MEMORANDUM OPINION AND ORDER
Plaintiff, Roberts & Schaefer Company ("R&S"), filed a complaint against defendant, Merit Contracting, Inc. ("Merit"), in the Circuit Court of Cook County on December 28, 1994. On January 12, 1995, Merit removed the action to this court pursuant to 28 U.S.C. § 1441 on the basis of diversity of citizenship.
R&S is a contractor incorporated in Delaware with its principal place of business in Chicago, Illinois. Merit is a Pennsylvania corporation and has its principal place of business in Monongahela, Pennsylvania. In summer 1993, R&S accepted Merit's bid to complete work in connection with the demolition, excavation, foundations and erection of a raw coal storage and handling facility at the Eighty-Four Mining Company in Pennsylvania. In September 1993, R&S sent Merit a letter confirming its purchase order relating to the work, and Merit began the job. R&S claims that during the project, disputes arose between the parties regarding delays which increased costs and postponed completion dates. R&S alleges that Merit has not submitted to R&S waivers of lien along with its invoices and has informed the owner of the Eighty-Four Mining Company of its intention to file a lien against the owner and the property for work performed under the purchase order but for which R&S has not paid. As a result, the owner is withholding payments from R&S. R&S asserts that Merit's actions have breached the parties' contract and injured R&S.
Merit has filed a motion to dismiss or, in the alternative to transfer or stay the proceedings. In response, R&S has filed a motion to remand the case to the circuit court. For the following reasons, R&S' motion is denied, and Merit's motion to dismiss is granted on the basis that this court does not have personal jurisdiction over Merit.
Whether this Action was Properly Removed
28 U.S.C. § 1441 permits a defendant to remove an action from state court to federal court if the federal court would have had jurisdiction over the lawsuit as originally filed by the plaintiff. Merit, as the party seeking to preserve removal, has the burden of establishing that this court has jurisdiction over the present case. Casey v. Hinckley & Schmitt, Inc., 815 F. Supp. 266, 267 (N.D. Ill. 1993). Remand to the state court is necessary if I decide that jurisdiction is lacking. Id. District judges may remand a removed case to state court based either on statutory grounds under 28 U.S.C. § 1447(c) or for nonstatutory, common law reasons. Rothner v. City of Chicago, 879 F.2d 1402, 1406, 1410-11, 1416 (7th Cir. 1989). Non-statutory grounds include the application of contract law to enforce forum selection clauses under the reasoning that defendants who have agreed to such clauses have, in effect, waived their removal rights. See e.g. Colonial Bank & Trust v. Cahill, 424 F. Supp. 1200, 1204 (N.D. Ill. 1976); Foster v. Chesapeake Insurance Company, Ltd., 933 F.2d 1207, 1215-1218 (3d Cir. 1991); Pelleport Investors v. Budco Quality Theatres, Inc., 741 F.2d 273, 279-81 (9th Cir. 1984) (cited by Rothner v. City of Chicago, supra, 879 F.2d at 1416); Karl Koch Erecting Co., Inc. v. New York Convention Center Development Corporation, 838 F.2d 656, 659 (2d Cir. 1988).
R&S nevertheless argues that Merit waived its right to remove this lawsuit to federal court by agreeing to the following forum selection clause:
This purchase order and all disputes between the parties hereto shall be governed by and construed according to the laws of Illinois whose Circuit Courts shall have exclusive jurisdiction to determine all such issues.
R&S Memo., Ex. A, p. 113. Courts have remanded cases involving similar forum selection clauses to state court. See e.g. Pelleport Investors v. Budco Quality Theatres, Inc., supra, 741 F.2d at 275, 280; Karl Koch Erecting Co., Inc. v. New York Convention Center Development Corporation, supra, 838 F.2d at 659. Before reaching the issue of whether this particular forum selection clause waived Merit's removal rights, it is necessary to determine whether this clause was part of the agreement between R&S and Merit.
In order to form a contract, each party must assent, and the essential terms must be definite and certain. Soderholm v. Chicago National League Ball Club, Inc., 225 Ill. App. 3d 119, 587 N.E.2d 517, 519, 167 Ill. Dec. 248 (1st Dist. 1992); Bielecki v. Painting Plus, Inc., 264 Ill. App. 3d 344, 637 N.E.2d 1054, 1061, 202 Ill. Dec. 318 (1st Dist. 1994). Furthermore, "a course of conduct may act as consent to a contract, [but] it must be clear exactly what contract the conduct relates to." Lundin v. Egyptian Construction Co., Inc., 29 Ill. App. 3d 1060, 331 N.E.2d 208, 211 (1st Dist. 1975).
R&S and Merit agree that R&S accepted Merit's bid to complete work for a project at the Eighty-Four Mining Co. R&S sent a confirming letter to Merit on September 7, 1993 stating that it had issued purchase orders for Merit to complete certain construction services at the Eighty-Four Mining Co. for a price of $ 1,775,000.00 as well as electrical work for $ 265,000.000. R&S Memo., Ex. A, p. 164. This letter indicates R&S' acceptance of Merit's bid and the parties' agreement that Merit would perform particular work for a specific price. Id.; Merit's Memo., Ex. A to Ex. D. The parties' agreement to these essential terms formed a contract. See B & C Electric, Inc. v. Pullman Bank and Trust Company, 96 Ill. App. 3d 321, 421 N.E.2d 206, 210, 51 Ill. Dec. 698 (1st Dist. 1981); Bielecki v. Painting Plus, Inc., supra, 637 N.E.2d at 1062. Merit commenced work on the project in September, and on September 30th sent R&S the first invoice in the amount of $ 154,620.00, which R&S subsequently paid in full. Merit Aff. PP 8, 9.
On November 1, 1993, R&S sent to Merit Purchase Order No. 9331-711 and other documents relating to the Eighty-Four Mining Co. project. R&S argues that the "Roberts and Schaefer Company Construction General Notes & Conditions" ("General Notes & Conditions"), R&S Memo., Ex. A, pp. 92-131, which contained the forum selection clause, was sent to Merit at this time and became part of its contract with Merit. However, Merit's affidavit, uncontradicted by any opposing affidavit, deposition or other evidence from R&S, states that "no one from Merit signed [the documents forwarded on November 1, 1993] because the terms were unacceptable and did not represent the parties' agreement." Merit Aff. P 10.
R&S has submitted no evidence that would support its position that the parties' agreement contained the General Notes & Conditions.
The General Notes & Conditions do not include a date, either party's signature, the purchase order number (9331-711) or any description of the job (e.g., "Eighty-Four Mining Co."). The document uses the generic terms "subcontractor" and "seller" and does not identify Merit as such. Furthermore, none of the documents R&S cites to in its briefs as comprising its contract with Merit incorporate the General Notes & Conditions by reference.
R&S argues that even if Merit never signed the contract documents it accepted the terms of the contract through its actions. It relies on Amelco Electric Co., Inc. v. Arcole Midwest Corp., 40 Ill. App. 3d 118, 351 N.E.2d 349 (1st Dist. 1976) and Landmark Properties, Inc. v. Architects International-Chicago, 172 Ill. App. 3d 379, 526 N.E.2d 603, 122 Ill. Dec. 344 (1st Dist. 1988), in support of its position.
In Amelco, supra, 351 N.E.2d at 351, the subcontract documents contained a document labeled as an appendix which related to "estimated manhours to be worked by minority persons" and was to be completed and signed by the plaintiff for transmittal to the City of Chicago. The plaintiff did execute the necessary papers "and on eight separate days plaintiff submitted written contractor's reports to the City in accordance with the written agreement." Id. at 354. Thus, the evidence in Amelco demonstrated that the plaintiff acted to carry out at least some of the written terms of the proposed subcontract. In this case, there is no evidence that Merit acted on any specific written term contained in the General Notes & Conditions or any particular document (other than the letter confirming R&S' acceptance of Merit's bid).
Moreover, in Amelco, the parties apparently agreed that the proposed subcontract was comprised of a discrete set of documents, which contained the term (a specific waiver of mechanics' lien) that the plaintiff was found to have accepted through its conduct. 351 N.E.2d at 352-53. In this case, the parties have not agreed on exactly what documents constituted the proposed subcontract. Unlike the Amelco court which found that the relevant term was in the proposed subcontract, I cannot conclude that the term at issue, found in the General Notes & Conditions which contains the forum selection clause, was part of the proposed subcontract here.
The court in Landmark Properties concluded that a party who never signed an architect's American Institute of Architects ("AIA") contract was nevertheless bound by its provisions because the party informed the architect that payment would be forthcoming provided all services were performed "in accordance with the AIA contract" and, in addition, filed a submission (later withdrawn) to mediation under the AIA contract. Landmark Properties, Inc. v. Architects International-Chicago, supra, 526 N.E.2d at 606. Although R&S argues that Merit engaged in similar conduct indicating acceptance in this case, there is no evidence to support its contention.
R&S apparently maintains that Merit's reference to a "force majeure situation" in its letter of October 12, 1993 indicates Merit's agreement to the General Notes & Conditions since the phrase "force majeure" is found in paragraph 6.8 of that document. R&S Memo., Ex. A, pp. 73, 111. I cannot agree. Merit wrote the letter to notify R&S of a "force majeure situation" which caused Merit to cease work. The force majeure clause in the General Notes & Conditions does not relate to force majeure circumstances encountered by Merit but only to the effect of such circumstances on R&S:
In the event of causes beyond the control of Buyer [i.e., R&S], including but not limited to acts of God, fire, the elements, strikes or labor disputes, and accidents or transportation difficulties, which would make it unreasonable in Buyer's judgment to accept delivery hereunder, Buyer shall have the option to cancel this purchase order or to delay the delivery or completion of all or part of the items, such cancellation or delay being without cost to Buyer.
R&S Memo., Ex. A, p. 111.
R&S also attempts to show that the General Notes & Conditions were incorporated into the parties' agreement via their January 27, 1994 Agreement discussing "General Conditions" in the following manner:
All additional General Conditions including supervision, etc., required due to this accelerated and extended schedule inclusive of overtime, will be charged by Merit to R&S.