Tech. Credit Corp. v. N.J. Christian Acad., Inc., Case No.5:17–cv–06130–HRL

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
• Citation: 307 F.Supp.3d 993
• Decision Date: 18 April 2018
• Docket Number: Case No.5:17–cv–06130–HRL
• Parties: TECHNOLOGY CREDIT CORPORATION, Plaintiff, v. N.J. CHRISTIAN ACADEMY, INC., et al., Defendants.

307 F.Supp.3d 993

TECHNOLOGY CREDIT CORPORATION, Plaintiff,
v.
N.J. CHRISTIAN ACADEMY, INC., et al., Defendants.

Case No.5:17–cv–06130–HRL

United States District Court, N.D. California, San Jose Division.

Signed April 18, 2018

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Basil Peter Fthenakis, Criterion Law, Palo Alto, CA, Katherine Susan Clark, Law Offices of Katherine S. Clark, San Jose, CA, for Plaintiff.

Robert E. Camors, Jr., Law Offices of Bob Camors, San Jose, CA, Andrew Grant Hamill, Chris Kao, Whitney R. Miner, Kao LLP, San Francisco, CA, for Defendants.

ORDER (1) DENYING DEFENDANTS' MOTION TO DISMISS; AND (2) DENYING DEFENDANTS' MOTION TO TRANSFER VENUE

HOWARD R. LLOYD, United States Magistrate Judge

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Plaintiff Technology Credit Corporation (TCC) sues for alleged breach of written contract over funding it provided for a failed solar project. Jurisdiction is based on diversity, 28 U.S.C. § 1332. Briefly stated, TCC says that it advanced certain funds for a solar equipment installation at defendants' facilities, but claims that defendants have not re-paid those sums as required by the parties' contracts. Arguing that venue is not proper here, defendants N.J. Christian Academy, Inc. (NJCA or Church) and New Jersey United Christian Academy (NJUCA or School) now ask that the court either dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(3), or transfer this action to the District of New Jersey pursuant to 28 U.S.C. § 1406(a). Even if venue is proper here, defendants alternatively request that this action be transferred to the District of New Jersey pursuant to 28 U.S.C. § 1404(a) for the convenience of the parties and witnesses and in the interest of justice. TCC opposes the motion, contending that the court should enforce a forum selection clause designating venue in California. Following the motion hearing, and with leave of court, each side submitted supplemental briefing on the issue whether the subject forum selection clause is permissive or mandatory. The matter now being submitted, upon consideration of the moving and responding papers, as well as the arguments of counsel, this court denies the motion to dismiss and the request for a § 1406(a) transfer, as well as the alternate motion to transfer pursuant to § 1404(a).¹

BACKGROUND

TCC is headquartered in San Jose, California and says that it is in the business of funding solar equipment installations for non-profit schools, churches, and other non-profit organizations throughout the United States. (Dkt. 22–2, Declaration of James E. Hartigan (Hartigan Decl.) ¶ 2).

Defendant NJCA is a church that offers religious worship and seminars. (Dkt. 11–1, Declaration of Jeong Ha Shinn (Shinn Decl.), ¶ 4). Defendant NJUCA is a boarding school for grades 6–12 that combines academic and religious teachings. (Id. ). Both defendants say that they are incorporated in New Jersey and operate only in that state on the same 43–acre retreat facility. (Id. ).

According to defendants, in August 2015, a company identifying itself as Green Life Solar, Inc. (Green Life Solar) sent them an email offering to build a solar system on defendants' property. The email described Green Life Solar as "a Solar Integrator and Financing Company" that could build a solar system for defendants "without any upfront cost to the Church...." (Shinn Decl. ¶ 7, Ex. A). Among other things, the email stated that "Green Life Solar will coordinate the financing process with its funding partner, as well as[ ] design, build and install the solar system." (Id. ).² The Church says

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that, excited by the prospect of saving money without any upfront cost, it decided to have Green Life Solar construct a solar power system at their facilities and to proceed with Green Life Solar's financing offer. (Id. ¶ 10).

On September 22, 2015, TCC received an email from Chris Tzokas of Green Life Solar, with a Request for Financing on behalf of NJCA. (Hartigan Decl. ¶ 3). TCC says that, on September 24, 2015, it emailed Green Life Solar a proposal in connection with the NJCA project, conditioned on TCC's credit approval of the Church and the School (as the Church's guarantor), as well as on TCC's approval of the equipment to be used on the solar project. (Id. ¶ 4). A revised proposal was sent to Green Life Solar on October 28, 2015. (Id. ).

According to TCC, after conducting a thorough credit check on the defendants, it approved the terms of the proposed transaction. And, TCC's credit committee authorized Daniel Ambrogio (the company's Director of Operations) to prepare a Power Purchase Agreement, supporting documentation, and Guaranty. (Hartigan Decl. ¶ 5).

There were several agreements executed in connection with the project:

Installation Contract between Green Life Solar and the Church

On October 27, 2015, Green Life Solar executed a Solar Construction Agreement (or, what is referred to in the papers as the "Installation Contract") with the Church for the construction of the solar energy system at defendants' New Jersey facilities. (Shinn Decl. ¶ 8, Ex. B). The next day, the Church executed the agreement through David Kim, its Facility Administrator at that time. (Id. ). The Installation Contract contains a forum selection clause designating New Jersey:

Disputes; Jurisdiction; Venue: This Agreement shall be governed by the laws of the State of New Jersey. All disputes hereunder shall be adjudicated in the Superior Court of the State of New Jersey, Camden County Vicinage, unless the parties otherwise agree in writing to pursue alternative dispute resolution.

(Id., Installation Contract ¶ 12).

The first page of the Installation Contract states that the contract "includes: this page; the Terms, Conditions and Specifications; the State Addendum; Customer Pre–Installation Activities (if applicable) and any other documents expressly made a part of this Agreement." (Shin Decl. ¶ 8, Ex. B, Installation Contract at 1). It further provides that the "Agreement represents the entire agreement between [Church] and [Green Life Solar] and supersedes all prior negotiations, representation[s] or agreements, either written or oral." (Id. ). However, appended to the Installation Contract are several exhibits, most of which, on their face, indicate that they are part and parcel of, or supplements to, the Power Purchase Agreement between TCC and the Church. The Installation Contract also says that the Church's obligations under the contract are conditioned on "[Church]'s successful negotiation of a financing agreement and power purchase agreement (the "Financing and Power Purchase Agreement") with [TCC]...." (Id. ). Thus, if the Church didn't manage to obtain such financing on terms reasonably acceptable to the Church, then the Church could terminate the Installation Contract. (Id. ).

307 F.Supp.3d 998

Power Purchase Agreement between TCC and the Church

The Church subsequently entered into the Power Purchase Agreement with TCC. (Shinn Decl., ¶ 10, Ex. C). According to TCC, through the Power Purchase Agreement, the Church contracted with TCC to have TCC buy the solar energy system from Green Life Solar and to then sell the power from that system to the Church. (Id. ). The Power Purchase Agreement contains a forum selection clause that provides:

Governing Law . This Agreement shall be governed by and construed in accordance with the internal laws, but not the choice of laws provisions, of the State of California, without giving effect to conflicts of laws principles. [TCC] and [Church] hereby submit to the non-exclusive jurisdiction of any State or Federal court located in San Jose, California for all legal proceedings arising directly or indirectly from this Agreement, and each irrevocably waives any objection to any such proceeding based on venue or inconvenient forum . The Parties agree to waive their right to a jury trial and to submit all disputes of fact or law relating to or arising out of this Agreement to a trial pursuant to an Order of Reference under California Code of Civil Procedure section 638 et seq. The Parties intend this general reference agreement to be specifically enforceable in accordance with CCP section 638 et seq.

(Id. Power Purchase Agreement ¶ 22) (emphasis added). The Power Purchase Agreement also states that "[t]his Agreement (including all exhibits attached hereto represents the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior and contemporaneous oral and written agreements." (Id. Power Purchase Agreement ¶ 13).

Dr. Jeong Ha Shinn, NJCA's founder, Chairman and Director of the Board, executed the Power Purchase Agreement on December 15, 2015. (Shinn Decl. ¶ 10, Ex. C). James E. Hartigan, TCC's co-founder, executed the agreement on behalf of TCC. However, TCC says that it did not receive defendants' signed agreement until December 21, 2015; and, although his signature is dated December 15, 2015, Hartigan says that the agreement, as executed by defendants, was not actually presented to him for signature until sometime after December 21, 2015. (Dkt. 22–3, Declaration of...