Construction Law Insights

Marathon Res. Mgmt. Grp., LLC v. C. Cornell, Inc., 2020 U.S. Dist. LEXIS 109892, 2020 WL 3442322 (E.D. Va. Jun. 23, 2020)

In March 2018, defendant C. Cornell, Inc. d/b/a Certa Pro Painters of College Station (“Certa Pro”) obtained a default judgment against Marathon Residential Management Group, LLC (“Marathon”) in the district court of Brazos County, Texas (“Texas Court”) for breach of contract for failure to pay Certa Pro for painting and cleaning rooms in a building in College Station, Texas, as invoiced to Marathon on August 22, 2017 and September 11, 2017. The Texas Court awarded Certa Pro $40,263.00 for its unpaid invoices, $15,000 in reasonable attorneys’ fees, pre- and post-judgment interest, and costs. In December 2018, Marathon sued Certa Pro in Richmond Circuit Court, and Certa Pro removed the action to federal court.

Marathon alleged that Certa Pro executed a Master Services Agreement (“MSA”) with Marathon on September 23, 2017, which included the following forum selection clause: “[t]he validity, construction, interpretation, performance, and jurisdictional venue pertaining to this [MSA] shall be governed and construed in accordance with the laws of Virginia” and the Richmond Circuit Court has “personal jurisdiction” over Certa Pro. Marathon alleges that Certa Pro breached the terms of the MSA by filing suit in the Texas Court and by contacting one of Marathon’s customers by means of a writ of garnishment issued by the Texas Court to collect on the judgment. Because the six documents are attached to the Complaint or expressly referenced by the Complaint, the court considered those documents in deciding to grant Certa Pro’s motion to dismiss for failure to state a claim under Rule 12(b)(6).

The court dismissed the breach of contract claim related to the forum selection clause, because Certa Pro’s invoices to Marathon predated the MSA by one month and two weeks, respectively. Nothing in the MSA supports the unusual position that its terms would apply to services completed before the execution of the MSA. The MSA’s repeated use of the word “shall” and not the past tense “shall have” demonstrates the parties’ intention for the MSA to apply to future work. Nor did the MSA incorporate prior contracts between Marathon and Certa Pro. The court also dismissed the claim for unauthorized contact with a Marathon customer. If the prosecution of the action in the Texas Court did not violate the MSA, then, for the same reasons as stated above, the execution of the judgment did not violate the MSA. In addition, the only communication at issue in Marathon’s complaint is the Texas Court’s issuance of the writ of garnishment. Under the plain language of the MSA, this does not constitute a communication by Certa Pro.

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