Judge Gary I. Micon, Case Number: 23CHCV02259, Date: 2024-07-08 Tentative Ruling

Judge: Gary I. Micon, Case: 23CHCV02259, Date: 2024-07-08 Tentative Ruling

Case Number: 23CHCV02259 Hearing Date: July 8, 2024 Dept: F43

Dept. F43

Date: 7-8-24

Case #23CHCV02259, Hollis Frederick vs. Thor Motor Coach, Inc., et al.

Trial Date: 4-14-25

MOTION TO STAY ACTION

MOVING PARTY: Defendant Thor Motor Coach, Inc., joined by Stier’s RV Centers, LLC

RESPONDING PARTY: Plaintiff Hollis Frederick

RELIEF REQUESTED

Defendant has requested that the Court stay this action based on a forum selection clause.

RULING: Motion to stay is granted.

SUMMARY OF ACTION

Plaintiff Hollis Frederick (Plaintiff) purchased a new 2022 Thor recreational vehicle, made by Defendant Thor Motor Coach, Inc., (Thor) in August 2022. Plaintiff purchased the vehicle from Defendant Stier’s RV Centers, LLC, (Stier’s RV) in Santa Clarita. On July 31, 2023, Plaintiff filed this action in Los Angeles County, alleging warranty-based causes of action under the Song-Beverly Act.

Both the warranty registration form that Plaintiff signed before he purchased the vehicle and the limited warranty that Plaintiff signed when he bought the vehicle contained forum selection clauses. Both of those documents indicated that the proper forum for legal disputes involving the warranty was the state of manufacture, which was Indiana. The clause in the limited warranty reads as follows:

“EXCLUSIVE JURISDICTION FOR DECIDING LEGAL DISPUTES RELATING TO ALLEGED BREACH OF EXPRESS WARRANTY AND BREACH OF IMPLIED WARRANTIES ARISING BY OPERATION OF LAW AS WELL AS THOSE RELATING TO REPRESENTATIONS OF ANY NATURE MUST BE FILED IN A STATE OR FEDERAL COURT WITHIN THE STATE OF MANUFACTURE, WHICH IS INDIANA.” (Capitalization in original.)

(Stanley Decl., Ex. C, pp. 9 and 12.)

On January 25, 2024, Thor filed this motion to stay based on the above forum selection clause. Thor is requesting that the action be stayed to allow Plaintiff to file his lawsuit in the proper forum in Indiana. Thor filed this motion pursuant to CCP § 410.30.

Stier’s RV, the seller of Plaintiff’s vehicle, filed a joinder to Thor’s motion on January 25, 2024. Stier’s RV joined the motion on the basis that it is sufficiently intertwined with the transaction to join in the request for stay.

ANALYSIS

Staying or dismissing a case based on a forum selection clause is allowable under CCP § 410.30, which provides that “When a court upon motion of a party…finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” (CCP § 410.30(a).)

Enforcement of a forum selection clause is accomplished by a motion to stay or dismiss based on forum non conveniens. (Olinick v. BMG Entertainment (2006) 138 Cal.App.4th 1286, 1294.) Because section 410.30 contains no specific time constraint on the filing of a motion based on forum non conveniens, courts will entertain motions to dismiss or stay under that statute so long as they are brought within a reasonable time under the circumstances of the case. (See Trident Labs, Inc. v. Merrill Lynch Commercial Finance Corp. (2011) 200 Cal.App.4th 147.) Thor argues that because this motion was filed within 21 weeks (less than five months) of when Thor filed its answer, then it is timely filed. The Court agrees.

Next, Thor argues that Plaintiff will not be able to satisfy his burden of demonstrating that the forum selection clause is unreasonable. The modern trends favors the enforceability of forum selection clauses. (See Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 495.)

Courts have also noted that “[forum selection] clauses provided a degree of certainty, both for business and their customers, that contractual disputes will be resolved in a particular forum. California courts routinely enforce forum selection clauses even where the chosen forum is far from the plaintiff’s residence.” (Net2Phone, Inc. v. Superior Court (2003) 109 Cal.App.4th 583, 588-589.)

Where forum selection clauses are mandatory, as the one in this case is, then “the test is simply whether application of the clause is unfair or unreasonable, and the clause is usually given effect. Claims that the previously chosen forum is unfair or inconvenient are generally rejected. A court will usually honor a mandatory forum selection clause without extensive analysis of factors relating to convenience.” (Berg v. MTC Electronics Technologies (1998) 61 Cal.App.4th 349, 358.)

The court in Trident Labs, Inc., supra, 200 Cal.App.4th 147, held that a plaintiff contesting the application of a mandatory forum selection clause bears the burden of proof and a traditional forum non conveniens analysis is not utilized: “‘[T]he forum selection clause is presumed valid and will be enforced unless the plaintiff shows that enforcement of the clause would be unreasonable under the circumstances of the case.’” (Id. at 154; See also, Intershop Communications v. Superior Court (2002) 104 Cal.App.4th 191, 196 [“A mandatory clause will ordinarily be given effect without any analysis of convenience; the only question is whether enforcement of the clause would be unreasonable”].)

Forum selection clauses are mandatory when the clause dictates the court in which a lawsuit must be brought. (See Intershop Communications, supra, 104 Cal.App.4th 191; see also Lu v. Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490.) The forum selection clause in this case states that legal disputes “must be filed in a state or federal court within the state of manufacture, which is Indiana.” Because the clause uses the word “must,” it is mandatory rather than permissive.

In this case, the forum selection clause in Thor’s Limited Warranty and Warranty Registration is mandatory. The burden is now on Plaintiff to demonstrate that enforcement of the clause is unreasonable. This burden requires Plaintiff to show more than inconvenience or increased expenses to him. If Plaintiff cannot meet this burden, then the Court will grant Thor’s motion and stay the action to allow Plaintiff to file this suit in Indiana.

Thor also argues that the forum selection clause is enforceable because it was provided at the time of sale. Even if Plaintiff did not read the clause or understand it, the clause is enforceable. (See Desert Outdoor Advertising v. Superior Court (2011) 196 Cal.App.4th 866, 872.)

Finally, Defendant argues that Plaintiff’s rights under the Song-Beverly Act will be preserved if this case goes forward in Indiana because Thor will stipulate by this motion that the Song-Beverly Act will apply to Plaintiff’s warranty claims pursued in Indiana and Thor will not oppose a request that the Indiana court utilize the Song-Beverly Act. California courts have previously endorsed a stipulation to preserve a plaintiff’s unwaivable rights in the context of a mandatory forum selection clause. (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141.) Thor argues that by agreeing to stipulate that the Song-Beverly Act will apply to Plaintiff’s claims in Indiana, Thor has eliminated any doubt and uncertainty about which law an Indiana court will apply to Plaintiff’s allegations. Thor argues that its request to stay, rather than dismiss, would allow Plaintiff to return to this Court if an Indiana court declines to apply Song-Beverly to his claims. (See Berg, supra, 61 Cal.App.4th 349.)

The forum selection clause indicating that any legal disputes based on the warranty must be heard in Indiana is not unreasonable. Based on the foregoing, the Court grants Defendant Thor’s motion to stay the case.

CONCLUSION

Defendant Thor’s motion to stay the case pursuant to the forum selection clause is granted. The action is stayed pending a status report showing that an action was filed in Indiana and that Defendant Thor accepted jurisdiction and did not oppose the utilization of the Song-Beverly Act. The date for the status report will be set at the hearing on this motion.

Moving party to give notice.