Judge: Douglas W. Stern, Case: 22STCV25074, Date: 2023-01-25 Tentative Ruling

Case Number: 22STCV25074    Hearing Date: January 25, 2023    Dept: 68

Roxana Sosa de Brizuela vs. Michael Hoagberg, et al., Case No. 22STCV25074

Forum Non Conveniens, or in the Alternative, Compel Arbitration

BACKGROUND

Plaintiff filed this action to obtain the return of her investment with Defendants since she was unable to obtain a green card, which was the main reason for her investment with Defendants. The terms of her investment agreement include a forum selection clause which gives the state or federal courts in Hennepin County, Minnesota, jurisdiction over matters pertaining to the investment agreement. (Hoagberg Decl., ¶ 10, Ex. B, ¶ 8.2.) All of the defendants live in or are headquartered in Minnesota. (Hoagberg Decl., ¶¶ 2-5.)

Defendants filed this motion to have the forum moved to Minnesota, or, in the alternative, to compel arbitration, per the terms of the investment agreement. (Hoagberg Decl., ¶ 9, Ex. A, ¶ 20.) Plaintiff opposes this motion, and claims that she did not enter into the agreement freely and voluntarily because she does not have a good understanding of English. (Opposition at pp. 3-4.) Defendants counter this by claiming that Plaintiff was represented in her negotiations regarding the investment agreement by English-speaking agents, and she was given an opportunity to review the materials of the agreement, and it was not presented to her on a take-it-or-leave-it basis. (Reply at pp. 6-7.)

ANALYSIS

Enforcement of a Forum Selection Clause

            Courts routinely dismiss or stay actions in California where, as here, the parties contractually agreed to resolve any disputes in a non-California forum. CCP Section 410.30(a) provides that a court “shall” stay or dismiss an action when it finds that an action “should be heard in a forum outside this state.” (See also CCP § 418.10(a)(2) (permitting defendant to move “[t]o stay or dismiss the action on the ground of inconvenient forum”).) Further, when the forum selection clause is mandatory, it “will ordinarily be given effect without any analysis of convenience; the only question is whether enforcement of the clause would be unreasonable.” (Intershop Commc’ns, AG v. Sup. Ct. (2002) 104 Cal.App.4th 191, 196; Lu v. Dryclean-U.S.A. of Cal., Inc. (1992) 11 Cal.App.4th 1490, 1493 (plaintiff has a “heavy burden” of demonstrating “that enforcement of the [mandatory forum selection] clause would be unreasonable under the circumstances of the case”).)

            Plaintiff agreed to a mandatory forum selection clause in the investment agreement requiring that “any claim, action or proceeding” be litigated in Minnesota:

“To the fullest extent permitted by applicable law, each of the Partners hereby agrees that any claim, action or proceeding by such Partner seeking any relief whatsoever against any Covered Person based on, arising out of, or in connection with this Agreement or the Partnership’s business or affairs shall be brought only in the state or federal courts sitting in Hennepin County, Minnesota, and not in any other court.” (Bold added.)

(Hoagberg Decl., ¶ 10, Ex. B, ¶ 8.2.)

            Defendants are covered persons under the agreement because they are either signatories to it or alter egos for the signatories. Additionally, the forum selection clause applies to Plaintiff’s claims because the claims all arise out of the investment agreement. Plaintiff has also not presented any evidence demonstrating that the agreement is unreasonable.

            Therefore, the forum selection clause should be enforced. Minnesota is the proper forum for this matter, and the question regarding arbitration should be decided there.  The Motion to dismiss is granted on the basis that this claim must be brought in the contractually identified forum.