Judge: Joel R Wohlfeil, Case: 37-2023-00004298-CU-WT-CTL, Date: 2023-10-06 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - October 04, 2023

10/06/2023  09:00:00 AM  C-73 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Joel R. Wohlfeil

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Civil - Unlimited  Wrongful Termination Motion Hearing (Civil) 37-2023-00004298-CU-WT-CTL MEHTA VS ONDEMAND VISIT INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion to Dismiss, 08/24/2023

The Motion (ROA # 20) of Defendants OnDemand Visit, Inc. and Priority Ambulance, LLC (collectively 'Defendants') for an order dismissing the Complaint of Plaintiffs Vishal Mehta and Ashish Mehta (collectively 'Plaintiffs') or, in the alternative, for an order staying this matter until it can be re-filed in the State of Delaware for forum non conveniens, is DENIED.

The Request (ROA # 29) for judicial notice ius GRANTED IN PART and DENIED IN PART. The Court takes judicial notice of the date only on which the Complaint was filed with the Court; otherwise, the Request is DENIED.

The Securities Purchase Agreement entered between the parties includes a choice of law provision stating that 'any dispute or controversy related to or arising, directly or indirectly, out of, caused by or resulting from this Agreement ... will be governed by and construed in accordance with the domestic Laws of the State of Delaware, without giving effect to any choice or conflict of Law provision or rule ...

that would cause the application of the Laws of any jurisdiction other than the State of Delaware.' In addition, the agreement contains a forum selection clause mandating 'EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT WITHIN THE STATE OF DELAWARE, AND ANY APPELLATE COURT HAVING JURISDICTION OVER APPEALS FROM ANY SUCH STATE OR FEDERAL COURT ....' Initially, it appears all the alleged claims potentially arise, are caused by, and result from, the securities purchase agreement. Plaintiffs would not have been hired as employees under separate employment contracts if not for the agreement to sell their company to Defendant Priority.

Defendant, on or before the last day to file a responsive pleading, may serve and file a notice of motion to stay or dismiss the action on the ground of inconvenient forum. Code Civ. Proc. 418.10(a).

Although California has a policy favoring access to its Court by resident Plaintiffs, that policy is satisfied where Plaintiff freely and voluntarily negotiates away his or her right to a California forum. CQL Original Products, Inc. v. National Hockey League Players' Assn. (1995) 39 Cal. App. 4th 1347, 1353.

No satisfying reason of public policy has been suggested why enforcement of a forum selection clause appearing in a contract should be denied when entered into freely and voluntarily by parties who have negotiated at arm's length. Id. (quoting Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal. 3d 491, 495, 496).

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3011626 CASE NUMBER: CASE TITLE:  MEHTA VS ONDEMAND VISIT INC [IMAGED]  37-2023-00004298-CU-WT-CTL Forum selection clauses are valid and may be given effect, in the Court's discretion and in the absence of a showing that enforcement of such a clause would be unreasonable. Id. Given the significance attached to forum selection clauses, the Court has placed a substantial burden on Plaintiff seeking to defeat such a clause, requiring him or her to demonstrate enforcement of the clause would be unreasonable under the circumstances of the case. Id. at 1354.

That is, that the forum selected would be unavailable or unable to accomplish substantial justice. Id. Moreover, in determining reasonability, the choice of forum requirement must have some rational basis in light of the facts underlying the transaction. Id. However, neither inconvenience nor additional expense in litigating in the selected forum is part of the test of unreasonability. Id. A forum selection clause will not be enforced if to do so will bring about a result contrary to the public policy of the forum. Id. The party opposing the enforcement of the forum selection clause bears the burden of proof. Id. On the other hand, California recognizes an exception to the general rule favoring enforcement of forum selection clauses. Grove v. Juul Labs, Inc. (2022) 77 Cal. App. 5th 1081, 1093.

The Court need not defer to the selected forum when deferring would substantially diminish the rights of California residents in a way that violates this state's public policy. Id. The exception applies if the claims at issue are based on unwaivable rights created by California statutes, and it places a burden on the party seeking to enforce the forum selection clause to show that litigating the claims in the contractually designated forum will not diminish in any way the substantive rights afforded under California law. Id. In Hall v. Superior Court (1983) 150 Cal. App. 3d 411, two California investors exchanged their interests in an oil and gas limited partnership in return for stock in one of their co-investors, Imperial Petroleum, Inc., a Utah corporation. The contract embodying the exchange agreement contained both forum selection and choice of law provisions identifying Nevada as the selected forum and governing law. A dispute arose, and the two investors sued Imperial in California. Imperial asserted the forum selection clause, and the trial court found the forum selection clause was enforceable.

In reversing the lower court's decision, the appellate court noted that where substantive law might be employed which would materially diminish rights of California residents in violation of California public policy, the forum selection clause would not be enforced. Id. at 416, 417.

An agreement designating a foreign law will not be given effect if it would violate a strong California public policy or result in an evasion of a statute of the forum protecting its citizens. Id. The Hall Court determined that if the pending securities litigation were transferred to Nevada where Nevada law would be applied, the plaintiffs would lose the benefit of California's Corporate Securities Law of 1968, which would otherwise govern the transaction in question. This California law was designed to protect the public from fraud and deception in securities matters, and includes an anti-waiver provision. Id. at 417, 418; see also America Online, Inc. v. Superior Court (2001) 90 Cal. App. 4th 1, 13 – 15.

In this action, it is undisputed that Plaintiffs will lose their right to a jury trial if this action is filed in Delaware Chancery Court, and will also not be able to assert a claim for punitive damages. It is unclear Calendar No.: Event ID:  TENTATIVE RULINGS

3011626 CASE NUMBER: CASE TITLE:  MEHTA VS ONDEMAND VISIT INC [IMAGED]  37-2023-00004298-CU-WT-CTL whether Delaware law permits for the assertion of claims that are similar to claims premised on California's Fair Employment and Housing Act and California's Labor Code sections 201, et seq. These laws set forth fundamental California public policy, and the loss of these claims would materially diminish Plaintiffs' rights as California residents. Defendants, as the party seeking to enforce the forum selection clause, have the burden to show that litigating the claims in the contractually designated forum will not diminish in any way the substantive rights afforded under California law. They have not satisfied this burden.

In an effort to salvage this Motion, the reply seeks the alternative relief of only sending part of this action to Delaware, and staying selected claims. However, this request is problematic because partial relief was not set forth in the notice of this Motion such that it cannot be entertained by this Court.

Defendants do not specify exactly which of the 32 causes of action are sufficiently related to the Securities Purchase Agreement such that the claims should be litigated in Delaware. Presumably, causes of action 27 - 30 should be litigated in Delaware, but it is not clear what additional claims are also related, or should instead be litigated in California.

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