Judge: Stephen P. Pfahler, Case: 23CHCV00809, Date: 2023-09-07 Tentative Ruling
Case Number: 23CHCV00809 Hearing Date: September 7, 2023 Dept: F49
Dept. F-49
Date: 9-7-23
Case # 23CHCV00809
Trial Date: Not Set
DISMISSAL OR STAY
MOVING PARTY: Defendant, Exclusive Property Services
RESPONDING PARTY: Plaintiff, Quadient Holdings USA, Inc.
RELIEF REQUESTED
Moton to Dismiss or Stay the Action
SUMMARY OF ACTION
On January 18, 2019, predecessor to plaintiff Quadient
Holdings USA, Inc., Mail Finance, Inc., and defendant Exclusive Property
Services, entered into a lease for postal meter equipment. The lease required
minimum monthly payments, as well as a “finance” agreement for the provision of
postage fee credit processed through the equipment. Plaintiff alleges Defendant
breached the lease by failing to make the required minimum monthly payment,
thereby leading to a declared default balance of $35,497.57.
On March 20, 2023, Plaintiff filed a complaint for Breach
of Contract, Open Book Account, Account Stated, Quatum Meruit, and Money Lent.
RULING: Granted.
Defendant Exclusive Property Services moves to dismiss or
stay the action on grounds that the underlying lease between the parties
contains a forum selection clause requiring any and all claims arising from the
lease brought in the state of Connecticut. Plaintiff in opposition contends
that the court may disregard the forum selection clause in the lease on grounds
of “substantial justice” as enforcement of the lease term is “unreasonable” and
“unfair.” Defendant in reply notes it actually seeks to enforce the agreement
notwithstanding the public policy proclamations of unreasonableness and unfairness
from Plaintiff. Defendant notes authority regarding a resident seeking to
challenge enforcement of a contract not drafted by the challenging party, but
lack of any authority regarding the subject scenario where the drafting party
seeks to undercut its own agreement. Defendant cites authority and legal maxims
effectively noting the presumption of interpreting the terms of contract
against the drafter. Defendant also contends the complaint was improperly filed
in the wrong jurisdiction in violation of the agreement.
The court assumes the instant action was filed in the
subject court due to the identification Defendant’s business address as Santa
Clarita. The existence of lease and Connecticut forum selection remains
undisputed. Paragraph 25 of the lease states:
“Choice of Law; Venue; and Attorney’s Fees. This Lease
shall be governed under the laws of the State of Connecticut, without regard to
conflicts of law, and jurisdiction shall lie exclusively in a court of
competent jurisdiction in New Haven County, Connecticut. In any litigation or
other proceeding by which one party either seeks to enforce its rights under
this Lease (whether in contract, tort, or both) or seeks a declaration of any
rights or obligations under this Lease, the prevailing party shall be awarded
its reasonable attorney fees, and costs and expenses incurred.”
[Complaint, Ex. A.]
“When 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).)
“‘California
favors contractual forum selection clauses so long as they are entered into
freely and voluntarily, and their enforcement would not be unreasonable.
[Citation.] This favorable treatment is attributed to our law's devotion to the
concept of one's free right to contract, and flows from the important practical
effect such contractual rights have on commerce generally.’ (Citation).) [¶] A mandatory
forum selection clause … is generally given effect unless enforcement would be
unreasonable or unfair. (Citations.) ‘Mere inconvenience or additional expense is not the
test of unreasonableness ... for a mandatory forum selection clause.’ A clause
is reasonable if it has a logical connection with at least one of the parties
or their transaction. (Citations.)
‘Nonetheless,
“California courts will refuse to defer to the selected forum if to do so would
substantially diminish the rights of California residents in a way that
violates our state's public policy.” (Citations.) [¶] The party opposing enforcement of a forum selection
clause ordinarily ‘bears the ‘substantial’ burden of proving why it should not be enforced.” (Citations.) That burden,
however, is reversed when the claims at issue are based on unwaivable rights
created by California statutes. In that situation, the party seeking to enforce
the forum selection clause bears the burden to show litigating the claims in
the contractually-designated forum ‘will not diminish in any way the
substantive rights afforded ... under California law.’ (Citations.)”
(Verdugo
v. Alliantgroup, L.P. (2015) 237
Cal.App.4th 141, 146–147.)
Plaintiff in opposition maintains the injustice
occurs, due an effective waiver of the open book account cause of action, and
sought after recovery of attorney fees under Civil Code section 1717.5.
Plaintiff exclaims: “THIS IS AN OBLIGATION IMPOSED SOLELY BY CALIFORNIA LAW!” [Opposition,
4:10-11.] As addressed in the reply to the motion, as well as the public policy
of the law summarized in the standard, the law against enforcing forum
selection clauses applies to California residents potentially subject to
foreign jurisdiction enforcement. In the instant action, Plaintiff presents no
indication it operates as a California headquartered company, thereby somehow
establishing an equitable basis of consideration on this ground. In fact,
Plaintiff is identified as a Delaware corporation. Furthermore, the court
cannot disregard that the actual California resident, Defendant, in fact seeks
enforcement of the forum selection clause.
Notwithstanding this unique juxtaposition of an
otherwise commonly presented issue, e.g. the enforcing party challenges its own
enforcement clause, the court considers the implications of seeking enforcement
in New Haven Connecticut. The court accepts the representation of no specific
authority on this particular subject matter. Plaintiff apparently concedes to
the situation as well, and instead relies on the doctrine of forum non
conveniens in support of the argument.
“Forum non conveniens is an equitable doctrine invoking the
discretionary power of a court to decline to exercise the jurisdiction it has
over a transitory cause of action when it believes that the action may be more
appropriately and justly tried elsewhere.” (Stangvik
v. Shiley Inc. (1991) 54 Cal.3d 744, 751.)
A motion moving for a stay based on the doctrine of forum non conveniens
requires a two step inquiry by the court: Determination of “whether the
alternate forum is a ‘suitable’ place for trial” followed by consideration of
the “private interests of the litigants and the interests of the public in
retaining the action for trial in California.”
(Id.) “‘[U]nless the balance is strongly in favor
of the defendant, the plaintiff's choice of forum should rarely be disturbed.’
[Citations.]” (Ford Motor Company v. Insurance Company of North America (1995) 35
Cal.App.4th 604, 610-611.)
“[A] forum is suitable if the defendant is amenable to
process there, there is no procedural bar to the ability of courts of the
foreign jurisdiction to reach the issues raised on their merits (or, if there
is, the advantage of the bar-typically, the statute of limitations-is waived by
defendants), and adjudication in the alternative forum is by an independent
judiciary applying what American courts regard, generally, as due process of
law.” (Boaz v. Boyle & Company, Inc. (1995) 40 Cal.App.4th 700, 711; Chong v. Superior Court (1997) 58
Cal.App.4th 1032, 1036-1037.) “The
inquiry is not whether [Connecticut] provides a better forum than []
California, but whether California is a seriously inconvenient forum
[Citation.].” (Ford Motor Company v. Insurance
Company of North America, supra,
35 Cal.App.4th at p. 611.)
The moving party bears the burden of proof. (Stangvik v. Shiley Inc., supra, 54
Cal.3d at p. 751; Campbell v.
Parker-Hannifin Corporation (1999) 69 Cal.App.4th 1534, 1541.) In the
instant case, given the motion is not based on forum non conveniens, but
opposed on this ground, the court finds the burden of proof on Plaintiff as the
challenging party. (Korman v. Princess Cruise
Lines, Ltd. (2019) 32 Cal.App.5th 206, 214;
Global Packaging, Inc. v. Superior Court (2011) 196 Cal.App.4th 1623, 1633.)
Private interests require examination of factors making “the
trial and the enforceability of the ensuing judgment expeditious and relatively
inexpensive, such as the ease of access to sources of proof, the cost of
obtaining attendance of witnesses, and the availability of compulsory process
for attendance of unwilling witnesses. . . .
[P]ublic interest factors include avoidance of overburdening local
courts with congested calendars, protecting the interests of potential jurors
so that they are not called upon to decide cases in which the local community
has little concern, and weighing the competing interests of California and the
alternate jurisdiction in the litigation.”
(Stangvik v. Shiley Inc., supra, 54
Cal.3d at p. 751.)
Again, the argument focuses on the attorney fee
provision and one of the common count causes of action, but otherwise offers limited
address of the substantive requirements. The opposition instead depends on
essentially conclusive citations. (See Korman
v. Princess Cruise Lines, Ltd., supra,
32 Cal.App.5th at p. 214; Global Packaging, Inc. v.
Superior Court (2011) 196 Cal.App.4th
1623, 1633; Cal-State Business Products
& Services, Inc. v. Ricoh (1993) 12
Cal.App.4th 1666, 1680.)
Given the forum selection clause requires lessor
bring all contract based causes of action in New Haven Connecticut, and
actually includes the attorney fee recovery provision, it’s not clear on what LEGAL
BASIS Plaintiff supports the outcry of improper waiver based on preclusion
under Connecticut state law. The opposition lacks any address of Connecticut
state law, which under the standard behooves Plaintiff to thwart the
insufficiency of Connecticut state law, and any other factors, as a form of
counterpoint highlighting the favorability for sought after California enforcement.
In other words, nothing in the opposition provides any legal support for the
preclusion of the recovery of attorney fees or a common count cause of action
under Connecticut state law. Even if some or all of the common count claims
were precluded, the opposition further lacks any showing of material prejudice
due to a required proceeding with this approximately $35,000 collection case
under whatever available legal avenues exist in Connecticut law brought by a
Delaware corporation [Comp., ¶ 1].
Thus, even assuming the propriety of Plaintiff’s challenge
to its own forum selection clause on grounds of forum non conveniens to a
California defendant seeking enforcement of the forum selection clause against
a Delaware corporation, the court finds the lack of any address of the public
and private standards fails to establish any basis for remainder in a
California court. As stated above, mere convenience in no way constitutes a
basis for California jurisdiction given the forum selection clause. (Verdugo v. Alliantgroup, L.P., supra, 237 Cal.App.4th at pp. 146–147.)
The court
finds no basis for stay, and dismisses the entire collection action.
Defendant
to give notice.