Judge: Kerry Bensinger, Case: 21STCV12551, Date: 2023-02-07 Tentative Ruling

Case Number: 21STCV12551    Hearing Date: February 7, 2023    Dept: 27

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

I.          BACKGROUND

             This action arises out of a personal injury matter litigated between Frank Perez (“Plaintiff”) and Carparts.com. The Plaintiff sued Carparts.com for personal injury from a fall Plaintiff suffered on March 23, 2021. Carparts.com (“Cross-Complainant”) subsequently filed a cross-complaint against nGroup, Inc. (“Cross-Defendant”) for (1) contractual indemnity, (2) breach of contract-duty to defend, (3) breach of contract, and (4) declaratory relief (See Motion to Dismiss p. 3 Lines 12-15).

            On December 23, 2022, Cross-Defendant filed the current Motion to Dismiss.

            On January 25, 2023, Cross-Complainant filed their Opposition.

            On January 31, 2023, Cross-Defendant filed their Reply.

II.        LEGAL STANDARD OF A MOTION TO DISMISS

            The controlling rule is § 410.30 of the Code of Civil Procedure, which states “when a court upon motion of a party or its own motion finds 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.” (§ 410.30, subd. (a).) In California, 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.’ The burden of proof is on the plaintiff, and the factors involved in traditional forum non conveniens analysis do not control. Instead, the 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.’ (Korman v. Princess Cruise Lines, Ltd. (2019) 32 Cal.App.5th 206, 213,

216).

III.       DISCUSSION

            Here, Cross-Complainant has met their burden of showing enforcement of the forum selection clause would be unreasonable under the circumstances of the case for two reasons. First, it is likely Cross-Complainant’s First Amended Cross-Complaint (“FACC”) would be time barred by Chapter 735 of the Illinois Rules of Civil Procedure. Second, Cross-Defendant has availed themselves sufficiently to California’s litigation procedures such that enforcing the forum selection clause now runs counter to the interest of substantial justice.

(1) Statute of Limitations for Contribution and Indemnity –

            Cross-Defendant argues in their Reply that Cross-Complainant will not be time barred because the applicable Illinois statute concerns claims for “contribution”, and Cross-Complainant’s claims are (1) contractual indemnity, (2) breach of contract-duty to defend, (3) breach of contract, and (4) declaratory relief. (Reply, 7:2-4). However, the statute reads “Sec. 13-204. Contribution and Indemnity”. (735 ILCS 5/13-204). A reasonable interpretation of the statute would lead one to believe a claim such as Cross-Complainant’s would fall well within the statute’s scope and be subject to the two-year statute of limitations. As both parties point out, this would mean Cross-Complainant would have until April 2, 2023, to obtain Illinois counsel, prepare another cross-complaint, and file it in the appropriate Illinois forum. (See Opposition 8:23-28 and Reply 6: 7-9). As to the Cross-Complainant’s claims, this endangers remedy and invites prejudice. 

(2) Cross-Defendant Has Availed Itself to California Litigation –

            Here, both parties arguments center on Trident Labs, Inc. v. Merrill Lynch Commercial Finance Corp. In Trident, (2011) 200 Cal.App. 4th 147, 150. In Trident Labs, Inc., Merrill Lynch sought dismissal through its forum selection clause. However, on appeal, the court denied dismissal, citing Merrill Lynch’s extensive use of California’s litigation machinery including: (1) multiple sets of discovery, (2) the filing of several motions, (3) taking numerous depositions, (4) filing for demurrer, and (5) continuing the case for 12 years. (See supra, Trident Labs, at 151). All before moving to dismiss under the forum selection clause it had in its loan agreement with the plaintiff Trident. (Id.). Cross-Defendant distinguishes this case from Trident Labs, Inc. arguing their availment is nowhere as extensive as Merrill Lynch’s. There, Merrill Lynch served seven sets of written discovery, engaged in procedural maneuvers, and filed two counterclaims. (Reply, 4: 13-20) Counter-defendant is correct, in arguing their own availment is not as extensive as Merrill Lynch’s, however, it is more than sufficient. The Court can analogize the facts in the instant case.

Here, Cross-Defendant has been party to the case since at least April of 2022 (See Carparts.com Inc.’s Notice of Motion to Continue Trial, filed on April 20, 2022). Instead of filing a motion to dismiss based on the forum selection clause then, Cross-Defendant has responded to written discovery and appeared at depositions (See Reply, 3: 7-11). Additionally Cross-Defendant has submitted filings to this very court, including a demurrer in May of 2022. Notably, none of those filings were a motion to dismiss until the instant motion.

The court retains discretion to refuse enforcement of a valid forum selection clause if a showing of enforcement of such a clause would be unreasonable. That showing has been made here.

IV.       CONCLUSION

In conclusion, Cross-Defendant’s Motion to Dismiss for Forum Non Conveniens Based On Mandatory Forum Selection Clause is: DENIED.

DATED: February 7, 2023.

                                                                         ___________________________

                                                                              Hon. Kerry Bensinger

                                                                              Judge of the Superior Court