Lejano v. Bandak

• Decision Date: 12 December 1997
• Parties: 97-0388 La
• Court: Louisiana Supreme Court

Page 158

705 So.2d 158

97-0388 La. 12/12/97, 1998 A.M.C. 692

Feliciano LEJANO and Melinda Lejano v. K.S. BANDAK, et al.

No. 97-CC-0388.

Supreme Court of Louisiana.

Dec. 12, 1997.

Rehearing Denied March 27, 1998.

Dissenting Opinion on Denial of Rehearing March 27, 1998.

Richard J. Dodson, David C. Vidrine, Baton Rouge, John J. Molaison, Jr., Walter J. LeBlanc, Jr., Gretna, Arthur D. Dupre, Jr., Metairie, A.N. Yiannopoulos, New Orleans, Symeon C. Symeonidas, for Applicant.

David B. Lawton, Kevin J. LaVie, New Orleans, for Respondent.

[97-0388 La. 1] JOHNSON, Justice.

We granted certiorari in this maritime tort case to determine the enforceability and validity of a forum selection provision of an employment contract between a Filipino seaman, and a Norwegian shipowner and employer. The cause of action arose in Florida, but a forum selection provision in the employment contract states that the claim may be brought in either the Philippines or Norway. Finding that the forum selection clause is enforceable, the trial court granted defendants' motion for partial summary judgment and ordered plaintiffs to file their claim in either the Philippines or Norway. The court of appeal affirmed the trial court's grant of defendants' motion for partial summary judgment and denied plaintiffs' writ application.

FACTS AND PROCEDURAL HISTORY

On November 7, 1991, plaintiff, Feliciano Lejano, a Filipino seaman, was working aboard the M/V BANDAK in the straits of Florida after sailing from Mobile, Alabama. Mr. Lejano was working on a suspended scaffold when a rope broke which had been holding the scaffold, resulting in his falling approximately thirty feet to the deck below. The parties agree that the accident occurred during the course and scope of Mr. Lejano's employment with defendant, K.S. Bandak, a Norwegian limited partnership owned by Borgestad, Inc., a Norwegian company. At the time of the accident, the M/V BANDAK was located in international waters, and was owned and operated by defendant, K.S. Bandak. Mr. Lejano suffered severe injuries as a result of the accident, including quadriplegia and brain damage. Mr. Lejano was hospitalized for a few months in a hospital in Miami, Florida. He was subsequently transferred to a hospital in the Republic of the Philippines in February, 1992, where he was hospitalized for an additional 10 months.

[97-0388 La. 2] Seeking recovery under the Jones Act, General Maritime Law, and Federal Maritime Law, plaintiffs filed suit against K.S. Bandak and its foreign insurers, Assuranceforeningen Gard and Gard (U.K.), Ltd. in the Twenty-Fourth Judicial District Court for the Parish of Jefferson, State of Louisiana on September 16, 1993. Plaintiffs obtained quasi-in-rem jurisdiction by way of a non-resident writ of attachment on the M/V BANDAK in September, 1993, which was docked within the jurisdiction of the Twenty-Fourth Judicial District Court. Plaintiffs later filed an amended petition, naming as an additional defendant, K.S. Bandak II, the owner of the vessel at the time it was attached. ¹ Plaintiffs subsequently filed yet another amended petition naming AS Borgestad and AS Borgestad Shipping as defendants. ²

After the attachment, defendants posted security for Mr. Lejano's claims in the amount of $8,750,000 and the vessel was released. Defendants then filed several declinatory exceptions ³ and a request for a dismissal based on forum non conveniens. Defendants argued that under the forum selection clause in Mr. Lejano's employment contract, he has no cause of action and no right of action. After a hearing on August 3, 1994, the trial court rendered judgment overruling defendants' declinatory exceptions. However, the trial court maintained defendants' peremptory exceptions of no cause of action and no right of action, dismissing plaintiffs' demands with prejudice. In its Reasons for Judgment, the trial court reasoned that there were no sufficient contacts with the United States to warrant [97-0388 La. 3] application of its laws to this case. The trial court further reasoned that Mr. Lejano's employment contract, the revised standard employment contract, and the collective bargaining agreement applicable to the employment relationship require that disputes be resolved in Norway or the Philippines. Additionally, the trial court ruled that the doctrine of forum non conveniens is applicable to this case, stating that plaintiffs' suit was dismissed on this basis.

The court of appeal reversed the trial court judgment and remanded the case to the trial court on March 1, 1995. The court of appeal reasoned that because plaintiffs' petition states claims under the Jones Act and General Maritime Law, that plaintiffs are afforded a remedy in law, and that plaintiffs are the people in whose favor the law extends the remedy, plaintiffs therefore have a right of action. The court of appeal further reasoned that pursuant to La. C.C.P. art. 123(C), the doctrine of forum non conveniens is inapplicable to this Jones Act case.

On remand, defendants moved for a partial summary judgment on the issue of choice-of-law, urging the application of Norwegian substantive law. Plaintiffs argued that the substantive provisions of Philippine law should be applied. On September 21, 1995, the trial court found that the forum selection clause in Mr. Lejano's contract was valid and that the case was governed by either Norwegian or Philippine law. Accordingly, the trial court ordered Mr. Lejano to file his claim in either Norway or the Philippines, indicating that should defendants attempt to frustrate his efforts to pursue the case in a foreign forum, it would proceed to adjudicate the claim applying Philippine or Norwegian law.

Plaintiffs filed a motion for new trial. In their motion for new trial, plaintiffs contended that the trial court was in error and bound by the "law of the case" by virtue of the court of appeal's previous opinion. Plaintiffs further argued that Mr. Lejano's cause of action had prescribed in both Norway and the Philippines, and [97-0388 La. 4] that therefore, the only viable forum in the entire world was the Twenty-Fourth Judicial District Court, where plaintiffs' action was pending. The trial court denied plaintiffs' motion for new trial on November 16, 1995. Plaintiffs sought appellate review of this ruling. After a different panel of the court of appeal denied plaintiffs' writ application on January 9, 1996, plaintiffs filed a writ application with this court. This court granted the writ and remanded the case to the court of appeal for briefing and the rendering of an opinion. On January 15, 1997, the court of appeal affirmed the decision of the trial court. Lejano v. Bandak, 95-1011 (La.App. 5 Cir. 1/15/97), 688 So.2d 86. Plaintiffs filed writs with this court, arguing that the court of appeal erred in affirming the trial court's dismissal of their action on the basis of the forum selection clause, and that by doing so, the court of appeal violated state and federal jurisprudence, the open access clause of Article I, Section 22 of the Louisiana Constitution, and the policy embodied in La. C.C.P. art. 123(C). In their writ application to this court, plaintiffs allege that the court of appeal erred in the following respects:

1. Enforcing a choice of forum clause in favor of a party who was not a signatory to the clause;

2. Enforcing a clause against a party who was not in a position to negotiate the clause and who could not read the language in which the clause was written;

3. Arbitrarily extending the scope of the clause to delictual disputes in blatant disregard of the specific wording of the clause which clearly confined the scope of the clause to purely contractual disputes; and

4. Treating as being mandatory a clause that was clearly intended to be merely permissive.

[97-0388 La. 5] BACKGROUND

A. Maritime Jurisdiction, Generally

Three provisions of the United States Constitution govern maritime law jurisdiction: (1) Article III, section 2 extends the judicial power of the United States to "all cases of admiralty and maritime jurisdiction"; (2) Article I, section 8 gives Congress the power to "make all laws which shall be necessary and proper for carrying into execution ... all ... powers vested by this constitution in the government of the United States, or in any department or officer thereof"; (3) the Supremacy Clause (Article VI, clause 2) makes that body of federal law binding on the states. David W. Robertson, Admiralty and Maritime Litigation in State Court, 55 La. L.Rev. 685, 687-688 (1995). The United States Supreme Court has held that the first two constitutional provisions above empower the federal courts and Congress to create and interpret a nationally uniform maritime law. Robertson, supra notes 8 and 9, at 687-688.

Article III of the United States Constitution, from the Constitutional Convention of 1787, marked a significant centralization of admiralty authority from Colonial days and from the period of the Articles of Confederation during which maritime claims were adjudicated in the admiralty courts of each colony/state. See generally, Putnam, How the Federal Courts Were Given Their Admiralty Jurisdiction, 10 Cornell L.Q. 460 (1925). While Article III extended the judicial power of the United States to all admiralty and maritime cases, it did not create the lower federal courts or vest them with jurisdiction.

In 1789, the First Congress took the essential first step by creating federal district courts and giving them admiralty jurisdiction. Robertson, supra note 13, at [97-0388 La. 6] 688. ⁴ By this statute, "the entire admiralty power of the Constitution was lodged in the Federal Courts." The Belfast, 74 U.S. (7 Wall.) 624, 638, 19 L.Ed. 266 (1869). The statutory grant of admiralty jurisdiction to the federal districts courts, in its present version, is codified as 28 U.S.C. § 1333, and provides in pertinent part:

"The district courts ... shall ... have...