Energy Claims Ltd. v. Catalyst Investment Group Ltd. , 701 Utah Adv. Rep. 10 ( 2012 )

IN THE UTAH COURT OF APPEALS
‐‐‐‐ooOoo‐‐‐‐
Energy Claims Limited, a British Virgin ) AMENDED OPINION1
Islands company, )
) Case No. 20100128‐CA
Plaintiff and Appellant, )
)
v. ) FILED
) (February 2, 2012)
Catalyst Investment Group Limited; )
Timothy Roberts; ARM Asset‐Backed ) 2012 UT App 32Securities, S.A.; Christopher P. Baker; )
Thomas DePetrillo; Charles Becker; and )
Robert Beuret, )
)
Defendants and Appellees. )
‐‐‐‐‐
Third District, Salt Lake Department, 090900505
The Honorable Tyrone E. Medley
Attorneys: Jefferson W. Gross and Robert J. Shelby, Salt Lake City, for Appellant
Reid W. Lambert, Anthony M. Grover, James L. Barnett, and Mona L.
Burton, Salt Lake City; and Charles D. Schmerler, James H. Neale, and
Jami Mills Vibbert, NewYork City, New York, for Appellees
‐‐‐‐‐
Before Judges McHugh, Voros, and Roth.
McHUGH, Associate Presiding Judge:
¶1 Energy Claims Limited (ECL) appeals the trial court’s dismissal of its claims
against Catalyst Investment Group Limited (Catalyst), Timothy Roberts, Christopher P.
1. This Amended Opinion replaces the Opinion in Case No. 20100128‐CA issued on
October 14, 2011.
Baker, Thomas DePetrillo, Charles Becker, and Robert Beuret for forum non conveniens,
and the dismissal of its claims against ARM Asset‐Backed Securities, S.A. (ARM), for
improper venue. We affirm.
BACKGROUND2
¶2 Eneco, Inc., was incorporated in Utah in 1991 for the purpose of developing
technologies related to cold fusion. Eneco subsequently redirected its research and
development activities to focus on thermal chip technologies. Between 1999 and 2006,
Eneco raised and spent significant funds by selling equity in Eneco and borrowing
funds from lenders. One group of lenders, the 2005 Noteholders, advanced several
million dollars to Eneco, securing the loans with Eneco’s rights to its patents. In 2006,
Eneco’s board of directors (board)—consisting of Harold L. Brown, Max Lewinsohn,
Patrick Murrin, and Charles Becker—projected that a minimum of $5 million in
additional funds was needed to develop a commercially‐viable product.
¶3 On May 15, 2006, Eneco entered into a contract with Catalyst (Catalyst
Agreement), a United Kingdom investment group with its principal place of business in
London, England. Pursuant to the Catalyst Agreement, Catalyst agreed to provide
general corporate financial advice and to assist Eneco in the issuance of a $40 million
convertible corporate bond. The Catalyst Agreement contained a forum selection clause
that stated, “This Agreement shall be governed by, and construed in accordance with
the Laws of England, and the parties hereto submit to the exclusive jurisdiction of the
Courts of England and Wales.” Timothy Roberts, the executive director of Catalyst,
represented that Catalyst would raise $5 million for Eneco by September 30, 2006.
Roberts is a resident of England and a director and agent of ARM, a société anonyme3
incorporated under the laws of the Grand Duchy of Luxembourg. ARM’s principal
2. In reviewing a motion to dismiss, “we view the facts and construe the complaint in
the light most favorable to the plaintiff and indulge all reasonable inferences in his
favor.” Prows v. Pinpoint Retail Sys., Inc., 868 P.2d 809, 810 (Utah 1993) (internal
quotation marks omitted).
3. A société anonyme is an incorporated joint‐stock company. See Black’s Law Dictionary
1518 (9th ed. 2009).
20100128‐CA 2
place of business is in Luxembourg, and its operations are focused on transactions
involving asset‐backed securities. Acting as ARM’s agent, Catalyst advised Eneco to
involve ARM in its fundraising efforts. Specifically, Catalyst proposed that Eneco “sell
an investment bond, the ‘C3 Bond,’ issued by Eneco Financing, S.A., which in turn
would be made up of bonds issued by Eneco and bonds issued by ARM.” Catalyst also
encouraged Eneco to form two subsidiaries, Eneco Europe, PLC (Eneco Europe), and
Eneco Assets, Ltd. (Eneco Assets). Catalyst’s strategy called for Eneco to license its
intellectual property rights in the United Kingdom to Eneco Assets, then sell shares of
Eneco Assets to Eneco Europe, so that Catalyst could offer shares of Eneco Europe to
third‐party investors to fund Eneco Europe’s purchase of shares of Eneco Assets.
Catalyst represented that this mechanism would raise at least $5 million for Eneco.
¶4 To facilitate the sale of Eneco Europe’s shares and the issuance of the $40 million
convertible bond, Catalyst asked Eneco to convert the 2005 Noteholders’ debt to equity.
Catalyst, ARM, and Roberts were aware that the 2005 Noteholders were unlikely to
agree to such a conversion in the absence of assurances that Catalyst was successful in
its fundraising efforts on behalf of Eneco. Based on written assurances from Roberts,
Eneco informed the 2005 Noteholders that Catalyst had raised $5 million as promised.
In reliance on this information, “the 2005 Noteholders agreed to convert their loans to
equity upon the express condition that Catalyst had raised $5 million for Eneco,” and
“Eneco treated the debt owed to [the] 2005 Noteholders as having been converted to
equity.”
¶5 By early 2007, Eneco’s board was concerned that none of the money allegedly
raised by Catalyst had been received. Therefore, the board “hired counsel in the United
Kingdom in order to investigate and pursue possible claims against Catalyst and
possibly others for breach of contract and fraud.” Catalyst was made aware of Eneco’s
concerns through a letter from Eneco’s U.K. lawyer demanding that it perform its
obligations under the Catalyst Agreement.4
¶6 In June 2007, Roberts approached Becker, a member of Eneco’s board, to enlist
his help in reconstituting Eneco’s board for the benefit of Catalyst and ARM. Becker is a
4. Although ECL’s opening brief indicates that Becker, Baker, DePetrillo, and Beuret
caused Eneco to instruct the company’s U.K. counsel not to send the demand letter to
Catalyst, we recite the facts as set forth in the complaint.
20100128‐CA 3
resident of Texas. In exchange for Becker’s efforts to appoint three new directors
acceptable to Catalyst, Catalyst agreed to pay Becker, or a company controlled by
Becker, $300,000 to develop a demonstration unit of Eneco’s technology. Without
disclosing the agreement with Catalyst to the rest of Eneco’s board, Becker recruited
three new directors, Baker, Beuret, and DePetrillo, who were investment bankers
“familiar to Catalyst.” Baker and Beuret are residents of Massachusetts, and DePetrillo
is a resident of Rhode Island. Becker, Baker, DePetrillo, and Beuret (collectively,
Defendant Directors) secretly acquired proxies from Eneco’s shareholders and voted
those shares so that Baker, DePetrillo, and Beuret were appointed to the Eneco board.
Once ensconced on the Eneco board, the Defendant Directors conspired with Catalyst,
ARM, and Roberts “to pursue their own self interests at the expense of Eneco.”
Specifically, ECL alleges that the conspirators publically listed Eneco’s stock, enriched
themselves with fees, and refused to hold a special shareholder’s meeting authorized by
resolution of the board.
¶7 By October 2007, Eneco was in default to the 2005 Noteholders and had no
means to satisfy the deficiencies; the board acknowledged that the debt had been
improperly converted to equity. Eneco’s chief executive officer, Lewinsohn, acting
through Maximillian & Co., an English sole proprietorship, notified Eneco that
Maximillian & Co. had been appointed as collateral agent for the 2005 Noteholders.
Despite numerous proposals from Maximillian & Co. to resolve the matter favorably to
Eneco and to reconstitute the Eneco board in a manner acceptable to the 2005
Noteholders, the Defendant Directors refused to accept any offer from Maximillian &
Co. and also rejected the written financing proposals from two other suitors presented
to Eneco’s board by Lewinsohn in November 2007. In response, Lewinsohn resigned as
a director of Eneco and Murrin resigned shortly thereafter. In December 2007,
Lewinsohn, acting through Maximillian & Co., initiated procedures to foreclose on
Eneco’s right to its patents on behalf of the 2005 Noteholders.
¶8 In December 2007, the Eneco Europe board, which included Roberts’s wife,
Barbara Piper, “put Eneco Europe into administration under the laws of the United
Kingdom due to it insolvency.” Because the administration of Eneco Europe was
detrimental to Catalyst’s business reputation, Catalyst sought a method to make Eneco
Europe solvent. Roberts and Catalyst accomplished this purpose by inducing the
Defendant Directors to forgive Eneco Europe’s $3.5 million debt to Eneco for no
consideration.
20100128‐CA 4
¶9 In early 2008, the Defendant Directors entered into an agreement with Catalyst,
ARM, and Roberts (the Subscription Agreement), in which ARM agreed to finance
Eneco’s anticipated bankruptcy proceedings for $225,000 by purchasing shares of Eneco
in that amount “provided that [ARM] obtain a release of any prior commitment to
provide funds to Eneco.” The Subscription Agreement contained provisions selecting
the laws of England and Wales and designating the courts of England and Wales as the
choice of forum. ECL alleges that, in furtherance of the conspiracy, the Defendant
Directors entered into the Subscription Agreement, thereby releasing Roberts, Catalyst,
and ARM from liability for breach of the Catalyst Agreement, and that they did so
without adequate consideration.
¶10 On January 18, 2008, Eneco filed for reorganization under Chapter 11 of the
United States Bankruptcy Code. See generally 11 U.S.C. §§ 1101‐74 (2006). Thereafter, in
June 2008, the bankruptcy trustee converted the case to a liquidation proceeding
pursuant to Chapter 7 of the Bankruptcy Code. See generally id. §§ 701‐84. All of
Eneco’s assets were sold by the bankruptcy trustee to pay Eneco’s creditors.
Maximillian & Co., the 2005 Noteholders’ collateral agent, purchased Eneco’s causes of
action against all of the defendants from the bankruptcy estate for $750,000.
Maximillian & Co. then assigned those causes of action to ECL. ECL is a British Virgin
Islands company with its principal place of business in Tortola, British Virgin Islands.
¶11 On January 9, 2009, ECL filed a complaint in the Third Judicial District Court of
Utah against Catalyst, ARM, and the Defendant Directors, asserting three causes of
action and praying for over $150 million in relief. First, ECL alleges that the Defendant
Directors breached their fiduciary duties to Eneco in their dealings with Catalyst, ARM,
and Roberts. Second, ECL contends that the Defendant Directors, Catalyst, Roberts,
and ARM entered into a civil conspiracy in furtherance of which the Defendant
Directors “(1) refused to pursue claims against Catalyst, ARM, and Roberts, (2) released
claims against Catalyst, ARM and Roberts, and (3) released claims against Eneco
Europe.” Third, ECL alleges that “Catalyst, ARM, and Roberts knowingly induced,
aided and abetted the numerous breaches of fiduciary duty by [the Defendant
Directors].” In addition, ECL alleges that the Subscription Agreement revoked the
Catalyst Agreement. None of the parties to the complaint is a Utah resident.
¶12 On March 13, 2009, the Defendant Directors filed an answer denying the
allegations in the complaint accusing them of breach of fiduciary duty and conspiracy.
20100128‐CA 5
Approximately one month later, Catalyst filed a motion to dismiss for improper venue
and forum non conveniens. Roberts filed a separate motion to dismiss, joining in the
arguments advanced by Catalyst, and adding the defense of failure to state a claim. In
support of the motion, Catalyst and Roberts explained that the claims were all based on
“Catalyst’s purported failure to perform its obligations under [the Catalyst
Agreement]” and that the efforts of Catalyst under that agreement “were to occur and
did occur principally in the United Kingdom and Europe, through a bond offering to be
listed on the Channel Island Stock Exchange and through services to be governed by the
rules of England’s Financial Services Authority (the equivalent of the United States’
Securities [and] Exchange Commission).” Catalyst and Roberts pointed to the Catalyst
Agreement’s designation of England and Wales as the choice of law and forum,
claiming that ECL could not avoid that forum selection clause by repackaging its breach
of contract claims against Catalyst and Roberts as tort claims consisting of conspiring
with and aiding and abetting the Defendant Directors. Catalyst and Roberts also
argued that the complaint should be dismissed under the doctrine of forum non
conveniens, noting that the primary parties are located outside of Utah, with many of
them located in Europe, and that “access to the documents and testimony is made more
difficult, not easier by litigating in Utah.”
¶13 In response, ECL filed a memorandum in opposition to Catalyst’s and Roberts’s
motions to dismiss, asserting that the claims were not within the scope of the Catalyst
Agreement’s forum selection clause and were instead focused on the breach of fiduciary
duty by the Defendant Directors, who joined in a conspiracy with and were aided by
Catalyst, Roberts, and ARM. Because Roberts was not a party to the Catalyst
Agreement, ECL argued that he could not rely on it to prevent litigation in Utah, even if
it were applicable. In addition, ECL argued that Catalyst and Roberts had failed to
meet their heavy burden under the doctrine of forum non conveniens of coming
forward with evidence of the hardship they would suffer if the case were tried in Utah.
ECL further asserted that there was no other convenient forum because Utah is the only
forum with personal jurisdiction over all of the parties.
¶14 On May 15, 2009, ARM filed a separate motion to dismiss on the grounds of
improper venue and lack of personal jurisdiction. ARM argued that the claims against
it were within the scope of the forum selection clause in the Subscription Agreement
and, therefore, venue in Utah was improper. With respect to personal jurisdiction,
ARM contended that it did not have minimum contacts with the State of Utah. In
20100128‐CA 6
support, ARM filed a declaration from Roberts, in his capacity as a director of ARM,
indicating that ARM “provides services primarily to clients in England and Europe,”
and further stating that it has no contacts with Utah other than its participation in the
Subscription Agreement.
¶15 On May 26, 2009, Catalyst and Roberts filed a reply, again arguing that the
claims were within the scope of the Catalyst Agreement’s forum selection clause, that
Roberts was entitled to the protection of that clause, and that the complaint should be
dismissed for forum non conveniens. With the reply memorandum, Catalyst and
Roberts filed a declaration from Moray Macpherson, the “Head of Legal Management
and Risk of Defendant Catalyst.” The declaration indicated that Catalyst provides
services to clients primarily in England and Europe, had done no business with a Utah
entity other than Eneco, and had no other connections to Utah, past or present.
According to Macpherson, all of Catalyst’s services to Eneco were provided pursuant to
the Catalyst Agreement and the Subscription Agreement, which were negotiated and
executed in England. Macpherson also stated that Catalyst was compelled to
participate in Eneco’s Utah bankruptcy proceedings “at great expense and hardship to
its business,” due to the time and money required to defend its interests, including
“thousands of dollars in traveling expenses,” and the costs of hiring additional staff,
who were “regularly . . . forced to work at odd hours to coordinate with local counsel”
due to the seven‐hour time difference. In closing, Macpherson stated, “If forced to
defend claims brought in this action, Catalyst will suffer these same grave hardships,”
in that it “would again be forced to expend significant sums to employ local counsel, fly
to and from Utah, and maintain staff in London to coordinate with Utah,” resulting in
“disruption of Catalyst’s business [that] will place enormous strain upon our
operational capacity,” and the expenditure of “significant expense and time” due to the
fact that “most parties and witnesses are located far from Utah.”
¶16 On June 12, 2009, ECL filed its opposition memorandum to ARM’s motion to
dismiss the complaint for lack of personal jurisdiction and improper venue, arguing
that ARM had significant contacts with Utah, that Utah is the proper forum for the
resolution of the dispute, and that the tort claims asserted were based on facts that
occurred before the Subscription Agreement was executed and, therefore, do not fall
within its forum selection clause. In the alternative, ECL argued that even if the forum
selection clause did apply, the Utah court should not enforce it because to do so would
deprive ECL of its day in court. ARM filed a reply memorandum contending that the
20100128‐CA 7
Utah court did not have personal jurisdiction over it and that the claims were related to
the Subscription Agreement and, thus, were required to be brought in England, which
was also the most convenient forum.
¶17 After briefing was completed, the Defendant Directors joined in the motions to
dismiss for forum non conveniens and expressly consented to the jurisdiction of the
English courts, explaining that “the whole matter should be litigated in a single action
in that forum,” and opining that “[t]his will not result in prejudice to [ECL], which is a
British Virgin Islands company, particularly where its predecessor [Maximillian & Co.]
is already a party to an action in England involving substantially similar issues.” ECL
objected to the Defendant Directors’ joinder, claiming that ECL was not a party to the
English proceedings and that the Defendant Directors could not meet their heavy
burden of establishing forum non conveniens.
¶18 On August 11, 2009, the trial court scheduled a hearing on the combined motions
to dismiss for October 14, 2009, reserving two‐and‐one‐half hours for argument. On
October 9, 2009, Catalyst, Roberts, and ARM filed a Request for Judicial Notice, asking
the trial court to take judicial notice of related legal proceedings filed
(i) with the Third Judicial District Court in and for Salt Lake
County, State of Utah, No. 080923582, styled Maximillian &
Co. v. Catalyst Investment Group Limited et al. (the “Utah
Noteholder Action”); (ii) with the Third Judicial District
Court in and for Summit County, State of Utah, No.
080500707, styled Harry Reed, et al. v. Catalyst Investment
Group Limited et al. (the “Park City Action”); (iii) with the
English High Court of Justice, Chancery Division, No.
HC08C03158, styled Catalyst Investment Group Ltd. et al. v.
Max Lewinsohn et al. (the “UK Noteholder Action”); (iv) with
the English High Court of Justice, Chancery Division, No.
HC08C03241, styled Catalyst Investment Group Ltd. et al. v.
Max Lewinsohn et al. (the “UK Declaratory Action”); and (v)
with the English High Court of Justice, Chancery Division,
No. HC08C03618, styled ARM Asset‐Backed Securities, S.A. v.
Max Lewinsohn et al. (the “UK ARM Action”).
20100128‐CA 8
The motion includes attachments of transcripts, documents, and decisions from these
identified proceedings, including the decision and order dismissing the Utah
Noteholder Action for forum non conveniens; the order in the UK Noteholder Action
denying a motion to dismiss brought by the defendants there based on forum non
conveniens;5 forms purporting to be Maximillian & Co.’s admission of liability for “the
whole claim” in the UK Declaratory Action and the UK ARM Action; and documents
entitled “Particulars of Claim” from the UK ARM Action and the UK Declaratory
Action.6
¶19 Due to a continuance, the hearing on the motions to dismiss took place on
December 16, 2009. After extensive argument, the trial court took the motions under
advisement. The following day, the trial court announced its ruling from the bench and
granted the defendants’ motion to dismiss ECL’s complaint for forum non conveniens
as to Catalyst, Roberts, and the Defendant Directors, and for improper venue as to
defendant ARM. ECL now appeals.
ISSUES AND STANDARDS OF REVIEW
¶20 To begin, ECL contends that the trial court did not apply the correct legal
standard when dismissing its complaint for forum non conveniens because Utah’s
framework for analyzing such motions is outdated and should be replaced with a
threshold test similar to that applied by the federal courts.7 “[W]hether the trial court
5. ECL is not a party to any of the actions in the United Kingdom.
6. Although there is no written ruling on the request for judicial notice, at the hearing
on the motions to dismiss, the trial court confirmed that opposing counsel had no
objection to the motion, ECL made no objection to the use of the information by the
defendants, and ECL relied on portions of the information during its own argument.
Thus, we treat the motion as having been granted.
7. ECL asks us to adopt a threshold test applied in some federal courts that would
preclude the trial court from declining jurisdiction here. See, e.g., Needham v. Phillips
Petroleum Co. of Nor., 719 F.2d 1481, 1483 (10th Cir. 1983); Membreno v. Costa Crociere
(continued...)
20100128‐CA 9
applied the proper legal standard is a question of law that is reviewed for correctness.”
Chen v. Stewart, 2004 UT 82, ¶ 19, 100 P.3d 1177.
¶21 ECL next asserts that, even using the current Utah standard for analyzing
motions to dismiss for forum non conveniens, the trial court erred in dismissing ECL’s
causes of action. We review the trial court’s decision to dismiss a complaint on the
ground of forum non conveniens for abuse of discretion. See Kish v. Wright, 562 P.2d
625, 628 (Utah 1977).
¶22 Finally, ECL argues that the trial court erred in granting ARM’s motion to
dismiss for improper venue based on the forum selection clause in the Subscription
Agreement. The trial court’s interpretation of the forum selection clause is a question of
law that we review for correctness. See Innerlight, Inc. v. Matrix Grp., LLC, 2009 UT 31,
¶ 14, 214 P.3d 854 (interpreting a forum selection clause and stating that “[i]f the
language within the four corners of the contract is unambiguous . . . a court determines
the parties’ intentions from the plain meaning of the contractual language as a matter of
law” (alteration in original)). We review a district court’s decision to enforce a forum
selection clause for abuse of discretion. See Jacobsen Constr. Co. v. Teton Builders, 2005 UT
4, ¶ 9, 106 P.3d 719 (citing Prows v. Pinpoint Retail Sys., Inc., 868 P.2d 809, 810 (Utah
1993)). The trial court exceeds its discretion “in enforcing [a] forum selection clause
[when the] clause is so unreasonable that its enforcement would be . . . against both
logic and the facts on the record.” Id. (alterations in original) (internal quotation marks
omitted). However, “[b]ecause the district court did not hold an evidentiary hearing
and relied only on documentary evidence, we use a correctness standard on review” of
its decision to dismiss ECL’s claims against ARM. See id. ¶ 10.
7. (...continued)
S.P.A., 425 F.3d 932, 936 (11th Cir. 2005). However, we decline to do so because the
Utah Supreme Court has adopted a different analysis to be applied to motions to
dismiss for forum non conveniens. See Summa Corp. v. Lancer Indus., Inc., 559 P.2d 544,
545‐46 (Utah 1977); see also State v. Shoulderblade, 905 P.2d 289, 292 (Utah 1995) (“Under
the doctrine of stare decisis, once a point of law is decided, that ruling should be
followed by a court of . . . a lower rank in subsequent cases confronting the same legal
issue.”). Consequently, we do not consider this issue further.
20100128‐CA 10
ANALYSIS
I. The Trial Court Did Not Exceed Its Discretion in Dismissing ECL’s Claims
for Forum Non Conveniens.
¶23 Trial courts, as courts of general jurisdiction, have inherent power to dismiss an
action on the basis of forum non conveniens. See Summa Corp. v. Lancer Indus., Inc., 559
P.2d 544, 546 (Utah 1977) (noting that trial courts “undoubtedly could refuse to exercise
jurisdiction if convinced that it would place an unreasonable burden upon some or all
of the parties, or upon the court, to try the case here”). Further, “[t]he purpose of the
doctrine of forum non conveniens is to provide protection against a plaintiff selecting a
remote court where added time, trouble and expense would result in unreasonable
inconvenience and hardship to the defendant, when the cause could [be better] tried in
a more convenient court.” Id. at 545‐46. In Summa Corp. v. Lancer Industries, Inc., 559
P.2d 544 (Utah 1977), the Utah Supreme Court noted that when a trial court evaluates a
motion to dismiss on the ground of forum non conveniens, the factors it should
consider are
the location of the primary parties[;] where the fact situation
creating the controversy arose[;] the ease of access to proof,
including the availability and costs of obtaining witnesses;
the enforceability of any judgment that may be obtained;
and the burdens that may be imposed upon the court in
question in litigating matters which may not be of local
concern.
Id. at 546. The supreme court then instructed that these factors are to be considered “in
the light of the particular facts of each case and [the trial court should] balance the
considerations in favor of according the plaintiff the assurance” of constitutional access
to the courts. See id.; see also Utah Const. art. I, § 11 (“All courts shall be open, and every
person . . . shall have remedy by due course of law, which shall be administered
without denial or unnecessary delay . . . .”).
20100128‐CA 11
A. The Trial Court Properly Considered the Availability of an Alternative Forum.
¶24 ECL argues that the trial court erred in numerous ways when applying the
Summa standard. First, ECL contends that the trial court applied the wrong legal
standard by considering a factor not identified in Summa. In support of this argument,
ECL points to the trial court’s statement that “this Court’s decision is premised upon the
finding that all of the defendants have conceded to the jurisdiction of the Courts of
England as a more convenient forum.” However, we see nothing improper in that
comment. The trial court’s consideration of this issue is consistent with the “pre‐
requisite required” before a court declines to exercise jurisdiction over an action “that
another alternate, available forum is still open to the plaintiff.” See Kish, 562 P.2d at 627‐
29 (holding that the trial court correctly exercised its discretionary power to refuse to
exercise subject matter jurisdiction on the basis of forum non conveniens, but should
have dismissed the complaint without prejudice). Because the Defendant Directors had
consented to the jurisdiction of the English courts, ECL would have an alternative
forum in which to pursue its claims even if the trial court declined to exercise
jurisdiction over the dispute. The trial court did not err in considering that the
defendants had consented to the jurisdiction of the English courts, thereby resolving
any concerns that ECL could obtain personal jurisdiction over the defendants in
England. See, e.g., Hahn v. Diaz‐Barba, 125 Cal. Rptr. 3d 242, 253‐54 (Cal. Ct. App. 2011)
(affirming a trial court’s stay of an action brought in California for forum non
conveniens based on the consent of the defendants to the jurisdiction of the Mexican
courts and stating that “[i]t is well settled under California law that the moving parties
satisfy their burden on the threshold suitability issue by stipulating to submit to the
jurisdiction of the alternative forum”); Tilleke & Gibbins Int’l Ltd. v. Baker & McKenzie,
756 N.Y.S.2d 179, 179‐80 (N.Y. App. Div. 2003) (affirming a trial court’s dismissal of an
action based on forum non conveniens that was granted on the condition that the
defendant submit to the jurisdiction of the courts of Thailand).
B. Where the Causes of Action Were Factually and Legally Intertwined, the Trial
Court Was Not Required To Evaluate the Claim Against the Defendant Directors
Independently.
¶25 ECL next argues that the trial court erred when it dismissed ECL’s first cause of
action for breach of fiduciary duty against the Defendant Directors, without considering
that claim separately. According to ECL, even if we uphold the trial court’s ruling with
20100128‐CA 12
regard to the claims against the other defendants, we should reverse with respect to the
first cause of action against the Defendant Directors, because they are all United States
citizens who formerly served on Eneco’s board. Because Eneco was a Utah corporation,
ECL contends that the Defendant Directors can show neither that they would suffer
hardship if the case is tried in Utah, nor that another forum would be more convenient.
¶26 In support of its position that each cause of action must be considered separately,
ECL relies on the Sixth Circuit’s decision in Duha v. Agrium, Inc., 448 F.3d 867 (6th Cir.
2006). There, a United States citizen sued his former employer, a Canadian parent
company with both an American and Argentine subsidiary, asserting forty‐five causes
of action regarding the terms of his employment and subsequent termination in
Argentina. See id. at 868‐69. The district court dismissed the plaintiff’s claims for forum
non conveniens. See id. at 868. On appeal, the Sixth Circuit reversed because the trial
court “dismissed many of [the plaintiff’s] claims without including them in its forum
non conveniens analysis,” and gave “too little deference” to a United States citizen’s
choice of forum. See id. The Duha court reasoned that even if the district court had
properly dismissed the claims for wrongful termination on forum non conveniens
grounds, the plaintiff’s claims for unjust enrichment, quantum meruit, silent fraud, and
misrepresentation should not have been dismissed because those issues appeared to
have no connection to Argentina. See id. at 879‐81. The circuit court explained that the
obligation to consider all the relevant “factors applies to each analytically distinct set of
claims,” and “[w]here causes of action A and B differ so much that B cannot be
dismissed for the same reason as A, a district court may not dismiss B on forum non
conveniens grounds merely because A appears in the same complaint.” Id. at 879(emphasis omitted).
¶27 Although ECL seizes on the above language from Duha to argue that the trial
court erred in dismissing the first cause of action against the Defendant Directors, the
facts present here are distinguishable. In Duha, the appellate court found that the
district court viewed the case solely as a wrongful termination case for purposes of its
forum non conveniens analysis and ignored the factually and analytically distinct
remainder of the plaintiff’s claims. See id. at 880‐81. In contrast, the trial court here
found that the three separate causes of action against the various defendants were
factually and analytically intertwined.
20100128‐CA 13
¶28 Indeed, ECL’s complaint alleges fifty‐one paragraphs of shared factual
background and then incorporates those allegations into all three claims for relief.
Essentially, the complaint involves complex issues arising out of the business
relationships between ECL’s predecessor‐in‐interest, Eneco, on the one hand, and
Catalyst, ARM, Roberts, and the Defendant Directors on the other. The series of
business transactions that resulted in this dispute began in 2006 and include the
execution of two contracts, the Catalyst Agreement and the Subscription Agreement,
which each contain a choice of law and forum provision identifying England and Wales;
the creation of two wholly‐owned Eneco subsidiaries, Eneco Europe and Eneco Assets;
and the involvement of business entities and individuals with no connection to Utah.
ECL’s entire conspiracy theory is premised on the assumption that Catalyst was in
breach of the Catalyst Agreement, feared multi‐million dollar liability and recruited the
Defendant Directors to manipulate the Eneco board so as to relieve it of that liability.
Indeed, ECL contends that the Subscription Agreement was nothing more than a
nullification of Eneco’s claims against coconspirators Catalyst, ARM, and Eneco Europe
for little or no consideration. As a result, the breach of fiduciary duty claims necessarily
involve the assessment of whether Catalyst was, in fact, in breach of the Catalyst
Agreement and, if so, the estimate of the magnitude of any resulting liability that may
have motivated Catalyst to engage in a conspiracy with the other defendants. Unlike
the complaint in Duha, ECL’s first cause of action against the Defendant Directors for
breach of fiduciary duty is factually and legally intertwined with the claims against the
other defendants. Under the facts present here, we agree with the trial court that the
claims against the Defendant Directors could be considered in light of the broader
dispute involving the other defendants.
C. Despite ECL’s Choice of Forum, the Trial Court Did Not Exceed Its Discretion in
Dismissing the Complaint.
¶29 Next, ECL argues that the trial court erred in dismissing all three of ECL’s causes
of action because, as the plaintiff, ECL’s choice of forum is entitled to deference and the
findings on the record do not support a dismissal for forum non conveniens in
contravention of that choice. In Summa, the supreme court indicated that “the general
policy of the law is that when a plaintiff has commenced a lawsuit and acquired
jurisdiction over the defendant, he should be allowed to pursue his remedy; and that
such a motion to dismiss should be granted only with great caution and under
compelling circumstances.” See Summa Corp. v. Lancer Indus., Inc., 559 P.2d 544, 546
20100128‐CA 14
(Utah 1977). The federal courts also favor the plaintiff’s choice of forum. See Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981). However, when a plaintiff chooses its
home forum, “it is reasonable to assume that this choice is convenient. When the
plaintiff is foreign, however, this assumption is much less reasonable.” Id. at 255‐56;
accord Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430 (2007). Thus,
courts typically afford significantly less deference to the choice of forum by a foreign
plaintiff. See, e.g., Gschwind v. Cessna Aircraft Co., 161 F.3d 602, 606 (10th Cir. 1998);
Stangvik v. Shiley Inc., 819 P.2d 14, 20 (Cal. 1991). While Utah has not expressly adopted
a similar view concerning nonresident plaintiffs, the reasons for the distinction are
persuasive. Unlike a plaintiff who resides in Utah, a foreign plaintiff’s choice of forum
is not obviously convenient. Second, while the Utah courts have a strong interest in
assuring that Utah residents have access to the Utah courts for the resolution of their
disputes, the interest that runs to foreign entities or individuals is weaker.
¶30 ECL is a British Virgin Islands company that purchased its claims from an
English sole proprietorship, Maximillian & Co., that, in turn, bought the claims from
Eneco’s bankruptcy trustee. While the trial court was required to exercise “great
caution” before preventing ECL from pursuing its claims in Utah, it was not required to
assign determinative weight to ECL’s choice of forum in balancing the Summa factors.
See Summa, 559 P.2d at 546. Rather, the trial court had to consider each of the Summa
factors and decide whether this case presents the type of compelling circumstances
where, despite ECL’s choice of forum, the dispute does not warrant the exercise of the
Utah courts’ subject matter jurisdiction. See id. We now consider whether the trial court
properly considered each of the Summa factors.
¶31 First, the trial court addressed the location of the primary parties, see id. at 546,
stating that “none of the parties are Utah residents.” ECL does not dispute that this is
apparent from the complaint. While the trial court acknowledged that ECL purchased
its claims via Maximillian & Co. from a now defunct Utah corporation, it concluded that
any proceeds from the litigation “would enure to the benefit of a British Virgin Island
resident,” ECL.8
8. For the first time in its reply brief on appeal, ECL argues that some of ECL’s
shareholders include former Eneco shareholders who reside in Utah and, thus, if there
were proceeds from the litigation that were paid to former Eneco shareholders, a benefit
(continued...)
20100128‐CA 15
¶32 Next, the trial court focused on “where the fact situation creating [the]
controversy arose,” see id. While ECL argues that the tort claims for breach of fiduciary
duty, conspiracy, and aiding and abetting can each be considered in isolation, the trial
court reached a different conclusion based on its review of the complaint. Recognizing
“a close interrelationship between [ECL’s] tort claims and the agreements[,] which are
at issue in this case,” the trial court found “that the majority of the transactions alleged
by plaintiff in this complaint occurred largely in Europe and England.” As discussed
previously, the breach of fiduciary duty is premised upon Catalyst’s alleged breach of
the Catalyst Agreement. The financial services contemplated by that agreement
involved the sale of stock in Eneco Europe, a company formed to hold the stock of
Eneco Assets, which in turn, held the right to exploit Eneco’s patents in the United
Kingdom. The fundraising efforts pursuant to the Catalyst Agreement included the
issuance of bonds by ARM, which were to be offered on the Channel Island Stock
Exchange and governed by the rules of England’s Financial Services Authority.
Further, ECL claims that the defendants falsely represented that over $5 million had
been placed with English solicitors as a commitment from “a major European private
investment bank.” When Eneco became concerned that Catalyst had not accurately
reported these facts, it hired counsel in the United Kingdom to investigate its legal
claims and to identify potential defendants.
¶33 From the face of the complaint, the trial court found that the facts related to the
implosion of the European capital‐raising efforts, including the truthfulness of the
communications concerning those efforts, must be unraveled in order to assess the
propriety of subsequent events involving the Defendant Directors. Indeed, ECL
contends that Catalyst, ARM, and Roberts initiated the conspiracy and aided the
Defendant Directors’ breaches of fiduciary duties due to the damage to Catalyst’s
business reputation caused by the insolvency administration of Eneco Europe in
England. Considering the allegations of the complaint, the trial court acknowledged
that, while some harm may have occurred in Utah, the majority of the facts creating the
8. (...continued)
would enure to these Utah residents. However, this information was never presented
to the trial court. Once the defendants asserted in their motion to dismiss that “[n]one
of the parties is from Utah and the dispute does not involve issues of local interest,”
ECL was required to alert the trial court if it claimed that the litigation was a matter of
local concern due to the residency of some of ECL’s shareholders.
20100128‐CA 16
controversy arose in Europe. Our reading of the complaint is in‐line with that of the
trial court, and we agree that the “fact situation creating [the] controversy” arose
primarily in Europe.
¶34 The trial court then evaluated the “ease of access to proof, including the
availability and costs of obtaining witnesses,” see id. Although ECL identified some
Eneco witnesses located in Utah, the trial court found “that the primary defendants,
Catalyst, Roberts, ARM, and their employees are in either England or in Luxembourg,
and the [Defendant Directors] reside outside of the State of Utah. Therefore, this court
is satisfied that most of the witnesses and parties reside outside of Utah.” In addition,
the trial court found that because the transactions alleged in the complaint occurred
outside of Utah, “[t]he documents regarding the transactions additionally can be
expected to be located principally outside of Utah where the primary defendants reside,
although . . . Eneco documents are expected to be located in Utah.” The trial court
therefore concluded that “easier access to proof, both documentary and testimonial, is
more convenient . . . in England.” While ECL points to documents located in Utah due
to the bankruptcy proceedings and some witnesses with Utah connections, it does not
dispute the trial court’s findings regarding the location of the named parties. Instead,
ECL contends that the trial court’s assumptions about the location of those parties’
documents were not supported by sufficient evidence. In support, ECL correctly notes
that in Summa Corp. v. Lancer Industries, Inc., 559 P.2d 544 (Utah 1977), and Mooney v.
Denver & Rio Grande Western Railroad Co., 118 Utah 307, 221 P.2d 628 (1950),9 the Utah
Supreme Court reversed dismissals based on forum non conveniens because the
evidence of inconvenience to the defendants was inadequate. See Summa, 559 P.2d at
547; Mooney, 221 P.2d at 647‐49. While we agree with ECL that better factual support
for the forum non conveniens argument would have been helpful to the trial court, we
9. Even after a remittitur that permitted the defendant to provide “somewhat more in
detail its anticipated hardship and inconvenience,” the trial court again denied the
motion to dismiss for forum non conveniens and, after a trial and verdict against the
defendant, the Utah Supreme Court affirmed that decision. See Mooney v. Denver &
R.G.W.R. Co., 118 Utah 307, 257 P.2d 947, 948‐49 (1953).
20100128‐CA 17
are convinced that the complaint provided enough information to conclude that Summa
and Mooney are distinguishable.10
¶35 In Mooney, the plaintiff was a Colorado resident who was injured in Colorado by
the alleged negligence of the defendant, Rio Grande Western Railroad Company, a
Delaware corporation with its principal place of business in Salt Lake City. See 221 P.2d
at 629‐30. The plaintiff filed suit in Utah, and the trial court granted the defendant’s
motion to dismiss the complaint on the ground of forum non conveniens. See id. at 630.
The Utah Supreme Court reversed, first asserting that the defendant conducted a
“substantial amount” of business in Utah, see id. at 630, 649, and then criticizing the
defendant for presenting only minimal evidence to support its motion for forum non
conveniens, see id. at 648. Specifically, the defendant presented only one affidavit,
which indicated that a trial in Utah would be inconvenient because the majority of its
witnesses were located in Colorado and could not be compelled to appear in Utah, it
would have to pay its expert witnesses more to travel to Utah, the jury would not be
able to view the site of the accident, and the Utah trial courts’ already congested docket
would be further burdened by the case. See id.at 630, 647‐48.
¶36 In determining that this evidence was insufficient, the supreme court began by
highlighting that “[t]he contents of the affidavit filed by the defendant were
controverted,” id. at 647‐48, and that “a substantial amount of [the affidavit] adopted by
the court [was] hearsay,” id. at 648. However, the supreme court also attacked the
defendant’s affidavit for its lack of specificity, indicating that the witnesses were not
identified by either name or residence, and there was no explanation of why a view of
the site of the accident would be helpful to the jury. See id. Finally, the supreme court
challenged the defendant’s premise that resolving the dispute in Utah would be
inconvenient for the courts of Utah, reasoning that the defendant’s evidence did not
indicate that the Utah courts were particularly busy, and noting that the plaintiff was
10. It appears that because Catalyst, Roberts, and ARM did not submit more evidence
on this point, the focus of their arguments in the trial court was that the claims against
them were governed by the forum selection clauses in the Catalyst Agreement and, as
to ARM, the Subscription Agreement. Thus, they argued that the clauses should be
enforced unless the plaintiffs met their burden of convincing the court that enforcement
of the forum selection provisions would be “unfair or unreasonable.” See Prows v.
Pinpoint Retail Sys., 868 P.2d 809, 812 (Utah 1993).
20100128‐CA 18
not given the opportunity to refute the defendant’s evidence on that issue. See id. at 649.
In reaching its conclusion, the court noted that although the witnesses may reside in
Colorado, they might live far enough from Denver that similar expenses may have been
incurred in trying the case there. See id. at 648. Where the defendant had its principal
place of business in Salt Lake City, the accident occurred and the witnesses were located
in an adjacent state, and the defendant ran a railroad that serviced both cities, it is not
surprising that the supreme court concluded that the affidavit was insufficient to
warrant dismissal. See id. at 630, 647‐49.
¶37 Here, the only connection any party has to Utah is that ECL bought the claims of
a now‐defunct Utah corporation from a foreign entity, Maximillian & Co. Although the
defendants submitted only one declaration, the trial court relied on the face of the
complaint to determine that the majority of the parties, witnesses, and documents were
located in Europe and that the heart of the dispute arose from transactions in Europe.
And ECL does not dispute that the employees of those foreign entities and their
documents are not located in Utah. Rather, ECL points to the fact that a significant
number of documents have been transported to Utah and produced in connection with
the Eneco bankruptcy proceedings. While the trial court acknowledged that those
documents had been produced in Utah, it deemed the greater number of parties,
witnesses, and documents to be located outside of Utah, with the majority of them to be
found in Europe, the situs of most of the events and parties described in the complaint.
¶38 Furthermore, as opposed to Mooney, where the trial court relied on speculation
about the general burden on the Utah courts, the trial court here examined the specific
claims asserted in the complaint and compared the burden of resolving the allegations
in the Utah courts with the corresponding interest of Utah in the resolution of the
matter. After assessing these benefits and burdens, the trial court concluded that while
Utah had a minimal interest in the case, the courts and the citizens of Utah would
shoulder an enormous burden if the litigation were allowed to proceed in Utah. Finally,
we note that Mooney was decided before the Utah Supreme Court decided Summa,
where the court adopted a balancing test to be applied by the trial court in determining
whether to dismiss an action on the ground of forum non conveniens.11
11. Most jurisdictions that have considered the issue have adopted a balancing test
under which the trial court considers a number of private and public factors to
(continued...)
20100128‐CA 19
¶39 In Summa, one of the named defendants was a Utah limited partnership, see 559
P.2d at 545, and the defendant’s main justification for his motion was the “logistics of
arranging for testimony, and/or depositions of witnesses from Florida and California,”
see id. at 547. In addition to the argument that these logistics were minor, the Summa
plaintiff argued that the lawsuit “involve[d] only $16,000” and that “it ha[d] already
gone to considerable trouble and expense in engaging counsel” in Utah and “getting the
action under way.” Id. The supreme court agreed that the defendant’s basis for
inconvenience was insufficient, especially because it would be “an unreasonable
burden” to make the plaintiff initiate another lawsuit in a different state where the
amount of money in controversy was so small. See id. In the present case, none of the
defendants are Utah residents, the witnesses are located in Europe rather than a sister
state, and the amount in controversy is $150 million. Given these appreciable
differences, we are not persuaded that Summa required the trial court to deny the
defendants’ motions to dismiss for forum non conveniens.
¶40 While ECL justifiably attacks the lack of specificity in the single declaration
provided by the defendants, the trial court’s decision was based on its conclusion that
the allegations in the complaint sufficiently illustrate that Utah is not a convenient
forum. Based on those allegations, the trial court concluded that ECL’s tort claims were
part of a much more complicated dispute that involved the European activities of the
primarily European defendants, and that the evidence and witnesses needed to
determine whether the defendants were liable in tort were located primarily in Europe.
We agree that the complaint supports the trial court’s conclusion that the majority of the
witnesses and documents are maintained outside of Utah and are located primarily in
Europe.
11. (...continued)
determine whether the action should be dismissed for forum non conveniens. See
Koskar v. Ford Motor Co., 923 N.Y.S.2d 901, 902 (N.Y. App. Div. 2011) (applying a
balancing test to assess a forum non conveniens motion); accord Investors Equity Life
Holding Co. v. Schmidt, 126 Cal. Rptr. 3d 135, 142 (Cal. Ct. App. 2011) (same); Yousef v.
General Dynamics Corp., 16 A.3d 1040, 1049 (N.J. 2011) (same); Sales v. Weyerhaeuser Co.,
177 P.3d 1122, 1125 (Wash. 2008) (same).
20100128‐CA 20
¶41 The next factor from Summa that the trial court considered was “the
enforceability of any judgment that may be obtained,” 559 P.2d at 546. Because the trial
court determined that any judgment would be enforceable in England or Utah, it did
not find that this factor compelled a result in either direction. ECL challenges the trial
court’s treatment of this factor on several grounds, including that its lawyers cannot
appear pro hac vice in England and thus ECL would be deprived of its choice of
counsel; the English courts do not permit representation on a contingent fee basis; ECL
would not have a right to jury trial or punitive damages; and it would have to post a
significant cost bond. Although the circumstances under which ECL may litigate in
England are not identical to those in the United States, the distinctions identified do not
equate to a conclusion that a judgment from the English courts would not be
enforceable.
¶42 To begin, the forum non conveniens analysis is focused on whether the plaintiff,
not the plaintiff’s lawyers, can bring the action in an alternate forum. See, e.g.,
Langenhorst v. Norfolk S. Ry. Co., 848 N.E.2d 927, 938‐39 (Ill. 2006) (“[T]he location of the
parties’ attorneys is accorded little weight in determining a forum non conveniens
motion.” (emphasis omitted)); Engstrom v. Bayer Corp., 2004 PA Super. 223, ¶ 13, 855
A.2d 52 (affirming an order in which the trial court noted that the “out‐of‐state plaintiffs
. . . chose to file in Philadelphia County for no apparent reason other than the fact that
their attorneys have their offices here—a fact of no relevance to a forum non conveniens
analysis” (emphasis omitted) (internal quotation marks omitted)).
¶43 Next, although there are no Utah cases that explain the way in which a trial court
should balance the forum non conveniens factors when a foreign forum is available that
the plaintiff views as less favorable than the chosen United States forum, several federal
courts have addressed the issue. Most notably, in Piper Aircraft Co. v. Reyno, 454 U.S.
235 (1981), the United States Supreme Court considered the argument of the
beneficiaries of the estates of Scottish citizens who were killed in a plane crash
occurring in Scotland that they should be permitted to sue the manufacturers of the
plane and its propeller in the United States to obtain the benefits of this country’s more
favorable laws on “liability, capacity to sue, and damages.” See id. at 239‐40. In that
case, the district court granted the defendants’ motion to dismiss for forum non
conveniens and the Third Circuit Court of Appeals reversed. See id. at 238. On
certiorari review, the Supreme Court reversed the circuit court’s decision, explaining
that “the central focus of the forum non conveniens inquiry is convenience.” Id. at 247‐
20100128‐CA 21
49. Although the Supreme Court acknowledged that the plaintiffs “may not be able to
rely on a strict liability theory” and their “potential damages award may be smaller,” it
held that Scotland provided an adequate alternative forum.12 Id. at 255. Thus, “Piper
Aircraft establishes that the law in the United Kingdom need not be identical to U.S.
law, or even as favorable to plaintiffs as U.S. law may be.” In re Factor VIII or IX
Concentrate Blood Prods. Litig. v. Bayer Corp., 484 F.3d 951, 957 (7th Cir. 2007); see also
Lueck v. Sundstrand Corp., 236 F.3d 1137, 1144‐45 (9th Cir. 2001) (noting that New
Zealand was an adequate alternative forum even if it does not allow the plaintiffs to
maintain the same suit or recover as much money as in the United States). According to
the Ninth Circuit, “[t]he effect of Piper Aircraft is that a foreign forum will be deemed
adequate unless it offers no practical remedy for the plaintiff’s complained of wrong.”
Lueck, 236 F.3d at 1144. Where the Utah Supreme Court has not indicated otherwise, we
consider these decisions instructive. Thus, we are not convinced that England is an
inadequate alternative forum and that ECL cannot obtain an enforceable judgment in
the English courts.
¶44 Finally, the trial court analyzed “the burdens that may be imposed upon the
court in question in litigating matters which may not be of local concern.” Summa, 559
P.2d at 546. The trial court again noted that none of the parties are Utah residents; that
any benefit from the case would enure to ECL, a British Virgin Islands company; and
that any local interest was weak because Eneco, the Utah corporation, no longer exists.
The trial court then reasoned that despite this minimal local interest, the court and the
citizens of Utah “would be taking on . . . what amounts to an enormous burden of time,
expense and resources to maintain this litigation. This is a complex case, which
correspondingly increases and burdens the resources necessary to properly manage this
12. The Piper Aircraft Court identified a number of factors that make the courts of the
United States attractive to foreign plaintiffs, including the concept of strict liability, the
right to a jury trial, the ability to hire an attorney on a contingent fee basis, the absence
of the risk of paying the successful party’s attorney fees, and the availability of more
extensive discovery. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 252 n.18 (1981).
Nevertheless, it concluded that these factors were not determinative in the forum non
conveniens inquiry. See id. at 247‐51.
20100128‐CA 22
litigation.”13 Thus, the trial court concluded that “when you balance the tenuous nature
of the local interest and issues in this particular case, this factor strongly favors England
as a more convenient forum because the issues of local interest again are very tenuous.”
On appeal, ECL continues to argue that the claims in the complaint arise out of the
breaches of fiduciary duty by the directors of a Utah corporation. However, where the
Utah corporation has dissolved, the Defendant Directors are not located in Utah, and
none of the parties to the lawsuit is a Utah resident, we agree with the trial court that
the connection to this state is tenuous.
¶45 The trial court next analyzed the burden on the defendants if the motion were to
be denied. In doing so, the trial court was “satisfied that there is sufficient[ly] great
hardship evident from the face of the complaint, and that the defendants would have to
expend significant sums of money [and] resources to travel to and from Utah, to hire
local counsel, to obtain documents, [and to] have them sent to Utah.” ECL contends
that the fact that Catalyst initiated an adversary proceeding in Eneco’s Utah bankruptcy
proceedings is evidence that the trial court’s finding are not supported. However, once
Eneco filed its petition with the United States Bankruptcy Court for the District of Utah,
Catalyst was required to file its adversary proceeding in that forum. See 28 U.S.C.
§ 1409(a) (2006) (“[A] proceeding arising under title 11 or arising in or related to a case
under title 11 may be commenced in the district court in which such case is pending.”);
see also Official Comm. of Asbestos Claimants of G‐I Holding, Inc. v. Heyman, 306 B.R. 746,
750 (S.D.N.Y. 2004) (“[T]he district in which the underlying bankruptcy case is pending
is presumed to be the appropriate district for hearing and determination of a
proceeding in bankruptcy.” (internal quotation marks omitted)). Thus, we are not
13. We further note that, due to the Catalyst Agreement’s and the Subscription
Agreement’s choice of law provisions, and our prior conclusion that the fiduciary duty
claims are dependent, in part, on an interpretation of those agreements, the Utah court
may have been faced with the additional burden of ascertaining and applying the law
of England and Wales. See, e.g., Kinney Sys., Inc. v. Continental Ins. Co., 674 So. 2d 86, 92
(Fla. 1996) (including the fact that “foreign law will predominate if jurisdiction is
retained” as a factor in favor of granting a motion to dismiss for forum non conveniens
(internal quotation marks omitted)); First Eng. Funding, LLC v. Aetna Life Ins. & Annuity
Co., 790 A.2d 243, 245 (N.J. Super. Ct. App. Div. 2002) (providing that forum non
conveniens factors include “the avoidance of . . . the application of foreign law”
(internal quotation marks omitted)).
20100128‐CA 23
convinced that Catalyst’s prosecution of its claim in the Eneco bankruptcy is indicative
of whether the trial court exceeded its discretion in weighing the Summa factors.
Likewise, whether the bankruptcy proceedings were more or less involved than the
litigation of the complaint would be, the trial court was not required to view Catalyst’s
pursuit of its adversary action in the only available forum as a concession that Utah is a
convenient forum.14
¶46 To a large extent, this case presents a question of the amount of discretion to be
afforded the trial court’s decision granting or denying a motion to dismiss for forum
non conveniens. “It is [the] general rule that the trial court’s discretion to invoke the
doctrine of forum non conveniens will not be interfered with by an appellate court,
absent an abuse of discretion.” Kish v. Wright, 562 P.2d 625, 628 (Utah 1977); see also
Piper Aircraft Co., 454 U.S. at 257 (“[W]here the court has considered all relevant public
and private interest factors, and where its balancing of these factors is reasonable, its
decision deserves substantial deference.”). Here, we are convinced that the trial court
identified and considered each of the Summa factors, and its conclusion is reasonable.
Therefore, we will not disturb its decision.
II. The Trial Court Did Not Err in Enforcing the Forum Selection
Clause in the Subscription Agreement.
¶47 ECL also challenges the trial court’s decision granting ARM’s motion to dismiss
for improper venue. The trial court based its ruling on the choice of forum provision of
the Subscription Agreement, which provides,
8. Any dispute, controversy or claim arising out of or
related to the agreement shall be brought exclusively before
the courts of England & Wales.
14. We are also unconvinced that Catalyst’s contracts with third parties on unrelated
matters that include forum selection clauses designating other cities in the United States
is determinative of whether the trial court properly dismissed the complaint at issue for
forum non conveniens. The issue before the trial court was whether the Summa factors,
as applied to the facts and circumstances of this case, warranted dismissal in favor of a
more convenient forum.
20100128‐CA 24
9. This agreement shall be governed by, and construed and
enforced in accordance with the laws of England & Wales.
ARM and ECL’s predecessor‐in‐interest, Eneco, are both parties to the Subscription
Agreement, with a right to enforce the forum selection clause. See First Inv. Co. v.
Andersen, 621 P.2d 683, 686 (Utah 1980) (“[T]he assignee . . . [stands] in the shoes of the
assignor and [takes] subject to existing equities and defenses.”). Therefore, ARM
contends that ECL, as Eneco’s successor‐in‐interest, could not sue ARM in Utah.
Although ECL tacitly concedes that it is bound by the Subscription Agreement’s forum
selection clause to the same extent as Eneco, it argues that the claims against ARM in
the complaint do not arise out of and are not related to the Subscription Agreement.
“When interpreting a contract, we begin by looking within the four corners of the
contract ‘to determine the parties’ intentions, which are controlling.’” Innerlight, Inc. v.
Matrix Grp., LLC, 2009 UT 31, ¶ 14, 214 P.3d 854 (quoting Bakowski v. Mountain States
Steel, Inc., 2002 UT 62, ¶ 16, 52 P.3d 1179). If the language of the contract is
unambiguous, we will determine the parties’ intentions from the four corners of the
document. See id.A. The Claims Asserted Against ARM Fall Within the Scope of the Forum Selection
Clause.
¶48 The trial court ruled that the allegations of the complaint were a “dispute,
controversy or claim arising out of or related to” the Subscription Agreement and,
therefore, were improperly brought in Utah. Pointing to the fact that its causes of action
sound in tort, ECL contends that the forum selection clause does not apply to its
complaint.
¶49 Specifically, ECL notes that the complained‐of activities predate the formation of
the Subscription Agreement, a fact the Southern District of New York considered
determinative in Armco Inc. v. North Atlantic Insurance Co., 68 F. Supp. 2d 330 (S.D.N.Y.
1999). See id. at 338‐40. There, a corporation, Armco, and four of its subsidiaries filed a
complaint against various entities and individuals asserting causes of action for “fraud,
conversion, breach of fiduciary duty, and violation of the Federal Racketeer Influenced
and Corrupt Organizations Act.” Id. at 333. The dispute involved Armco’s decision to
divest itself of a group of its insurance subsidiaries, the North Atlantic Group (group),
through a management buy‐out by the managing director and chairman of the group.
20100128‐CA 25
See id. at 333‐34. Armco’s complaint alleged that the executives it assigned to negotiate
the buy‐out on its behalf (executive defendants), through entities controlled by them,
conspired with the purchasers to buy the group jointly and to enter into a contract of
sale detrimental to Armco. See id. As part of the sale, Armco contributed over $40
million to the purchasing entity to cover pay‐outs on pre‐existing insurance policies as
they became due. See id. The contract of sale was executed in 1991 and included a
forum selection clause that designated England as the choice of forum “to settle any
dispute which may arise out of or in connection with this Agreement.” See id. at 334,
338. After the purchase and until their activities were discovered in 1997, the executive
defendants allegedly used a subsidiary of the group (NAIC) to withdraw trust funds
fraudulently, eventually driving NAIC into bankruptcy, and to otherwise divert funds
to themselves through excessive fees, dividends, and commissions. See id. at 334‐35.
Armco and the other plaintiffs sued in the United States District Court for the Southern
District of New York to recover funds they claimed were taken under false pretenses,
and the defendants moved to dismiss based on the forum selection clause in the
contract of sale. See id. at 335, 337. The district court declined to enforce the forum
selection clause because it determined that the action did not arise out of the sale
contract, but instead “arose out of the alleged wide ranging fraud, including numerous
acts committed before the execution of the Sale Contract.” Id. at 338. In particular, the
Armco court concluded that the “cause of action for breach of fiduciary duty is not also
based on the terms or relationships embodied in the Sale Contract” but upon the failure
of the executive defendants to disclose their interest in the purchasing entity. See id. at
339.
¶50 In contrast, the trial court here concluded that the forum selection clause in the
Subscription Agreement “is sufficiently broad and encompassing to include the
allegations set forth in the plaintiff’s complaint.” Unlike the situation in Armco, ECL’s
cause of action for breach of fiduciary duty is based on terms embodied in the
Subscription Agreement. ECL alleges that by entering into the Subscription Agreement,
the Defendant Directors, in a conspiracy with ARM and the other defendants,
discharged Catalyst’s liability for inadequate consideration, thereby breaching their
fiduciary duties to Eneco. The Subscription Agreement allegedly embodies the
breaches of fiduciary duty and is the product of the alleged conspiracy.
¶51 Unlike the Armco court, we conclude that the tort claims here fall within the plain
language of the Subscription Agreement. The agreement governs “any dispute,
20100128‐CA 26
controversy or claim” that is “related to” the Subscription Agreement. The tort claims
are related to the Subscription Agreement, and the use of “any” does not support a
distinction between tort or contract claims. Consequently, we agree with the trial court
that the parties intended that the forum selection clause apply to claims, whether
sounding in tort or contract, that are related to the agreement. See Innerlight, Inc. v.
Matrix Grp., LLC, 2009 UT 31, ¶ 14, 214 P.3d 854 (“We find that there is no ambiguity in
the relevant provisions of the Contract and therefore look to the plain meaning of the
contractual terms to determine the parties’ intent.”); see also Coombs v. Juice Works Dev.,
Inc., 2003 UT App 388, ¶ 6 n.3, 81 P.3d 769 (stating in dicta, “[T]he Agreement expressly
provides that ‘any action arising out of or relating to this Agreement’ shall be brought
in Arkansas courts. . . . This language appears to account for both tort and contract
claims that arise out of or relate to the Agreement.” (emphasis omitted)).
B. The Trial Court Did Not Exceed Its Discretion in Enforcing the Forum Selection
Clause.
¶52 Utah courts give effect to a forum selection clause unless “‘it is unfair or
unreasonable.’” Prows v. Pinpoint Retail Sys., Inc., 868 P.2d 809, 812 (Utah 1993) (quoting
Restatement (Second) Conflict of Laws § 80 (Supp. 1988)). “To meet this burden, a
plaintiff must demonstrate that the chosen state would be so seriously an inconvenient
forum that to require the plaintiff to bring suit there would be unjust.” Id. (internal
quotation marks omitted). “A party might also show that . . . the choice‐of‐forum
provision was obtained by fraud, duress, the abuse of economic power, or other
unconscionable means . . . .” Id. at 812 n.5 (emphasis added) (internal quotation marks
omitted). Although ECL suggests briefly that obtaining the Subscription Agreement in
furtherance of a conspiracy may render the clause unenforceable based on
“unconscionable means,” its argument is inadequately briefed and we do not consider
it. See Utah R. App. P. 24(a)(9).15
¶53 In considering whether to enforce a forum selection clause, the court should
avoid a decision that will result in multiple legal actions. See Prows, 868 P.2d at 812‐13.
15. ECL devotes only two paragraphs of its fifty‐page brief to the complex issue of
whether the forum selection clause is unenforceable because the Subscription
Agreement was allegedly entered in furtherance of a conspiracy in which the Defendant
Directors breached their fiduciary duties to Eneco.
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In Prows v. Pinpoint Retail Systems, Inc., 868 P.2d 209 (Utah 1993), the Utah Supreme
Court explained that to require that the matter be tried in multiple forums against
different defendants “contravenes the objective of modern procedure, which is to
litigate all claims in one action if that is possible.” Id. at 813 (internal quotation marks
omitted). In addition, it “increases the cost of litigation.” Id. Here, the question of
whether Catalyst breached the Catalyst Agreement and any claim related to the
Subscription Agreement must be tried in England or Wales. A refusal to enforce the
forum selection clause in the Subscription Agreement would have resulted in multiple
litigations in separate jurisdictions.
¶54 For all these reasons, we conclude that ECL has not met its burden of
demonstrating that enforcing the forum selection clause would be “unjust.” See id. at
812. We, therefore, affirm the trial court’s decision dismissing ECL’s complaint against
ARM based on improper venue under rule 12(b)(3) of the Utah Rules of Civil
Procedure. See Utah R. Civ. P. 12(b)(3).16
CONCLUSION
¶55 The trial court did not exceed its discretion in dismissing ECL’s complaint for
forum non conveniens where none of the parties is a Utah resident, the primary
defendants and witnesses are located in Europe, and all defendants have consented to
the jurisdiction of the English courts, providing ECL an alternative forum. The trial
court correctly interpreted the forum selection clause in the Subscription Agreement
and correctly dismissed the claims against ARM for improper venue.
¶56 Affirmed.
____________________________________
Carolyn B. McHugh,
Associate Presiding Judge
16. For the same reasons discussed in part I of this decision, the claims against ARM
could also have been dismissed for forum non conveniens.
20100128‐CA 28
‐‐‐‐‐
¶57 WE CONCUR:
____________________________________
J. Frederic Voros Jr., Judge
____________________________________
Stephen L. Roth, Judge
20100128‐CA 29