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Kelvion, Inc. v. Petrochina Canada Ltd.

United States Court of Appeals, Tenth Circuit

March 15, 2019

KELVION, INC., a foreign corporation, Plaintiff - Appellant,
v.
PETROCHINA CANADA LTD., formerly known as BRION ENERGY CORPORATION, a foreign corporation, Defendant-Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA (D.C. NO. 4:17-CV-00355-GKF-FHM)

          Samanthia S. Marshall (W. Kirk Turner with her on the briefs), McAffee & Taft, P.C., Tulsa, Oklahoma, for Appellant.

          Richard D. Salgado, Dentons U.S. LLP (Wade P. K. Carr, Dentons U.S. LLP, Kansas City, Missouri, with him on the brief), Dallas, Texas, for Appellee.

          Before TYMKOVICH, Chief Judge, McKAY and CARSON, Circuit Judges.

          TYMKOVICH, CHIEF JUDGE.

         PetroChina Canada bought ten large heat-exchanger units from Kelvion's Oklahoma plant for use in PetroChina's oil and gas operations. Their contract included a mandatory forum-selection clause subjecting the parties to Canadian jurisdiction. After a dispute over unanticipated delivery costs that PetroChina refused to pay, Kelvion brought suit in Oklahoma. It asserted quantum meruit and unjust enrichment claims, arguing the forum-selection clause did not apply to its equitable claims.

         The district court disagreed, concluding the forum-selection clause applied, and dismissed the suit under the doctrine of forum non conveniens. We agree- the parties plainly intended any dispute arising from their contract would be heard in Canadian courts. We affirm the district court's dismissal for forum non conveniens.

         I. Background

         In August 2012, PetroChina Canada, a Canadian corporation, purchased ten heat exchanger units from Kelvion's principal place of business in Catoosa, Oklahoma.[1] The parties agreed Kelvion would manufacture the exchangers "and arrange for their shipment to [PetroChina's] facility" in Alberta, Canada. App. 158. The Purchase Order Agreement contained the following provision:

This Purchase Order shall be governed by and construed in accordance with the laws of the Province of Alberta and the Parties agree to accept and submit to the exclusive jurisdiction of the courts of the Province of Alberta.

Id. 228, § 20.1. The Purchase Order also provided that "[c]ost changes . . . will not be accepted unless official change order(s) have been issued by [PetroChina]." Id. 202. Once approved, Change Orders became incorporated into the Purchase Order as amendments.

         Kelvion provided PetroChina a shipping estimate and shipped the exchangers from Oklahoma in February 2014. Because of unanticipated delays and seasonal restrictions on shipping weights over Canadian roads in the winter, delivery costs exceeded Kelvion's original estimate by $671, 324. Kelvion never submitted nor did PetroChina approve any change order for the increased shipping costs.

         After a long period of negotiation, Kelvion filed suit in Oklahoma state court in May 2017 asserting breach of contract, quantum meruit, and unjust enrichment claims. PetroChina promptly removed to federal court and filed a motion to dismiss for forum non conveniens based on the Purchase Order's mandatory forum-selection clause. Kelvion dropped its breach of contract claim, but insisted the forum-selection clause did not apply to its equitable claims because they addressed matters outside the scope of the contract. The district court dismissed for forum non conveniens after determining the Purchase Order's forum-selection clause governed Kelvion's claims.

         II. ...


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