Republic Leasing Co., Inc. v. Haywood

• Decision Date: 18 December 1998
• Docket Number: No. 2777,2777
• Citation: 329 S.C. 562,495 S.E.2d 804
• Court: South Carolina Court of Appeals
• Parties: REPUBLIC LEASING COMPANY, INC., Appellant, v. Richard Wayne HAYWOOD, individually and d/b/a/ Haywood's Discount Drugs, Respondent. REPUBLIC LEASING COMPANY, INC., Appellant, v. CENTER VETERINARY HOSPITAL, INC. and Ray H. Coble, Jr., Respondents. REPUBLIC LEASING COMPANY, INC., Appellant, v. ST. PAULS DRUG CO., INC. and James E. Cash, Respondents.

Page 804

495 S.E.2d 804

329 S.C. 562

REPUBLIC LEASING COMPANY, INC., Appellant, v. Richard Wayne HAYWOOD, individually and d/b/a/ Haywood's

Discount Drugs, Respondent.

REPUBLIC LEASING COMPANY, INC., Appellant, v. CENTER VETERINARY HOSPITAL, INC. and Ray H. Coble, Jr., Respondents.

REPUBLIC LEASING COMPANY, INC., Appellant, v. ST. PAULS DRUG CO., INC. and James E. Cash, Respondents.

No. 2777.

Court of Appeals of South Carolina.

Submitted Nov. 4, 1997.

Decided Jan. 5, 1998.

Rehearing Denied Feb. 19, 1998.

Certiorari Dismissed, Cause Remanded Dec. 18, 1998.

Certiorari Granted Dec. 18, 1998.

Robert L. Widener, Julianne Farnsworth, and James Edward Bradley, McNair Law Firm, Columbia, for appellant.

Wilburn Brewer, Jr., and Marcus A. Manos, Nexsen, Pruet, Jacobs & Pollard, Columbia, for respondents Center Veterinary Hospital, Inc. and Ray H. Coble, Jr.

H. Flynn Griffin, Ill, of Anderson & Associates, Columbia; and Karen C. Dyer, of Duker, Barrett & Gravante, Fort Lauderdale, FL, for respondents St. Pauls Drug Co., Inc. and James E. Cash.

Grady L. Patterson, III, of Quinn, Patterson & Willard, Columbia, for respondent Richard Wayne Haywood.

HEARN, Judge:

These consolidated appeals arise out of the breach of a lease agreement between a South Carolina lessor and out-of-state lessees. The lessor appeals the trial court's dismissal of its lawsuit for lack of personal jurisdiction. It also disputes the trial court's finding that its filing of affidavits was untimely and contained impermissible hearsay. We reverse. ¹

ISSUE

The dispositive issue in this appeal is whether the trial court erred in refusing to exercise personal jurisdiction based solely on the consent to jurisdiction clause.

FACTS

This dispute centers on a consent to jurisdiction clause contained in a lease agreement between Republic Leasing and each of the Respondents, which include the presidents of two drug stores and one veterinarian clinic. The lease agreements originated with a third-party vendor, Recomm International Display, Ltd., who sold in-store advertising equipment to Respondents. In addition to the lease, Respondents guaranteed all obligations under the lease to Recomm's "Designated Republic commenced these causes of action in February 1996, alleging breach of an equipment lease and seeking judgments of $4,954.70, $5,662.82, and $10,170.42, including attorney fees and interest. Respondents filed motions to dismiss asserting lack of jurisdiction. The special circuit court judge granted these motions.

                Leasing Company."   Six weeks later, Republic took title to the equipment, thereafter leasing it to Respondents.  At this time, Republic stamped its name on the lease and notified Respondents that all payments should be sent to its address in Lexington, South Carolina.  After software problems rendered the equipment useless, Respondents ceased making payments
                

Paragraph 17 of the lease agreements provided by Recomm to Respondents contains a consent to jurisdiction clause, which provides:

"APPLICABLE JURISDICTION" MEANS THE STATE, AS MAY CHANGE FROM TIME TO TIME, WHERE THE HOLDER OF THE LESSOR'S INTEREST IN THIS LEASE MAINTAINS ITS PRINCIPAL OFFICE RESPONSIBLE FOR ADMINISTERING THIS LEASE. THIS LEASE SHALL BE BINDING WHEN ACCEPTED IN WRITING BY US AND SHALL BE GOVERNED BY THE LAWS OF THE APPLICABLE JURISDICTION, PROVIDED HOWEVER, IN THE EVENT THIS LEASE OR ANY OF ITS PROVISIONS CANNOT BE ENFORCED UNDER THE LAWS OF THAT STATE THEN THE LAWS OF THE STATE WHERE THE EQUIPMENT IS LOCATED SHALL GOVERN. AS USED IN THIS PARAGRAPH 17, "COUNTY OF APPLICABLE JURISDICTION" MEANS THE COUNTY WITHIN THE STATE, AS MAY CHANGE FROM TIME TO TIME, WHERE THE HOLDER OF THE LESSOR'S INTEREST IN THIS LEASE MAINTAINS [ITS] PRINCIPAL OFFICE RESPONSIBLE FOR ADMINISTERING THIS LEASE....

Nowhere does the lease signed by Respondents reference Republic Leasing, Lexington County, or South Carolina. In addition, Respondents are not registered to do business in South Carolina and have had no professional contact with the State other than making lease payments for approximately three years to Republic. Finally, the record contains no evidence of coercion or misrepresentation about the terms of the contract.

DISCUSSION

Republic Leasing bore the burden at the pre-trial stage of making a prima facie showing of facts sufficient to meet the standards for exercising personal jurisdiction. Brown v. Investment Management & Research, Inc., 323 S.C. 395, 398-400, 475 S.E.2d 754, 756 (1996). We find it met this burden. On appeal, Republic argues the consent to jurisdiction provision contained in the lease agreements with Respondents--standing alone--provides a sufficient basis for finding personal jurisdiction. We agree.

A party may always waive lack of personal jurisdiction. Lillard v. Searson, 170 S.C. 304, 307, 170 S.E. 449, 450 (1933); Firestone Financial Corp. v. Owens, 309 S.C. 73, 75, 419 S.E.2d 830, 832 (Ct.App.1992); Jack H. Friedenthal et al., Civil Procedure § 3.5, at 101-02 & n. 2 (2d ed. 1993). Moreover, it is not the function of courts to rewrite contracts between parties. Our function is limited to the contract's terms, and absent ambiguity, their plain meaning controls our inquiry. C.A.N. Enters., Inc. v. South Carolina Health & Human Servs. Fin. Comm'n, 296 S.C. 373, 378, 373 S.E.2d 584, 587 (1988); Gray v. State Farm Auto Ins. Co., 327 S.C. 646, 649, 491 S.E.2d 272, 274 (Ct.App.1997).

Forum selection clauses have historically been disfavored by American courts. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 1913, 32 L.Ed.2d 513 (1972). Today, however, they are prima facie valid and enforceable when made at arm's length by sophisticated business entities, absent a compelling reason for abrogation. Id.; Scott v. Guardsmark Security, 874 F.Supp. 117, 120 (D.S.C.1995). Forum selection clauses will not be enforced if unreasonable or unjust. Id. Courts must scrutinize them for "fundamental fairness." Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595, 111 S.Ct. 1522, 1528, 113 L.Ed.2d 622 (1991). This court noted its approval of forum selection provisions in Firestone Financial Corp. v. Owens, 309 S.C. 73, 75-76, 419 S.E.2d 830, 832 (Ct.App.1992).

In M/S Bremen, the United States Supreme Court found a forum selection provision was a vital part of the parties' agreement and held compelling reasons favored enforceability. Noting that "there is nothing in the record presently before us that would support a refusal to enforce the forum clause," the Court held: "A contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision." 407 U.S. at 15, 92 S.Ct. at 1916.

Subsequently, in Carnival Cruise Lines, Inc., the Court upheld the enforceability of a forum selection clause in a passage contract ticket. The Court noted the advantages of certain standard contracts--namely lower transaction costs--and rejected the language in M/S Bremen requiring that forum selection clauses be "bargained for." Carnival Cruise Lines, Inc., 499 U.S. at 593-94, 111 S.Ct. at 1527. "[A] clause establishing ex ante the forum for dispute resolution has the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing litigants the time and expense of pretrial motions to determine the correct forum and conserving judicial resources that otherwise would be devoted to deciding those motions." Id. Significantly, the Court also rejected the federal court of appeals' "independent justification" for non-enforceability based on financial and geographical inconvenience to the parties. Id. In Firestone, this court recognized the long-standing rule of law in South Carolina that a party may waive lack of personal...