Crowson v. Sealaska Corp., SEATTLE-FIRST

Citation705 P.2d 905
Decision Date02 August 1985
Docket Number5-422,Nos. 5-407,SEATTLE-FIRST,s. 5-407
PartiesR. Michael CROWSON d/b/a Marineco; R. Michael Crowson d/b/a Pacific Barge Leasing Co.; R. Michael Crowson d/b/a Marine Eagle Flat and Container, Petitioner, v. SEALASKA CORPORATION; Alaska Aggregate Corporation d/b/a Pacific Western Lines, Inc.; and Alaska Brick Company, Inc., Respondents.NATIONAL BANK, a national banking association, Petitioner, v. SEALASKA CORPORATION; Alaska Aggregate Corporation d/b/a Pacific Western Lines, Inc.; and Alaska Brick Company, Inc., Respondents.
CourtSupreme Court of Alaska (US)

Jon R. Zulauf, Edward M. Bensussen, Franco, Asia, Bensussen, Coe & Finegold, Seattle, Wash., Dan E. Dennis, Dennis, Kibby & Moss, Anchorage, for petitioner, Crowson.

David T. Walker, Juneau, Evan L. Schwab, Craig Miller, Seattle, Wash., for petitioner, Seattle-First National Bank.

Bruce E. Gagnon, Patrick B. Gilmore, Atkinson, Conway, Bell & Gagnon, Anchorage, for respondents.

Before RABINOWITZ, C.J., and BURKE, COMPTON and MOORE, JJ.

OPINION

RABINOWITZ, Chief Justice.

This consolidated petition for review arises out of a suit by the respondent, Sealaska Corporation, to rescind six barge charters and one equipment lease which were allegedly procured through extensive fraud and bribery. Petitioners and defendants below, R. Michael Crowson and Seattle-First National Bank (Seattle-First), the lessor and assignee of the lessor's interest in the contracts, respectively, contend this action must be dismissed on forum non conveniens grounds and because forum selection clauses in the contracts do not permit Sealaska to bring this type of suit in Alaska.

I

Sealaska is an Alaskan corporation with its principal place of business in Juneau, Alaska. Sealaska is the sole owner of Alaska Brick Company, which in turn is the sole owner of Pacific Western Lines. Pacific Western is the entity that chartered the six barges and leased the equipment (1,175 pallets and 1,100 containers) that is at issue. Sealaska guaranteed Pacific Western's performance under the contracts.

Crowson, an attorney and businessman from Seattle, borrowed approximately 20 million dollars from Seattle-First so that he could purchase the barges and equipment that he leased to Pacific Western. In exchange for the loans, Crowson granted preferred ship mortgages on the barges to Seattle-First and assigned to the bank his interest in the charters, lease and guarantees. As additional security, Seattle-First obtained from Pacific Western consents to the charter and lease assignments in which Pacific Western agreed to pay Seattle-First all amounts payable under the contracts. Pacific Western also agreed to waive any defenses to payment that it may have against anyone other than the bank. Three consents were executed--the first purports to cover two of the barge charters, the second purports to cover the other four charters, and the third concerns the equipment lease.

The charters and equipment lease contract were entered into by Crowson and Pacific Western in 1981-1982. Thomas Marshall, the president of Alaska Brick Company and Pacific Western Lines, signed the agreements for Pacific Western after obtaining permission from the management and board of Sealaska. Shortly thereafter, Sealaska personnel uncovered evidence indicating that the contract prices were unreasonably high and that Crowson paid bribes to Marshall and Kenneth R. Fry, the general manager of Pacific Western, in order to obtain the agreements. Sealaska estimates that the illegal payments amounted to over $1.4 million. Fry has admitted his own involvement and given a sworn statement describing in detail the mechanics of the fraud and implicating both Crowson and Marshall. Cancelled checks and other records documenting the bribe payments have been uncovered. Crowson denies any wrongdoing and has invoked the fifth amendment privilege with respect to all questions concerning the contracts. Marshall has apparently fled the country.

Sealaska discontinued payments under the contracts early in 1983, and Crowson soon after defaulted on its loan payments to Seattle-First. This action was filed on March 4, 1983. Sealaska is seeking judgment declaring void each of the contracts, guarantees, and consents and seeks the recovery of damages and other relief. The complaint also alleged violations of the Federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1964, and the Robinson-Patman Antitrust Act, 15 U.S.C. § 15, claims over which the federal courts have exclusive jurisdiction. Defendants removed the case to the United States District Court for the District of Alaska, under 28 U.S.C. § 1441. However, because removal jurisdiction is derivative and the state court lacked subject matter jurisdiction over the federal claims, the United States District Court remanded the case back to the superior court. 1 The federal claims were necessarily withdrawn.

Thereafter, Crowson and Seattle-First moved to have the case dismissed on two alternative theories; first, that the doctrine of forum non conveniens is applicable and bars the action, and second, that various forum selection clauses in the contracts are mandatory and should be enforced. The superior court decided to retain jurisdiction, concluding that defendants' inconvenience in litigating the case in Alaska did not so outweigh plaintiffs' right to choose their forum that the doctrine of forum non conveniens should be invoked. With respect to the forum selection clauses, the superior court held that they are not applicable because the action to rescind did not arise out of the contracts. The superior court also concluded, alternatively, that even if the clauses were applicable, they are not enforceable here where plaintiffs have shown a "triable issue of fact" as to their claim of fraud in the procurement of the contracts. The court further noted that it would be against public policy to enforce the clauses and "in essence reward a commercial briber."

II

Under the doctrine of forum non conveniens, a court should decline to exercise its jurisdiction over a case, thereby compelling the plaintiff to sue elsewhere only if the selected forum is a seriously inconvenient place to conduct the litigation. 2 In determining the applicability of the rule, the court must consider the public interest as well as the private interests of the litigants. The Supreme Court of California has delineated some of the factors which a court should consider when facing a forum non conveniens claim:

[T]he ease of access of proof, the availability and cost of obtaining witnesses, the possibility of harassment of the defendant in litigating in an inconvenient forum, the enforceability of the judgment, the burden on the community in litigating matters not of local concern, and the desirability of litigating local matters in local courts.

Goodwine v. Superior Court, 63 Cal.2d 481, 47 Cal.Rptr. 201, 204, 407 P.2d 1, 4 (1965). Unless the balance of these factors is strongly in favor of defendants, plaintiff's choice of forum should rarely be disturbed. Id. Where, as here, plaintiff is a bona fide resident of the forum state, the doctrine of forum non conveniens has only an extremely limited application. Thomson v. Continental Ins. Co., 66 Cal.2d 738, 59 Cal.Rptr. 101, 105, 427 P.2d 765, 768 (Cal.1967). 3

Crowson 4 argues that several critical witnesses are not subject to compulsory process here and may decide not to testify in Alaska. Although this may be true, there is nothing in the record before us to support this contention. Given the evidence, it would be as equally reasonable for us to conclude that certain important witnesses that can be made to testify in Alaska are not subject to process in Washington, the state in which petitioners desire to have this action litigated. We note that a party claiming that the convenience of witnesses would be promoted by a venue change within the state must submit an affidavit stating the names of the witnesses and the reasons why the attendance of each would be inconvenient, and must show that their proposed testimony is admissible, relevant and material to an issue in the case. AS 22.10.040. 5 A similar showing is essential where, as here, the moving party seeks to have the case removed from the jurisdiction on the grounds that some witnesses may otherwise choose not to testify.

Crowson further contends that it would be wasteful to continue the suit here since two related actions, which cannot be tried in the state courts, are currently pending before the United States District Court for the Western District of Washington. Only if this case is dismissed, Crowson argues, will it be possible to try the entire matter in one forum. In our view, neither of the pending federal actions warrants the dismissal of this case.

On March 17, 1983, Seattle-First filed in the Washington federal court an in rem admiralty action against Crowson to foreclose upon the six barges. Joined with that suit were certain in personam state law claims against Crowson and Sealaska to enforce the charters and equipment lease. On August 5, 1983, the Federal District Court in Washington bifurcated the action and stayed the in personam claims pending decision by the Federal District Court in Alaska in this action after it was removed. The in rem action was allowed to proceed, since all parties agreed it should take place in Washington, and the foreclosures have been completed. The stay on the in personam claims was removed after the Federal District Court in Alaska's decision to remand, and that part of the action is apparently proceeding. We think it is unfair, however, to dismiss this case simply because a later filed suit concerning the same state law issues is pending in federal court. Once again, there is no basis in the record for concluding that a suit in Alaska will be significantly more burdensome for the parties than a suit in...

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