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Cherry Creek Mortgage Co., Inc. v. Jarboe

United States District Court, D. Colorado

November 29, 2018

CHERRY CREEK MORTGAGE CO., INC., Plaintiff,
v.
THOMAS R. JARBOE, and ALVARO C. BARAJAS, Defendants.

          ORDER

          Kristen L. Mix United States Magistrate Judge.

         This matter is before the Court on Defendant Thomas R. Jarboe's (“Jarboe”) Motion to Transfer Venue [#19][1] (the “Motion”). Plaintiff filed a Response [#34] in opposition to the Motion, and Defendant Jarboe filed a Reply [#38]. The Court has reviewed the Motion, Response, Reply, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#19] is DENIED.[2]

         I. Background

         The well-pled facts of the Complaint [#3] are construed in a light most favorable to Plaintiff. Barnes v. Harris, 783 F.3d 1185, 1191-92 (10th Cir. 2015). Plaintiff Cherry Creek Mortgage Co., Inc., (“Plaintiff” or “CCMC”) is a Colorado corporation with its principal place of business in Greenwood Village, Colorado. Compl. [#3] ¶ 1. Defendant Jarboe and Defendant Alvaro C. Barajas (“Barajas”)[3] are residents of California. Id. ¶¶ 2, 4. Plaintiff alleges that on April 18, 2016, the parties entered into a Non-Producing Branch Manager Agreement (“the Agreement”) whereby Plaintiff agreed to employ Defendant Jarboe and Defendant Barajas to manage certain loan origination branch offices in California. Id. Defendant Jarboe managed twenty-two branches in California, and Defendant Barajas managed one branch in California under the overall supervision of Defendant Jarboe. Motion [#19] ¶¶ 18-19. As non-producing branch managers, Defendants' jobs were to solicit, originate, and negotiate residential mortgage loans, and from time to time perform duties assigned by Plaintiff as well as perform various managerial duties as contemplated by the Agreement. Id. Plaintiff alleges that Defendants breached the Agreement by failing to compensate it when the loan origination branches accumulated “net losses.” Id. 2-3.

         To recover the losses, Plaintiff filed this lawsuit on January 19, 2018. Compl. [#3]. Plaintiff asserts three claims against Defendants. Id. ¶¶ 15-33. First, Plaintiff asserts a claim for breach of contract. Id. ¶¶ 15-24. Second, Plaintiff asserts a claim for breach of fiduciary duty. Id. ¶¶ 25-30. Finally, Plaintiff asserts a claim for unjust enrichment. Id. ¶¶ 31-33.

         In response to the Complaint [#3], Defendant Jarboe filed the present Motion [#19] seeking transfer to the Central District of California pursuant to 28 U.S.C. § 1404(a). Defendant Jarboe has also filed a separate suit in California regarding his rights as an employee under California labor laws. Motion [#19] at 2. In the present Motion [#19], Defendant Jarboe asserts that, despite the forum selection clause designating Colorado as a permissive venue for resolving disputes relating to the Agreement, a California court is more convenient and better situated to resolve this dispute and the clause is void and unenforceable. Id. at 2-3. The applicable clause states:

At the option of CCMC, an action may be brought to enforce this Agreement in the District Court in and for the County of Arapahoe, State of Colorado or in any other court in which venue and jurisdiction are proper. Loan Originator hereby irrevocably and unconditionally consents to venue and jurisdiction in the District Court in and for the County of Arapahoe, State of Colorado and in the United States District Court for the District of Colorado, and hereby waives any right or objection that jurisdiction and venue in those Courts is not convenient.

Motion [#19] at 5 ¶ 15.

         II. Standard of Review

         “For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 25 U.S.C. § 1404(a). The calculus changes, however, when the parties' contract contains a valid forum selection clause, which “represents the parties' agreement as to the most proper forum.” Stewart Org. v. Ricoh Cor., 487 U.S. 22, 31 (1988). The “enforcement of valid forum selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system.” Id. at 33. When a § 1404(a) motion seeks transfer to an identified forum in spite of the forum bargained for by the parties, the motion to transfer should not be granted absent “extraordinary circumstances unrelated to the convenience of the parties.” Atl. Marine Constr. Co. v. U.S. Dist. Court, 571 U.S. 49, 52 (2013). “The party defying the forum selection clause bears the burden of establishing that transfer . . . is []warranted.” Id. at 62.

         The existence of a forum selection clause requires the Court to limit its transfer analysis. Id. at 63. The Court may only consider public-interest factors and not the parties' private interests. Id. at 64. “When the parties agree to a forum-selection clause, they waive the right to challenge the preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of the litigation.” Id. “Because those [public-interest] factors will rarely defeat a transfer motion, the practical result is that forum-selection clauses should control except in unusual cases.” Id.

         III. Analysis

         A. Forum Selection Clause

         Forum selection clauses are presumptively valid under federal law, and should not be set aside unless the party challenging the clause shows that enforcement would be unreasonable. M/S Bremem v. Zapata Off-Shore Co., 407 U.S. 1, 18 (1972). A forum selection clause is unreasonable if (1) it was incorporated into a contract as a result of fraud, undue influence, or overweening bargaining power, (2) the selected forum is so gravely difficult and inconvenient that the complaining party will for all practical purposes be deprived of his day in court, or (3) enforcement of the clause would contravene a strong public policy of ...


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