An agreement’s expansive forum selection clause that encompasses all claims “related to” the agreement applies even to claims that do not allege a breach of the agreement. Karriker v. Harpoon Holdings, L.P., 2024 NCBC 6 (J. Conrad). So long as Plaintiff’s claims “relate to” the applicable agreement, Plaintiff was required to litigate those claims in the agreement’s selected forum.

Plaintiff sold his insurance company to an entity (“Buyer”) in exchange for continued employment and an ownership interest in Buyer. When Defendant subsequently acquired Buyer, it offered Plaintiff the opportunity to convert his ownership interests in Buyer into a partnership interest in Defendant.  Plaintiff agreed and, in doing so, became party to a limited partnership agreement (“LPA”) that contained a permissive forum selection clause and allowed Defendant to repurchase Plaintiff’s interests “at cost” in certain circumstances, including if Plaintiff were terminated for cause from Buyer. Later, Plaintiff acquired more membership interests in Defendant through a Subscription Agreement, which contained a mandatory forum selection clause (i.e., Delaware). Plaintiff was subsequently fired without explanation.  Defendant initially contended it could buy Plaintiff’s interests back at fair market value, but then later claimed that because Plaintiff had been fired “for cause,” Defendant could buy Plaintiff’s interests “at cost.” Plaintiff filed suit initially asserting a claim, inter alia, for a declaration that Defendant could not compel the purchase of his interests for less than fair market value. After Defendant moved to dismiss for improper venue, Plaintiff amended his complaint to assert a demand that Defendant purchase all of his membership units for fair market value.  Defendant again moved to dismiss, contending the claims had to be brought in Delaware.  Plaintiff opposed the motion, contending that because he had not alleged a breach of the Subscription Agreement, its mandatory forum selection clause was not applicable.

The Business Court disagreed with Plaintiff and dismissed the action. Recognizing that the Subscription Agreement’s forum selection clause unambiguously applied to any dispute “related to” the Subscription Agreement, the Business Court held Plaintiff’s claims plainly “related to” the Subscription Agreement because Plaintiff sought the fair market value for all of his membership units, including those obtained through the Subscription Agreement.  The fact that Plaintiff had not asserted a claim for breach of the Subscription Agreement did not preclude its forum selection clause from applying to any claims that were “related to” it.

Based upon this decision, a company seeking to enforce its agreement’s forum selection clause should closely analyze whether clause’s expansive nature covers a plaintiff’s claims, even if a breach of the agreement is not alleged.

Additional Legal Points: Where one agreement contains a permissive forum selection clause, but another applicable agreement contains a mandatory clause, the mandatory clause must be followed to ensure its benefit is not negated. (Opinion, ¶18).