American Home Contractors, LLC v. Kenneth Dorsey Slaughter and Elizabeth Ann Smith Slaughter

Summary

The United States District Court for the Southern District of West Virginia held that a contractual forum-selection clause requiring exclusive jurisdiction and venue in the Circuit Court of Putnam County, West Virginia, and expressly waiving federal diversity jurisdiction, barred removal. The court granted the plaintiff’s motion to remand, denied its request for attorney’s fees and costs, and declined to rule on the defendants’ motion to dismiss. The action was remanded to the Circuit Court of Putnam County.

Holdings

1. A mandatory and enforceable contractual forum-selection clause expressly waiving federal diversity jurisdiction prevents removal to federal court, even though the federal court possesses subject matter jurisdiction over the dispute.
2. American Home Contractors did not clearly waive its contractual right to prevent removal by removing a separate Virginia action and promptly seeking dismissal of that action based on the same forum-selection clause.
3. Attorney fees and costs were not warranted because defendants had an objectively reasonable basis for removal and for asserting that removal was timely.

Questions Presented

1. Whether the contractual forum-selection clause mandating exclusive jurisdiction and venue in the Circuit Court of Putnam County and expressly waiving federal diversity jurisdiction was enforceable and barred removal.
2. Whether American Home Contractors waived its right to enforce the forum-selection clause by removing a separate Virginia action involving the parties.
3. Whether American Home Contractors was entitled to attorney fees and costs under 28 U.S.C. § 1447(c).

Disposition

remanded