United States District Court, E.D. Virginia, Richmond Division
Hannah Lauck, United States District Judge.
matter comes before the Court on Marathon Resource Management
Group, LLC's ("Marathon") Motion to Remand.
(ECF No. 6.) Marathon seeks remand of this case to the
Circuit Court for the City of Richmond (the "Richmond
Circuit Court"). Defendant C. Cornell, Inc. d/b/a
CertaPro Painters of College Station ("CCI")
opposed the remand. (ECF No. 7.) Marathon filed a Reply. (ECF
No. 10.) The Court dispenses with oral argument because the
materials before it adequately present the facts and legal
contentions, and argument would not aid the decisional
process. The matter is ripe for disposition.
Court exercises jurisdiction pursuant to 28 U.S.C. §
1332(a)(1). For the reasons that follow, the Court
will deny the Motion to Remand.
Procedural and Factual Background
to the dispute lies a choice-of-law provision in a contract
between Marathon and CCI. To understand the dispute, the
Court offers a summary of the case at bar and of prior
relevant dealings between the Parties.
Underlying Texas Litigation
current litigation arises from a default judgment that CCI
obtained against Marathon in the District Court of Brazos
County, Texas (the "Texas court" or the "Texas
state court"). In the Texas suit, CCI alleged that in
May 2017, Marathon and CCI entered into two separate
contracts for CCI to paint and clean rooms in a building
located in College Station, Texas. (CCI 1st Am. Pet. 3, ECF
No. 1-2 Ex. B.) CCI completed the work and submitted two
invoices to Marathon: on August 22, 2017, CCI sent Marathon
an invoice for $29, 578.00 for the painting services; and, on
September 11, 2017, CCI sent an invoice for $11, 280.00 for
the cleaning services. (Id.) Marathon did not pay
the invoices. (Id. A.) CCI filed a breach of
contract suit in the Texas state court.
did not make an appearance in the Texas court or otherwise
respond to the allegations against it. (Default J. 1, ECF No.
1-2 Ex. C.) In March 2018, after holding a hearing on the
matter, the Texas court entered a default judgment against
Marathon. The Texas court found that Marathon "failed to
promptly pay [CCI] as required" by Texas law and awarded
CCI $40, 263.00 in damages. (Default J. 1-2.)
Current Virginia Court Litigation
brings a breach of contract suit against CCI based on
CCI's alleged violation of a "Master Subcontract
Agreement" (the "MSA"). According to Marathon,
it sent the MSA to CCI on September 22, 2017-well after CCI
performed and billed for its painting and cleaning
services. (Mot. Remand ¶ 6.) Marathon contends
that CCI signed the MSA on the same day. (Mot. Remand
parties declined to provide insight, or even mention, two
critical sections of the MSA that speak to forum selection.
Because the Court finds these sections more pertinent to
forum selection than those briefed by the parties, they will
be discussed first. The parties do not mention Section 28 in
their briefings, although Marathon discusses Section 28.3 in
its Complaint filed in the Richmond Circuit Court. (Compl.
¶ 8, ECF No. 1-1.) Two provisions contained in Section
28, entitled "Dispute Resolution," address venue.
(MSA § 28.) First, Section 28.1 provides that if a
dispute arises relating to any term or condition of the MSA,
Marathon "can elect, at its own discretion, to engage in
mediation, engage in arbitration... or pursue resolution in
the County of Hanover, Virginia Circuit or General District
Court." (MSA § 28.1.) Second, Section 28.3 states:
"the parties hereby agree that exclusive jurisdiction of
any dispute arising from this Master Subcontract or the
prosecution of the Work will be found in the Commonwealth of
Virginia." (Id.) Section 28.3 also provides
that any proceeding that Marathon initiates "will be
held in the City of Richmond, Virginia unless otherwise
agreed upon by the parties." (Id.) Thus,
Section 28.1 allows Marathon to bring suit in the County of
Hanover, Virginia, while Section 28.3 confusingly requires
Marathon to seek relief of any kind in Richmond, Virginia.
than speak to the MSA provisions addressing the potential
conflict between the provisions, the Parties argue that
Section 30-the "Choice-of-law/Forum"
provision-should guide this Court's analysis. The
"Choice-of-law/Forum" provision reads in full:
"The validity, construction, interpretation,
performance, and jurisdictional venue pertaining to this
Master Subcontract shall be governed and construed in
accordance with the laws of Virginia." (Mot. Remand
¶ 6-11; Reply at 3; Notice Removal Ex. A "MSA"
§ 30, ECF. 1-2.) According to Marathon, this provision
binds the Parties to dispute claims exclusively in Virginia
state courts, meaning CCI violated the terms of the MSA when
it filed suit in the Texas court, rather than in Virginia.
(Compl. ¶¶ 18-22, ECF No. 1-2 Ex. B.) This forms
the basis of Count I of Marathon's
Complaint. The Court now turns to this argument.
Procedural Background and Removal to This Court
filed this breach of contract suit against CCI in the
Richmond Circuit Court, bringing two claims against CCI for
alleged violations of the MSA and seeking $115, 236.00 in
damages, plus interest, attorney's fees, and costs.
(Notice Removal ¶ 1, ECF No. 1; Compl. ¶ 3.) CCI
specially appeared in the Richmond Circuit Court and filed a
Motion to Dismiss for Lack of Personal
Jurisdiction. (ECF No. 1 Ex. C.) CCI then timely removed
the action from the Richmond Circuit Court, asserting
diversity jurisdiction under 28 U.S.C. § 1332(a).
(Notice Removal ¶¶ 5-8.)
petitions this Court to remand the case to the Richmond
Circuit Court for improper venue. (Mot. Remand ¶¶
11-13.) Marathon argues that the
"Choice-of-law/Forum" provision of the MSA
precludes CCI from removing the case to this federal court.
In opposition, CCI raises two arguments: (1) it did not sign
the MSA; and, (2) even assuming the validity of the MSA, the
provision is a choice-of-law, not a forum selection clause.
(Resp. Mot. Remand. 2.) CCI contends that, considering
Marathon "expressly concedes" the existence of
diversity jurisdiction, the Court should deny the Motion for
Legal Standard for Removal and Remand
28 U.S.C. § 1441(a),  a defendant may remove a civil action
to a federal district court if the plaintiff could have
originally brought the action in federal court. 28 U.S.C.
§ 1441(a). Section 1446 delineates the procedure for
removal, including the requirement that the defendant file a
notice of removal in the federal district court and the state
court. See 28 U.S.C. §§ 1446(a), (d). The
state court loses jurisdiction upon the removal of an action
to federal court. 28 U.S.C. § 1446(d) ("[T]he State
court shall proceed no further unless and until the case is
remanded."). The removability of a case "depends
upon the state of the pleadings and the record at the time of
the application for removal" Ala. Great S. Ry. Co.
v. Thompson, 200 U.S. 206, 216 (1906); see also
Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939)
("the right to remove ... [is] determined according to
the plaintiffs' pleading at the time of the petition for
party seeking removal bears the initial burden of
establishing federal jurisdiction." Abraham v.
Cracker Barrel Old Country Store, Inc., No. 3:11cv182,
2011 WL 1790168, at *1 (E.D. Va. May 9, 2011) (citing
Mulcahey v. Columbia Organic Chem. Co., 29 F.3d 148,
151 (4th Cir. 1994)). No. presumption favoring the existence
of federal subject matter jurisdiction exists because federal
courts have limited, not general, jurisdiction. Id.
(citing Pinkley Inc. v. City of Frederick, 191 F.3d
394, 399 (4th Cir. 1999)). In deference to federalism
concerns, courts must construe removal jurisdiction strictly.
Id. (citing Mulcahey, 29 F.3d at 151).
"If federal jurisdiction is doubtful, a remand is
necessary." Id. (quoting Mulcahey, 29
F.3d at 151).
federal district court has diversity jurisdiction over
"all civil actions where the matter in controversy
exceeds ... $75, 000 ... and is between... [c]itizens of
different states." 28 U.S.C. § 1332(a)(1). When
diversity of citizenship provides the grounds for removal,
then "the sum demanded in good faith in the initial
pleading shall be deemed to be the amount in
controversy...." 28 U.S.C. § 1446(c)(2).
order remanding the case may require payment of just costs
and any actual expenses, including attorney fees, incurred as
a result of the removal. 28 U.S.C. § 1447(c). The
standard for awarding fees is reasonableness of the removal.
Martin v. Franklin Capital Corp., 546 U.S. 132, 141
(2005). Courts may award attorney fees under § 1447(c)
only "where the removing party lacked an objectively
reasonable basis for removal." Id.
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