Discount Bridal Serv., Inc. v. Kovacs

• Decision Date: 27 April 1998
• Docket Number: No. 72409.,72409.
• Parties: DISCOUNT BRIDAL SERVICES, INC., Appellee, v. KOVACS, Appellant.
• Court: Ohio Court of Appeals

127 Ohio App.3d 373

713 NE 2d 30

DISCOUNT BRIDAL SERVICES, INC., Appellee, v. KOVACS, Appellant.

No. 72409.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

Decided April 27, 1998.

Millisor & Nobil, Michele Schmidt and Sue Marie Douglas, for appellee.

Csank McCafferty & Perelman and Robert L. Steely, for appellant.

TIMOTHY E. MCMONAGLE, Judge.

Defendant-appellant, Charlene Kovacs ("appellant"), appeals the decision of the Cuyahoga County Common Pleas court denying her motion for relief from judgment that sought to vacate a foreign judgment filed by plaintiff-appellee, Discount Bridal Services, Inc. ("Discount Bridal"), under R.C. 2329.021 et seq. For the reasons that follow, we affirm.

The record reflects that, sometime in February 1993, appellant entered into a contractual relationship with Discount Bridal, a Maryland corporation, agreeing to become a dealer for the latter's bridal apparel in the Cleveland area. The agreement, and an amendment thereto, included inter alia (1) a noncompete clause effective for two years upon termination of the agreement (2) a forum-selection clause mandating that any action on the contract be instituted in Maryland, and (3) a provision for the payment of attorney fees in the event that Discount Bridal prevails on any such action.

Appellant eventually terminated the agreement in August 1995, whereupon Discount Bridal instituted suit in Maryland seeking to enforce the noncompete clause and for associated attorney fees. Appellee, through counsel, informed Discount Bridal's Maryland counsel that she would not be answering the complaint and would instead defend any enforcement proceedings in Ohio. As a result, a default judgment was obtained against appellant in Maryland, and in an order journalized on January 28, 1997, the Maryland court enjoined appellant from marketing bridal apparel for a period of two years from the date the judgment is enrolled in Ohio. Appellant was further ordered to pay $1,347.92, plus interest, to Discount Bridal for attorney fees.

Discount Bridal subsequently filed a notice of foreign judgment in the Cuyahoga County Court of Common Pleas pursuant to R.C. 2329.022. In response, appellant filed a motion seeking relief from judgment. In its journal entry denying the motion, the trial court stated in part:

"Defendant's Motion for Relief from Judgment filed 3-19-97, is denied. Any attack on the judgment to occur in the proper forum, to wit, Maryland."

Appellant now appeals and assigns the following errors for our review:

"I. The court below erred in ruling that the judgment of the plaintiff could only be attacked in the state of Maryland. "II. The court below erred in failing to grant the defendant/appellant a hearing on the issue of the Maryland court's jurisdiction, which jurisdiction was disputed in her motion for relief from judgment."

I

In her first assignment of error, appellant contends that the trial court erroneously determined that the judgment of the Maryland court could be challenged only in Maryland. Specifically, appellant argues that the forum-selection clause contained in the agreement is invalid and does not permit the Maryland court to exercise personal jurisdiction over her.

In support of her argument, appellant relies on United Std. Mgt. Corp. v. Mahoning Valley Solar Resources, Inc. (1984), 16 Ohio App.3d 476, 16 OBR 559, 476 N.E.2d 724, for the proposition that the validity of a forum-selection clause, like a choice-of-law provision, should be analyzed according to minimum-contacts principles and, inter alia, upheld unless "application of the law of the chosen state would be contrary to the fundamental policy of a state having a greater material interest in the issue than the chosen state." Id. at 478, 16 OBR at 560, 476 N.E.2d at 726. See, also, Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Co. (1983), 6 Ohio St.3d 436, 438-439, 6 OBR 480, 481-483, 453 N.E.2d 683, 685-687. In this regard, appellant argues that she has had no contacts with Maryland apart from the agreement at issue in this case and that Ohio has a greater material interest in the issues involved because appellant and her customers are located in Ohio.

Nonetheless, the Supreme Court of Ohio has rejected this type of analysis in Kennecorp Mtge. Brokers, Inc. v. Country Club Convalescent Hosp., Inc. (1993), 66 Ohio St.3d 173, 610 N.E.2d 987, in favor of finding forum-selection clauses prima facie valid in a commercial context, as long as the clause has been freely bargained for. Id. at 175, 610 N.E.2d at 988-989, citing The Bremen v. Zapata Off-Shore Co. (1972), 407 U.S. 1, 16, 92 S.Ct. 1907, 1916-1917, 32 L.Ed.2d 513, 524; see, also, Marvel Consultants, Inc. v. Gilbar Eng., Inc. (Jan. 22, 1998), Cuyahoga App. No. 72666, unreported, 1998 WL 23807. Thus, in the absence of fraud or overreaching, a forum-selection clause contained in a commercial contract between business entities is valid and enforceable unless it can be clearly shown that enforcement of the clause would be unreasonable and unjust. Id. at 176, 610 N.E.2d at 989-990.

As a threshold matter and contrary to appellant's contention, the burden of demonstrating the enforceability of such a clause falls upon the party challenging the clause. The Bremen, supra, at 9-12, 92 S.Ct. at 1912-1914,32 L.Ed.2d at 519-522. Thus, it is incumbent upon a...