Bombardier Capital Inc. v. Progressive Marketing Group, Inc.

• Decision Date: 14 November 2001
• Docket Number: No. 4D01-663.,4D01-663.
• Citation: 801 So.2d 131
• Parties: BOMBARDIER CAPITAL INC., a Canadian corporation, Appellant, v. PROGRESSIVE MARKETING GROUP, INC., a Texas corporation, Appellee.
• Court: Florida District Court of Appeals

801 So.2d 131

BOMBARDIER CAPITAL INC., a Canadian corporation, Appellant, v. PROGRESSIVE MARKETING GROUP, INC., a Texas corporation, Appellee.

No. 4D01-663.

District Court of Appeal of Florida, Fourth District.

November 14, 2001.

Rehearing Denied December 26, 2001.

Robert M. Brochin and Erik W. Scharf of Morgan, Lewis & Bockius LLP, Miami, for appellant.

Reed A. Bryan of Law Office of Reed A. Bryan, Fort Lauderdale, for appellee.

OWEN, WILLIAM C., Jr., Senior Judge.

This non-final appeal is from an order denying appellant's motion to dismiss for improper venue. The motion was based on an unambiguous mandatory forum selection clause, contained in the contract documents out of which this litigation arose, which required any judicial proceeding arising therefrom to be brought only in a court located in the City and State of New York. We reverse.

Appellee, Progressive Marketing Group Inc. ("Progressive"), a Texas corporation, purchased an aircraft in California. Financing of the purchase was provided by appellant, Bombardier Capital, Inc. ("BCI"), a Massachusetts corporation, with its principal place of business in Vermont, but having a servicing agent in New York. The relevant sales and financing documents out of which this dispute arose contained a provision requiring any judicial proceedings with respect thereto be brought exclusively in certain New York courts. Further, the documents provided that each of the parties accepted, generally and unconditionally, the exclusive jurisdiction of such courts and irrevocably waived any objection as to the venue of such suit. The forum selection clause concluded, in bold-faced capitalized text, with the following language:

ANY JUDICIAL PROCEEDING BY PURCHASER AGAINST SELLER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT SHALL BE BROUGHT ONLY IN A COURT LOCATED IN THE CITY AND STATE OF NEW YORK.

Some year and a half later, during which time BCI had relocated its loan servicing agent from New York to Florida, a dispute arose between the parties over certain rights and obligations under the loan documents, culminating in appellee filing this suit in the Circuit Court of Broward County. Appellant moved to dismiss for improper venue, relying on the forum selection clause in the contract documents. The court found the forum selection clause mandatory. Nonetheless, it denied the motion on the reasoning that the parties' selection of a New York forum contemplated that BCI would have its principal place of business in New York, and because BCI was no longer located in New York the forum selection clause was no longer appropriate.

Forum selection clauses are presumptively valid and "should be enforced in the absence of a showing that enforcement would be unreasonable or unjust." Manrique v. Fabbri, 493 So.2d 437, 440 (Fla.1986)¹; accord, Am. Online, Inc., v. Booker, 781 So.2d 423, 425 (Fla. 3d DCA 2001); Mgmt. Computer Controls, Inc. v. Charles Perry Constr., Inc., 743 So.2d 627, 631 (Fla. 1st DCA 1999). Here, however, the trial court did not find, nor did appellee make a showing, that enforcement would be unreasonable or unjust. Instead, the court attempted to avoid enforcing the mandatory forum selection clause by the simple expedient of finding that the parties intended that the forum selection clause would not be binding if BCI was no longer located in New York. Based on that construction, and on the fact that BCI was now located in Florida, the court held that the clause was inapplicable. In doing so, the court erred.

The interpretation or construction of a contract is a matter of law and an appellate court is not restricted from reaching a construction contrary to that of the trial court. Khosrow Maleki, P.A. v. M.A. Hajianpour, M.D., P.A., 771 So.2d 628, 630-31 (Fla. 4th DCA 2000). The polestar guiding the court in the construction of a written contract is the intent of the parties. Blackhawk Heating & Plumbing Co., Inc. v. Data Lease Fin. Corp., 302 So.2d 404, 407 (Fla.1974); Bennett v. Williams, 149 Fla. 4, 5 So.2d 51, 51 (1941). Where, as here, the language used is clear and unambiguous the parties' intent must be garnered from that language, Hamilton Constr. Co. v. Board of Public Instruction of Dade County, 65 So.2d 729, 731 (Fla.1953); Khosrow, 771 So.2d at 631, and not from extrinsic evidence. There is nothing in the unambiguous contract language that would support an inference that the parties intended their forum selection clause to apply only if BCI was located in New York. The fact that BCI was no longer located in New York is irrelevant and has no effect on the forum selection clause.

Nonetheless, appellee argues that the trial court's decision should be affirmed if it is correct for whatever reason. See Applegate v. Barnett Bank of Tallahassee, 377 So.2d 1150, 1152 (Fla.1979). Appellee contends the trial court order denying the motion to dismiss is correct because it made a showing that it fit within three recognized exceptions to enforcement of contractual forum selection clauses, i.e., (1) where the forum selection clause is tainted by fraud, (2) where the forum selection clause is the product of overwhelming bargaining power on the part of one party, and (3) where the forum selection clause is the sole basis upon which to create jurisdiction in a chosen forum. On this record none of these exceptions will justify the court's decision to deny the motion, but we discuss each briefly.

FORUM SELECTION CLAUSE TAINTED BY FRAUD

Appellee's complaint alleged a count in fraud, but in essence it claimed that appellant fraudulently misrepresented that the loan documents did not contain a prepayment penalty. When one "seeks to void a forum selection clause on the basis of fraud, it must be demonstrated that the clause itself is the product of fraud." Holder v. Burger King Corp., 576 So.2d 973, 974 (Fla. 2d DCA 1991). Alternatively, "[t]he fraud complained of must relate to the inclusion of the clause in the contract." First Pac. Corp. v. Sociedade de Empreendimentos e Construcoes, LTDA., 566 So.2d 3, 4 (Fla. 3d DCA 1990). Appellee did not specifically allege that the forum selection clause was part of appellant's scheme to defraud, that the forum selection clause was itself the product of fraud, nor that the fraud related to the inclusion of the clause in the contract.

FORUM SELECTION CLAUSE THE PRODUCT OF OVERWHELMING BARGAINING POWER

Manrique states that trial courts may refuse to enforce forum selection provisions which result from unequal bargaining power, but we think it clear that in using the term "unequal bargaining power" the supreme court intended it to be subsumed within the court's express holding, i.e., that forum selection clauses should be enforced in the absence of a showing that enforcement would be "unreasonable or unjust." Appellee's complaint does not allege that the contract was created involuntarily or that the parties did not stand on equal footing. Facts developed for the record show that while BCI prepared the contract documents without input from appellee, the latter is a consulting firm conducting business all over North America, that it engaged in negotiations for the aircraft, and that prior to the dispute which precipitated this action it was happy to do business with appellant. Our attention has not been called to any Florida case which the court has inquired into whether the parties were "equals" before enforcing a forum selection clause.²...