MANAGEMENT COMPUTER v. PERRY CONST.

• Decision Date: 27 October 1999
• Docket Number: No. 99-863.,99-863.
• Citation: 743 So.2d 627
• Parties: MANAGEMENT COMPUTER CONTROLS, INC., a foreign corporation, Appellant, v. CHARLES PERRY CONSTRUCTION, INC., a Florida corporation, Appellee.
• Court: Florida District Court of Appeals

743 So.2d 627

MANAGEMENT COMPUTER CONTROLS, INC., a foreign corporation, Appellant, v. CHARLES PERRY CONSTRUCTION, INC., a Florida corporation, Appellee.

No. 99-863.

District Court of Appeal of Florida, First District.

October 27, 1999.

Leonard E. Ireland, Jr., of Clayton, Johnston, Quincey, Ireland, Felder, Gadd & Roundtree, P.A., Gainesville, for Appellant.

Michael D. Sechrest of Peter A. Robertson & Associates, P.A., Gainesville, for Appellee.

PADOVANO, J.

This is an appeal from a nonfinal order denying a motion to dismiss for improper venue. We conclude that a venue provision incorporated into the sales contracts at issue required the trial court to grant the motion as to three of the four counts of the complaint. Consequently, we reverse in part and affirm in part.

Management Computer Controls, Inc. is a Tennessee corporation engaged in the business of selling computer software. The company uses the shorthand name MC2. Charles Perry Construction, Inc. is a Florida corporation with its principal place of business in Alachua County. Perry entered into two contracts with MC2 to purchase computer software designed to perform estimating and accounting functions for construction firms.

Each of the purchase contracts is printed on a standard order form containing a paragraph that purports to incorporate by reference a license agreement. Paragraph four of the order form states "Any MC2 License Agreement governing the use of and normally packaged with any MC2 software is incorporated herein by reference, as though fully set forth." The license agreement to which the order form refers includes the following provision relating to venue and the choice of laws:

1. GOVERNING LAW. Agreement is to be interpreted and construed according to the laws of the State of Tennessee. Any action, either by you or MC2, arising out of this Agreement shall be initiated and prosecuted in the Court of Shelby County, Tennessee, and nowhere else; both you and MC2 do hereby waive the right to change venue.

Perry had access to the referenced license agreement before the contracts were signed. The order form in each case states that "A copy of any such MC2 License Agreement is available for your review upon request."

No request was made under this provision of the contract, but MC2subsequently delivered a copy of the applicable license agreement along with the software. Each of the software packages arrived with the license agreement affixed to the outside of the box. Additionally, the boxes were sealed with an orange sticker bearing the following warning: "By opening this packet, you indicate your acceptance of the MC2 license agreement."

Perry became dissatisfied with the software and filed suit against MC2 in Alachua County. The amended complaint served on December 2, 1998, asserts a claim for damages in four counts: breach of contract, negligent misrepresentation, breach of implied warranty of fitness, and a violation of Florida's Unfair and Deceptive Trade Practices Act. In support of these claims, Perry alleged that the software was not suitable for use in a Windows NT network environment, as MC2 had represented. With the exception of one component, Perry maintained that the software did not work.

MC2 filed a motion to dismiss the complaint on the ground that venue was not proper in Alachua County. Relying on the venue and choice of law provision of the license agreement, MC2 maintained that venue is proper only in Shelby County, Tennessee. The trial court entered an order denying the motion to dismiss, and MC2 then filed a timely notice of appeal to this court.

We have jurisdiction to review the order by appeal, even though it does not conclude the litigation. Rule 9.130(a)(3)(A) of the Florida Rules of Appellate Procedure includes orders concerning venue within the limited class of nonfinal orders that are subject to review by appeal before the final judgment. See Sagaz Industries, Inc. v. Martin, 706 So.2d 374, 375, fn. 1 (Fla. 5th DCA 1998)

(noting that an order denying a motion to dismiss for improper venue is appealable); accord Lesco, Inc. v. Celotex Corp., 464 So.2d 1336 (Fla. 2d DCA 1985). This rule enables a party to seek review of an adverse decision on venue before that party is forced to litigate the entire controversy in the wrong forum.

Perry assumes that all venue orders are reviewable by the abuse of discretion standard, but that is not the case. Judicial discretion is most often required when the trial court must decide whether to change venue from one proper location to another. For example, if the trial court determines that it is necessary to change venue under section 47.122, Florida Statutes for the convenience of the witnesses, the order is reviewable by the abuse of discretion standard. See Hu v. Crockett, 426 So.2d 1275, 1281 (Fla. 1st DCA 1983)

; Stoppa v. Water Oak Management Corp., 584 So.2d 161, 163 (Fla. 1st DCA 1991). Likewise, the abuse of discretion standard applies if the trial court finds it necessary to change venue under section 47.101, Florida Statutes, to ensure the right to a fair trial. See Tindall v. Smith, 601 So.2d 627 (Fla. 2d DCA 1992). In these examples, the trial court must make a reasoned judgment based on the facts and circumstances.

Whether venue is proper in a particular forum, however, is not a matter of judicial discretion. If there is no legal basis to support the plaintiff's choice of venue, the trial court must dismiss the case or transfer it to a forum that is authorized under the applicable venue statute. This kind of venue motion usually presents an issue of law or a mixed issue of law and fact. The question is not whether the trial court should transfer venue, but whether it must.

In the present case, the trial court rejected a claim that venue was improper in Alachua County. The decision did not involve fact finding or the exercise of judicial discretion, but rather it concerned only an issue of law. MC2's motion to dismiss was based entirely on the forum selection clause of the parties' contract. Florida courts have held that a decision interpreting a contract presents an issue of law that is reviewable by the de novo standard of review. See Inter-Active Servs., Inc. v. Heathrow Master Ass'n, Inc., 721 So.2d 433 (Fla. 5th DCA 1998)

; Steuart Petroleum Co., Inc. v. Certain Underwriters at Lloyd's London, 696 So.2d 376 (Fla. 1st DCA 1997). Because the venue order in this case turns on an issue of law, we must review the order by the de novo standard.

The parties to a contract may include a provision that establishes venue in a particular forum in the event of a contract dispute. See Mercedes Homes, Inc. v. Osborne, 687 So.2d 840, 841 (Fla. 2d DCA 1996)

; Hughes Supply, Inc. v. Lupton, 487 So.2d 429, 430 (Fla. 5th DCA

1986). Whether a venue clause is binding on the parties depends on its language. If the clause merely authorizes the filing of the suit in a particular forum it is said to be permissive and it is not binding. See Granados Quinones v. Swiss Bank Corp. (Overseas), S.A., 509 So.2d 273, 274-275 (Fla.1987); Intercapital Funding Corp. v. Gisclair, 683 So.2d 530, 532 (Fla. 4th DCA 1996). A permissive forum selection clause may provide an alternative to the statutory choices of venue but it does not require the plaintiff to file the suit in the forum referred to in the agreement.

In contrast, a venue clause is said to be mandatory if it states that any litigation must be initiated in a specified forum. See Granados Quinones, 509 So.2d at 274

. If the venue clause is phrased in mandatory terms, each party has a contractual right to demand that the case be litigated in the forum referred to in the contract. We have no doubt that the forum selection clause at issue in this case is mandatory. The license agreement states in material part, "Any action, either by you or MC2, arising out of this Agreement shall be initiated and prosecuted in the Court of Shelby County, Tennessee, and nowhere else." (emphasis supplied). By these terms, the parties have expressed their intent to limit venue to one particular location.

As a general principle, the trial court must honor a mandatory forum selection clause in a contract in the absence of a showing that the clause is unreasonable or unjust. See Manrique v. Fabbri, 493 So.2d 437 (Fla.1986)

; Haws & Garrett Gen. Contractors, Inc. of Fort Worth v. Panhandle Custom Decorators & Supply, Inc., 500 So.2d 204 (Fla. 1st DCA 1986). There are no circumstances here to suggest that the venue clause was unreasonable or that we should otherwise decline to...