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Good Feet Worldwide, LLC v. Larry Schneider

August 1, 2011

GOOD FEET WORLDWIDE, LLC, PLAINTIFF,
v.
LARRY SCHNEIDER, DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. SammartinoUnited States District Judge

ORDER DENYING DEFENDANT'S MOTION TO DISMISS FOR IMPROPER VENUE, OR IN THE ALTERNATIVE, TO TRANSFER VENUE (ECF No. 6.)

On December 17, 2010, Plaintiff Good Feet Worldwide, LLC filed its complaint against Defendant Larry Schneider, asserting causes of action for trademark infringement, dilution of trademark, unfair business practices pursuant to state and federal law, breach of contract, intentional interference with contractual relations, and accounting. In response, Defendant filed the present motion to dismiss for improper venue, or in the alternative, to transfer venue. (Mot. to Dismiss, ECF No. 6.) Plaintiff opposed the motion, (Opp'n, ECF No. 8), and Defendant replied, (Reply, ECF No. 14). After consideration, the Court DENIES Defendant's motion.

LEGAL STANDARD

A defendant may raise the defense of improper venue via a motion to dismiss under Federal Rule of Civil Procedure 12(b)(3). Once a defendant challenges venue, the plaintiff bears the burden of showing that venue is proper. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). In determining whether venue is proper, the Court may consider facts outside the pleadings probative of the issue of venue. Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996).

If the Court determines venue is improper, it may dismiss the case, or if it is in the interest of justice, the Court may transfer the case to any other district in which it could have been brought. 28 U.S.C. § 1406(a); Dist. No. 1, Pac. Coast Dist. v. Alaska, 682 F.2d 797, 799 n.3 (9th Cir. 1982). Ultimately, the decision whether to dismiss or transfer rests in the Court's sound discretion. See King v. Russell, 963 F.2d 1301, 1304--05 (9th Cir. 1992).

ANALYSIS

The ultimate question before the Court is whether venue is proper in the Southern District of California. Plaintiff asserts that venue is proper by virtue of a forum selection clause contained in a franchise agreement. (Opp'n 4.) Defendant asserts that he never entered into the agreement and cannot be bound by the forum selection clause. (Mot. to Dismiss 3--7.).

Thus, the venue question begets a contract question. If the franchise agreement binds the parties, the forum selection clause applies and venue is proper in the Southern District of California. If the franchise agreement does not ensnare Defendant, the parties agree that the action should be transferred to the Eastern District of California.*fn1 (Mot. to Dismiss 10; Opp'n 12.)

At the outset, the Court notes that Plaintiff-bearing the burden of establishing venue and by extension the existence of a binding franchise agreement-does not present the Court with a franchise agreement signed by Defendant. (See Coleman Decl., Exhibit A, ECF No. 10.) Instead, Plaintiff offers several arguments to establish the existence and enforceability of a franchise agreement between the parties. Plaintiff's arguments and the Court's analysis covers three areas:

1) the statute of frauds; 2) whether the franchise agreement required both parties' signatures; and 3) Plaintiff's standing to assert the franchise agreement.

1. Statute of Frauds

Defendant asserts that any franchise agreement is unenforceable because of the statute of frauds. The franchise agreement has a term of seven years. As a result, the contract is not valid unless it, or some note or memorandum thereof, is in writing and signed by the party against whom enforcement is sought. See Cal. Civ. Code § 1624(a)(1). Here, Plaintiff attempts to enforce the franchise agreement against Defendant, but the franchise agreement is not signed by Defendant. (Coleman Decl., Exhibit A 97, ECF No. 10.)

Plaintiff concedes that the statute of frauds applies but presents two arguments in response. First, Plaintiff argues that the franchise agreement is enforceable even if unsigned because the statute of frauds is satisfied. (Opp'n 5.) Alternatively, Plaintiff argues that Defendant is estopped from relying on a statute of frauds defense. (Opp'n 10.) The Court finds that the statute of frauds is satisfied and discusses Plaintiffs' first argument only.

Plaintiff argues that statute of frauds is satisfied because Defendant "signed documents that relate to, refer to and/or comprise important Exhibits and Addenda to the Franchise Agreement that clearly evidence his ...


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