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Hagen Construction, Inc. v. The Whiting-Turner Contracting Co.

United States District Court, D. Maryland

April 24, 2018

HAGEN CONSTRUCTION, INC., Plaintiff,
v.
THE WHITING-TURNER CONTRACTING COMPANY, Defendant.

          ZACHARY DAVID SANDERS COHEN SEGLIAS PALLAS GREENHALL & FURMAN PC ON BEHALF OF PLAINTIFF

          MICHAEL CHARLES ZISA CHARLES FRANCIS KENNY, JR. PECKAR & ABRAMSON, P.C. ON BEHALF OF DEFENDANT

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This is a breach of contract action arising from two subcontracting agreements. Before the Court is Defendant Whiting-Turner Contracting Company's Motion to Transfer Venue. For the reasons that follow, the Court will grant Defendant's Motion and will transfer this case to the United States District Court for the District of Maryland, Baltimore Division.

         I.

         The Court takes the following facts from Plaintiff's August 2, 2017 Complaint. Defendant, a Maryland corporation with its principal place of business in Maryland, entered into a contract with the Nemours Foundation for a construction project (the “Project”) located in Deptford, New Jersey.

         On July 29, 2015, Plaintiff Hagen Construction, Inc. and Defendant entered into a written subcontract under which Plaintiff agreed to provide drywall materials and rough carpentry work (the “Drywall Subcontract”) for the Project. The original value of the Drywall Subcontract was $2.4 million. On January 28, 2016, the parties entered into a second written subcontract under which Plaintiff agreed to furnish certain materials for millwork and casework (the “Millwork Subcontract”) for the Project. The original value of the Millwork Subcontract was $130, 720. The Subcontracts included detailed schedules for the work to be completed.

         Plaintiff alleges it “experience[d] substantial disruptions on the Project and incurred additional and unexpected costs in completing its work.” Plaintiff alleges this resulted in it incurring $650, 000 in excess costs. Plaintiff argues this “increased the total value of the Subcontracts to $2, 952, 166.96.” Plaintiff's Complaint pleads that Defendant has only paid $2, 844, 442.77, leaving an unpaid balance of $107, 724.19.

         Plaintiff filed suit in the Superior Court of New Jersey, Law Division on August 2, 2017 claiming breach of contract (Count I), violation of the New Jersey Prompt Payment Act (NJPPA), N.J.S.A. 2A:30A-1 to -2, (Count II), and unjust enrichment (Count III). On September 11, 2017, Defendant removed this case to the United States District Court for the District of New Jersey. Defendant filed a September 18, 2017 Motion to Transfer Venue to the United States District Court for the District of Maryland, Baltimore Division.

         II.

         This Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiff is a citizen of Pennsylvania, which is its state of incorporation and the location of its principal place of business. Defendant is a citizen of Maryland, which is its state of incorporation and the location of its principal place of business. The Complaint further pleads an amount in controversy in excess of $75, 000, exclusive of interest and costs.

         III.

         The issue before the Court on the pending motion is the validity of a forum selection clause contained in the Subcontracts. Article 9, section (r) of both Subcontracts identically states, in relevant part: “Any action or suit arising hereunder shall be brought in the jurisdiction where Contractor's principal office is located without regard to principles of conflict of laws or forum non conveniens.” This Court applies federal law rather than state law in determining whether this forum selection clause is valid. The Third Circuit has held that federal law applies when determining the validity of a forum selection clause in diversity cases. Jumara v. State Farm Ins. Co., 55 F.3d 873, 877-78 (3d Cir. 1995). Federal law controls in such cases because “[q]uestions of venue and the enforcement of forum selection clauses are essentially procedural, rather than substantive, in nature.” Id. at 877 (quoting Jones v. Weibrecht, 901 F.2d 17, 19 (2d Cir. 1991)).[1]

         In federal court, if both the original and requested venue are proper, the court looks to 28 U.S.C § 1404(a) to determine if a transfer of venue is appropriate. Id. at 878. 28 U.S.C. § 1404(a) provides that, “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division ...


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