Superior Roll, LLC v. Mach. Mktg. Int'l

1

SUPERIOR ROLL, LLC, Plaintiff-Appellant, v. MACHINERY MARKETING INTERNATIONAL, LLC, Defendant-Appellee.

No. 369279

Court of Appeals of Michigan

November 20, 2024

Monroe Circuit Court LC No. 2023-146880-CK

Before: K. F. Kelly, P.J., and Cavanagh and Riordan, JJ.

Riordan, J.

Plaintiff Superior Roll, LLC appeals as of right the trial court's order granting defendant Machinery Marketing International LLC's motion for summary disposition pursuant to MCR 2.116(C)(4) (lack of subject-matter jurisdiction) on the basis that the parties contractually agreed to a forum-selection clause for Illinois. On appeal, plaintiff argues that the trial court erred because the forum-selection clause was not a part of the parties' agreement. Further although not considered by the trial court, plaintiff also argues that the trial court had subject-matter jurisdiction over the case and personal jurisdiction over defendant.

We conclude that the forum-selection clause was not a part of the parties' agreement under the Uniform Commercial Code (UCC). Therefore, we reverse the trial court and remand to that court for further proceedings.

I. FACTS

On September 20, 2023, plaintiff filed its complaint against defendant, alleging that plaintiff is a Michigan LLC that does business in Monroe County, defendant is an Illinois LLC that does business in Monroe, Michigan, and that venue is proper in Monroe Circuit Court because the cause of action arose in Monroe County. Plaintiff further alleged that on or about October 17, 2022, it purchased a piece of machinery from defendant for $83,000. In doing so, plaintiff relied upon defendant's representation that the machine was fully operational and its representation that it would provide a 30-day warranty to plaintiff. Unfortunately, the machine quickly developed problems, which defendant failed to correct at its own expense. Plaintiff ultimately corrected these problems after several weeks, thus incurring both the expenses of repair and lost profits. Plaintiff accordingly maintained four separate claims against defendant, such as breach of warranty, seeking damages exceeding $25,000.

As an exhibit to the complaint, plaintiff attached an October 17, 2022 invoice defendant had sent to plaintiff. The invoice identified the purchase price of $83,000 and the 30-day warranty. In addition, the invoice included the following term of sale:

Any claims relating to this equipment shall be decided in Illinois courts without a jury, applying Illinois state law, and with the prevailing party entitled to recover all reasonable expenses, including legal fees.

On November 1, 2023, defendant moved for summary disposition under MCR 2.116(C)(4), asking the trial court to dismiss the complaint without prejudice to allow plaintiff an opportunity to file its complaint in Cook County, Illinois. In the accompanying brief, defendant argued that the trial court was required to apply the forum-selection clause in the invoice pursuant to MCL 600.745(3), which requires courts to apply forum-selection clauses unless one of the limited statutory exceptions is present.^[1] Defendant also requested attorney fees.

On November 27, 2023, plaintiff filed its response, explaining the following additional facts about the machine sale. On September 26, 2022, defendant e-mailed a quote for the sale to plaintiff. Specifically, according to an e-mail exchange that day, at 10:42 a.m., plaintiff sent defendant an email stating, "I am interested in this machine. It has the envelope I am looking for, the pictures tell a story that this machine may have had a tough life?" At 11:23 a.m., defendant sent plaintiff a quote including certain terms of sale but, importantly, not including a forum-selection clause.^[2] Then, at 12:23 p.m., defendant sent plaintiff an e-mail stating, in relevant part:

As this is a part of my inventory and at the asking $80,000 price, I am willing to accept a 30-day return/repair warranty on all mechanical and electrical parts of the machine. . . . If there are any mechanical or electrical issues on the machine we will repair it for free of cost or you can return the machine for a full refund.

* * * Please let me know if you are interested or if you have any questions for me.

At some point after this e-mail exchange, plaintiff agreed to purchase the machine.^[3] Then, on or about October 17, 2022, defendant provided the invoice to plaintiff, which contained the additional term at issue, i.e., the forum-selection clause.

Plaintiff contended that it never agreed to that additional clause by signature or otherwise. Plaintiff accordingly argued that "Plaintiff is not bound by the Illinois forum selection clause contained in the Invoice because it never discussed nor agreed to the provision and the provision materially alters the contract and, thus, did not become a part of the contract as a matter of law." (Emphasis omitted.) Plaintiff also argued that the trial court had subject-matter jurisdiction over the case, and defendant was subject to the personal jurisdiction of the court.

On December 8, 2023, the trial court held a hearing on the motion for summary disposition. Defendant appeared, but plaintiff did not. After noting that plaintiff's counsel had received notice of the motion hearing, the trial court promptly ruled in favor of defendant, reasoning as follows:

So your motion is granted. I'm denying your request for costs because they can bring that up in the litigation should they decide to do so in - in Cook County. It should be understood, maybe, or just emphasized on the record, is that there was a quote here and that quote said that there were no warranties, expressed or implied. Obviously we didn't want that. So then there was an invoice which I'm sure was given before the delivery which had the warranty conditions as well as the choice of form [sic]. So for all those reasons, your motion is granted and you may submit an order.

The same day, the trial court entered an order memorializing its decision on the record. This appeal followed.

II. STANDARD OF REVIEW

The trial court granted summary disposition in favor of defendant under MCR 2.116(C)(4), which provides that summary disposition is warranted when "[t]he court lacks jurisdiction of the subject matter." However, MCR 2.116(C)(7) provides that summary disposition is warranted when there is "an agreement to arbitrate or to litigate in a different forum." Regardless, "[t]his Court reviews de novo a trial court's decision on a motion for summary disposition." Allen v Bloomfield Hills Sch Dist, 281 Mich.App. 49, 52; 760 N.W.2d 811 (2008). In addition, "a trial court's dismissal of an action pursuant to a contractual forum-selection clause is properly reviewed on appeal under a de novo standard." Turcheck v Amerifund Fin, Inc, 272 Mich.App. 341, 345; 725 N.W.2d 684 (2006).

III. DISCUSSION

The issue in this appeal is whether the forum-selection clause included in the October 17, 2022 invoice unilaterally sent by defendant to plaintiff is deemed part of the agreement between the parties under the UCC.^[4] If so, the trial court correctly dismissed the case.^[5]

"In general, Michigan courts enforce forum-selection clauses, and Michigan's public policy favors the enforcement of contractual forum-selection clauses and choice-of-law provisions." Barshaw v Allegheny Performance Plastics, LLC, 334 Mich.App. 741, 748; 965 N.W.2d 729 (2020) (quotation marks and citations omitted). In this regard, MCL 600.745(3) provides as follows:

If the parties agreed in writing that an action on a controversy shall be brought only in another state and it is brought in a court of this state, the court shall dismiss or stay the action, as appropriate, unless any of the following occur:

(a) The court is required by statute to entertain the action.

(b) The plaintiff cannot secure effective relief in the other state for reasons other than delay in bringing the action.

(c) The other state would be a substantially less convenient place for the trial of the action than this state.

(d) The agreement as to the place of the action is obtained by misrepresentation, duress, the abuse of economic power, or other unconscionable means.

(e) It would for some other reason be unfair or unreasonable to enforce the agreement.

"If none of the exceptions listed in Subdivisions (a) through (e) applies, then Michigan courts will enforce the parties' contractual forum-selection clause as written pursuant to MCL 600.745(3)." Barshaw, 334 Mich.App. at 749.

In this case, plaintiff does not argue that any of the exceptions set forth in MCL 600.745(3)(a) to (e) is applicable. Rather, plaintiff argues that under UCC 2-207, see MCL 440.2207, the forum-selection clause set forth in the invoice was not a part of the parties' agreement. Plaintiff contends that the parties' agreement predated the invoice and was established by phone or e-mails, or both. Defendant, on the other hand, argues that the invoice is the only written contract between the parties, so the forum-selection clause therein is valid and enforceable. According to defendant, the invoice is the enforceable contract between the parties under MCL 440.2207.^[6]

MCL 440.2207 provides as follows:

(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon unless acceptance is expressly made conditional on assent to the additional or different terms.

(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

(a) the offer expressly limits acceptance to the terms of the offer;

(b)

...