Cal-State Business Products & Services, Inc. v. Ricoh

• Decision Date: 14 January 1993
• Docket Number: CAL-STATE
• Citation: 16 Cal.Rptr.2d 417,12 Cal.App.4th 1666
• Court: California Court of Appeals Court of Appeals
• Parties: BUSINESS PRODUCTS & SERVICES, INC., Plaintiff and Appellant, v. RICOH, et al, Defendants and Respondents. Civ. C013313.

Page 417

16 Cal.Rptr.2d 417

12 Cal.App.4th 1666

CAL-STATE BUSINESS PRODUCTS & SERVICES, INC., Plaintiff and Appellant, v. RICOH, et al, Defendants and Respondents.

Civ. C013313.

Court of Appeal, Third District, California.

Jan. 14, 1993.

As Modified Feb. 4, 1993.

[12 Cal.App.4th 1670] Joel D. Bierer, Richard L. Katz and Katz & Bierer, Inc. Larkspur, for plaintiff and appellant.

Nancy J. Newman, James T. Fousekis, Matthew S. Covington, and Steinhart & Falconer, San Francisco, for defendants and respondents.

DAVIS, Associate Justice.

INTRODUCTION

As we explain more fully in the course of this opinion, Code of Civil Procedure sections 410.30 and 418.10 (undesignated section references will be to this code) are the means by which a defendant may challenge a plaintiff's selection of California as the forum for the litigation between them. Two substantive bodies of law are affected by this procedural vehicle: the traditional (or noncontractual) doctrine of forum non conveniens and the enforceability of contractual forum-selection clauses. In light of the fact the appellant has fused aspects of these related but distinct areas, we are called upon to delineate the relevant criteria of each, to explain that this is not the proper context for application of traditional forum non conveniens principles, and to determine that a contractual forum-selection clause put in issue by the case before us is enforceable.

In response to the complaint filed by plaintiff Cal-State Business Products & Services, Inc. (Cal-State), defendant "Ricoh" ¹ moved for an order staying or dismissing this action as being brought in an inconvenient forum. (§§ 410.30, 418.10.) The basis of the motion is forum-selection clauses contained in contracts between Ricoh and Cal-State which designate New York as the proper forum for any litigation connected with the contracts. The trial court ruled the action was "best decided" in New York and issued a stay pending the resolution of a suit brought by Ricoh in a New York federal court. We shall affirm. ²

BACKGROUND

Both parties filed declarations and exhibits in the trial court in connection with the motion. We draw our facts from these sources.

John Fisher is the president, director, and principal shareholder of Cal-State. He has extensive knowledge of the business practices in the office machine industry based on 22 years of experience in the field. He has a great deal of familiarity According to Mr. Fisher, Ricoh offers two product lines, office machines (i.e., photocopiers) and facsimile machines ("fax") and assigns specific territories to dealers. In contracting with dealers, Ricoh executes separate contracts for each product line in a territory. Mr. Fisher also asserted Ricoh had an informal practice of granting de facto "exclusive" dealerships for "preferred" dealers in certain territories, which was accomplished by refusing to renew the contracts of other dealerships in the territory as they expired.

with the operations of Ricoh in particular, having been one of its dealers from 1981 to 1983 and its director of dealer sales for the western United States from 1987 to 1988. His primary responsibility in the latter position was negotiating and authorizing hundreds of new dealer contracts, and he had input in the wording of the contracts. As he stated to Ricoh in a 1990 letter, "I am extremely familiar with the Ricoh dealer contract."

After Mr. Fisher left Ricoh, he founded Cal-State in December 1989. Although it is disputed who initially solicited whom, he filed a dealership application for the Stockton branch of his business in February 1990. He claimed he did so only because he was promised by various Ricoh representatives that he would ultimately be given a dealership in Sacramento and an exclusive dealership in Stockton upon the expiration of another dealer's contract. In any event, he signed standard contracts for both product lines for a several-county territory (generally referred to as the "Stockton territory") on March 7, 1990 which expired June 30, 1990. The contracts contained identical integration ³ and choice-of-law/forum clauses ⁴ among the "GENERAL PROVISIONS." The contracts explicitly noted the territory was not exclusive. Jim Ivy, Ricoh's senior vice-president of marketing, approved and signed the contracts at the corporate headquarters in New Jersey on March 22.

In August 1990, a Ricoh manager sent Mr. Fisher a letter reminding him that "with the upcoming authorization of Cal-State in Sacramento on October 1st, it is important you have the proper inventory to support that marketplace." Mr. Fisher ordered "a large amount of [Ricoh] machines on credit."

Subsequently, Messrs. Fisher and Ivy executed contracts for fax dealerships in the Stockton and Sacramento territories (the latter also embracing several counties from Solano to the foothills) and an office machine dealership in the Stockton territory. These were to be in effect until March 31, 1992. Again, both contracts expressly noted the territories were non-exclusive. Both contracts contained integration ⁵ and choice-of-law/forum clauses ⁶ identical to the previous contracts. Mr. Fisher signed them in California in October 1990, and Mr. Ivy signed in New Jersey in November 1990.

In late October 1990, Mr. Fisher received a letter from the Ricoh manager assuring him "You are correct that you were promised to be authorized in Sacramento for both copiers and facsimile units no later It is not exactly clear what specifically took place over the course of the next year. Mr. Fisher simply points out he never received an office machine dealership in the Sacramento territory or an exclusive dealership in the Stockton territory. Mr. Ivy states only that Mr. Fisher did not pay for the machines he received on credit and currently owes $477,000 (rounded). In any event, Cal-State filed its original complaint against Ricoh in September 1991 in Sacramento County Superior Court. As amended, the complaint alleged six causes of action: restraint of trade (premised on the facts we have just described), unfair trade practices (this involved only below-cost pricing by the Millers and their business entity, California Copy), breach of contract (both oral and written), two types of fraud (the representations he would receive an exclusive Stockton dealership and a copier dealership in Sacramento), and two species of negligent misrepresentation (the same promises made with a less culpable state of mind). The motion to stay/dismiss followed in December 1991.

                than October 1st.  However, since you worked for Ricoh you understand that we must give a dealer written notification before authorizing another dealer in their territory.  We are now going through that process.  [p] Please be patient.  Now that you are authorized for fax [y]ou can spend the next two months getting a fast start with that product line.  I have been assured by [other Ricoh executives] there will be no problems getting you authorized on January 1, 1991."   He received a similar letter from defendant Sasaki dated November 30, 1990, stating "we need some more time to determine the application [sic ] of adding another copier dealer in this territory because of our committment [sic ] to the other party."
                

In his declaration in opposition to the motion, Mr. Fisher asserted he was not aware of the choice-of-forum provision, and it was never called to his attention during negotiations for either set of contracts. ⁷ He further claimed all witnesses familiar with the negotiation resided in California. Ricoh claimed its files were located in its New Jersey offices, close to the New York forum, as were corporate witnesses who made decisions regarding Cal-State's territory and contracts. Ricoh also produced the first page of a complaint it filed in the Southern District of the New York federal court seeking payment on the debt owed by Cal-State on its account with Ricoh; although there is no date stamp, we discern by the docket number (92 Civ. 0435) that it was filed in early 1992.

The trial court's order essentially echoed its tentative ruling. In pertinent part, the court held "Although some of the allegations are independent of the forum[-]selection clause and the contract, the entire dispute between the parties is best decided in the state of New York, where there is already an action pending in the federal court. The existence of other parties does not prevent the court from issuing this stay.... The court notes that defendants California Copy, Inc., Gene Miller, and Joyce Miller[ ] did not oppose the motion. In the event that plaintiff is unable to obtain jurisdiction over those defendants in New York, plaintiff may apply for a partial lifting of the stay, or a severance of the claim against them." Cal-State timely sought the proper remedy of appeal. (§ 904.1, subd. (c); Youngblood v. Board of Supervisors (1978) 22 Cal.3d 644, 651, 150 Cal.Rptr. 242, 586 P.2d 556.)

DISCUSSION

I

Forum non conveniens

Ultimately, we must be concerned with the principles governing enforcement of a contractual choice-of-forum clause. First, however, we discuss a related matter.

A

As originated in federal case law, imported into California case law, and codified in section 410.30, ⁸ the doctrine of forum non conveniens allows a trial court discretion to decline to exercise jurisdiction over a cause and parties otherwise properly before it if it concludes the action may be more appropriately and justly tried elsewhere. (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751, 1 Cal.Rptr.2d 556, 819 P.2d 14; Holmes v. Syntex Laboratories, Inc. (1984) 156 Cal.App.3d 372, 377-378, 202 Cal.Rptr. 773; Great Northern Ry. Co. v. Superior Court (1970) 12 Cal.App.3d 105, 109, 90 Cal.Rptr. 461.) The doctrine is most typically applied where the parties and the transaction underlying the litigation are foreign to the forum. (Appalachian Ins. Company v. Superior Court (1984) 162 Cal.App.3d 427, 434, 208...