Judge: Joseph Lipner, Case: 23STCV07332, Date: 2023-08-29 Tentative Ruling

Case Number: 23STCV07332    Hearing Date: August 29, 2023    Dept: 72

Defendants BXK Capital Nova Fund GP, LLC (“BXK Capital”), Vala Javahery, and Does 1 through 10 including BXK Capital Nova Fund LP (“Nova Fund”) (collectively “Defendants”) move to dismiss the action for Forum Non Conveniens or in the alternative stay the action based on Forum Non Conveniens.

The Court GRANTS Defendants’ Motion to Dismiss the action for Forum Non Conveniens.

Background

This is an action arising out of Dr. Nima Astaraee’s role as a limited partner and BXK Capital’s role as a general partner in the Nova Fund governed by Delaware Revised Uniform Limited Partnership Act and a limited partnership agreement (“LPA”) where both parties agreed to be bound by the LPA’s forum selection clause.

The Nova Fund is a limited partnership that was organized and filed with the Delaware Secretary of State on August 19, 2021. (Motion, Ex. 2.) The Nova Fund was organized and formed under the Delaware Revised Uniform Limited Partnership Act. (LPA Ex. 1 at Art. 1) The Nova Fund drafted and finalized the LPA on September 1, 2021. (LPA, Ex. 1) Dr. Nima Astaraee is a shareholder of Astaraee Dental Corp, which applied to be a limited partner on September 17, 2021, through its shareholder Dr. Nima Astaraee.

The LPA includes a mandatory forum selection clause which states that the parties “irrevocably” consent to jurisdiction in Delaware federal and state courts.  (LPA Ex. 1 at Art. XII §12.06.)  The clause says: “Said courts will have sole and exclusive jurisdiction over any and all claims, controversies, disputes and actions which in any way relate to this agreement or the subject matter of this agreement.”  (Ibid.)  Defendants assert that Dr. Nima Astaraee and Astaraee Dental Corp. consented to the Nova Fund’s mandatory Delaware forum selection clause when they entered into the LPA on September 17, 2021. (LPA Ex. 1.) 

            On June 13, 2023, Plaintiffs Nima Astaraee and Astaraee Dental Corp. (“Plaintiffs”) filed an Opposition to Defendants’ Motion to Dismiss. The Plaintiffs argue that the forum selection clause is unreasonable because (1) Vala Javahery is not a party to the LPA, (2) Plaintiffs were fraudulently induced by Defendants to enter the LPA and should not be bound to its forum selection clause, and (3) every party named in the litigation is a California resident, California company and Plaintiffs’ harm occurred in the state of California.

Legal Standard

A defendant may move to stay or dismiss an action on grounds of inconvenient forum.¿ (Code Civ. Proc., § 418.10,¿subd. (a)(2).)¿¿The doctrine of forum¿non¿conveniens¿is codified in Code of Civil Procedure, section 410.30.¿ (Animal Film, LLC v. D.E.J. Prods., Inc.¿(2011) 193 Cal.App.4th 466, 471 (Animal Film).)¿¿Code of Civil Procedure, section 410.30, subdivision (a) provides: “[w]hen a court upon motion of a party or its own motion 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.”¿ (Code Civ. Proc., § 410.30,¿subd. (a).)

Section 410.30 motions are proper for enforcing a forum-selection clause. (Grove v. Juul Labs, Inc. (2022) 77 Cal.App.5th 1081, 1090.) The modern trend is to enforce mandatory forum selection clauses. (Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 495.) If an agreement contains a mandatory forum selection clause, the test applied by courts is whether the application of the clause is unfair or unreasonable, and the clause is usually given effect. (Berg v. MTC Electronics Technologies (1998) 61 Cal.App.4th 349, 358.) Forum selection clauses are presumed valid under California law and the burden is on the party seeking to overturn the forum selection clause. (Schlessinger v. Holland America (2004) 120 Cal.App.4th 552, 558.) The opposing party must establish that enforcement of the clause would be unreasonable. (Berg, supra, 61 Cal.App.4th at p. 358.) Absent a mandatory forum selection clause, the traditional forum non conveniens analysis applies. (Animal Film, Inc. v. D.E.J. Productions (2011) Cal.App.4th 466, 471.)

Discussion

Defendants contend the instant action should be dismissed because the forum selection clause is mandatory, and Delaware is the proper forum. (Motion, p. 12-14.) Plaintiffs oppose the motion for several reasons.

Here, the forum selection clause in the LPA clearly states that Delaware has exclusive jurisdiction over claims which “in any way” relate to this agreement.  (LPA Ex. 1, Art. XII, Section 12.06.)  As such, the forum selection clause expressly provides that the action must be resolved exclusively in Delaware.

First, Plaintiffs oppose the forum selection clause as unreasonable because Vala Javahery did not sign the LPA. However, courts have found that a party failing to sign an agreement does not render the forum selection clause unenforceable. (See Lu v. Dryclean-U.S.A. (1992) 11 Cal.App.4th 1490; TAAG Linhas Aereas de Angola v. Transamerica, 915 F.2d 1351, 1354 (9th Cir. 1990); Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.3d 5019, 514 (9th Cir. 1988). Moreover, the Plaintiffs are mistaken because Vala Javahery’s signature as Manager on behalf of BXK Capital and Nova Fund can be found at the end of the LPA. (LPA Ex. 1, p. 74-75.) Vala Javahery’s signature is also found on the Certificate of Limited Partnership of Nova Fund. (LPA, Ex. 2). Accordingly, Vala Javahery is a party to the LPA acting in her capacity as a Manager of BXK Capital and Nova Fund, which renders the Forum Selection Clause enforceable against her.

Second, Plaintiffs claim they were fraudulently induced by Defendants to enter the LPA and should not be bound by the forum selection clause. Plaintiffs claim that “Defendants made a series of intentional misrepresentations and false promises to enter into the LPA and invest in the Nova Fund.” (Opposition at p. 5.)  Plaintiff has cited no case law that an allegation of intentional misrepresentation is sufficient to escape a forum selection clause. 

Lastly, the Plaintiffs argue that enforcement of the forum selection clause would be unreasonable because every party in litigation is a California resident, a California company, and the Plaintiffs’ harm occurred in California. However, Plaintiff’s argument essentially makes the case that it would be inconvenient to litigate in Delaware. Arguments that the “previously chosen forum is unfair or inconvenient are generally rejected.” (Berg, supra, 61 Cal.App.4th at p. 358). Moreover, mandatory forum-selection clauses are given effect regardless of the parties’ convenience. (Richtek USA, Inc v. UPI Semiconductor Corp. (2015) 242 Cal.App.4th 651, 661.) Because the LPA is governed under a mandatory forum selection clause, the clause is to be given effect even though it would be more convenient for the parties to litigate in California. Therefore, the Court will uphold the mandatory forum selection clause.

Conclusion

Therefore, the Court grants Defendants’ Motion to Dismiss the action for Forum Non Conveniens.

Defendants are ordered to provide notice and file a proof of service of such.