Art of Manliness, LLC v. UrbanDaddy, Inc.

Background

Art of Manliness, LLC (AOM) sued UrbanDaddy, Inc. and Lance Broumand. AOM asserted claims for breach of contract, fraud, negligence, breach of fiduciary duty, unjust enrichment, accounting and disgorgement, and constructive trust. AOM alleged that UrbanDaddy failed to make required payments under the parties’ advertising and licensing relationship.

UrbanDaddy and Broumand moved to dismiss for lack of personal jurisdiction and improper venue. Alternatively, they asked the court to transfer the case to the U.S. District Court for the Southern District of New York based on a forum-selection clause in the parties’ agreement. AOM argued that the defendants had sufficient contacts with Oklahoma and that the forum-selection clause appeared only in an older agreement that had expired.

Personal Jurisdiction

The court denied the request to dismiss for lack of personal jurisdiction. It found that UrbanDaddy did not have the continuous and widespread contacts with Oklahoma required for general personal jurisdiction. But the court found sufficient contacts for specific personal jurisdiction, which applies when a lawsuit arises from a defendant’s deliberate contacts with the forum state.

UrbanDaddy reached out to AOM, learned that AOM was based in Tulsa, sent representatives to Tulsa during contract negotiations, exchanged communications with AOM, and continued the relationship. Broumand also personally visited Tulsa while UrbanDaddy was trying to preserve the business relationship. The court concluded that these were deliberate contacts directed toward Oklahoma and that UrbanDaddy and Broumand could reasonably have anticipated being sued there over disputes arising from that relationship.

The court also considered whether exercising jurisdiction would be unreasonable. Although litigating in Oklahoma would impose some burden on the defendants, the court found that Oklahoma’s interest in providing a forum for AOM and AOM’s interest in obtaining relief there supported jurisdiction. The remaining considerations did not significantly favor either side. The court therefore found that it could exercise personal jurisdiction over both defendants.

Forum-Selection Clause and Transfer

The original written agreement stated that lawsuits arising out of or relating to the agreement “shall be filed only” in state or federal courts located in New York County, New York. The court held that this was a mandatory forum-selection clause because it required litigation in the designated courts rather than merely allowing it there.

The parties agreed that the original written agreement expired on December 31, 2016, but they disputed the terms governing their relationship afterward. AOM argued that the parties had formed a new, unwritten 2017 agreement without the forum-selection clause. The court found that the alleged 2017 agreement was too vague to be enforceable without using the original agreement’s terms. The parties’ conduct showed that they continued operating under the original agreement except for changes they specifically made.

The court concluded that the later implied contract included the original agreement’s provisions that had not been specifically amended. Because AOM had not shown that the parties renegotiated or removed the forum-selection clause, the court found the clause enforceable. It further found that all of AOM’s claims arose from or related to the parties’ contractual relationship.

Disposition

The court granted in part and denied in part the defendants’ motion. It denied the request to dismiss for lack of personal jurisdiction and granted the motion to transfer venue based on the forum-selection clause. The clerk was directed to transfer the case to the U.S. District Court for the Southern District of New York.