Camino Real Collision Center v. Boltek International

Filed 9/25/07 Camino Real Collision Center v. Boltek International CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

APPEAL from the judgment of the Superior Court of Los Angeles County. Jerry K. Fields, Temporary Judge. (Pursuant to Cal. Const., art. VI,  21.). Affirmed.

James A. Shalvoy for Plaintiff and Appellant.

No appearance by Defendants and Respondents.

____________________________

Camino Real Collision Center (Camino) appeals from the trial courts enforcement of a contracts forum selection clause to dismiss Caminos lawsuit against Boltek International, Inc. and its president. We affirm.

FACTS AND PROCEEDINGS

In 2005, appellant Camino filed a lawsuit for breach of contract against respondents Boltek International, Inc., a company based in Pennsylvania, and its president, Antonello Boldrini. Under the contract, Boltek had promised to finance and install two automobile painting booths in Caminos body shop in the Los Angeles suburb of Pico Rivera. Appellants complaint alleged respondents breached the contract by failing to do what they had promised.

Respondents moved to dismiss the complaint, arguing the contract obligated appellant to file its lawsuit in Pennsylvania. A forum selection clause in the contract stated: Parties agree that venue and jurisdiction shall reside in Wilkes-Barre, Luzerne County, Pennsylvania with regard to any dispute, controversy or claim arising out of or under this contract.

Appellant opposed the motion to dismiss. It noted the contract had a one-sided attorneys fee provision awarding attorneys fees to respondents if they won an action for breach of contract, but did not award attorneys fees to appellant if appellant prevailed. The provision stated: It is agreed that the seller [Boltek] is entitled to recover in addition to any damages caused by breach of said contract by the buyer [Camino] reasonable attorneys fees and court costs. Appellant argued California public policy as embodied in Civil Code section 1717 required mutuality in attorneys fees provisions; Pennsylvania, according to appellant, did not have a similar requirement. Because contracting parties cannot waive the mutuality requirement of section 1717 (see  1717, subd. (a)), appellant asserted that forcing it to file its lawsuit in Pennsylvania violated public policy by denying appellant the benefit of that statute.

The court disagreed, holding section 1717 did not embody a strong California public policy. Accordingly, it found the contracts forum selection clause was enforceable and dismissed appellants complaint. This appeal followed.

STANDARD OF REVIEW

We review the trial courts enforcement of the forum selection clause for abuse of discretion. (Schlessinger v. HollandAmerica, N.V. (2004) 120 Cal.App.4th 552, 557; but see Intershop Communications v. Superior Court (2002) 104 Cal.App.4th 191, 198-199 [noting courts disagree whether standard of review is abuse of discretion or substantial evidence].)

DISCUSSION

Section 1717 advances an important California public policy of ensuring equal access to the courts. (ABF Capital Corp. v. Grove Properties Co. (2005) 126 Cal.App.4th 204, 214.) Reflecting its importance as a strongly held public policy, section 1717s mutuality provision cannot be waived. ( 1717, subd. (a); Ribbens Intern., S.A. de C.V. v. Transport Intern. Pool, Inc. (C.D.Cal. 1999) 47 F.Supp.2d 1117, 1122 (Ribbens).) Our research appears to confirm Pennsylvania does not impose mutuality on contractual attorneys fees provisions. (Zavecz v. Yield Dynamics, Inc. (3d Cir. PA 2006) 179 F.Appen. 116, 119 (Zavecz); Ribbens, at p. 1119 fn. 1; 42 Pa.C.S.A.  1726, 2503; 25A Standard Pa. Practice 2d (1981)  127:49.) Accordingly, enforcing the contracts forum selection clause to move appellants lawsuit to Pennsylvania potentially undermines California public policy involving attorneys fees.

Appellant correctly notes California courts do not enforce forum selections clauses if enforcement will frustrate public policy. (America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 12 [refusing to enforce forum selection clause that would waive non-waivable protection under California Consumers Legal Remedies Act (Civ. Code,  1751)]; Wimsatt v. Beverly Hills Weight etc. (1995) 32 Cal.App.4th 1511, 1520-1521 [same for Californias Franchise Investment law (Corp. Code,  31000 et seq.)]; Hall v. Superior Court (1983) 150 Cal.App.3d 411 [same for provisions of California securities law (Corp. Code,  25701)].) When a forum selection clause arguably threatens a public policy, the party trying to enforce the clause bears the burden of showing the other forum will honor that public policy. (America Online, Inc. v. Superior Court, supra, 90 Cal.App.4th at pp. 10-11; but see Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 753-754 fn. 5, 763-764 [the fact that an alternative jurisdictions law is less favorable to a litigant than the law of the forum should not be accorded any weight in deciding a motion for forum non conveniens provided, however, that some remedy is afforded.].)

Here, we conclude the trial court did not err in upholding the contracts forum selection clause because choice of law principles indicate Pennsylvania state courts will apply section 1717 to appellants lawsuit against respondents. In Ribbens, supra, 47 F.Supp.2d 1117, a business contract involving sale of property in California contained a choice of law provision stating Pennsylvania law governed the contract. (Id. at p. 1119.) Accordingly, the federal trial court sitting in California applied Pennsylvania law to a lawsuit alleging breach of the contract. The court did not, however, apply Pennsylvania law wholesale. Noting that choice of law principles permit laws from different jurisdictions to apply to different issues in the same lawsuit, the court singled out the contracts attorneys fee clause. (Id. at p. 1120.) It noted that California had a materially greater interest in requiring mutuality in attorneys fees in a lawsuit involving business and property in California than did Pennsylvania, which was merely the place of incorporation of one of the contracting parties. (Id. at pp. 1120-1122.) Consequently, Californias section 1717 applied to make the contracts attorneys fee provision mutual, notwithstanding the contracts choice of law provision adopting Pennsylvania law. (Id. at p. 1119.) The court reasoned that a one-sided attorneys fees clause contained in a California contract concerning California merchandise sold by a company doing substantial business in California from a California facility and to be received by the buyer in California is presumptively governed by California law, at least where, as here, no countervailing factors point strongly to another state having a more significant relationship to the issue. (Id. at p. 1122.)

Ribbens applied Californias choice of law principles, a posture admittedly different from here, where a Pennsylvania state court will presumably look to Pennsylvania choice of law rules. But, the one case we have found that applied Pennsylvania choice of law rules to attorneys fees did so in a way that echoed Ribbens. In Zavecz, supra, 179 Fed.Appx. at page 119 the federal circuit court of appeals for the Third Circuit found California law applied to a contract performed in California. The Third Circuit stated the district court properly applied Pennsylvania choice-of-law rules to determine that California law would govern the award of attorneys fees under the parties contractual fee-shifting provision. (Id. at p. 120; see Blain v. Smithkline Beecham Corp. (E.D.Penn. 2007) 240 F.R.D. 179, 194 [favorably citing Zavecz].)

In light of the reinforcing holdings of Ribbens and Zavecz and in the absence of any contradictory authority we conclude a Pennsylvania court is likely to apply the mutuality provision of section 1717. As the federal district court for the Eastern District of Pennsylvania noted when comparing choice of law rules in Pennsylvania and California, in Pennsylvania, a choice of law provision in a contract is given effect so long as the transaction bears a reasonable relationship to the state whose law is governing. [Citation.] Generally speaking, under California choice of law principles . . . . California law will not give force to a choice of law clause where the contract contains a provision which violates a strong California public policy. [Citation.] (Cottman Transmission Systems, Inc. v. Melody (E.D.Pa. 1994) 851 F.Supp. 660, 671.) The district courts harmonization of the law of both states leads us to conclude that a Pennsylvania state courts application of section 1717 which vindicates an important California public policy will not offend Pennsylvania law because California had a reasonable relationship to the contract. Accordingly, the trial court here did not abuse its discretion in enforcing the contracts forum selection clause to dismiss appellants complaint.

DISPOSITION

The judgment is affirmed. Each side to bear its own costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

RUBIN, J.

WE CONCUR:

COOPER, P. J.

FLIER, J.

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