Sanchez v. Valadez
| Citation | 36 F.3d 1103 |
| Decision Date | 08 June 1994 |
| Docket Number | No. 93-55048,93-55048 |
| Parties | NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. Juan SANCHEZ, Plaintiff-Appellant, v. Alberto Aguilera VALADEZ, a/k/a Juan Gabriel; Maria De La Paz Arcaraz, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
Before: FLETCHER, CANBY and HALL, Circuit Judges
Plaintiff appeals from the district court's dismissal of his action pursuant to a contractual forum selection clause. Plaintiff argues that the clause should not control because defendants acted fraudulently, had undue bargaining power, and threatened to have him jailed or worse if he came into the contractual forum to litigate. The district court found these reasons unpersuasive. We affirm.
On November 19, 1990, plaintiff Juan Sanchez filed this diversity action in the Central District of California, alleging claims for breach of contract and interference with contractual relations. The defendants are Alberto Aguilera Valadez (popularly known as "Juan Gabriel"), a performing artist who contracted with Sanchez to give four concerts in California and New Mexico in the summer of 1990, and Maria de la Paz Arcaraz, Valadez's agent. The concerts were never given; Sanchez alleged in his complaint that he stood ready to perform his obligations under the contract, but that Arcaraz thwarted him by not telling him until practically the eve of the first concert how, when, and where to pay an $80,000 balance still outstanding.
Defendants moved to dismiss the complaint, arguing that plaintiff had failed to allege performance of a condition precedent, and hence had failed to state a claim on which relief could be granted. The district court dismissed the action (1) for failure to state a claim on which relief could be granted; and (2) for improper venue, pursuant to a contractual forum selection clause. The latter ground for dismissal was brought to the court's attention for the first time in a "Supplement" filed by defendants the Friday before the Monday on which the motion to dismiss was noted.
In a memorandum disposition filed June 1, 1992, this court reversed the dismissal of Sanchez's complaint. This court held that the district court had erred in granting defendants' Rule 12(b)(6) motion, and had abused its discretion in granting the improper venue motion without affording Sanchez an adequate opportunity to respond. This court expressed no opinion on the merits of the motion to dismiss for improper venue, or on Sanchez's argument that enforcement of the forum selection clause would be unreasonable under the circumstances.
On remand, the district court ordered the parties to rebrief the motion to dismiss for improper venue. Defendants filed a new motion to dismiss, again relying on the contractual forum selection clause. That clause provides that
For the interpretation, fulfillment or rescission of this contract, the parties expressly submit themselves to the jurisdiction and competence of the Courts of Mexico City, Federal District, renouncing the jurisdiction that could correspond to them by reason of their present or future domicile or for any other circumstance.
(English translation).
Sanchez opposed the motion to dismiss, and filed an affidavit stating (1) that the contract did not represent his oral agreement with Arcaraz, but that he signed it because Arcaraz told him he could take it or leave it, and he was afraid he would not be able to recover costs he had already expended in promoting the concerts; (2) that when he asked defendants' secretary, Jesus Salaz, to return his money, Salaz told him he would have to come to Mexico to pursue his claims, and that if he did so, he would be put in jail, or would "disappear"; and (3) that he had learned that Valadez never intended to perform the concerts, but instead was using the contract as a pretext for severing his relationship with Arcaraz, which he later did.
Arcaraz filed an affidavit in reply, stating that she had never told Salaz or anyone else that Sanchez would be put in jail or would "disappear" if he came to Mexico, and that she had never threatened Sanchez in any way.
The district court found that the forum selection clause was enforceable. The court stated that it had "considered fully Plaintiff's arguments," but "f[ound] them to be unpersuasive." The court therefore granted defendants' motion to dismiss for improper venue, and denied plaintiff's motion to amend the complaint in order to add allegations consistent with those in his affidavit.
Plaintiff has timely appealed both rulings.
We review for an abuse of discretion the district court's order enforcing the forum selection clause and dismissing the case for improper venue. Spradlin v. Lear Siegler Management Servs., 926 F.2d 865, 867 (9th Cir.1991). In this circuit, federal law governs the validity of a forum selection clause. Id.; Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 512-13 (9th Cir.1988).
In The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), the Supreme Court held that a forum selection clause entered into by sophisticated parties after arm's-length negotiation was prima facie enforceable, and should be honored by the courts "absent some compelling and countervailing reason." Id. at 12. Both The Bremen and cases following it, however, have made it clear that in certain situations forum selection clauses will not be enforced. A forum selection clause may be set aside if the party challenging it can "clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching." 407 U.S. at 15. Likewise, the clause may be set aside if the party seeking to escape the provision "show[s] that trial in the contractual forum will be so gravely difficult and inconvenient that he will for all practical purposes be deprived of his day in court." Id. at 18; see also Pelleport Investors v. Budco Quality Theaters, 741 F.2d 273, 280 (9th Cir.1984). Sanchez argues that several of the exceptions to enforceability pertain in this case. Defendants contend that Sanchez has not made the "strong showing" which The Bremen requires of those challenging a forum selection clause. 407 U.S. at 15; see also Manetti-Farrow, 858 F.2d at 514.
Sanchez stated in his affidavit that Valadez never intended to perform the concerts. Standing alone, this allegation is clearly insufficient to set aside the forum selection clause. Spradlin, 926 F.2d at 868 ().
Sanchez goes further, however, and also imputes a motive to Valadez: Sanchez claims that Valadez entered into the contract in order to terminate his relationship with Arcaraz--which he has now done. But Sanchez does not...
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