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Greg Passmore, An Individual, and v. Chris Johnson

November 28, 2011

GREG PASSMORE, AN INDIVIDUAL, AND
3D PIPELINE CORP., A CALIFORNIA CORPORATION DOING BUSINESS AS PASSMORE LABS,
THE ALTERNATIVE, TRANSFER
PLAINTIFFS,
v.
CHRIS JOHNSON, AN INDIVIDUAL, AND
DERMA-MED TECHNOLOGIES CORP., AN ALABAMA CORPORATION,
DEFENDANTS.



The opinion of the court was delivered by: Hon. John A. Houston United States District Judge

ORDER DENYING DEFENDANTS' MOTION TO DISMISS OR, IN VENUE [DKT. NO. 18]

INTRODUCTION

Before the Court is defendants Chris Johnson and Derma-Med Technologies Corporation's ("Defendants") Motion to Dismiss Based on the Anticipatory Suit Exception to the First-to-file Rule or, in the Alternative, to Transfer Venue under 28 U.S.C. § 1404(a) ("Motion"). (Dkt. No. 18.) Plaintiffs Greg Passmore and 3D Pipeline Corporation ("Plaintiffs") have filed an opposition to the Motion, (Dkt. No. 21), and Defendants have filed a reply, (Dkt. No. 22). After a careful review of the parties' submissions, including accompanying declarations, exhibits, lodgments, and objections, and for the reasons set forth below, the Court DENIES Defendants' Motion.

PROCEDURAL BACKGROUND

Plaintiffs initiated this action in the Superior Court of the State of California, County of San Diego ("San Diego Superior Court") on March 30, 2010, by filing a complaint that asserts four causes of action: (1) breach of contract, (2) negligent misrepresentation, (3) unjust enrichment, and (4) declaratory relief. (Dkt. No. 1 at 10.*fn1

Plaintiffs' suit arises from an apparent dispute regarding performance under a contract the parties apparently entered into in September 2007. (Dkt. No. 1 at 13.) Pursuant to the contract, Plaintiffs were to develop a skin scanning device for Defendants and, in exchange, Defendants would give Plaintiffs $200,000.00 and a stock interest in defendant Derma-Med Technologies Corporation. (Id.) The written agreement contains the following provision:

27. Any disagreements not covered in this Agreement that cannot be worked out between the parties will be handled through mediation. The parties [sic] agents shall select a mutually agreed upon state, excluding Alabama and California, in which to handle all legal proceedings.

(Dkt. No. 18-1 at 9; Dkt. No. 9 at 65.)

After Plaintiffs filed suit in the San Diego Superior Court, Defendants filed suit in the Texas District Court of Harris County on April 12, 2010. (Dkt. No. 18 at 19; Dkt. No. 21 at 5.) Thereafter, on May 7, 2010, Defendants moved to dismiss or stay the San Diego Superior Court action based on the above-referenced forum selection clause, but the San Diego Superior Court denied the motion, finding the forum selection clause unenforceable. (Dkt. No. 18 at 8; Dkt. No. 21 at 5.) On September 3, 2010, Defendants filed another lawsuit in the United States District Court for the Southern District of Alabama. (Dkt. No. 18 at 8; Dkt. No. 21 at 5.) Defendants then filed, in this Court, a Notice of Removal on October 1, 2010, and an additional Notice of Removal on November 23, 2010 -- each seeking to remove the instant action from the San Diego Superior Court to this Court. (Dkt. Nos. 1, 9.) In response, Plaintiffs filed a Motion to Remand on October 7, 2010, and an additional Motion to Remand on December 6, 2010. (Dkt. Nos. 2, 12.) On March 21, 2011, Plaintiffs withdrew both motions to remand.

(Dkt. No. 17.) And on April 18, 2011, Defendants filed the instant motion. (Dkt. No. 18.)

BACKGROUND

It appears relations between the parties began to disintegrate during the latter half of 2009. (Dkt. No. 18 at 7; Dkt. No. 21-2 at 2.) Thereafter, it appears the parties, through counsel, attempted to agree upon a location (other than California or Alabama) to mediate and litigate the dispute pursuant to the forum selection clause in the parties' written agreement.

Counsel for Plaintiffs, Dyson, declares that, "after two months of correspondence and telephone contacts" between him and counsel for Defendants, he received a letter from Morris, Defendants' counsel, on February 5, 2010. (Dkt. No. 21-2 at 2.) In the letter, Morris acknowledged the written agreement's forum selection clause, asked Dyson to call to discuss the matter, and conveyed Defendants' desire to mediate in either Mississippi or Florida. (Dkt. No. 18-1 at 15.*fn2 ) Dyson declares that he called Morris on February 5, 2010, to discuss a mediation location but the two did not reach a resolution. (Dkt. No. 21-2 at 2.) Dyson then avers that, on February 22, 2010, he again discussed the matter with Morris, suggesting the parties mediate in Austin, Texas. (Id.) On February 24, 2010, Dyson received an email from Morris stating Defendants did not wish to mediate in Texas but did want to mediate in New Orleans, Louisiana. (Dkt. No. 18-1 at 20.*fn3 ) Dyson declares he and Morris spoke again on February 24, 2010, but the two were again unable to reach a resolution on the issue of a mediation location. (Dkt. No. 21-2 at 2.)

On March 3, 2010, Dyson received a letter from Morris, in which Morris reiterated Defendants' desire to mediate in New Orleans. (Dkt. No. 18-1 at 16; Dkt. No. 21-2 at 2.) Dyson responded with an email stating he was not in the position to respond to Defendants' request to mediate in New Orleans but that he anticipated being able to respond within about a week. (Dkt. No. 18-1 at 19.*fn4 ) The parties appear to agree that Morris and Dyson did not speak again until at least March 30, 2010, at which point their versions of events diverge.

In an affidavit, Morris swears he "was informed by Mr. Dyson on March 30, 2010 that he would let [Morris] know [Plaintiffs'] position on litigation/mediation locale 'asap, but certainly within the week.'" (Dkt. No. 22-2 at 4.) And in defendant Chris Johnson's Declaration, Johnson restates Morris's account of the March 30, 2010, conversation as follows:

Defendants [sic] agent called Plaintiffs [sic] agent to get an update on Defendants' counter offer of March 4, 2010 [regarding mediation in New Orleans]. Plaintiffs' agent stated in the conversation with Defendants [sic] agent that "he would call his client (Plaintiffs) today and get confirmation that a New Orleans, Louisiana mediation locale would work. He then stated he would let me (Defendants [sic] agent) know something firm asap, but certainly within this week." (Dkt. No. 18-1 at 2.) Attached to Johnson's Declaration is a confirmatory email that Morris apparently sent to his client, Johnson, that states:

After telling me how busy he has been, [Dyson] said that he would call his client [i.e., Plaintiffs] today and get confirmation that a New Orleans, Louisiana mediation locale would work.

He then stated he would let me know something firm asap, but certainly within this week.

(Dkt. No. 18-1 at 17.)*fn5

Plaintiffs filed their Complaint the same day Dyson purportedly told Morris he would "get confirmation that a New Orleans, Louisiana mediation locale would work" -- March 30, 2010. (Dkt. No. 1 at 7.)

DISCUSSION

I. Legal ...


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