Judge Lee W. Tsao, Case 22NWCV00829 2023-01-26 Tentative Ruling

Judge: Lee W. Tsao, Case: 22NWCV00829, Date: 2023-01-26 Tentative Ruling

Case Number: 22NWCV00829 Hearing Date: January 26, 2023 Dept: C

ARDITO v. FOREST RIVER, INC.

CASE NO.: 22NWCV00829

HEARING: 01/26/23

TENTATIVE ORDER

Defendant FOREST RIVER, INC.’s Motion to Dismiss for Inconvenient Forum is DENIED. The Alternative Motion to Stay this Action for Inconvenient Forum is GRANTED.

Moving Party to give Notice.

Defendant FOREST RIVER, INC. (“Defendant”) moves to dismiss the action under CCP §418.10, arguing that the parties are bound to litigate their claims in Indiana under the forum selection clause contained in the Forest River Limited Motorized Warranty, which accompanied the Forest River vehicle purchased by Plaintiff. Defendant maintains that Plaintiff signed a document entitled “Forest River, Inc. Customer Delivery and Warranty Registration Form” wherein he confirmed the following: “I have had the opportunity to review THE FOREST RIVER, INC. LIMITED WARRANTY….” (Evans Decl., Ex. B.) Consequently, Defendant argues that this agreement is mandatory, and that the agreement requires application of Indiana law.

The forum selection clause at issue states: “EXCLUSIVE JURISDICTION FOR DECIDING LEGAL DISPUTES RELATING TO THIS LIMITED WARRANTY, AN ALLEGED BREACH OF WARRANTY, BREACH OF IMPLIED WARRANTIES, OR REPRESENTATIONS OF ANY KIND MUST BE FILED IN THE COURTS WITHIN THE STATE OF INDIANA.” (Evans Decl., Ex. C.)

A “mandatory [forum selection] clause will ordinarily be given effect without any analysis of convenience; the only question is whether enforcement of the clause would be unreasonable. On the other hand, when the clause merely provides for submission to jurisdiction and does not expressly mandate litigation exclusively in a particular forum, then the traditional forum non conveniens analysis applies.” (Intershop Communications A.G. v. Superior Court (2002) 104 Cal.App.4th 191, 196.) “[I]f there is a mandatory forum selection clause, the test is simply whether application of the clause is unfair or unreasonable, and the clause is usually given effect… ‘Mere inconvenience or additional expense is not the test of unreasonableness…’ of a mandatory forum selection clause.” (Berg v. MTC Electronics Technologies (1998) 61 Cal.App.4th 349, 358-359.)

“Given the importance of forum selection clauses, both the United States Supreme Court and the California Supreme Court have placed a heavy burden on a plaintiff seeking to defeat such a clause, requiring it to demonstrate that enforcement of the clause would be unreasonable under the circumstances of the case.” (Lu v. Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490, 1493.) “[T]he selected jurisdiction must be ‘suitable,’ ‘available,’ and able to ‘accomplish substantial justice.’” (America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 12.)

Plaintiff’s Complaint asserts the following causes of action: (1) Breach of Implied Warranty; (2) Breach of Express Warranty; (3) Violation of the Song-Beverly Act; and (4) Violation of Uniform Commercial Code.

Here, the contract terms at issue provide for mandatory jurisdiction in Indiana. Therefore, the Court will limit its analysis to determining whether its enforcement is unreasonable given the circumstances of this case. This requires a showing that “the forum selected would be unavailable or unable to accomplish substantial justice.” (Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 494.) California’s public policy favoring residents’ access to its court is not thwarted when residents surrender this right voluntarily in the course of negotiating a contract. A forum selection clause will only be disregarded if it is the result of overreaching or the unfair use of unequal bargaining power or if the forum chosen by the parties would be a seriously inconvenient one for the trial of the action. There is no public policy which would compel denial of a forum selection clause in a contract which has been entered into freely and voluntarily by the parties who have negotiated at arms’ length. Thus, forum selection clauses may be given effect in the court’s discretion and in the absence of a showing that enforcement would be unreasonable. (See CQL Original Products, Inc. v. NHL Players Assoc. (1995) 39 Cal.App.4th 1347.)

Where forum selection clauses are presumptively valid and may be given effect absent a showing that enforcement of such a clause would be unreasonable—the crux of the instant motion lies in determining whether the underlying forum selection clause is unreasonable.

In order to ensure that enforcement would not be unreasonable or unfair, Moving Party’s Counsel is ORDERED to prepare a Stipulation to be signed by both parties stating that the Song-Beverly Act will apply to Plaintiff’s claims in Indiana. The execution of this Stipulation will ensure that Plaintiff’s unwaivable statutory rights will not be diminished.

Additionally, by staying this action, rather than dismissing it— if the Indiana court refuses to apply the Song-Beverly Consumer Warranty Act, Plaintiff can return to this Court and request that the stay be lifted.

Upon the execution of the above stipulation, the Court has no basis to determine that enforcement of the forum selection clause would be unfair and/or unreasonable.

The Motion to Dismiss is DENIED. The Alternative Motion to Stay is GRANTED.