Background
On January 15, 2025, Chantelle Flores and her Florida corporation, Integrity Roofing and Gutters, Inc., entered into an Asset Purchase Agreement (APA) with Kelly Roofing Holdings and Reliant Roofing to sell the roofing and gutter repair business for $12 million plus earnout consideration. The APA contained a forum selection clause providing that disputes “arising out of or based upon this Agreement…may be instituted in the federal courts of the United States of America or the courts of the state of Delaware” and that “each party irrevocably submits to the exclusive jurisdiction of such courts.” On the same date, Flores also entered into an Employment Agreement with Reliant designating Florida state courts or federal court in Indiana as the forum for disputes.
After the transaction closed, Plaintiffs discovered that Defendants had concealed over $1.5 million in liabilities, pending litigation, and material contracts. More seriously, Flores had engaged in fraudulent invoicing, bribery, and kickbacks while operating the business, manipulating invoices totaling over $500,000 and depositing business checks into her personal account. Upon termination for misconduct, Flores deleted the business’s online profiles, sabotaged vendor relationships, and formed a competing roofing business attempting to recruit the sales team.
Plaintiffs filed suit in Collier County, Florida on June 6 to enforce the Employment Agreement. Defendants then sued in Orange County, Florida on June 13 to enforce the APA. On September 17, Plaintiffs initiated the present Delaware action for fraud in the inducement and breach of restrictive covenants in the APA. Defendants moved to dismiss, arguing the forum selection clause was permissive rather than mandatory, or alternatively that Plaintiffs had waived it by filing first in Florida.
The Court’s Holding
Vice Chancellor David held that the forum selection clause in the APA is mandatory and unwaived. Under plain language principles, the word “may” in “may be instituted in…Delaware” relates only to the choice between federal and state courts within Delaware, not to whether parties can file elsewhere. The critical language—”irrevocably submits to the exclusive jurisdiction of such courts”—plainly establishes that Delaware courts have exclusive jurisdiction over APA disputes. The court noted that Defendants’ interpretation would render “exclusive jurisdiction” meaningless and would contradict the parties’ express waiver of the forum non conveniens defense, which would be superfluous if either party could sue in any forum.
The court rejected Defendants’ McWane argument (deferring to first-filed litigation in another forum) because that doctrine applies only absent a binding forum selection clause. Citing cases interpreting nearly identical language—including *Mensah v. Bell*, *AGR Financial*, and *Sunset Digital Communications*—the court concluded that “exclusive jurisdiction” language combined with a prohibition on forum non conveniens arguments creates a mandatory forum selection provision despite the permissive “may” language.
On the waiver issue, the court held that Plaintiffs did not waive their rights by filing the Collier County Employment Agreement action in Florida. The APA and Employment Agreement must be read harmoniously as complementary documents executed on the same date in connection with the same transaction. The Employment Agreement expressly permits disputes to be brought in Florida or Indiana, so Plaintiffs properly invoked that forum for employment-related claims without waiving their right to enforce APA claims in Delaware. Finding otherwise would render the Employment Agreement’s forum selection clause meaningless.
Key Takeaways
- Forum selection clauses using “exclusive jurisdiction” language combined with “may be instituted” (offering a choice between federal and state court in a single jurisdiction) create mandatory, not permissive, forum designations.
- The word “may” in a forum selection clause is permissive only as to the choice between federal and state court within the designated jurisdiction, not as to whether disputes can be litigated elsewhere.
- When two related agreements executed together contain different forum selection clauses, courts will harmonize them so each provision retains independent effect rather than allowing one to override the other.
- A party does not waive rights under one forum selection clause by filing suit in a different forum permitted by an alternative forum selection clause in a related agreement.
- Count III, which sought only injunctive relief without asserting an independent cause of action, was dismissed, but this was without practical effect since injunctive relief remains available to remedy the surviving contractual breach claims.
Why It Matters
This decision provides critical guidance for transactional attorneys drafting asset purchase agreements and related transaction documents. Delaware courts will enforce forum selection clauses using “exclusive jurisdiction” language even if the clause permits a choice between federal and state court venues within that single jurisdiction. Attorneys can rely on this language to create mandatory forum selection provisions without using imperative terms like “shall” or “must.” The decision also clarifies that when multiple agreements with different forum selection clauses are negotiated in connection with the same transaction, courts will read them together harmoniously rather than allowing one provision to subvert another.
For litigants, the decision reinforces that filing suit in one forum related to one transaction agreement does not constitute a waiver of forum selection clauses in related agreements. Careful attention to which claims arise under which agreements becomes essential when multiple agreements with different forum provisions govern a single transaction. The court’s analysis suggests that sophisticatedly negotiated agreements with deliberate forum selection choices will be enforced according to their terms, making forum selection clauses a reliable tool for controlling where disputes will be resolved.