Reiner, Reiner & Bendett, P.C. v. Cadle Co., 17378.

• Decision Date: 09 May 2006
• Docket Number: No. 17378.,17378.
• Court: Connecticut Supreme Court
• Parties: REINER, REINER AND BENDETT, P.C. v. THE CADLE COMPANY et al.

Page 58

897 A.2d 58

278 Conn. 92

REINER, REINER AND BENDETT, P.C. v. THE CADLE COMPANY et al.

No. 17378.

Supreme Court of Connecticut.

Argued October 24, 2005.

Decided May 9, 2006.

Paul M. Gaide, Collinsville, for the appellant (named defendant).

David F. Borrino, Farmington, for the appellee (plaintiff).

BORDEN, NORCOTT, KATZ, VERTEFEUILLE and ZARELLA, Js.

VERTEFEUILLE, J.

The plaintiff, Reiner, Reiner and Bendett, P.C., a law firm, rendered legal services to the named defendant, The Cadle Company (defendant), an Ohio corporation, for which the plaintiff allegedly was not paid. This joint appeal arises out of two actions brought by the plaintiff seeking payment for those services. In both actions, the plaintiff obtained default judgments against the defendant. In the first action, brought in 2000, the plaintiff sought and obtained judgment for the amount of the unpaid fees (collection action). The plaintiff thereafter filed a judgment lien against real property in Connecticut owned by the defendant. The plaintiff then brought the second action in 2004, to foreclose the judgment lien (foreclosure action), and obtained a judgment of foreclosure by sale.¹ In this joint appeal,² the defendant challenges the default judgment in the collection action, claiming that the trial court lacked personal jurisdiction over the defendant in that action.³ The defendant also challenges the default judgment in the foreclosure action, contending that the trial court in the foreclosure action improperly failed to observe the statutory continuance for a nonresident, nonappearing defendant as mandated by General Statutes § 52-87(b)⁴ and Practice Book § 9-1,⁵ and improperly failed to open the judgment on that ground. We reject both of these claims and affirm the trial court's judgments.

The record reveals the following undisputed procedural history and facts that are relevant to our disposition of this appeal. On March 31, 2000, the plaintiff filed the collection action, alleging that the defendant had obtained the plaintiff's legal services pursuant to a written "Retainer Agreement" and that the plaintiff had failed to pay for those services as required by the agreement. The complaint was served on the defendant by certified mail pursuant to the corporate long arm statute, General Statutes § 33-929.⁶ After the defendant had failed to appear, the plaintiff filed a motion for judgment by default. On July 16, 2001, the trial court, Berger, J., rendered a default judgment for the plaintiff, awarding damages of $40,512.67 plus costs.

The plaintiff thereafter recorded a judgment lien against certain Connecticut property owned by the defendant, and, on January 29, 2004, brought the foreclosure action. The plaintiff again served the complaint by certified mail pursuant to the corporate long arm statute, § 33-929. See footnote 6 of this opinion. On March 8, 2004, after the defendant again had failed to appear, Hon. Robert Satter, judge trial referee, granted the plaintiff's motions for default and for judgment of foreclosure by sale.

Within three weeks after the foreclosure judgment was entered, the defendant filed a motion to open the default and the judgment claiming, in part, that the judgment was void because the trial court had failed to order the mandated continuance pursuant to § 52-87(b). The defendant also contended that the trial court had lacked personal jurisdiction over it in the collection action, rendering the judgment in that action void as well. This claim was based on a forum selection clause in the retainer agreement, which vested Ohio courts with exclusive jurisdiction over disputes arising under the agreement. After a hearing on the motion to open, Hon. Samuel Freed, judge trial referee, issued a memorandum of decision denying the motion. The trial court first found that the defendant had received actual notice of the foreclosure action, which obviated the need to observe the statutory continuance. The trial court further concluded that the forum selection clause did not deprive the court of personal jurisdiction of the defendant in the collection action. This appeal followed. Additional facts will be set forth as necessary.

I

The defendant first claims that the trial court improperly concluded that the forum selection clause in the retainer agreement did not deprive the trial court of personal jurisdiction over the defendant in the collection action. The defendant contends that the forum selection clause, which required litigation arising from the contract to be resolved in Ohio courts, deprived the trial court of the power to exercise personal jurisdiction over the defendant. Because of this lack of personal jurisdiction, the defendant argues, the judgment against the defendant in the collection action was void and, accordingly, the judgment in the foreclosure action should have been vacated because it was premised on the validity of the judgment in the collection action.

The plaintiff responds that, although forum selection clauses may be enforceable generally, a specific clause will not deprive a court of jurisdiction unless one of the parties actually seeks to enforce it and the trial court determines, based on several factors, that the clause should be enforced. Because the defendant failed to appear in the collection action and seek enforcement of the clause, the plaintiff argues, the clause did not deprive the court of personal jurisdiction of the defendant.⁷ We agree with the plaintiff.

The following additional facts are necessary to the resolution of this issue. In an affidavit dated March 25, 2004, which the defendant filed with its motion to open the judgment in the foreclosure action, Peter T. Barta, an assistant vice president of the defendant, alleges that the contract claim upon which the judgment in the collection action was based was subject to the terms set forth in a memorandum that is attached to the affidavit. The memorandum, which is entitled "Terms of Representation" and is dated November 2, 1994, is from the general counsel for the defendant and is addressed to "All Retained Counsel." The memorandum's eleventh numbered paragraph provides that "[a]ll disputes as to any amounts charged or services rendered, or as to these Terms of Representation shall be resolved in the Newton Falls, Ohio Municipal Court or the Trumbull County, Ohio Common Pleas Court, depending on the amount in controversy, and shall be resolved pursuant to the laws of the State of Ohio." The plaintiff has not disputed the defendant's claim that the plaintiff's representation of the defendant was subject to the terms set forth in the memorandum.

We begin with the applicable standard of review. The question before the trial court, i.e., whether, in a contract action, a forum selection clause will divest a court not designated in the clause of personal jurisdiction over a defendant that had not sought to enforce the clause in that action, is a question of law, over which our review is plenary. See McBurney v. Cirillo, 276 Conn. 782, 799, 889 A.2d 759 (2006).

Historically, courts viewed forum selection clauses as improper attempts by the parties to oust jurisdiction from a court that otherwise had the authority to hear an action. Annot., 31 A.L.R.4th 404, 409 (1984). Courts refused to enforce, as contrary to public policy, forum selection clauses that attempted to vest exclusive jurisdiction in a specific forum over controversies that would arise in the future. Id. Indeed, this court previously adopted that reasoning and concluded that a forum selection clause in an insurance policy making Haiti the exclusive forum for all questions arising from the policy was illegal and against public policy. Parker, Peebles & Knox v. El Saieh, 107 Conn. 545, 557-59, 141 A. 884 (1928). Quoting from a decision of the Massachusetts Supreme Judicial Court, this court embraced the notion that, just as "parties cannot, by their consent, give jurisdiction to courts, where the law has not given it ... it seems to follow from the same course of reasoning, that parties cannot take away jurisdiction, where the law has given it." (Internal quotation marks omitted.) Id., at 557, 141 A. 884, quoting Hall v. People's Mutual Fire Ins. Co., 72 Mass. (6 Gray) 185, 192 (1856) (Shaw, C.J.).

In more recent years, however, courts have concluded that forum selection clauses do not oust courts of their jurisdiction, but they have been willing to enforce such contract clauses as long as they were reasonable by declining to exercise jurisdiction over an action in certain circumstances. Annot., 31 A.L.R.4th at 415 (1984); 1 Restatement (Second), Conflict of Laws § 80 (1971). The United States Supreme Court took the lead on this issue in Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), in which the court rejected the traditional view that forum selection clauses are unenforceable as contrary to public policy. The court stated that "[t]he argument that such clauses are improper because they tend to `oust' a court of jurisdiction is hardly more than a vestigial legal fiction.... No one seriously contends in this case that the forum-selection clause `ousted' the District Court of jurisdiction over [the defendant's] action. The threshold question is whether that court should have exercised its jurisdiction to do more than give effect to the legitimate expectations of the parties, manifested in their freely negotiated agreement, by specifically enforcing the forum clause." Id., at 12, 92 S.Ct. 1907.⁸

Moreover, the claim that a forum selection clause will strip a court of its jurisdiction over the parties, while not yet expressly considered by this court,⁹ has been solidly rejected by the great weight of courts and authorities considering the question after the Supreme Court's decision in Bremen. See, e.g., Lambert v. Kysar, 983 F.2d 1110, 1118 n. 11 (1st Cir. 1993) ("It is well established that a forum selection clause...