Nielsen v. Thermo Mfg. Sys., LLC

KENNETH NIELSEN, Plaintiff, v. THERMO MANUFACTURING SYSTEMS,LLC, COLUMBUS WESTGATE, LLC,YORKSHIRE FEDERAL, INC., and DOE CORPORATION, Defendants.

8:17CV471

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

March 19, 2018

MEMORANDUM AND ORDER

This matter is before the Court on the Motion to Dismiss, ECF No. 11, filed by Defendant Columbus Westgate, LLC (Westgate); the Motion to Dismiss, ECF No. 23, filed by Defendant Thermo Manufacturing Systems, LLC (Thermo); and the Motion to Dismiss, ECF No. 26, filed by Defendant Yorkshire Federal, Inc. (Yorkshire). For the reasons stated below, the Motion to Dismiss filed by Westgate will be granted and the Motions to Dismiss filed by Thermo and Yorkshire will be denied.

BACKGROUND

On June 2, 2015, Plaintiff Kenneth Nielsen, purchased a commercial building in Columbus, Nebraska, from Westgate, a Missouri limited liability company. Before it sold the building, Westgate hired Yorkshire, a Texas corporation, to perform maintenance and repair work on the roof in 2010 and on multiple occasions in 2014. In connection with the 2014 repair work, Yorkshire used "fluid applied reflective roofing membrane systems" manufactured by Thermo, an Arizona limited liability company. Comp., ECF No. 1-1, Page ID 8. Thermo issued Westgate a ten-year "material and labor warranty" in 2014 and the warranty was "transferred" to Nielsen on July 17, 2015. Id. at Page ID 9. In November of 2015, the building's tenant, Hobby Lobby, complained to Nielsen about water intrusion into the store's retail space. Accordingly, Nielsen hired another roofing contractor to repair the building's roof.

Nielsen filed his Complaint, ECF No. 1-1, in the District Court of Platte County, Nebraska, against Westgate, Yorkshire, and Thermo Manufacturing. He asserted claims against Westgate for negligent breach of contract, fraudulent misrepresentation, negligent misrepresentation, fraudulent concealment, and negligent concealment. He asserted claims against Yorkshire and Thermo Manufacturing for negligence and breach of warranty. On December 8, 2017, Westgate removed the case to this Court, ECF No. 1, and both Thermo and Yorkshire consented to the removal, ECF Nos. 4 & 8.

Westgate argues that Nielsen's Complaint fails to state a claim upon which relief can be granted under Fed. R. Civ. P. 12(b)(6). Thermo and Yorkshire argue the claims against them should be dismissed under Fed. R. Civ. P. 12(b)(3) or 12(b)(6) because the District of Nebraska is an improper venue. The Court first will address whether the claims against Thermo and Yorkshire should be dismissed for improper venue. It will then address Westgate's Motion to Dismiss for failure to state a claim upon which relief can be granted.

STANDARD OF REVIEW

I. Improper Venue—Fed. R. Civ. P. 12(b)(3)

Federal Rule of Civil Procedure 12(b)(3) permits a party to raise the defense of "improper venue" by motion. "[V]enue of all civil actions brought in district courts of the United States" is governed by 28 U.S.C. § 1391, which states:

A civil action may be brought in—

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;

(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or

(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b).

Venue is proper in "any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action" only "if there is no district in which an action may otherwise be brought as provided in" § 1391. Therefore, the fact that a defendant is subject to personal jurisdiction in Nebraska does not make a Nebraska court a proper venue unless there is no other district in which this action may have been brought. This means that the Court must determine whether venue is appropriate under subsections (1) and (2) of § 1391(b) before looking to subsection (3) to determine if venue is proper.

With respect to § 1391(b)(1), the venue statute provides that a "natural person . . . [is] deemed to reside in the judicial district in which that person is domiciled," and "an entity with the capacity to sue and be sued . . . [is] deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question." Id. § 1391(c)(1), (2). "If natural persons are involved, it is their residence at the time the action is commenced, not when the claim arose, that is decisive in ascertaining the propriety of federal venue."14D Charles Alan Wright et al., Federal Practice and Procedure § 3805 (3d ed. 2012). The time the claim arose is decisive in ascertaining the propriety of venue when an entity is involved. Great Am. Ins. Co. v. Louis Lesser Enters., Inc., 353 F.2d 997, 1001 (8th Cir. 1965).

With respect to § 1391(b)(2), "[t]he statute does not posit a single appropriate district for venue; venue may be proper in any of a number of districts, provided only that a substantial part of the events giving rise to the claim occurred there," Woodke v. Dahm, 70 F.3d 983, 985 (8th Cir. 1995) (citing Setco Ents. Corp. v. Robbins, 19 F.3d 1278, 1281 (8th Cir. 1994)), or that "a substantial part of property that is the subject of the action is situated" there. 28 U.S.C. § 1391(b)(2). The question is not which is the "best" venue, but "whether the district the plaintiff chose had a substantial connection to the claim, whether or not other forums had greater contacts." Pecoraro v. Sky Ranch for Boys, Inc., 340 F.3d 558, 563 (8th Cir. 2003) (citing Setco, 19 F.3d at 1281).

II. Failure to State a Claim—Fed. R. Civ. P. 12(b)(6)

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). To satisfy this requirement, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Corrado v. Life Inv'rs Ins. Co. of Am., 804 F.3d 915, 917 (8th Cir. 2015) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Barton v. Taber, 820 F.3d 958, 964 (8th Cir. 2016) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusorystatements, do not suffice." Zink v. Lombardi, 783 F.3d 1089, 1114 (8th Cir. 2015) (quoting Iqbal, 556 U.S. at 678), cert. denied, 135 S. Ct. 2941 (2015). The complaint's factual allegations must be "sufficient to 'raise a right to relief above the speculative level.'" McDonough v. Anoka Cty., 799 F.3d 931, 946 (8th Cir. 2015) (quoting Twombly, 550 U.S. at 555). The Court must accept factual allegations as true, but it is not required to accept any "legal conclusion couched as a factual allegation." Brown v. Green Tree Servicing LLC, 820 F.3d 371, 373 (8th Cir. 2016) (quoting Iqbal, 556 U.S. at 678). Thus, "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Ash v. Anderson Merchandisers, LLC, 799 F.3d 957, 960 (8th Cir. 2015) (quoting Iqbal, 556 U.S. at 678), cert. denied, 136 S. Ct. 804 (2016).

On a motion to dismiss, courts must rule "on the assumption that all the allegations in the complaint are true," and "a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and 'that a recovery is very remote and unlikely.'" Twombly, 550 U.S. at 555 & 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). "Determining whether a complaint states a plausible claim for relief . . . [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Mickelson v. Cty. of Ramsey, 823 F.3d 918, 923 (8th Cir. 2016) (alternation in original) (quoting Iqbal, 556 U.S. at 679).

DISCUSSION

I. Motions to Dismiss for Improper Venue

Thermo and Yorkshire¹ argue Nielsen's claims against them must be dismissed under Fed. R. Civ. P. 12(b)(3) and 12(b)(6) because the Warranty Agreement contains a valid forum-selection clause. Thermo and Yorkshire's Motions to Dismiss for improper venue will be denied because venue is proper under 28 U.S.C. § 1441(a), and the existence of a valid forum-selection clause does not render venue improper thereunder. The Court will, nevertheless, permit Thermo and Yorkshire to reassert their motions to enforce the forum-selection clause under 28 U.S.C. § 1404(a), as prescribed by the Supreme Court in Atlantic Marine Constr. Co., Inc. v. U.S. Dist. Ct. for the W. Dist. of Tex., 571 U.S. 49, 134 S. Ct. 568, 577 (2013).

a. Venue is Proper Under 28 U.S.C. § 1441(a).

Venue is proper under 28 U.S.C. § 1441(a) because this case was removed from the District Court of Platte County, Nebraska. Micro-Surface Finishing Prods., Inc. v. SDI, Inc., 97 F. Supp. 3d 1077, 1080 (S.D. Iowa 2015) (citing Polizzi v. Cowles Magazines, Inc., 345 U.S. 663, 665 (1953) ("The venue of removed actions is governed by [§] 1441(a) . . . ."); 14C Charles Alan Wright et al., Federal Practice and Procedure § 3732 (4th ed.). Section 1441(a) states "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a); see also St. Clair v. Spigarelli, 348 Fed. App'x 190,...