United States District Court, D. Oregon
FINDINGS AND RECOMMENDATION
F. BECKERMAN, UNITED STATES MAGISTRATE JUDGE
Dr. Merrit Quarum (“Dr. Quarum”) brings this
action against Defendant Mitchell International, Inc.
(“Mitchell”), alleging claims for breach of
contract, violation of the covenant of good faith and fair
dealing, wrongful discharge, and unpaid wages. (ECF No.
before the Court is Mitchell's motion to dismiss Dr.
Quarum's complaint based on the doctrine of forum non
conveniens. (ECF No. 7.) Alternatively, Mitchell asks
the Court to transfer this case to the District of Delaware
under 28 U.S.C. § 1404(a), or abstain under Colo.
River Water Conservation Dist. v. United States, 424
U.S. 800 (1976). (ECF No. 7.) For the following reasons, the
Court recommends that the district judge grant Mitchell's
motion to transfer this case to the District of Delaware.
Quarum, an Oregon physician, founded QMedtrix Systems, Inc.
(“QMedtrix”) in 1996. (Compl. ¶ 4.) QMedtrix
developed software and processes to streamline the review and
approval process used by insurance companies to vet
physicians' claims for reimbursement in workers
compensation and automobile insurance actions. (Compl. ¶
2016, Dr. Quarum and the other shareholders of QMedtrix sold
the company to Mitchell through a Stock Purchase Agreement
(“SPA”). (Compl. ¶ 5.) The Preamble to the
SPA identifies the contracting parties:
This Stock Purchase Agreement (this
“Agreement”), . . . is entered
into among the shareholders listed on Appendix
A hereto (collectively,
International, Inc., a Delaware corporation
(“Buyer”), as representative of
the Sellers, Merrit Quarum (the “Sellers'
Representative”), and solely for the purposes
of Section 5.01 and Section 5.02, Merrit Quarum in his
individual capacity (the “Managing
(Declaration of Laura Salerno Owens, Dec. 20, 2018
(“Salerno Owens Decl.”), Ex. 1 at 5.) (emphasis
same time, Dr. Quarum and Mitchell entered into two other
contracts relevant here: an Earnout Agreement and an
Employment Agreement. (Compl. ¶¶ 5-6.) Under these
contracts, Mitchell agreed to pay Dr. Quarum in part through
earnout payments, and to hire Dr. Quarum as a full-time
employee. (Compl. ¶¶ 5-6.) The Employment Agreement
prevented Mitchell from terminating Dr. Quarum's
employment without cause before October 31, 2018, and
required six months of severance pay if Mitchell terminated
Dr. Quarum without cause after that date. (Compl. ¶ 6.)
and the Earnout Agreement contain the following
Any legal suit, action or proceeding arising out of or based
upon this Agreement, or the transactions contemplated hereby
may be instituted in the federal courts of the United States
of America or the courts of the state of Delaware in each
case located in Wilmington County, and each party irrevocably
submits to the exclusive jurisdiction of such courts in any
such suit, action or proceeding. . . . The parties
irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or any proceeding in such
courts and irrevocably waive and agree not to plead or claim
in any such court that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient
(Salerno Owens Decl., Ex. 1 at 55, 104-105.) The Employment
Agreement does not include a forum-selection clause. (Salerno
Owens Decl., Ex. 1.)
January 8, 2018, Mitchell terminated Dr. Quarum's
employment. (Compl. ¶ 11.) In response, Dr. Quarum sued
Mitchell in the Delaware Court of Chancery, alleging that
Mitchell breached the SPA and the Earnout Agreement by
failing to market and promote QMedtrix's products.
(Salerno Owens Decl., Ex. 2 at 5-8, 10-14.) On January 10,
2019, the Delaware Court of Chancery dismissed Dr.
Quarum's complaint for lack of subject matter
jurisdiction, and gave Dr. Quarum sixty days to transfer the
case to Delaware Superior Court. (Declaration of Thomas J.
Payne, Jan. 10, 2019, Ex. 1 at 15.) The parties indicated at
oral argument that the case is now pending in the Delaware
November 16, 2018, Dr. Quarum filed this case in Multnomah
Country Circuit Court, and ...