Offerdahl v. Silverstein

• Decision Date: 08 July 1997
• Docket Number: Docket No. 196104
• Citation: 569 N.W.2d 834,224 Mich.App. 417
• Parties: Eric OFFERDAHL and Thomas Hooyer, Plaintiffs-Appellants, v. Saul SILVERSTEIN, d/b/a American Coin Laundry, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 834

569 N.W.2d 834

224 Mich.App. 417

Eric OFFERDAHL and Thomas Hooyer, Plaintiffs-Appellants, v. Saul SILVERSTEIN, d/b/a American Coin Laundry, Defendant-Appellee.

Docket No. 196104.

Court of Appeals of Michigan.

Submitted May 13, 1997, at Marquette.

Decided July 8, 1997, at 9:20 a.m.

Released for Publication Oct. 8, 1997.

Mika, Meyers, Beckett & Jones, P.L.C. by Neil P. Jansen, Grand Rapids, for Plaintiffs-Appellants.

Doyle Group Attorneys, P.C. by James D. Stone, Macatawa, for Defendant-Appellee.

Before O'CONNELL, P.J., and SAWYER and MARKMAN, JJ.

O'CONNELL, Presiding Judge.

In this declaratory action, plaintiffs appeal as of right the order of the circuit court granting summary disposition in favor of defendant on the ground that the court lacked subject-matter jurisdiction. MCR 2.116(C)(4). We vacate and remand.

Davna Investments Limited, owner of an apartment building in Grand Rapids, Michigan, entered into an agreement with defendant whereby defendant was permitted to maintain coin-operated laundry equipment in the laundry areas of the apartment building. Paragraph twelve of the agreement provided that "[t]his Agreement shall be governed by the laws of the State of Illinois with the courts of Cook County having sole and exclusive jurisdiction." Plaintiffs purchased the building from Davna Investments and, soon thereafter, filed a declaratory action in the Kent Circuit Court, Michigan, to determine their rights vis-a-vis defendant's rights with respect to the laundry areas of the building.

The circuit court ruled that, because the forum selection clause in the agreement provided that the courts of Cook County, Illinois, had exclusive jurisdiction over disputes pertaining to the contract, it lacked jurisdiction to hear plaintiffs' complaint. Implicit in the circuit court's reasoning was its assumption that only the courts of Cook County had jurisdiction to determine whether plaintiffs were, in fact, subject to the terms of the agreement. Accordingly, the court granted summary disposition in favor of defendant pursuant to MCR 2.116(C)(4). Plaintiffs now appeal as of right. Our review is de novo. Steele v. Dep't of Corrections, 215 Mich.App. 710, 712, 546 N.W.2d 725 (1996).

As stated in Jones v. State Farm Mut. Automobile Ins. Co., 202 Mich.App. 393, 397, 509 N.W.2d 829 (1993), "[g]enerally, matters relating to [a] right of action are governed by the laws of the state where the cause of action arose." However, parties may, in general, agree that all causes of action pertaining to a particular matter will be brought in a particular venue, M.C.L. § 600.745; M.S.A. § 27A.745, or be subject to the law of a particular jurisdiction. Hardy v. Monsanto Enviro-Chem Systems, Inc., 414 Mich. 29, 86, n. 60, 323 N.W.2d 270 (1982); Chrysler Corp. v. Skyline Industrial Services, Inc., 199 Mich.App. 366, 369-371, 502 N.W.2d 715 (1993). The former are typically termed forum selection provisions and the latter choice-of-law provisions. See Banek Inc. v. Yogurt Ventures USA, Inc., 6 F.3d 357, 360 (C.A.6, 1993) (recognizing the distinction between forum selection provisions and choice-of-law provisions under the Franchise Investment Law, M.C.L. § 445.1501 et seq.; M.S.A. § 19.854 et seq.).

In the instant case, we believe that the circuit court erred in ruling that the forum selection provision set forth in the agreement dictated that the threshold question, that is, whether plaintiffs were bound by the agreement, be answered by an Illinois court. The present situation is analogous to disputes concerning whether a particular party is subject to an arbitration agreement. As stated by our Supreme Court, Kaleva-Norman-Dickson School Dist. No. 6, Counties of Manistee, Lake & Mason v. Kaleva-Norman-Dickson School Teachers' Ass'n, 393 Mich. 583, 591, 227 N.W.2d 500 (1975), relying on United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 568, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960), "the question whether a dispute is arbitrable is for a court...." More specifically, a "party cannot be required to arbitrate an issue that he has...