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Heritage Disposal & Storage, L.L.C. v. VSE Corporation

United States District Court, D. Nebraska

October 5, 2015

HERITAGE DISPOSAL & STORAGE, L.L.C., a Nebraska limited liability company; Plaintiff,
v.
VSE CORPORATION, a Delaware corporation; Defendant.

MEMORANDUM AND ORDER

Cheryl R. Zwart United States Magistrate Judge

This matter is before the court on Defendant VSE Corporation’s motion to transfer venue from this court to the United States District Court for the Eastern District of Virginia, (Filing No. 16). For the reasons set forth below, the motion will be granted.

BACKGROUND

Plaintiff’s complaint alleges a breach of contract action against Defendant VSE Corporation (“VSE”). (Filing No. 1). Plaintiff Heritage Disposal & Storage, L.L.C. (“Heritage”) is a Nebraska limited liability company with its sole place of business in Alda, Nebraska. The members of Heritage are not citizens of the states of Delaware or Virginia. (Id. at CM/ECF p. 1, ¶ 1). VSE is a Delaware Corporation with its principal place of business in Alexandria, Virginia. (Id. at CM/ECF p. 1, ¶ 2).

VSE provides the federal government with support services, including the storage and handling of seized property. (Filing No. 17 at CM/ECF p. 2). In 2007, VSE worked with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) to provide services for a seizure of roughly 900, 000 pounds of illegal fireworks from a location in Covington Kentucky (“Covington Fireworks”). (Id.). In July of 2007, VSE entered into a subcontracting agreement[1] with Heritage to store the Covington Fireworks in Heritage’s facilities in Nebraska. (Filing No. 21 at CM/ECF p. 2).

In July of 2008, a year after this agreement and service began, VSE and Heritage entered into a Purchase Order specifying the terms and conditions of Covington Fireworks’ storage. (Id.; Filing No. 18-2). The Purchase Order was entered into while VSE was maintaining the storage of Covington Fireworks under its prime contract with the U.S. Department of Treasury (“Treasury Prime Contract”). (Filing No. 21 at CM/ECF p. 3). The Purchase Order contained a Resolution of Disputes and Choice of Law Clause (“Resolution Clause”). (Filing No. 18-2, at CM/ECF pp. 8-12).

Subsection B of the Resolution Clause states:

In the event of any dispute that arises solely between the Parties, . . . either party shall have the right to pursue resolution of the dispute in either the Circuit Court of Alexandria, Virginia, or in the United States District Court for the Eastern District of Virginia (Alexandria Division). The courts identified in the preceding sentence shall be the exclusive venue as between the Parties . . . .

(Id. at CM/ECF p. 9). The Purchase Order also contained a Survivability Clause which read, “In the event this Order is terminated, the Parties shall remain bound by the content of the following provisions, which shall survive termination: . . . Resolution of Disputes Choice of Law . . . .” (Id. at CM/ECF p. 11).

The court proceedings and resulting disposition of the Covington Fireworks were unexpectedly delayed. As a result, Heritage and the ATF became concerned about the conditions and safety of the fireworks.. (Filing No. 17 at CM/ECF p. 3-4). In May of 2009, following an inspection, ATF recommended certain changes to ensure safety during the Covington Fireworks’ continuing storage. (Id. at CM/ECF p. 3). Thereafter, the Covington Fireworks required more space for storage and in July of 2009, Heritage sought to increase the monthly payments made by VSE. (Id.). The change in the storage and subsequent price increase lead to a disagreement and, ultimately, this lawsuit. (See Id.).

In September of 2010, the Treasury Prime Contract was terminated. (Filing No. 21 at CM/ECF p. 3). Thereafter, VSE and Heritage repeatedly attempted to negotiate a new contract to govern the terms and conditions of the Covington Firework’s storage, but they have been unable to come to a mutual understanding and full resolution. (Id. at CM/ECF p. 5). In late 2010, VSE and Heritage attempted to renegotiate terms, but a conclusion was never reached in these negotiations. (Filing No. 21 at CM/ECF p. 5).

Parties entered into a Settlement Agreement in October of 2013. (Filing No. 17 at CM/ECF p. 3). This agreement was intended to end the parties’ dispute regarding the price of storage. (Id. at CM/ECF p. 3). Unfortunately, even after the Settlement Agreement was executed, the dispute continued. (Filing No. 25 at CM/ECF p. 3). Heritage now claims it properly rescinded the Settlement Agreement and cannot be bound by its terms. (Filing No. 21 at CM/ECF p. 9). VSE argues the triggering event for Heritage’s right to rescind the agreement never occurred and the Settlement Agreement is still in effect. (Filing No. 22 at CM/ECF p. 8).

The Settlement Agreement contains a forum-selection clause which states “This Agreement shall be subject to and governed by the laws of the Commonwealth of Virginia. Exclusive Jurisdiction for any disputes arising under this Agreement shall reside within courts of the Commonwealth of Virginia.” (Filing No. 18-5 at CM/ECF p. 4). In November of 2014 the parties entered into a Tolling Agreement to preserve certain claims and defenses arising from a dispute or the Settlement Agreement. (Filing No. 17 at CM/ECF p. 3; see also Filing No. 18-6 at CM/ECF p. 1). The Tolling Agreement has a forum-selection clause providing the agreement is subject to the laws of the Commonwealth of Virginia. (Filing No. 18-6 at CM/ECF p. 2).

The complaint was filed by Heritage on February 27, 2015. (Filing No. 1). Defendant moved to have the case transferred to the Eastern District of Virginia. (Filing ...


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