

Ex Parte Killian Construction Company and Christian Mills
v.
Killian Construction Company and Christian Mills In re: Edward E. Woerner

          Baldwin Circuit Court, CV-17-900436

          PETITION FOR WRIT OF MANDAMUS

          MENDHEIM, JUSTICE.

         Killian Construction Company ("Killian") and Christian Mills petition this Court for a writ of mandamus directing the Baldwin Circuit Court to vacate its order denying their motion to dismiss the underlying action and to enter an order dismissing the action, based on improper venue. We grant the petition and issue the writ.

         I. Facts

         The City of Foley, Alabama, contracted with Killian to construct the Foley Sports Tourism Complex ("the sports complex"). Killian is a Missouri corporation whose principal place of business is located in Springfield, Missouri. On December 17, 2015, Killian entered into a subcontract for part of the work on the sports complex with Edward E. Woerner, who owns Southern Turf Nurseries, Inc. ("the subcontract"). Woerner is a resident of Baldwin County.

         Under the subcontract, Woerner agreed to spread sand on all sports fields, to install sod on all sports fields, and to sprig and overspread all common areas in connection with the sports complex. Section 16 of the subcontract provided:

"16. Governing Law; Venue. This Subcontract Agreement and the rights and duties of all persons arising from or related to this Subcontract Agreement shall be governed by the laws of the State of Missouri. Any dispute arising under or related to this Subcontract Agreement, the performance of work or provision of any materials pursuant hereto, shall be brought only in state court in Greene County, State of Missouri, or if federal jurisdiction is applicable, in the U.S. District Court for the Western District of Missouri, Southern Division. The parties hereto agree to waive trial by jury in all proceedings under this Subcontract Agreement and waive, as against each other, any claim or entitlement to punitive or exemplary damages."

(Emphasis added.)

         According to Woerner, Killian failed to pay him the full amount due for the work performed under the subcontract and failed to pay him for additional work performed at the sports complex that was not included in the subcontract. On April 25, 2017, Woerner filed a complaint in the Baldwin Circuit Court against Killian and one of Killian's employees, Christian Mills.[1] Woerner alleged that he had performed all the work required under the subcontract but that Killian had failed to pay him the full amount due under the subcontract, with the outstanding balance being $143, 581. Woerner also alleged that Mills, who the complaint stated had been "at all times pertinent thereto, ... Defendant Killian's representative in dealings with [Woerner]," had convinced Woerner "to perform maintenance work not within the original [subcontract]" for a certain price, but that Woerner was never paid for that work. Woerner alleged that the outstanding amount for the additional work was $206, 996. The complaint asserted three counts. Count I asserted a claim "against Defendant Killian for breach of contract in the amount of $350, 577.00, plus interest and costs." Count II asserted a claim against both Killian and Mills alleging that Mills committed fraudulent misrepresentations "to induce [Woerner] to continue to work on the project" and sought compensatory and punitive damages. Count III asserted a claim of unjust enrichment against Killian in the amount of $350, 577.

         On June 2, 2017, Killian and Mills filed: (1) a "Notice of Removal" in the United States District Court for the Southern District of Alabama ("the federal district court") and (2) a "Notice of Removal of Action to Federal Court" in the circuit court in which the defendants notified the circuit court that the action had been removed to the federal district court. In their notice filed in the federal district court, Killian and Mills alleged complete diversity among the parties because Mills was a resident and citizen of the State of Florida. Killian and Mills also stated that Woerner "filed [his] Complaint in [the] Circuit Court of Baldwin County, Alabama, despite [his] agreement to litigate any dispute arising under or related to the Subcontract in Missouri pursuant to a mandatory forum selection clause," and they quoted section 16 of the subcontract.

         On June 7, 2017, Woerner filed in the federal district court a motion to remand the action to state court because, he asserted, complete diversity was lacking. According to Woerner, Mills was, in fact, domiciled in Alabama. The federal district court referred the matter to United States Magistrate Judge Sonja F. Bivens. On June 13, 2017, Woerner filed an amended complaint in the federal district court. On June 23, 2017, Killian and Mills filed a response in opposition to Woerner's motion to remand the action to state court.

         On June 27, 2017, Killian and Mills filed in the federal district court a "Motion to Dismiss or Transfer Venue and Brief in Support Thereof." In the motion, Killian and Mills moved to dismiss Woerner's amended complaint

"in its entirety, or to transfer venue to the United States District Court for the Western District of Missouri, Southern Division, due to a mandatory forum selection clause stipulated to in the parties' Subcontract Agreement (the 'Subcontract'). The forum selection clause makes Missouri the exclusive, agreed upon forum for this litigation."

         The motion quoted section 16 of the subcontract. In support of the motion to dismiss, Killian and Mills filed an affidavit of Matt Breland, Killian's "Project Executive," who asserted that Mills was a citizen and resident of the State of Florida and who described the nature of the subcontract between Killian and Woerner. A copy of the subcontract was attached to Breland's affidavit.

         On January 31, 2018, Magistrate Judge Bivens entered an order in which she declared that "[t]he parties in this case have presented conflicting, fragmented evidence, such that the record is incomplete and inconclusive as to Mills' domicile at the time the complaint was filed. Accordingly, this matter is hereby scheduled for an evidentiary hearing before the undersigned on February 20, 2018." Following the evidentiary hearing, on March 7, 2018, Magistrate Judge Bivens entered a "Report and Recommendation" on the issue of Mills's domicile in which she recounted the evidence the parties had presented for their respective positions. Judge Bivens concluded: "In examining the totality of the evidence presented, the Court finds that Mills was domiciled in Alabama and was a citizen of Alabama at the time he purchased his home in Foley, Alabama, in 2015, if not earlier." Magistrate Judge Bivens recommended that Woerner's motion to remand should be granted.

         On March 22, 2018, the federal district court entered an order adopting the recommendation of Magistrate Judge Bivens, and it remanded the action to the Baldwin Circuit Court.

         On March 29, 2018, Killian and Mills filed in the circuit court a "Motion to Dismiss for Contractually Improper Venue." In the motion, Killian and Mills moved to dismiss the action without prejudice "pursuant to the mandatory forum selection clause stipulated to in the parties' Subcontract Agreement (the 'Subcontract'). The forum selection clause makes Missouri the exclusive, agreed upon forum for this litigation." Killian and Mills argued that the outbound forum-selection clause was valid and applicable to all claims because: (1) the claims were all related to the subcontract and (2) Mills, as a Killian employee, was entitled to enforce the forum-selection clause because of his relationship to Killian. As they had done in their motion to dismiss in the federal district court, Killian and Mills attached an affidavit of Breland to their motion, and Breland's affidavit included a copy of the subcontract.

         On March 30, 2018, Woerner filed in the circuit court a response in opposition to Killian and Mills's motion to dismiss the action. In the response, Woerner argued that the outbound forum-selection clause should not be enforced because it would be "seriously inconvenient" to do so because most of the witnesses he intended to use were residents of Baldwin County. Woerner subsequently filed a supplement to his response in opposition to the motion to dismiss in which he purported to "identify those persons having knowledge of discoverable information," a total of 23 individuals. He alleged that all the individuals were Alabama residents and that 19 were residents of Baldwin County.

         On April 23, 2018, Killian and Mills filed a reply to Woerner's responses in opposition to their motion to dismiss. They argued that distance alone did not establish that Missouri was a "seriously inconvenient" forum.

         On April 24, 2018, Woerner filed a second supplement to his response in opposition to the motion to dismiss. In his second supplement, in addition to contending that Missouri was a "seriously inconvenient" forum, Woerner argued that Mills could not enforce the outbound forum-selection clause because he was not a party to the subcontract. Woerner also stated that at trial he would ask the circuit court to "make a site visit in order that the Court will have a full understanding of the site issues."

         On the same date, Killian and Mills filed a reply to Woerner's second supplement. They argued that

"[t]his lawsuit involves a simple claim of non-payment on a subcontract, and there is no need for a judge to visit the Foley Sports Complex to understand that issue. Any complexities -- which have not been explained at all by [Woerner] -- that may require a visual inspection of the property can be effectively explained via photographs or videos."

         On April 25, 2018, the circuit court entered an order that stated: "Motion to Dismiss, or in the alternative [for a] Summary Judgment[, ] filed by Killian Construction Company and Christian Mills is hereby denied." Killian and Mills filed a timely petition for a writ of mandamus from the circuit court's April 25, 2018, order.

         II. Standard of Review

"'[A] petition for a writ of mandamus is the proper vehicle for obtaining review of an order denying enforcement of an "outbound" forum-selection clause when it is presented in a motion to dismiss.' Ex parte D.M. White Constr. Co., 806 So.2d 370');">806 So.2d 370');">806 So.2d 370');">806 So.2d 370, 372 (Ala. 2001); see Ex parte CTB, Inc., 782 So.2d 188, 190 (Ala. 2000). ... '[T]he review of a trial court's ruling on the question of enforcing a forum-selection ...

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