Judge: Maurice A. Leiter, Case: 23STCV31299, Date: 2024-03-18 Tentative Ruling

Case Number: 23STCV31299    Hearing Date: March 18, 2024    Dept: 54

Hearing Date: March 18, 2024

Department 54, Judge Maurice Leiter

Motion to Dismiss

Moving Party: Defendant Total Quality Logistics, LLC

Responding Party: Plaintiff Singleton Fisheries, Inc. dba Meridian Products

T/R:    DEFENDANT’S MOTION TO DISMISS IS DENIED.

            DEFENDANT to notice. 

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:30 am on the day of the hearing.

            The Court considers the moving papers, opposition, and reply.

BACKGROUND

            On December 22, 2023, Plaintiff Singleton Fisheries, Inc. dba Meridian Products sued Defendants Total Quality Logistics, LLC, alleging causes of action for: (1) breach of contract and (2) negligence. Plaintiff and Defendant entered a contract concerning orders of logistical transport; Defendant was to ensure the safe delivery of goods to Plaintiff’s customers. Plaintiff alleges that Plaintiff placed goods refrigerated seafood with Defendant to transport by truck from California to New Jersey. Defendant failed to maintain the refrigeration and the seafood was spoiled upon delivery.

            Before the Court is Defendant’s motion to dismiss the complaint pursuant to CCP § 418.10. The motion claims that the contract contains a mandatory forum selection clause requiring this dispute to be litigated in state court in Clermont County, Ohio.

ANALYSIS

On or before the last day of his or her time to plead, a defendant may file and serve a motion to stay or dismiss the action on the ground of inconvenient forum. (CCP § 418.10(a)(2).) “[I]n cases with a contractual forum selection clause, the burden of proof is on the plaintiff, the party resisting the motion.” (Intershop Communications v. Superior Court (2002) 104 Cal.App.4th 191, 198.) “[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.” (Ibid.) “The party’s burden on a motion to enforce a mandatory forum selection clause is to demonstrate that the contractually selected forum would be unavailable or unable to accomplish substantial justice or that no rational basis exists for the choice of forum.” (Id. at p. 199.) “Neither inconvenience nor the additional expense of litigating in the selected forum is a factor to be considered.” (Ibid.) “[A] forum selection clause will not be enforced if to do so would bring about a result contrary to the public policy of this state.” (Id. at p. 200.)

Usually, the party opposing a forum selection clause “bears the burden to show enforcement would be unreasonable or unfair, [however] the burden is reversed when the underlying claims are based on statutory rights the Legislature has declared to be unwaivable.” (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 144.) “In that instance, the party seeking to enforce the forum selection clause has the burden to show enforcement would not diminish unwaivable statutory rights, otherwise a forum selection clause could be used to force a plaintiff to litigate in another forum that may not apply California law.” (Id. at p. 144-45.)

“[T]he fundamental public policy of California indeed does mandate reciprocal treatment of a unilateral contractual attorney fees provision.” (ABF Capital Corp. v. Grove Properties Co. (2005) 126 Cal.App.4th 204, 214.) Civ. Code § 1717 “make[s] reciprocal any provision awarding attorney’s fees regardless of any wording purporting to make the right unilateral.” (Wilson’s Heating & Air Conditioning v. Wells Fargo Bank (1988) 202 Cal.App.3d 1326, 1332.) “As a statutory modification of unilateral attorneys’ fees provisions, section 1717 was designed to accomplish mutuality of remedy.” (Smith v. Krueger (1983) 150 Cal.App.3d 752, 756.)

The contract provides that “[t]he state courts located in Clermont County, Ohio shall have exclusive and irrevocable jurisdiction and shall be the exclusive venue with respect to any claim, counterclaim, dispute or lawsuit arising in connection with any transactions, loads, or other business between Total Quality Logistics and Customer.” (Bostwick Decl., ¶ 3; Exh. A at ¶ 11.)

The parties do not dispute that the forum selection clause is mandatory or that the forum selection clause covers the claims raised in the complaint. Plaintiff contends that litigation in Ohio would deprive Plaintiff of the right to reciprocal treatment under the attorney’s fees clause at issue, which is held to be a fundamental California public policy.

The attorney’s fees provision in the contract states that “[if] TQL utilizes the services of a collection agency or attorney to collect any amounts due, Customer agrees to pay all associated collection costs, attorney fees, and court costs.” (Bostwick Decl., ¶ 3; Exh. A at ¶ 5.) In other words, if Defendant uses an attorney or collection agency to collect any amounts due, Plaintiff will be responsible for such collection costs, attorney fees, and court costs. On its face, the attorney’s fees provision in the contract is unilateral.

Plaintiff is suing Defendant pursuant to the contract. If this Court were to dismiss this action and it is brought in Ohio, Defendant might initiate a claim or counterclaim against Plaintiff court which would invoke the attorney’s fees provision.

The issue here is whether Ohio law provides for mutuality of remedy for attorney’s fees. Neither Plaintiff nor Defendant have provided any legal authority concerning reciprocity of attorney’s fees under Ohio law. Ohio courts apparently will uphold a contractual agreement that contains a one-sided attorney’s fees provision. (Wilborn v. Bank One Corp. (2009) 121 Ohio St.3d 546, 548-549.) But the public policy of California mandates reciprocal treatment of a unilateral attorney’s fees provision, under ABF Capital Corp. v. Grove Properties Co., supra, 126 Cal.App.4th 204, 214.

Plaintiff seeks attorneys’ fees in the complaint. Enforcing the forum selection clause in these circumstances is inappropriate. Defendant has not shown that enforcing the forum selection clause would not diminish the statutory rights set forth in Civ. Code § 1717.

The motion to dismiss is DENIED.