COURT OF APPEALS DECISION DATED AND FILED December 17, 2009 David
R. Schanker Clerk of Court of Appeals |
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NOTICE |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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APPEAL
from an order of the circuit court for
Before Dykman, P.J., Higginbotham and Bridge, JJ.
¶1 BRIDGE, J. This interlocutory appeal arises from the
circuit court’s denial of a motion brought by Pacific Rollforming, LLC and Todd
E. Beasley (collectively Pacific) to dismiss this action due to improper
venue. Pacific and Trakloc Midwest, LLC
(
Background
¶2 Pacific is an
¶3 Midwest filed an amended complaint in
¶4 The circuit court concluded as a matter of law that the fact
that the Sublicense Agreement contained a
DISCUSSION
Standard of Review
¶5 When reviewing a motion to dismiss, we ordinarily look only
to the complaint, summarizing its allegations and taking them as true for
purposes of the appeal. Converting/Biophile
Labs., Inc. v. Ludlow Composites Corp., 2006 WI App 187, ¶2, 296
Enforceability of Forum Selection Clauses
¶6 Because “[o]
¶7
¶8
¶9 Midwest acknowledges that no
¶10 Pacific responds that the Sublicense Agreement and the
Contribution Agreement do not create a franchise and are instead a licensing
agreement and an agreement for the sale of stock, respectively. Thus, it argues that the WFIL has no
application to this matter. Pacific
argues further that even assuming for the sake of argument that the WFIL does
apply here, nothing in the WFIL forbids forum selection clauses in franchise
agreements. Pacific points out that
although the franchise laws of many states expressly prohibit any type of forum
selection clauses in franchise agreements,
¶11 We first consider whether the agreements create a franchise, thus implicating the WFIL and its attendant public policy considerations. Wis. Stat. § 553.03(4)(a) defines a franchise as follows:
(4)(a) “Franchise” means a contract or agreement, either express or implied, whether oral or written, between 2 or more persons by which:
1. A franchisee is granted the right to engage in the business of offering, selling or distributing goods or services under a marketing plan or system prescribed or suggested in substantial part by a franchisor; and
2. The operation of the franchisee’s business pursuant to such plan or system is substantially associated with the franchisor’s business and trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the franchisor or its affiliate; and
3. The franchisee is required to pay, directly or indirectly, a franchise fee.
¶12 Both before the circuit court and on appeal,
¶13
Ambiguity
¶14 Midwest’s remaining argument is that the forum selection
clauses are ambiguous and thus should not be enforced because they place venue
in two different forums. In cases involving
contract claims, such as the present matter, summary judgment will not be
granted “when the contract is ambiguous and the intent of the parties to the
contract is in dispute.” Energy
Complexes, Inc. v.
¶15 We are not convinced on the record before us that the fact that
the two agreements call for different venues renders each of them
ambiguous. At least on their face, there
is no apparent reason why disputes related to the Sublicense Agreement cannot
be litigated in
CONCLUSION
¶16 In sum, we conclude that Midwest has not met its burden of
proving that it is entitled to have the forum selection clauses contained in
the Sublicense Agreement and the Contribution Agreement set aside as
unenforceable for public policy reasons embodied in the WFIL, nor has it
demonstrated that the forum selection provisions are ambiguous. We therefore conclude that summary judgment in
favor of Pacific is appropriate. See Energy
Complexes, Inc., 152
¶17 For the reasons discussed above, the order of the circuit court is reversed.
By the Court.—Order reversed and cause remanded with directions.
Not recommended for publication in the official reports.
[1] All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise noted.
[2] The Sublicense Agreement provides in relevant part as follows:
25.4 Governing Law and Choice of Forum.
This Agreement shall be construed and enforced in accordance with
the laws of the State of
[3] The Contribution Agreement provides in relevant part as follows:
7.7 Interpretation/Venue. If
any portion of this Agreement shall be held to be void or unenforceable, the
balance thereof shall nonetheless be effective.
This Agreement has been made and entered into in the State of
[4] The
amended complaint alleged that Pacific violated the WFIL in two ways: (1) by not providing
The amended complaint also alleged alternative claims under the California Franchise Investment Law and the Wisconsin Fair Dealership Law, Wis. Stat. §§ 135.01 – 135.07, which are not at issue in the present appeal.
[5]
(4) The division shall, in any determination he or she shall make as to whether a marketing plan or system is deemed to be “prescribed in a substantial part by a franchisor,” within the meaning of s. 553.03(4)(a)1., Stats., include, but not be limited to, consideration of the following factors:
(a) Whether the representations made by the offeror or seller in connection with the offer to sell or sale of a franchise suggest or any agreement executed in connection with the offer to sell or sale of a franchise requires that the distributor or licensee operate a business which can purchase a substantial portion of its goods solely from sources designated or approved by the licensor.
(b) Whether the representations made by the offeror or seller in connection with the offer to sell or sale of a franchise suggest or any agreement executed in connection with the offer to sell or sale of a franchise requires that such distributor or licensee follow an operating plan, standard procedure, or training manual or its substantial equivalent promulgated by the licensor in the operation of the licensed business, violations of which may, under the terms of the agreement, permit the licensor to terminate the agreement.
(c) Whether the representations made by the offeror or seller in connection with the offer to sell or sale of a franchise suggest or any agreement executed in connection with the offer to sell or sale of a franchise requires that the distributor or licensee be limited as to the type, quantity and/or quality of any product or service the distributor or licensee may sell or limits the distributor or licensee as to the persons or accounts to which the person may sell the licensor’s product or service.
(d) Whether the provisions of the agreement permitting the licensor to terminate the agreement, to buy back the distributor or license rights assigned by the agreement, or to refuse to renew the grant of such distributor or license rights are such as to operate or be exercisable substantially at the will of the licensor, or
(e) Whether the representations made by the offeror or seller in connection with the offer to sell or sale of a franchise suggest or any agreement executed in connection with the offer to sell or sale of a franchise requires that the licensor aid or assist the distributor or licensee in training, obtaining locations or facilities for operation of the franchisee’s business or in marketing the franchisor’s product or service.
[6] In
addition,