Commerce Consultants Intern., Inc. v. Vetrerie Riunite, S.p.A., 88-7077

• Decision Date: 14 February 1989
• Docket Number: No. 88-7077,88-7077
• Citation: 867 F.2d 697
• Parties: COMMERCE CONSULTANTS INTERNATIONAL, INC., Appellant, v. VETRERIE RIUNITE, S.p.A., Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 697

867 F.2d 697

276 U.S.App.D.C. 81

COMMERCE CONSULTANTS INTERNATIONAL, INC., Appellant, v. VETRERIE RIUNITE, S.p.A., Appellee.

No. 88-7077.

United States Court of Appeals, District of Columbia Circuit.

Argued Nov. 22, 1988.

Decided Feb. 14, 1989.

Russell J. Gaspar, Washington, D.C., for appellant.

Dario Ceppi, New York City, for appellee. Mark C. Ellenberg and David F. Williams, Washington, D.C., also entered appearances for appellee.

Before EDWARDS, WILLIAMS, and FRIEDMAN, ^* Circuit Judges.

Opinion for the Court filed by Circuit Judge FRIEDMAN.

FRIEDMAN, Circuit Judge:

This is an appeal from an order dismissing, for improper venue, a breach of contract suit by an American corporation against the other party to the contract, an Italian corporation. Commerce Consultants Int'l v. Vetrerie Riunite, No. 87-2104 (Jan. 28, 1988, D.D.C.). The ground for dismissal was that, under the contract, suit could be brought only in an Italian court. We affirm.

I

A. The appellant, Commerce Consultants International, Inc. (Commerce Consultants), a District of Columbia corporation, entered into a written contract with Vetrerie Riunite, S.p.A. (Riunite), an Italian corporation, under which Commerce Consultants became Riunite's exclusive agent for the sale of Riunite's lenses in North America. The written agreement was drafted in English for Commerce Consultants by its employee Michael Galbraith, who was fluent in Italian, but not a lawyer. According to Galbraith's affidavit, Galbraith "was the sole person responsible for all of the relations between" the two companies.

The draft of the agreement that Galbraith sent to Riunite's representative in the negotiations, Rossi, contained the following provision:

13. The validity, enforceability and interpretation of this agreement shall be determined and governed by the laws of the District of Columbia, U.S.A.

In a letter that accompanied the agreement, written in Italian, Galbraith stated: "Of course, should you wish to modify any provision, we would be pleased to comply, based on your comments."

In response, Rossi stated in a Telex that his company was "in agreement with all points" except for two, one of which was (as translated into English by Galbraith):

Responsible will be the Verona court rather than the United States one.

Galbraith then redrafted paragraph 13 of the agreement to read:

13. The validity, enforceability and interpretation of this agreement shall be determined and governed by the appropriate court of Verona, Italy.

Galbraith sent the revised agreement to Rossi, and Riunite executed it.

B. More than a year after the contract was signed, Commerce Consultants filed in the district court a suit against Riunite alleging that Riunite had breached the contract by itself selling its products in the United States, in violation of Commerce Consultants' appointment as Riunite's exclusive sales agent there, and by terminating the contract before its expiration date.

Riunite moved, pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure, to dismiss the complaint for improper venue, because under the contract such a suit could be maintained only in the courts of Verona, Italy. The district court granted the motion.

The court held that paragraph 13 of the "agreement is unambiguous and the product of fair arms-length bargaining," and that it was a "choice-of-forum clause" and not a "choice-of-law" provision. The court rejected Commerce Consultants' contention that "even if the contract language is construed as a choice-of-forum provision, it should not be enforced because under the Italian system for conducting civil cases, CCI would effectively be deprived of its day in court." Id., slip op. at 5. The court stated that "[t]he court sees no reason to believe that reliance on the Italian courts will depreive [sic] CCI of its day in court." Id. at 6. The court

conclude[d] that paragraph 13 of the parties' agreement of February 26, 1986 requires plaintiff's claims to be brought in the courts of Verona, Italy. Defendant's motion to dismiss this case for improper venue is granted.

Id.

II

The district court correctly held (A) that paragraph 13 of the contract was a choice-of-forum and not a choice-of-law clause, and (B) that enforcement of paragraph 13 to require that the case be brought in Italy was proper.

A. Paragraph 13 unambiguously specified where any litigation relating to the contract should be conducted and, by implication, what law should be applied in such case. It states that the "validity, enforceability and interpretation" of the contract "shall be determined" by the "appropriate court of Verona, Italy" and that in making that determination the law of that court shall govern. This clear language cannot be read, as Commerce Consultants would read it, as permitting suit in the United States and requiring only that in deciding that suit the American court would apply Italian law.

This interpretation of paragraph 13 is confirmed by the negotiation of that provision. As Mr. Galbraith originally drafted it, paragraph 13 designated the law of the District of Columbia as governing any question relating to the contract. In response to an objection by Riunite that it could not agree to the provision and that "the Verona court rather than the United States one" should be "[r]esponsible," Galbraith changed the provision, as he had indicated he would be willing to do, to conform it to Riunite's demand, i.e., that any litigation regarding the contract would be conducted in an Italian court.

In light of this clear language of paragraph 13 and the negotiations that produced it, Commerce Consultants cannot rely on the statement in Galbraith's affidavit, which was filed long after the contract was negotiated and as part of Commerce Consultants' response in opposition to Riunite's motion to dismiss, that:

I understood Mr. Rossi's statement to be a request from VR to change the substantive law that "determined and governed" the relationship from the laws of the District of Columbia to the laws that would be applied by the courts of Verona. It was in this sense that I understood the word "[r]esponsible" used in the telex.... I did not believe that the requested change had to do with the choice of forum for disputes, which was not addressed by the Paragraph.

... I accepted that the laws "governing and determining" the relationship would be the laws of the Court of Verona. However, I would have never agreed to the possibility of having to go to Italy to protect CCI's rights under the agreement, because I had often been told that Italy operates one of the most inefficient and unpredictable legal system [sic] in the Western world.

Apart from the fact that the language of paragraph 13 of the agreement as executed is clear, so that there is no occasion to refer to parol evidence to interpret it, Mr. Galbraith's position ignores the significant change made in the provision...