Background
Reich Family Limited Partnership is a Nevada limited partnership whose general partner is a Nevada corporation and whose limited partners are three Florida trusts. Mitchell Krassan served as the general partner’s president and as a co-trustee of the trusts. The Partnership Agreement states that the exclusive venue for any action brought in connection with the agreement is Carson County, Nevada.
The Partnership alleged that Mitchell used his authority over the Partnership to engage in self-dealing and to make unauthorized transfers and other transactions involving Partnership assets. Counts IV through XIII asserted claims against Mitchell Krassan, Susan Krassan, or both, and Count V specifically alleged that Mitchell violated section 11.2 of the Partnership Agreement through loans and advances made on impermissible terms. The Krassans moved to dismiss Counts IV through XIV under the mandatory forum-selection clause, but the circuit court denied the motion after concluding that all claims except Count V existed independently of the agreement.
The Court’s Holding
The Fourth District held that the Partnership’s claims against the Krassans had a sufficient nexus to the Partnership Agreement to fall within its forum-selection clause. Count V expressly alleged a contractual violation, while the remaining claims incorporated the same general allegations and concerned the same or related transfers, loans, investments, and other transactions involving Partnership assets.
Resolving those claims would implicate Mitchell’s authority to act through the general partner and the rights and obligations established by the Partnership Agreement. The court therefore reversed the order insofar as it denied dismissal of Counts IV through XIII and the Partnership’s attorney-fee request in Count XIV, and remanded for dismissal without prejudice to refiling in the contractually selected Nevada forum. Because the forum-selection clause required dismissal, the court did not address the parties’ arguments concerning nonbinding arbitration.
Key Takeaways
- A claim need not expressly allege breach of contract to fall within a broad forum-selection clause, but it must have a sufficient nexus to the contract containing the clause.
- The required nexus existed because the claims involved related transactions concerning Partnership assets and implicated authority, rights, and obligations established by the Partnership Agreement.
- The affected claims and related attorney-fee request must be dismissed without prejudice to being brought in the contractually selected Nevada forum.
Why It Matters
The decision shows that Florida courts assess the substance of claims—not merely their labels—when determining whether they fall within a contractual forum-selection clause. Claims involving transactions governed by contractual authority and obligations may be subject to the selected forum even when they are pleaded separately from an express contract claim.
The ruling also illustrates that enforcing a mandatory forum-selection clause can resolve the proper forum without requiring an appellate court to reach alternative arguments concerning arbitration.