Fish Mkt. Rests., Inc. v. Riverfront, LLC (In re Riverfront, LLC.)

• Decision Date: 31 May 2013
• Docket Number: 1111239.
• Citation: 129 So.3d 1008
• Parties: Ex parte RIVERFRONT, LLC. (In re Fish Market Restaurants, Inc., and George Sarris v. Riverfront, LLC).
• Court: Alabama Supreme Court

129 So.3d 1008

Ex parte RIVERFRONT, LLC.

(In re Fish Market Restaurants, Inc., and George Sarris

v.Riverfront, LLC).

1111239.

Supreme Court of Alabama.

May 31, 2013.

Wayne L. Williams of Wayne L. Williams & Associates, LLC, Tuscaloosa; and James E. Fleenor, Jr., of Fleenor & Green LLP, Tuscaloosa, for petitioner.

Robert J. Hayes of Hayes, Jackson & McKinney, LLC, Birmingham, for respondents.

PARKER, Justice.

Riverfront, LLC, petitions this Court for a writ of mandamus directing the Etowah Circuit Court (“the circuit court”) to vacate its order denying Riverfront's motion to enforce a forum-selection clause in a lease agreement between it and Fish Market Restaurants, Inc., and George Sarris (hereinafter collectively referred to as “Fish Market”) and to direct the circuit court either to dismiss the action filed against it by Fish Market or to transfer the action to the Tuscaloosa Circuit Court. We grant the petition and issue the writ.

Facts and Procedural History

Riverfront owns real property located in Gadsden (“the property”). In late 2006, Riverfront and Fish Market entered into negotiations concerning the property, which Fish Market sought to lease from Riverfront. In negotiating the terms of the lease, Fish Market made handwritten changes to a copy of the lease provided to it dated January 8, 2007 (“the proposed lease”). Section 3.3.1 of the proposed lease, entitled “Jurisdiction and Venue,” stated:

“Regardless of any place to which any of the parties may move and maintain legal domicile or suits at any time, each agrees, to the full extent permitted by law, that any action against them based on this Lease or any document or instrument delivered in accordance herewith shall be instituted in the Circuit Court of Tuscaloosa County, Alabama, and, to the full extent permitted by law, each party irrevocably consents to the jurisdiction of such court and waives any and all jurisdictional defenses that each may have to the institution of such an action in such court.”

The proposed lease contains handwritten additions and strike-throughs to this section. The word “Tuscaloosa” of the above provision was struck through, and the words “any proper” were handwritten in its place. Also, the word “in” was inserted into the above provision of the proposed lease following the word “County.” With the handwritten changes, the above provision of the proposed lease reads, in pertinent part, as follows: “any action ... shall be instituted in the Circuit Court of any proper County, in Alabama.” The proposed lease also contained handwritten changes to Sections 1.1, 1.2, 1.10.1, and 1.11. However, the proposed lease was not signed by any representative of Riverfront.

A lease dated January 18, 2007 (“the lease”), was also admitted into evidence. The lease is signed by Sanjay Singh, as president of Riverfront; by Sarris, both individually and as president of Fish Market; and by Robert J. Hayes, Sarris's attorney. Each signature is notarized.¹ The desired handwritten changes to the proposed lease by Fish Market were not incorporated into Section 3.3.1 of the lease, entitled “Jurisdiction and Venue.” That section in the lease reads:

“Regardless of any place to which any of the parties may move and maintain legal domicile or suits at any time, each agrees, to the full extent permitted by law, that any action against them based on this Lease or any document or instrument delivered in accordance herewith shall be instituted in the Circuit Court of Tuscaloosa County, Alabama, and, to the full extent permitted by law, each party irrevocably consents to the jurisdiction of such court and waives any and all jurisdictional defenses that each may have to the institution of such an action in such court.”

(We will refer to Section 3.3.1 as “the forum-selection clause.”) The lease did incorporate the handwritten changes made by Fish Market to Sections 1.2 and 1.11 of the proposed lease. The lease also contains the following clause:

“Section 3.13 Entire Agreement. This Lease constitutes the entire understanding and agreement among the parties concerning the indemnification obligations of the parties and related matters discussed herein, and supersedes any and all prior negotiations, understandings or agreements in regard thereto.”

On February 27, 2012, Fish Market filed a declaratory-judgment action against Riverfront in the circuit court. In its initial pleading, Fish Market identified the property and noted that “the land and premises and items of property located therein are the basis of some of the issues involved.” Fish Market also requested that the circuit court

“enter an [o]rder identifying the rights, duties and obligations of the parties, under that certain lease agreement entered into between the parties on or about the 8th of January 2007 while taking into consideration all of the facts and circumstances met and faced throughout the terms of the lease by [Fish Market].”

In response, on March 26, 2012, Riverfront filed a motion to dismiss the declaratory-judgment action on the basis of improper venue or, in the alternative, to transfer the case to the Tuscaloosa Circuit Court, pursuant to the forum-selection clause. In its motion, Riverfront alleged that the forum-selection clause required that any lawsuit arising under the lease be filed in the Tuscaloosa Circuit Court. Fish Market did not file a written response.

The circuit court held a hearing on Riverfront's motion on May 1, 2012. At the hearing, the lease was admitted into evidence, and Sarris confirmed that his signature was on the lease. Even though he confirmed that it was his signature on the lease and that his signature had been notarized, Sarris testified that the lease was not “the document [he] signed.” Sarris also agreed with his attorney's statement that Sarris had never “had any opportunity whatsoever to look at [the lease] at any time.” The proposed lease was also admitted into evidence. Fish Market presented no oral argument opposing Riverfront's motion to dismiss or to transfer the action on the basis that venue in the Etowah Circuit Court was improper.

On May 14, 2012, the circuit court denied Riverfront's motion without stating its reasoning for doing so. Riverfront then filed this petition for a writ of mandamus.

Standard of Review

In Ex parte CTB, Inc., 782 So.2d 188, 190 (Ala.2000), we noted that forum-selection clauses implicate venue and that the “ ‘proper method for obtaining review of a denial of a motion for a change of venue in a civil action is to petition for the writ of mandamus.’ ” (Quoting Ex parte National Sec. Ins. Co., 727 So.2d 788, 789 (Ala.1998).) See also Ex parte Bad Toys Holdings, Inc., 958 So.2d 852, 857 n. 3 (Ala.2006) ( “[A]lthough venue may sometimes be appropriate in multiple forums, parties may, via a forum-selection clause, contract in advance to restrict venue to a single forum.”). Thus, in reviewing the trial court's denial of a party's attempt to enforce an “outbound” forum-selection clause in Ex parte CTB,² this Court applied our well settled principles for considering a petition for a writ of mandamus:

“Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court.”

782 So.2d at 190 (quoting Ex parte Integon Corp., 672 So.2d 497, 499 (Ala.1995)). Further, a trial court's ruling on the question of enforcing a forum-selection clause is reviewed to determine whether in enforcing or refusing to enforce the forum-selection clause the trial court exceeded its discretion. Ex parte D.M. White Constr. Co., 806 So.2d 370, 372 (Ala.2001).

Discussion

In its petition, Riverfront argues that the circuit court exceeded its discretion by refusing to enforce the forum-selection clause and by denying Riverfront's motion to dismiss or, in the alternative, to transfer this action on the basis that venue in the Etowah Circuit Court was improper. Specifically, Riverfront argues that the forum-selection clause should be enforced because, it argues, enforcement of the clause is not unfair in that the lease was not “affected by fraud, undue influence, or overweening bargaining power,” and it is not unreasonable because, Riverfront argues, the selected forum would not be “seriously inconvenient” for the parties. See Professional Ins. Corp. v. Sutherland, 700 So.2d 347, 352 (Ala.1997).

“[A] ... forum-selection clause is enforceable unless the challenging party can establish that enforcement of the clause would be unfair on the basis that the contract ‘ “[w]as affected by fraud, undue influence, or overweening bargaining power or ... enforcement would be unreasonable on the basis that the [selected] forum would be seriously inconvenient.” ’ The burden on the challenging party is difficult to meet. Ex parte CTB,[ Inc., 782 So.2d 188 (Ala.2000) ]. See also Professional Ins. Corp. v. Sutherland, 700 So.2d 347, 351 (Ala.1997).”

D.M. White, 806 So.2d at 372.

Riverfront states that Fish Market “do[es] not appear to allege that enforcement of the forum-selection clause would be unfair due to fraud, undue influence, or overweening bargaining power.” In its response, Fish Market does not disagree with Riverfront's characterization of its argument that Fish Market is not alleging that enforcement of the forum-selection clause would be unfair on the basis of fraud, undue influence, or overweening bargaining power. Instead, Fish Market appears to be attacking the formation of the lease itself. Fish Market argues that “[t]here was not a clear meeting of the minds between the parties to the lease in question.” In support of its argument, Fish Market relies upon Ray v. Alabama Central Credit Union, 472 So.2d 1012, 1014 (Ala.1985), in which this Court stated:

“The Court addressed the issue of what...