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Ormand v. Sanford Clinic

May 26, 2010

JOANN E. ORMAND, M.D., PLAINTIFF,
v.
SANFORD CLINIC, FORMERLY KNOWN AS SIOUX VALLEY CLINIC, A SOUTH DAKOTA NONPROFIT CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Karen E. Schreier Chief Judge

AMENDED ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY REMAND AND DENYING DEFENDANT'S MOTION TO DISMISS

Plaintiff, Dr. JoAnn Ormand, moves for summary remand and for recovery of costs incurred as a result of the case being removed to federal court. Defendant, Sanford Clinic, resists Ormand's motion and moves to dismiss Counts 1 through 6 and part of Count 7 in the amended complaint under Federal Rule of Civil Procedure 12(b)(6).

PROCEDURAL BACKGROUND

On August 14, 2008, Ormand brought suit in state court seeking declaratory relief with regard to a non-compete provision in an employment agreement with Sanford. On October 28, 2009, the complaint was dismissed in state court because the issue had become moot as a result of Sanford having released Ormand from the non-compete provision. That same day, Ormand filed an amended complaint with seven counts that alleged various causes of action. On November 3, 2009, Sanford removed the case to federal court on the basis of federal question jurisdiction and supplemental jurisdiction and moved to dismiss the amended complaint. The following day, Ormand moved to remand the case to state court.

DISCUSSION

I. Ormand's Motion for Remand

Ormand argues that pursuant to the forum selection clause in the employment agreement, the court must remand the case to state court. Sanford argues that the forum selection clause does not unequivocally waive the right to remove the case to federal court. Sanford alternatively argues that the forum selection clause only applies to those claims that pertain to the employment agreement. Both parties agree that the forum selection clause is valid and enforceable. Therefore, the issue before the court is the interpretation of the forum selection clause.

A. Exclusivity

The forum selection clause at issue is found in Section 16 of the employment agreement. Section 16 states in its entirety that "[t]his Agreement shall be construed and enforced under and in accordance with the laws of South Dakota, with exclusive venue for resolution of disputes in the State Circuit Court for the Second Judicial Circuit, Minnehaha County." (Docket 6, Ex. A at 6.)

The court is guided at the outset by the analysis found in Dunne v. Libbra, 330 F.3d 1062 (8th Cir. 2003). In Dunne, the forum selection clause provided that " '[t]his agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois, and the parties consent to jurisdiction to [sic] the state courts of the State of Illinois.' " Id. at 1063 (alterations in original). The Eighth Circuit Court of Appeals held that Illinois law applied for purposes of construing the contract's language because "[t]he stock purchase agreement state[d] that it 'shall' be construed in accordance with Illinois law." Id. at 1064.*fn1 The court then held in Dunne that "the forum selection clause [was] permissive" because there was "no plain language basis to support a finding of exclusivity[.]" Id. Specifically, the court noted that "the forum selection clause [did] not use the words 'exclusive,' 'only,' 'must,' or any other terms that might suggest exclusivity." Id.

In direct, material contrast, the forum selection clause in the contract at issue uses the word "exclusive" in relation to the "venue for resolution of disputes" provision. (Docket 6, Ex. A at 7.) Thus, the State Circuit Court for the Second Judicial Circuit, Minnehaha County, is the exclusive venue for resolution of disputes. Next, the court must determine the scope of the forum selection clause.

B. Scope

Sanford argues that if the forum selection clause provides for an exclusive state court venue, it only applies to "disputes regarding the Agreement." (Docket 14 at 3-4.) Ormand argues that the clause applies to all of the claims in the amended complaint because they are "claims and causes of action [that] arise from the fact that Dr. Ormand and Sanford entered into a written contract in 2004."*fn2 (Docket 15 at 11.) Ormand also argues that any ambiguity should result in the ambiguous language being construed against Sanford because Sanford drafted the employment agreement.

South Dakota law applies for purposes of construing the clause. See Dunne, 330 F.3d at 1064. "Absent some ambiguity in the contract terms, the plain and ordinary meaning of the[] written document[] is controlling." Full House, Inc. v. Stell, 640 N.W.2d 61, 64 (S.D. 2002) (citation omitted). "Whether the language of a contract is ambiguous is a question of law." Bunkers v. Jacobson, 653 N.W.2d 732, 738 (S.D. 2002) (citation omitted). "Ambiguity exists 'when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement.' " Id. at 738 (quoting Divich v. Divich, 640 N.W.2d 758, 761 (S.D. 2002)).

After reviewing the employment agreement, the court finds that the forum selection clause is not ambiguous. The forum selection clause applies to disputes that arise under the employment agreement because the sentence containing the forum selection clause begins with the phrase "[t]his Agreement." (Docket 6, Ex. A at 7.) There is nothing in the agreement that could reasonably support a differing interpretation of the forum selection clause. Thus, Section 16 establishes the exclusive forum for addressing those disputes that arise under the agreement. The next issue, then, ...


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