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EISENMANN CORPORATION v. TEK-MOR

February 4, 2004.

EISENMANN CORPORATION, Plaintiff,
v.
TEK-MOR, INC. Defendant



The opinion of the court was delivered by: PAUL PLUNKETT, Senior District Judge

MEMORANDUM OPINION AND ORDER

The case is before the Court on Tek-Mor's motion to dismiss or stay based on pending foreign litigation. For the reasons set forth below, the motion is denied.

Background*fn1

  Plaintiff Eisenmann was hired by Toyota Tsusho Canada, Inc. to engineer and install paint booths and a plastic parts painting system at a Toyota facility in Ontario, Canada. Following a bid process, Eisenmann hired Tek-Mor to perform the sheet metal work for the project. Tek-Mor was subsequently awarded additional work at the Toyota plant.

  As of March 31, 2003, Tek-Mor was owed in excess of $1,000,000.00 by Eisenmann for its work at the Toyota plant. On April 24, 2003, Tek-Mor filed a lien pursuant to the Ontario Page 2 Construction Lien Act ("Ontario Lien Act"). The lien identified Eisenmann as the contractor and Toyota as the property owner and was served upon both Eisenmann and Toyota by letter dated May 1, 2003. In accordance with the Ontario Lien Act, Tek-Mor filed a statement of claim against Eisenmann and Toyota in the Ontario Superior Court of Justice on May 29, 2003. Eisenmann appeared in the Ontario action and filed a statement of defence.

  Before Tek-Mor filed its statement of claim against Eisenmann in Ontario, but after it served Eisenmann with notice of the lien, Eisenmann filed a complaint against Tek-Mor in Cook County Circuit Court, alleging breach of contract and other common law violations. In its complaint, filed May 6, 2003, Eisenmann alleges that Tek-Mor did not complete its work at the Toyota plant in a timely manner and, as a result of the delay, Eisenmann has suffered injuries and damages. Tek-Mor removed the action to federal court in June 2003,

  Tek-Mor now requests that this Court dismiss or stay this action pending resolution of the action in Ontario. Tek-Mor advances three theories in support of its motion: (1) the doctrine of forum non conveniens; (2) the Colorado River abstention doctrine; and (3) general principles of comity. Eisenmann opposes Tek-Mor's motion, arguing inter alia that a valid forum selection clause, which states that, in the event of a contract dispute, "venue is agreed to be in Chicago, Illinois," clearly indicates Tek-Mor's consent to resolve any dispute in an Illinois forum. Page 3

  Discussion

 1. Forum Non Conveniens

  The traditional forum non conveniens analysis, articulated by Kamel v. Hill-Rom Co., 108 F.3d 799, 802 (7th Cir. 1997),*fn2 is not applicable in this case because the parties have agreed, through a forum selection clause, that contractual disputes will be resolved in Chicago, Illinois, See Eisenmann Corp. v. Tek-Mor, Inc., No. 03 C 4375 (Order dated Sept. 24, 2003).*fn3 In such a case, a forum selection clause is "prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances." Bonny v. The Society of Lloyd's, 3 F.3d 156, 159 (7th Cir. 1993) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972)). Forum selection clauses are "unreasonable under the circumstances" if they were agreed to as a result of fraud, undue influence or unequal bargaining power, if the selected forum is so "gravely difficult and inconvenient" as to deprive the complaining party of "its day in court" or if enforcement of the clause would "contravene a strong public policy of the forum in which the suit is brought." Id. at 160 (internal citation omitted). In order to succeed on its motion the basis of forum non conveniens, Tek-Mor must demonstrate one of the three factors set forth in Bonny. See AAR Int'l, Inc. v. Nimelias Enters. S.A., 250 F.3d 510, 526 (7th Cir. 2001). We find that Tek-Mor has not done so.

  Tek-Mor argues that enforcing the forum selection clause will deprive it of its day in court because it would be inconvenient and costly to defend this action in Illinois. The dispute involves Page 4 a construction project in Ontario and all witnesses are located in Ontario and beyond the reach of this Court's subpoena power, says Tek-Mor, and even if witnesses are willing to appear voluntarily, Tek-Mor's costs in producing these witnesses will be prohibitive. In contrast, Tek-Mor points out that it, Eisenmann arid Toyota are all subject to jurisdiction in Ontario.*fn4 Thus, argues Tek-Mor, even in light of the forum selection clause, a dismissal or stay under the doctrine of forum non conveniens is warranted.

  Tek-Mor's argument is unpersuasive. It has a "heavy burden of proof" to show that it will be deprived of its day in court. Quist v. Empire Funding Corp., 1999 WL 982953, at *3 (N.D. Ill. Oct. 22, 1999). Additional expense alone is not enough to invoke the doctrine of forum non conveniens under these circumstances. See Paper Express Ltd. v. Pfankuch Maschinen, 972 F.2d 753, 758 (7th Cir. 1992) (rejecting argument that forum selection clause requiring litigation in Germany is unreasonable even though witnesses and physical evidence located in Illinois). Nor does the fact that witnesses maybe located in a foreign jurisdiction mean that a party will be deprived of his day in court. See id. at 758; Karlberg European Tanspa, Inc. v. JK-Josef Kratz Vertrielbsgesellschaft MBH, 618 F. Supp. 344, 348-49 (N.D. Ill. 1985). Flights between certain cities in Ontario, Canada and Chicago, Illinois are frequent, of short duration and relatively inexpensive. Moreover, enforcement of forum selection clauses in international contracts is strongly favored. See Bonny, 3 F.3d at 159-60. Any burden of litigating in Illinois was foreseeable at the time Tek-Mor entered into its relationship with Eisenmann on the Toyota project. See AAR Int'l, Inc., 250 F.3d at 526 (inconvenience of being forced to litigate in particular forum pursuant to forum Page 5 selection clause was foreseeable at time contract freely entered into); Paper Express, Ltd., 972 F.2d at 758 (additional expense involved in litigation in foreign country was included in consideration received under contract).

  The two district court cases Tek-Mor cites in support of its argument, Pyrenee, Ltd. v. Wocom Commodities, Ltd., 984 F. Supp. 1148 (N.D. Ill. 1997) and ISI Int'l, Inc. v. Borden Ladner Gervais, LLP, 2001 WL 1382572 (N.D. Ill. Nov. 5, 2001), involved the traditional forum non conveniens analysis and are not on point. In each case there was apparently no forum selection clause which mandated the application of the stricter standards articulated in Bonny. When enforcing a forum selection clause freely entered into by sophisticated parties with equal bargaining power, the inquiry is limited to whether the objecting party would be deprived of his day in court. Roberts & Schaefer Co. v. Merit Contracting, Inc., 99 F.3d 248, 254 (7th Cir. 1996) (noting differences in evaluating motion for change of venue and enforcement of forum selection clause). ...


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