Sabatino v. Lasalle Bank, N.A., WD 60729.
| Decision Date | 28 January 2003 |
| Docket Number | No. WD 60729.,WD 60729. |
| Parties | Victor R. SABATINO and Kathryn L. Sabatino, Appellants, v. LASALLE BANK, N.A., Respondent. |
| Court | Missouri Court of Appeals |
R. Pete Smith, Hugh L. Marshall, Kansas City, MO, for Appellants.
Brett D. Anders, Christian J. Kelly, Kansas City, MO, for Respondent.
Before: BRECKENRIDGE, P.J., and HOWARD and HOLLIGER, JJ.
This is an appeal from the Platte County Circuit Court's judgment in favor of Respondent LaSalle Bank, N.A. ("LaSalle") on LaSalle's motion to dismiss. Appellants Victor and Kathryn Sabatino (the "Sabatinos") claim the trial court erred in granting LaSalle's motion to dismiss by finding that exclusive venue and jurisdiction lie in Cook County, Illinois, based on outbound forum selection clauses contained in various loan documents. We affirm the trial court's dismissal of plaintiffs' petition for the reasons set forth below.
On January 23, 1998, LaSalle loaned $20.5 million to Family Snacks, Inc. ("FSI"), a Missouri corporation. Victor Sabatino, the president of FSI, signed the loan documents on behalf of FSI. Kathryn Sabatino is Victor's wife. The loan was evidenced by various loan documents including, but not limited to, a Loan and Security Agreement (the "Loan Agreement") and Promissory Note ("Note"), each dated January 23, 1998. Victor Sabatino personally guaranteed the repayment and performance of the loan obligations by signing a Continuing Unconditional Guaranty ("Guaranty") also dated January 23, 1998. Mr. Sabatino's obligations under the Guaranty are secured by a Collateral Assignment of Certificate Deposit ("CD Assignment") in the original principal amount of $500,000, dated January 5, 2000. The Loan Agreement, the Note, the Guaranty, and the CD Assignment all include forum selection clauses placing venue in the courts of Cook County, Illinois.
In order to induce LaSalle to advance additional sums under the Loan Agreement, the Sabatinos signed and delivered to LaSalle a Deed of Trust dated September 28, 1999. The deed of trust granted LaSalle a lien on the Sabatinos' real property located in Platte County, Missouri. While the deed does not contain a separate forum selection clause, Section I of the deed states, "The terms and provisions of the Note and the Loan Agreement are hereby incorporated by reference in this Deed of Trust." The forum selection clause in the Loan Agreement provides for exclusive venue in the courts of Cook County, Illinois, for all actions, "ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT, THE OTHER AGREEMENTS, OR THE COLLATERAL...." The Loan Agreement defines "Other Agreements" as "all agreements, instruments and documents ... including without limitation, guaranties, mortgages, trust deeds, pledges, ... executed by or on behalf of Borrower [FSI] or any other Person." The term "Collateral" as defined by the Loan Agreement includes any real property of any Obligor or any other Person pledged to secure the repayment of the loan.
On February 14, 2000, FSI filed a voluntary bankruptcy petition under Chapter 11 of the Bankruptcy Code. Then, on March 24, 2000, all or substantially all of FSI's assets were sold to Guys Acquisition Company, L.L.C. ("GAC"). The sale was subject to the Sale Order of the Bankruptcy Court. The Sale Order approved the Asset Purchase Agreement ("APA") between FSI and GAC dated March 20, 2000. The APA provided that in exchange for all or substantially all of the assets of FSI, GAC would assume the total indebtedness owed by FSI to LaSalle under the Loan Agreement and pay $1,700,000 to be held in escrow.
On July 6, 2000, Victor Sabatino filed a cross-claim against LaSalle in litigation commenced against Victor Sabatino and LaSalle in the Bankruptcy Court. In his cross-claim, Victor Sabatino alleged the Sabatinos' obligations under the deed of trust were released and that Victor Sabatino's obligations under his Guaranty and the CD Assignment were released. La-Salle filed a motion to dismiss the cross-claim, and the Bankruptcy Court held a hearing on LaSalle's motion. After the hearing, but prior to the Bankruptcy Court entering an order on the motion, Victor Sabatino dismissed his cross-claim.
On September 1, 2000, the Sabatinos filed a lawsuit against LaSalle in the Circuit Court of Jackson County, Missouri, seeking: (1) discharge of all liability of Victor Sabatino under the Guaranty; (2) an order directing LaSalle to release the Guaranty and all property securing the Guaranty` to extinguish all liability of the Sabatinos under the deed of trust; (4) an order directing LaSalle to release the deed of trust; and (5) a judgment that the debt of FSI to LaSalle has been released, satisfied, and/or extinguished, that the property listed on the deed of trust is no longer encumbered by the deed of trust, and that the deed of trust no longer functions as security for any debt owed to LaSalle. On March 6, 2001, the Jackson County court transferred the case to the Circuit Court of Platte County, Missouri. LaSalle then filed a motion to dismiss with the Platte County court. Following a hearing on the motion to dismiss, Platte County entered its Order of Dismissal of the Sabatinos' lawsuit on October 3, 2001. The Sabatinos appealed to this court, challenging the dismissal.
When reviewing a motion to dismiss, this court will treat all facts alleged as true and give the non-moving party the benefit of all reasonable inferences deduced from the facts. Evergreen Nat'l Corp. v. Killian Constr. Co., 876 S.W.2d 633, 635 (Mo. App.W.D.1994). When the motion to dismiss is one for improper venue relating to a forum selection clause, it should be treated as an issue of jurisdiction. Scott v. Tutor Time Child Care Sys., Inc., 33 S.W.3d 679, 682 (Mo.App. W.D.2000). Whether jurisdiction exists is a question of law; therefore, the appellate court reviews the issue independently on appeal. Farris v. Boyke, 936 S.W.2d 197, 200 (Mo.App. S.D.1996).
The Sabatinos argue the forum selection clauses contained in the loan contracts are unenforceable because an outbound forum selection clause (one providing for trial outside of Missouri) cannot deprive a Missouri circuit court of its jurisdiction, which is conferred upon it by Article V, § 14(a) of the Missouri Constitution. The U.S. Supreme Court dismissed a similar argument in M/S Bremen v. Zapata Off-Shore Co. stating, "The argument that [forum selection] clauses are improper because they tend to `oust' a court of jurisdiction is hardly more than a vestigial legal fiction." 407 U.S. 1, 12, 92 S.Ct. 1907, 1914, 32 L.Ed.2d 513 (1972). The Missouri Supreme Court has embraced this Rule. After High Life Sales Co. v. Brown-Forman Corp., Missouri courts can no longer refuse to enforce forum selection clauses that provide an action on a contract shall be brought outside Missouri on the grounds that such a clause is against public policy and per se void. 823 S.W.2d 493, 494 (Mo. banc 1992). Our Missouri Supreme Court in High Life adopted the majority rule that an outbound forum selection clause should be enforced unless it would be unfair or unreasonable to do so. Id. Thus, the previous distinction between the enforceability of outbound and inbound (one providing for trial in Missouri) forum selection clauses was eliminated.
The party resisting enforcement of a forum selection clause bears a heavy burden in persuading the court that the clause is unfair or unreasonable. Chase Third Century Leasing Co. v. Williams, 782 S.W.2d 408, 411 (Mo.App. W.D.1989). In order to prove a forum selection clause is unfair, a party must do more than simply assert lack of bargaining power. Id. at 412. The Sabatinos have not alleged any facts tending to show the contracts at issue are in any way "adhesive" or that the contracts were not freely entered into in an arm's length transaction.
More specifically, the Sabatinos further argue it would be unreasonable to enforce the forum selection clauses for the following reasons: (1) § 508.030 RSMo (2000) applies; therefore, any action on the deed of trust can be properly brought only in Platte County; (2) Kathryn Sabatino is not a party to any of the forum selection clauses; and (3) as the portion of the lawsuit involving the deed of trust must be brought in Platte County, forcing Victor Sabatino to litigate the remaining issues in Cook County would violate the public policy favoring resolution of all related claims in a single forum.
For the reasons given below, we find the Sabatinos did not meet their heavy burden of demonstrating the enforcement of the forum selection clauses would be either unfair or unreasonable. We, therefore, affirm the trial court's dismissal of the Sabatinos' petition on the basis of the forum selection clauses contained in the various loan documents granting exclusive jurisdiction and venue to courts located in Cook County, Illinois.
The Sabatinos contend it would be unreasonable to enforce the forum selection clauses because their action seeking release from the deed of trust affects title to real estate and, therefore, must be brought in Platte County in accordance with § 508.030. Section 508.030 provides:
Suits for the possession of real estate, or whereby the title thereto may be affected ... shall be brought in the county where such real estate, or some part thereof, is situated.
This court in Dickenson Manor, Inc. v. Slagle, noted that the phrase "whereby the title may be affected" in § 508.030 has been held to mean the judgment must operate directly upon the title to the real estate. 732 S.W.2d 263, 265 (Mo.App.W.D.1987). In order for "title to be affected" so as to predicate venue in the county where the land is located, title to the land must be the subject of the controversy. It is not enough for the judgment to affect the title incidentally or collaterally. State...
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