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Thor Ronlake, and Paula Ronlake v. Us-Reports

February 6, 2012

THOR RONLAKE, AND PAULA RONLAKE
PLAINTIFFS,
v.
US-REPORTS, INC., A COLORADO CORPORATION, AND
GROUP MANAGEMENT 0002 LLC, A NEW YORK LIMITED LIABILITY COMPANY, AND DOES 1 THROUGH 20, EXCLUSIVE, DEFENDANT.



The opinion of the court was delivered by: Lawrence J. O'Neill United States District Judge

ORDER RE DEFENDANT'S MOTION TO DISMISS COMPLAINT

(DOC. 7)

I. INTRODUCTION.*fn1

Defendant Group Management 0002 LLC ("GM2") filed this motion to dismiss Thor and Paula Ronlake's ("Plaintiffs") Complaint asserting that a forum selection clause contained in the parties' operating agreement mandates that this action be heard by the state or federal courts of Erie County, New York. Plaintiffs contend that the forum selection clause cannot be enforced because it does not apply to Plaintiffs claims; Plaintiffs had no notice of the clause; enforcement will deprive them of their day in court; and enforcement would be contrary to public policy. 5

II. BACKGROUND.

In approximately 1999, Thor Ronklae was hired as an inspector by US-Reports, Inc. Compl. ¶3. Paula Ronlake was hire approximately two years later. Id.

In approximately July of 2007, Plaintiffs were advised that their business relationship with US-Reporter would change. Id at ¶ 4. Plaintiffs allege that only the outward appearance of the relationship changed, in that they were now referred to as "partners" and/or "members" of the entity GM2. Id.; Declaration of Thor Ronlake ¶ 3.However, they assert their relationship with US-Reports did not substantially change. Id. US-Reports continued to supervise and control the manner in which Plaintiffs performed their services, while GM2 acted as a payroll company, dispersing money received form US-Reports to Plaintiffs. Id.

Defendant states that as a result of the change, an operating agreement ("Operating Agreement") was created which governed the parties' new relationship. Declaration of John Schober, Exs. 1, 2. Defendant asserts that Plaintiffs are subject to the Operating Agreement and all its clauses. The Operating Agreement contains a forum selection clause which states in relevant part:

11.5 Governing Law and Consent to Jurisdiction

This Agreement and all issues regarding the rights and obligations of the Members, the construction, enforcement and interpretation hereof, and the formation, administration and termination of the Company shall be governed by the provisions of the law in New York, without reference to conflict of laws principles. The Company and each Member irrevocably submit to the exclusive jurisdiction of the Federal and state courts located in Erie County, New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby.

Id. (emphasis added). Defendant also provides signed, written notes from a meeting ("Meeting Notes") in which Plaintiffs agreed to become partners in GM2 as well as signed amendments to the Operating Agreement. Id., Exs. 3-6.

Plaintiffs allege they were never provided with nor signed any operating agreement.

Further, while Plaintiffs admit to signing the Meeting Notes and being sent a "Member Declaration and Acknowledgment" document, neither of these documents contained or mentioned the ...


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