Anosike v. Covenant Transport CA2/4

Filed 5/24/13 Anosike v. Covenant Transport CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
JOHN ANOSIKE, B238684
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC463482)
v.
COVENANT TRANSPORT, INC.,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los Angeles County,
Joanne O‟Donnell, Judge. Affirmed.
Mancini & Associates, Marcus A. Mancini, Timothy J. Gonzales; Benedon
& Serlin, Douglas G. Benedon, and Gerald M. Serlin for Plaintiff and Appellant.
McBreen & Senior, David A. Senior; Miller & Martin, and Bradford G.
Harvey for Defendant and Respondent.
__________________________________
INTRODUCTION
John Anosike filed a complaint for damages against respondent Covenant
Transport, Inc. (Covenant), alleging employment discrimination, wrongful
termination, and violation of the medical leave law. Respondent moved for a stay
of the proceedings, seeking to enforce a forum selection clause in a written
employment agreement. The superior court granted the motion for a stay, finding
the forum selection clause valid. Appellant appealed from the superior court‟s
order granting the motion to stay, contending the forum selection clause was
unconscionable and violated California public policy. Finding no error, we affirm.
STATEMENT OF THE FACTS
Respondent is a national trucking company incorporated under Tennessee
law, with its corporate headquarters and principal place of business in
Chattanooga, Tennessee. Appellant is a Black male, and a resident of California.
In June 2010, he learned that Covenant was hiring truck drivers out of its Pomona,
California terminal. Appellant completed a one-week orientation in Pomona.
During the orientation, he signed a written “Conditional Offer of Employment.”
The one-page document consisted of the following:
“I, [name], accept a conditional offer of employment with COVENANT
TRANSPORT pending successful completion of: [¶] DOT Physical and
Drug Screen [¶] DOT Written Exam [¶] Road Test [¶] Completion of
Orientation [¶] Personal Interview [¶] MVR Review [¶] Reference
Checks [¶] DAC Review [¶] I also acknowledge and agree that the venue
of any claims filed for injuries, accidents, or incidents will be handled
through the State of Tennessee. I also acknowledge and agree that the venue
of litigations that may arise from this employment shall be in the State of
Tennessee. I also acknowledge and agree that Tennessee law shall apply
exclusively to any such claims or litigation. Finally, I acknowledge and
agree that Covenant Transport shall have the right to recover reasonable
attorney fees and expenses it incurs if it prevails in any such dispute, charge,
or action.
2
“I also acknowledge and agree that Covenant Transport offers a Transitional
Duty Program, and as such, I agree to be subjected to said program and its
conditions/requirements. I also acknowledge and agree to medical treatment
and light duty in Hamilton County, Chattanooga, TN as part of my
employment responsibilities with Covenant Transport, Inc.”
Following the one-week orientation, appellant completed an approximately
three-week training course, during which he drove a truck throughout the United
States. Upon completion, he was hired by respondent on June 24, 2010.
On or about November 12, 2010, appellant was involved in a rollover
accident in the State of Washington. Following the accident, appellant received
medical treatment and participated in respondent‟s light duty program in
Chattanooga, Tennessee. After completion of Covenant‟s investigation into
appellant‟s accident, his employment was terminated December 22, 2010.
STATEMENT OF THE CASE
On June 13, 2011, appellant filed a complaint for damages. He asserted
claims for race and disability discrimination, harassment, retaliation, and violation
of the California Family Rights Act under the Fair Employment and Housing Act
(FEHA), Government Code section 12900 et seq., and for wrongful termination in
violation of public policy.
On August 23, 2011, respondent removed the case to federal court, based on
diversity jurisdiction. On October 6, 2011, the federal district court granted
appellant‟s motion to remand the removed action.
On October 24, 2011, respondent moved for an order staying further
proceedings on the ground that “California is an inconvenient and inappropriate
forum for the trial of this action.” In the motion, brought under Code of Civil
3
1
Procedure section 410.30, respondent contended that appellant had agreed to
litigate all employment-related claims in Tennessee. Respondent also asserted that
the decision to terminate appellant‟s employment was made in Tennessee, and that
the individuals who would testify concerning respondent‟s employment policies
and practices were located in Tennessee. Thereafter, respondent filed an answer,
generally denying the allegations in appellant‟s complaint.
Appellant opposed the motion to stay, arguing that the “forum
selection/choice of law provisions” in the Conditional Offer of Employment were
unconscionable. Appellant contended the provisions were procedurally
unconscionable because they were contained in a contract of adhesion. He
contended the provisions were substantively unconscionable because they were
unduly oppressive, “as [their] sole purpose [was] to shield Defendant Covenant
from liability by making litigation for a potential claimant, such as Plaintiff, so
onerous and expensive that the claimant will not pursue litigation.” Appellant also
contended, without elaboration, that he would be “unable to litigate his
discrimination claims in Tennessee.”
In a declaration filed in support of the opposition, appellant stated he was
given the Conditional Offer of Employment as a “take it or leave it contract.” He
further stated he was currently a part-time security guard in Los Angeles,
California, earning approximately $700 per month. He asserted that “[a]s a result
of my current economic situation, I do not have the money to travel to Tennessee
to litigate this lawsuit. In addition to not being able to afford to fly cross-country
for this case, I may also lose my job if I were required to take multiple days off
work and travel to Tennessee.”
1
All further statutory citations are to the Code of Civil Procedure, unless
otherwise stated.
4
In reply, respondent argued that the forum selection clause was not
unconscionable. Respondent asserted that the forum selection clause helped
provide it with “consistency in employment litigation outcomes, and therefore,
consistency in employment policies and procedures.” It alleged that “[t]he choice
of Tennessee is directly related to the fact that being headquartered in Tennessee
means that most of the daily business and management occurs in Tennessee.”
On December 15, 2011, the superior court granted the motion to stay,
pending the outcome of proceedings in Tennessee. The court found some
procedural unconscionability in the Conditional Offer of Employment because the
forum selection clause was contained in a contract of adhesion, but found no
substantive unconscionability. The court also noted that “[a]t the hearing on
defendant‟s motion, plaintiff raised for the first time the argument that plaintiff‟s
claim will likely be time-barred under Tennessee law . . . . Although the issue has
not been briefed by any party (and plaintiff did not request the opportunity for
further briefing), [the] argument is unpersuasive. Defendant seeks a stay, not
dismissal of the action. If plaintiff‟s action in Tennessee is found to be time-
barred, plaintiff may move this court to lift the stay.” Appellant timely appealed.
DISCUSSION
The California Supreme Court has held that “forum selection clauses are
valid and may be given effect, in the court‟s discretion and in the absence of a
showing that enforcement of such a clause would be unreasonable.” (Smith,
Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 496 (Smith).)
“Given the importance of forum selection clauses [to both national and
international commerce], both the United States Supreme Court and the California
Supreme Court have placed a heavy burden on a plaintiff seeking to defeat such a
clause, requiring it to demonstrate that enforcement of the clause would be
5
unreasonable under the circumstances of the case.” (Lu v. Dryclean-U.S.A. of
California, Inc. (1992) 11 Cal.App.4th 1490, 1493 (Lu), citing Smith, supra, at
p. 496 & The Bremen v. Zapata Off-Shore Co. (1972) 407 U.S. 1, 10, 15; accord,
Bancomer, S.A. v. Superior Court (1996) 44 Cal.App.4th 1450.) “The party‟s
burden is to demonstrate that the contractually selected forum would be
unavailable or unable to accomplish substantial justice or that no rational basis
exists for the choice of forum.” (Intershop Communications AG v. Superior Court
(2002) 104 Cal.App.4th 191, 199 (Intershop).) The inconvenience and additional
expense of litigating in another state is insufficient to meet this burden. (Smith,
supra, 17 Cal.3d at p. 496.) However, a forum selection clause will not be
enforced if to do so would “bring about a result contrary to the public policy of the
forum.” (Cal-State Business Products & Services, Inc. v. Ricoh (1993)
12 Cal.App.4th 1666, 1680 (Cal-State).)
“The enforceability of a forum selection clause is properly raised by a
motion to stay or dismiss under . . . section 410.30, as it is a request to the court to
decline jurisdiction.” (Furda v. Superior Court (1984) 161 Cal.App.3d 418, 425;
see also Smith, supra, 17 Cal.3d at p. 494 [defendant moved to dismiss lawsuit and
2
enforce forum selection clause under § 410.30].) The superior court‟s decision is
customarily reviewed for an abuse of discretion. (Trident Labs, Inc. v. Merrill
Lynch Commercial Finance Corp. (2011) 200 Cal.App.4th 147, 154; America
Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 9; but see Cal-State,
supra, 12 Cal.App.4th at pp. 1680-1681 [substantial-evidence test].) We apply that
standard of review to the instant case.
2
Section 410.30 provides: “When a court upon motion of a party or its own
motion finds that in the interest of substantial justice an action should be heard in a
forum outside this state, the court shall stay or dismiss the action in whole or in
part on any conditions that may be just.”
6
Appellant contends the superior court erred in granting the motion to stay
because the forum selection clause (1) is unconscionable, and (2) violates
California‟s public policy.
A. Alleged Unconscionability
“The doctrine of unconscionability is a judicially created doctrine which was
codified in 1979 when the Legislature enacted Civil Code section 1670.5.
[Citation.] That section provides in relevant part, „If the court as a matter of law
finds the contract or any clause of the contract to have been unconscionable at the
time it was made the court may refuse to enforce the contract . . . .‟ (Civ. Code,
§ 1670.5, subd. (a).) While the statute does not attempt to precisely define
„unconscionable,‟ there is a large body of case law recognizing the term has „both a
procedural and a substantive element, both of which must be present to render a
contract unenforceable. [Citation.] The procedural element focuses on the unequal
bargaining positions and hidden terms common in the context of adhesion
contracts. [Citation.] While courts have defined the substantive element in various
ways, it traditionally involves contract terms that are so one-sided as to “shock the
conscience,” or that impose harsh or oppressive terms. [Citation.]‟ [Citation.]”
(Bolter v. Superior Court (2001) 87 Cal.App.4th 900, 906-907 (Bolter).)
“[P]rocedural unconscionability requires oppression or surprise.
„“Oppression occurs where a contract involves lack of negotiation and meaningful
choice, surprise where the allegedly unconscionable provision is hidden within a
prolix printed form.”‟ [Citation.]” (See Pinnacle Museum Tower Assn. v.
Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 247.) We agree
with the trial court that some elements of procedural unconscionability are present
in the forum selection clause, as it was contained in a contract of adhesion
presented on a “take-it-or-leave-it” basis. Not all contracts of adhesion are
7
procedurally unconscionable, however, and there was no element of surprise, as
the forum selection clause was prominently placed in the single page Conditional
Offer of Employment which appellant had ample time to review. (See id. at p. 248
[rejecting claim of procedural unconscionability, although a condominium
project‟s CC&Rs “may perhaps be viewed as adhesive”].)
More importantly, appellant has not shown that the forum selection clause is
so one-sided as to “shock the conscience,” or that it imposes harsh or oppressive
terms. He contends the forum selection clause is substantively unconscionable
because it effectively shields respondent from liability, as it increases the costs and
burdens of employees such as appellant, by requiring them to litigate in Tennessee.
(See Comb v. Paypal, Inc. (N.D. Cal. 2002) 218 F.Supp.2d 1165, 1177 [denying
motion to enforce forum selection clause in arbitration agreement because
“[l]imiting venue to [defendant‟s] backyard appears to be yet one more means by
which the arbitration clause serves to shield [defendant] from liability”].) This
argument was foreclosed by our Supreme Court‟s holding in Smith, that “„[m]ere
inconvenience or additional expense is not the test of unreasonableness.‟” (Smith,
supra, 17 Cal.3d at p. 496; accord, Intershop, supra, 104 Cal.App.4th at pp. 199,
202 [enforcing forum selection clause requiring parties to settle disputes in
Hamburg, Germany]; CQL Original Products, Inc. v. National Hockey League
Players’ Assn. (1995) 39 Cal App.4th 1347, 1354, 1358-1359 [enforcing forum
selection clause requiring parties to settle disputes in Ontario, Canada].)
Appellant‟s reliance on Bolter, supra, 87 Cal.App.4th 900, Nagrampa v.
Mailcoups, Inc. (9th Cir. 2006) 469 F.3d 1257, 1287, and Lucas v. Gund, Inc.
(C.D. Cal. 2006) 450 F.Supp.2d 1125, 1134, is similarly misplaced. Those cases
involved forum selection clauses in arbitration agreements and did not address
Smith. Bolter is further distinguishable on the ground that the forum selection
8
clause requiring any arbitration to be conducted in Utah was imposed upon
preexisting California franchisees. As the Bolter court noted, “[w]hen petitioners
first purchased their . . . franchises in the early 1980‟s, [the franchisor] was
headquartered in California, and the franchise agreement did not contain an
arbitration provision. Thus, they never anticipated [the franchisor] would relocate
its headquarters to Utah and mandate that all disputes be litigated there.” (Bolter,
supra, 87 Cal.App.4th at p. 909.) In contrast, appellant was provided notice before
he was employed that all employment-related disputes would be litigated in
Tennessee.
Moreover, the Bolter court expressed concern that the “forum selection
provision[] ha[d] no justification other than as a means of maximizing an
advantage over the petitioners.” (Bolter, supra, 87 Cal.App.4th at p. 910.) Here,
the forum selection clause was included to help respondent attain consistency in its
employment practices and procedures. As a national employer, it was rational and
reasonable for respondent to select the State where its headquarters are located as
the exclusive forum for all employment litigation. (See Lu, supra, 11 Cal.App.4th
at p. 1493, fn. 2 [reasonable for national companies to limit venue to the State
where their principal place of business is located].) In short, appellant has failed to
show the forum selection clause in his conditional employment contract was
substantively unconscionable. Accordingly, the trial court did not err in declining
to find the provision unenforceable on this ground. (See Intershop, supra,
104 Cal.App.4th at pp. 201-202 [“A forum selection clause within an adhesion
contract will be enforced „as long as the clause provided adequate notice to the
9
[party] that he was agreeing to the jurisdiction cited in the contract.‟
3
[Citations.]”].)
B. Alleged Violation of California‟s Public Policy
A California court will not enforce a forum selection clause if it would lead
to a result contrary to California‟s public policy. (Cal-State, supra, 12 Cal.App.4th
at p. 1680.) Appellant contends enforcement of the forum selection clause would
violate California‟s public policy against disability discrimination because the
clause would require Tennessee courts to apply Tennessee law, which provides
less protection than California law. He also contends the conditional employment
contract contains a “unilateral attorney‟s fee provision” in favor of respondent that
violates California‟s public policy.
As an initial matter, we note that these arguments were not raised in the
court below. As such, they are forfeited. (See Redevelopment Agency v. City of
Berkeley (1978) 80 Cal.App.3d 158, 167 [failure to raise point in the trial court
constitutes waiver].) Even were we to consider the arguments, we would reject
them on the merits.
First, the forum selection clause does not address choice of law, and the
conditional employment contract does not have a separate choice of law provision.
More importantly, appellant has not demonstrated that Tennessee courts are less
likely to enforce antidiscrimination laws, or that he cannot get adequate redress for
disability discrimination under Tennessee law. (See Olinick v. BMG
Entertainment (2006) 138 Cal.App.4th 1286, 1304 [enforcing forum selection
3
Appellant contends our review should be de novo, as unconscionability is a
question of law for the court. (Civ. Code, § 1670.5 [“If the court as a matter of law
finds . . . .”]; Flores v. Transamerica HomeFirst, Inc. (2001) 93 Cal.App.4th 846,
851.) Under this standard, we would conclude that as a matter of law, the forum
selection clause was not unconscionable.
10
clause requiring California resident to litigate age discrimination claim in New
York City because New York City‟s Human Rights Law prohibits age
discrimination, and there was “no reason to believe the New York courts „are less
likely than California courts to enforce anti-discrimination laws‟”].) Appellant
concedes that Tennessee prohibits disability discrimination, but contends the
definition of “disability” is narrower under Tennessee law than California law.
Appellant has not shown, however, that his alleged disability would fall outside the
scope of Tennessee‟s disability discrimination law. Moreover, appellant is entitled
only to an adequate remedy in the alternative forum, not the exact remedy. (Id. at
p. 1303 [“[P]rovided [appellant] has an adequate remedy for his . . . discrimination
claim in the selected forum, the forum selection clause does not violate
California‟s public policy against . . . discrimination.”].) In addition, “the FEHA,
unlike other statutory schemes, does not contain an antiwaiver provision.” (Id. at
p. 1304.) The FEHA does not expressly prohibit “parties [from] selecting a forum
and/or substantive antidiscrimination law other than California‟s.” (Ibid.) In short,
the forum selection clause does not violate California‟s public policy against
disability discrimination.
Nor does the “unilateral attorney‟s fee provision” in the conditional
employment contract change our analysis, as the issue on appeal is the enforcement
4
of the forum selection clause. Accordingly, the superior court did not abuse it
discretion in granting respondent‟s motion to stay.
4
Appellant suggests the fee provision violates Civil Code section 1717, which
provides: “In any action on a contract, where the contract specifically provides
that attorney‟s fees and costs, which are incurred to enforce that contract, shall be
awarded either to one of the parties or to the prevailing party, then the party who is
determined to be the party prevailing on the contract, whether he or she is the party
specified in the contract or not, shall be entitled to reasonable attorney‟s fees in
11
DISPOSITION
The order is affirmed. Costs are awarded to respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
MANELLA, J.
We concur:
WILLHITE, Acting P. J.
SUZUKAWA, J.
addition to other costs.” This argument is unavailing. The statute governs only
“action[s] on a contract,” whereas appellant has asserted tort claims.
12