United States District Court, N.D. Alabama, Southern Division
STEVE DAILEY, individually and d/b/a Z DUST GROUP, INC., Plaintiff,
JAN BERKOWITZ, individually and d/b/a DMC ENERGY, LLC, Defendant.
M. BORDEN UNITED STATES MAGISTRATE JUDGE.
to 28 U.S.C. § 636(c), the parties have consented to the
jurisdiction of a United States Magistrate Judge. Pending
before the court are Defendant Jan Berkowitz's Motion to
Dismiss for Improper Venue (Doc. 15), Plaintiff Steve
Dailey's Request for Transfer (Doc. 16 at 3), and
Berkowitz's Motion to Dismiss for Lack of Subject Matter
Jurisdiction. Doc. 36. After careful consideration of the
parties' filings and the relevant law, and for the
reasons stated below, the court concludes that the motions to
dismiss (Docs. 15 & 36) are due to be denied, but that
the motion to transfer (Doc. 16) is due to be granted and the
action transferred to the Middle District of Florida, Orlando
JURISDICTION AND VENUE
court has subject matter jurisdiction over the claims in this
lawsuit pursuant to 28 U.S.C. § 1332,  but the parties
dispute whether venue is proper in the Northern District of
Alabama or the Middle District of Florida.
FACTUAL AND PROCEDURAL BACKGROUND
facts are as alleged in the complaint. Dailey filed suit
against Berkowitz-who does business as DMC Energy, LLC
(“DMC”)-asserting claims for breach of contract,
conversion, breach of fiduciary duty, and fraud. Doc. 35.
Dailey does business as Z Dust Group, Inc. (“Z
Dust”). Doc. 35 at 1. Both Z Dust and DMC are in the
business of reselling coal. See generally Doc. 35.
August 2017, Dailey agreed to purchase Anthracite coal from
Berkowitz. Doc. 35 at 2. Dailey sent a deposit of $1, 000,
000 to Berkowitz. Doc. 35 at 2. As a condition of the
agreement, Berkowitz was required to have the Anthracite coal
tested in Egypt. Doc. 35 at 2. Berkowitz represented that the
sample tested well, but that he could not meet the negotiated
price. Doc. 35 at 2. In response, Dailey asked for a lab
visit for testing the coal and a site visit to the mine. Doc.
35 at 2. When Dailey arrived in Atlanta, Georgia for the lab
visit, he discovered that the lab was inadequate for its
intended purpose. Doc. 35 at 3. Berkowitz did not show up for
the lab visit and he refused to allow a site visit. Doc. 35
then offered to sell coal to Dailey from mines in
Pennsylvania and the surrounding areas. Doc. 35 at 3. Dailey
visited the mine sites in Pennsylvania and learned that
Berkowitz was attempting to be paid for property he did not
own or control. Doc. 35 at 3.
parties met in Baltimore, Maryland in October 2017. Doc. 35
at 3. During the meeting, Berkowitz agreed that he would
acquire $1, 000, 000 worth of steam coal from a company
called E & I Holdings. Doc. 35 at 3. Dailey could then
provide the coal to a Berkowitz customer in Egypt. Doc. 35 at
3. A problem arose in the transportation of the steam coal,
during which Berkowitz falsified an email from Norfolk
Southern Rail and forced the cancellation of the shipment.
Doc. 35 at 3. E & I Holdings then returned $1, 300, 000
to Berkowitz that was intended to be repaid to Dailey, but
Berkowitz never returned any money to Dailey. Doc. 35 at 3.
On May 16, 2018, the parties signed a termination agreement
ending their original contract for the sale of Anthracite
coal. Doc. 35 at 3.
to the termination agreement, Berkowitz was to refund $1,
300, 000 to Dailey. Doc. 5 at 20. The agreement included the
following choice of law and forum selection clause:
This Agreement shall be construed in accordance with the laws
of the State of Florida. Further, the parties irrevocably
agree that venue for the resolution of any dispute arising
out of this Agreement shall be the state or federal courts
located in Orange County, Florida. The parties further agree
and forever waive any objection to the venue and the
jurisdiction of the state and federal courts located in
Orange County, Florida.
Doc. 5 at 21. Despite this provision, Dailey filed this
action in the Northern District of Alabama. Doc. 1. In light
of the forum selection clause, Berkowitz moves to dismiss the
action pursuant to Rule 12(b)(3). Doc. 15. In the
alternative, Berkowitz seeks leave to file a motion to
transfer pursuant to 28 U.S.C. § 1404(a). Doc. 19 at 1.
In his response, Dailey requests that the court either deny
the motion to dismiss or transfer the matter to the federal
court located in Orange County, Florida. Doc. 16 at 3. The
court construed this request as a motion to transfer this
action to the Middle District of Florida, Orland Division,
the federal district and division encompassing Orange County.
Doc. 30. Berkowitz does not oppose a transfer. Doc. 31 at 1.
STANDARD OF REVIEW
selection cannot be enforced by a motion to dismiss under
Rule 12(b)(3). Atl. Marine Const. Co. v. U.S.D.C. for
W.D. Tex., 571 U.S. 49, 52 (2013); see also Hisey v.
Qualtek USA, LLC, 753 Fed.Appx. 698, 793 (11th Cir.
2018) (“If a suit has been filed in a forum that
satisfies the federal venue requirements . . . a party may
not enforce a forum selection clause by seeking dismissal
under either § 1406(a) or Rule 12(b)(3).”).
“Instead, a forum-selection clause may be enforced by a
motion to transfer under 28 U.S.C. § 1404(a).”
Atl. Marine Const. Co., 571 U.S. at 52. “When
a [party] files such a ...