Voicelink Data Services, Inc. v. Datapulse, Inc.

• Citation: 937 P.2d 1158,86 Wn.App. 613
• Decision Date: 09 June 1997
• Docket Number: No. 36893-1-I,36893-1-I
• Court: Court of Appeals of Washington
• Parties: VOICELINK DATA SERVICES, INC., a Washington corporation, Appellant, v. DATAPULSE, INC., a New Jersey corporation, Respondent.

Page 613

86 Wn.App. 613

937 P.2d 1158

VOICELINK DATA SERVICES, INC., a Washington corporation, Appellant, v. DATAPULSE, INC., a New Jersey corporation, Respondent.

No. 36893-1-I.

Court of Appeals of Washington Division 1.

June 9, 1997.

Dean G. Von Kallenbach, Camp Von Kallenbach, Seattle, for Appellant

Aaron S. Okrent, Craig S. Sternberg, Sternberg Thomson Okrent & Scher Seattle, for Respondent.

SHARON S. ARMSTRONG, Judge Pro Tem. ^*

At issue in this appeal is the trial court's dismissal of plaintiff's case, one month before trial, under CR 12(b)(2) and 12(b)(3). The dismissal was based upon a contractual forum selection clause that specifies Nevada courts as the proper forum for litigation. We affirm the dismissal.

In 1991, Voicelink Data Services, Inc., a Washington corporation, entered into a contract with Datapulse, Inc., a New Jersey corporation. Under the contract, Datapulse provided Voicelink with a magnetic tape containing names, telephone numbers, and other personal information about consumers. Voicelink conducted interviews with these individuals regarding their smoking habits and compiled the information into a database. As of November 1992, Voicelink claimed Datapulse owed it over $150,000 for this work. Voicelink commenced this action in King County Superior Court to collect the outstanding debt.

Datapulse filed a special notice of appearance in the lawsuit and later filed its Answer, Affirmative Defenses and Counterclaim. In its answer, Datapulse sought dismissal because of lack of jurisdiction and improper venue, asserting that the contract between the parties contained a forum selection clause that required the parties to bring all actions on the contract in Nevada. Datapulse also asserted a counterclaim for damages. Both parties conducted discovery on the substantive claims.

One month before trial, Datapulse moved to dismiss the case under CR 12(b)(2) and (3) for lack of personal jurisdiction and improper venue solely on the basis of the forum selection clause. In connection with the motion, neither party submitted evidence about negotiations of the parties' agreement, the reason for a Nevada forum selection clause, the parties' contacts with either Washington or Nevada, the location of the work, or the convenience of the parties or witnesses. The trial court granted the motion to dismiss, finding that the forum selection clause was valid and enforceable and Voicelink had "not made the requisite showing why the choice of forum clause should not be enforced."

We hold that (1) a CR 12(b)(3) motion to dismiss for lack of venue may be brought to enforce a forum selection clause; (2) the defendant did not waive its CR 12(b)(3) defense by engaging in substantive discovery, moving to strike discovery depositions, or waiting until one month

before trial to file its motion to dismiss; (3) a forum selection clause will be enforced if the nonmoving party fails to establish the clause is unfair or unreasonable; and (4) parties by agreement may consent to personal jurisdiction in a court which lacks minimal contacts with the parties.

I ENFORCEMENT OF THE FORUM SELECTION CLAUSE

The contract between the parties expressly provides that Nevada law governs its construction and that any litigation to enforce the contract be brought in Nevada courts:

Governing Law This Agreement shall be performed in Nevada and shall be construed under Nevada law, and any litigation to construe or enforce this Agreement shall be brought in a court of appropriate state or federal jurisdiction venued in Clark County, Nevada.

Particularly in the commercial context, the enforcement of forum selection clauses serves the salutary purpose of enhancing contractual predictability. See Scherk v. Alberto-Culver Co., 417 U.S. 506, 516, 94 S.Ct. 2449, 2455-56, 41 L.Ed.2d 270 (1974). Nevada, ¹ like Washington, requires enforcement of forum selection clauses unless they are "unreasonable and unjust." Compare Kysar v. Lambert, 76 Wash.App. 470, 484, 887 P.2d 431, 440 (1995), review denied, 126 Wash.2d 1019, 894 P.2d 564 (1995) with Tandy Computer Leasing v. Terina's Pizza Inc., 105 Nev. 841, 784 P.2d 7, 8 (1989) (both citing Burger King Corp. v. Rudzewicz In deciding a motion to dismiss based on a forum selection clause, the court does not accept the pleadings as true. Rather, the party challenging the clause must present evidence to justify its nonenforcement. See Argueta v. Banco Mexicano, 87 F.3d 320, 324 (9th Cir.1996). Voicelink has failed to meet its burden of proving that the parties would be so seriously inconvenienced by litigation in Nevada that the clause must be found unreasonable or that the clause was obtained through unfair dealing.

                471 U.S. 462, 472 n. 14, 105 S.Ct. 2174, 2181 n. 14, 85 L.Ed.2d 528 (1985)).  This is consistent with the test set forth by the U.S. Supreme Court.  See Burger King, 471 U.S. at 472 n. 14, 105 S.Ct. at 2181 n. 14;  M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 1913, 32 L.Ed.2d 513 (1972) (a forum selection clause is prima facie valid and should be enforced unless the challenger clearly shows enforcement would be "unreasonable and unjust").  Thus, even where a forum selection clause establishes a remote forum for resolution of conflicts, "the party claiming [unreasonableness] should bear a heavy burden of proof."  M/S Bremen, 407 U.S. at 17, 92 S.Ct. at 1917.   See also Restatement (Second) Conflict of Laws § 80, comment c (1989 rev.)  ("[t]he burden of persuading the court that stay or dismissal of the action would be unfair or unreasonable is upon the party who brought the action");  Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 280 (9th Cir.1984) ("[a]bsent some evidence submitted by the party opposing enforcement of the clause to establish fraud, undue influence, overweening bargaining power, or such serious inconvenience in litigating in the selected forum so as to deprive that party of a meaningful day in court, the provision should be respected as the expressed intent of the parties")
                

Voicelink summarily alleges that enforcement would be "unreasonable" because it performed the work under the contract in Washington; Datapulse mailed its payments to Voicelink's Redmond office; and the Nevada forum selection clause was included in the contract by "mistake." Whether or not these allegations, if substantiated, would In its reply brief, Voicelink argues that the parties may not, by agreement, confer jurisdiction on a Nevada Although Florida and Alabama require a showing of long-arm jurisdiction, regardless of consent by a forum selection clause, ⁵ the sole authority that Voicelink cites for its claim that Nevada may refuse to hear the suit is Firouzabadi v. First Judicial Dist. Court, 110 Nev. 1348, 885 P.2d 616 (1994). In fact, in that case the Nevada Supreme Court found personal jurisdiction under Nevada's long-arm statute over a New Jersey corporation in a contractual dispute with a California partnership. Unlike the instant case, the contract in Firouzabadi contained no forum selection clause. Further, Voicelink relies on the Nevada trial court's reasoning to the effect that Nevada has little interest in providing a forum for an action brought by nonresidents. The Nevada Supreme Court expressly rejected this argument because due process requirements were met.

                be sufficient to establish unreasonableness, Voicelink's allegations are not supported in the record by either testimony or exhibits.  Because Voicelink failed to provide any evidence in opposition to the motion to dismiss, it has not satisfied its heavy burden of proof as the party opposing enforcement of a forum selection clause.  We will not consider allegations of fact without support in the record. 2  Voicelink has therefore failed to meet its burden of proof as to unreasonableness. 3
                court.  Voicelink also asserts that Nevada might refuse to hear the dispute, regardless of consent by a forum selection clause, unless Nevada also has jurisdiction over Datapulse under its long-arm statute.  At the outset, one must distinguish between personal and subject matter jurisdiction.  Federal courts and most state courts, including Washington, have expressly held that a choice of forum clause constitutes consent to personal jurisdiction. 4  Personal jurisdiction, unlike subject matter jurisdiction, may be conferred by agreement, even though the selected court might otherwise lack "minimum contacts" under the due process clause.
                

Voicelink has not argued persuasively or cited any authority for the proposition that Nevada would not Voicelink has not presented any evidence in the record to support its allegations that litigation in Nevada would be so seriously inconvenient as to make enforcement of the forum selection clause unreasonable. ⁶

exercise jurisdiction in this case. Further, it is not the role of this court to speculate on whether the parties' contractually designated forum would, in fact, assert jurisdiction.

II WAIVER

Voicelink argues that even if the forum selection clause is enforceable, Datapulse waived the defenses of improper venue and lack of personal jurisdiction by its conduct in the litigation prior to moving for dismissal under CR 12(b). Voicelink argues that Datapulse waived its right to assert the venue and jurisdiction defenses by its actions after filing its answer, which raised those defenses. We conclude that Datapulse preserved its venue defense. Because the venue issue is dispositive, we do not address the defense of lack of personal jurisdiction.

A

Appropriate Civil Rule for Motion to Dismiss Based on Forum

Selection Clause

At the outset, we must decide whether a CR 12(b)(3) motion was the appropriate vehicle to resolve the issue of venue. Voicelink asserted in oral argument that enforcement of the forum selection clause presents a contractual affirmative defense, not a CR 12(b)(3) defense of improper venue, and that the issue had been...