State ex rel. Polaris Industries, Inc. v. District Court of Thirteenth Judicial Dist. In and For Yellowstone County, 84-454

• Decision Date: 15 February 1985
• Docket Number: No. 84-454,84-454
• Citation: 695 P.2d 471,215 Mont. 110
• Parties: STATE of Montana, ex rel., POLARIS INDUSTRIES, INC., Relator, v. The DISTRICT COURT OF the THIRTEENTH JUDICIAL DISTRICT, In and For the COUNTY OF YELLOWSTONE, the Honorable Diane G. Barz, Judge presiding, Respondents.
• Court: Montana Supreme Court

Page 471

695 P.2d 471

215 Mont. 110

STATE of Montana, ex rel., POLARIS INDUSTRIES, INC. Relator, v. The DISTRICT COURT OF the THIRTEENTH JUDICIAL DISTRICT, In and For the COUNTY OF YELLOWSTONE, the Honorable Diane G. Barz, Judge presiding Respondents.

No. 84-454.

Supreme Court of Montana.

Submitted Jan. 25, 1985.

Decided Feb. 15, 1985.

McNamer, Thompson & Cashmore, Charles R. Cashmore, Jr. argued, Billings, for relator.

Berger Law Firm, Arnold Berger argued, Anderson, Edwards & Molloy, Billings, for respondents.

HUNT, Justice.

Relator Polaris Industries, Inc. filed an application for a writ of supervisory control asking this Court to reverse the Yellowstone County District Court's Order which refused to grant Polaris' motion to dismiss an action filed against it by Midland Implement Company, Inc.

Three issues were raised: first, whether the District Court erred in denying Polaris' motion to dismiss; second, whether a provision in an Agreement providing an exclusive out-of-state forum for litigation is valid and enforceable in Montana; and third, whether the District Court erred in holding that Polaris' refusal to renew the Agreement rendered it void as a matter of law, thereby precluding Polaris from availing itself of the out-of-state forum provision of the Agreement. Because we hold the forum-selection clause is void, we need not address the remaining issues.

On April 7, 1982, Midland entered into a written Distributor Agreement with Polaris. The Agreement provides Polaris would manufacture snowmobiles for commercial sale, and Midland would act as distributor for the products.

The Agreement further provides that no action on claims arising from the Agreement may be maintained by Midland against Polaris in any court except in Hennepin County, Minnesota District Court, or in the United States District Court in Minneapolis, Minnesota. After one year, the Agreement expired of its own terms, leaving matters such as inventory and warranty claims between the parties unresolved.

Midland asserted that Sec. 28-2-708, MCA renders the forum-selection clause void. We agree. That statute provides:

"Restraints upon legal proceedings void. Every stipulation or condition in a contract by which any party thereto is restricted from enforcing his rights under the contract by the usual proceedings in the ordinary tribunals or which limits the time within which he may thus enforce his rights is void." (Emphasis added.)

The complaint of the plaintiff in this case comes within the provisions of the foregoing code section. The plaintiff seeks to enforce its right under its contract with Polaris by a "usual proceeding" in the "ordinary tribunals" of Montana. We hold that the forum-selection clause of the Agreement is void under the statute as an improper restraint upon the plaintiff's exercise of its rights.

We, therefore, conclude that the District Court correctly denied Polaris' motion to dismiss. We deny the application for writ of supervisory control.

TURNAGE, C.J., and HARRISON, MORRISON, GULBRANDSON and WEBER, JJ., concur.

SHEEHY, Justice, specially concurring:

I concur in the foregoing opinion.

The provisions of Art. II, Section 16, 1972 Montana Constitution, are further evidence of a strong public policy in this State that impedances to state courts may not be contenanced by us. The constitutional statement is that courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property or character. Forum selection clauses in contracts impede the right to judicial process and especially discourage a speedy remedy.

A further reason for refusing validity to a forum selection clause may be found in the development of long-arm jurisdiction. Whereas formerly, a state could not make a binding judgment in personam against an individual or corporate defendant with which the state had no contacts, ties or relations (Pennoyer v. Neff (1877), 95 U.S. 714, 24 L.Ed. 565), with the decisions of the U.S. Supreme Court beginning...