Packers Printing & Publ'g Co., Inc. v. Anajet, LLC

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA13-1449
NORTH CAROLINA COURT OF APPEALS
Filed: 19 August 2014
PACKERS PRINTING AND PUBLISHING
COMPANY, INC. and PACKERS PRINTING
AND PUBLISHING COMPANY, INC.
t/d/b/a BUDGET PRINTING, CO.,
Plaintiff,
v. Columbus County
No. 13 CVS 675
ANAJET, LLC; and ANAJET, LLC
t/d/b/a ANAJET, INC.,
Defendant.
Appeal by defendant from order entered 24 October 2013 by
Judge Phyllis Gorham in Columbus County Superior Court. Heard
in the Court of Appeals 21 May 2014.
Wright, Worley, Pope, Ekster, & Moss, PLLC, by Boyd T.
Worley, for plaintiff-appellee.
McAngus, Goudelock & Courie, PLLC, by John P. Barringer and
Jeffrey B. Kuykendal, for defendant-appellant.
BRYANT, Judge.
Where the forum selection clause included in the contract
between plaintiff and defendant was not mandatory but
permissive, the trial court did not err in denying defendant’s
motion to dismiss on the basis of venue.
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In Columbus County Superior Court, on 21 May 2013 and later
on 13 August 2013 (amended), plaintiff Packers Printing and
Publishing Company, Inc., filed a complaint against defendant
Anajet, LLC. Plaintiff was located in Columbus County;
defendant in Costa Mesa, California.
In its complaint, plaintiff alleged that on 12 June 2012,
it purchased from defendant an Anajet Mp5 printer. To set up
the printer upon delivery, plaintiff was provided only a
training CD. Despite the CD instructions and support from
defendant’s technical staff, the printer did not function
properly upon assembly. Ultimately, plaintiff demanded a
rescission of the contract. Defendant refused. Plaintiff
sought recovery on the following grounds: breach of contract;
breach of express warranty; fraud and punitive damages; and
unfair and deceptive trade practices.
In lieu of an answer, defendant moved to dismiss the
complaint pursuant to Civil Procedure Rule 12(b), subsections
(1), (2), (3), and (6). Defendant asserted that the contract
between plaintiff and defendant—the Anajet Apparel Printer
Customer Order Form, which included a purchase agreement
(hereinafter “the contract”)—contained a forum selection clause
requiring application of California law and requiring that the
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dispute be settled in Orange County, California. The matter
came on for hearing on 16 September 2013. On 24 October 2013,
the trial court denied defendant’s motion to dismiss. Defendant
appeals.
_________________________________
On appeal, defendant contends the trial court erred in
denying defendant’s motion to dismiss the action for improper
venue.
Motion to dismiss
Initially, we note that plaintiff filed with this Court a
motion to dismiss defendant’s appeal on the grounds that the
appeal is interlocutory and that defendant has failed to
demonstrate any basis which meets the criteria for which this
Court will address an interlocutory appeal.
[I]mmediate appellate review of an
interlocutory order is available when the
trial court enters a final judgment as to
one or more, but fewer than all, claims or
parties and certifies that there is no just
reason for delay pursuant to N.C. Gen. Stat.
§ 1A–1, Rule 54(b) or when the interlocutory
order affects a substantial right under N.C.
Gen. Stat. § 1–277(a) and N.C. Gen. Stat. §
7A–27(d).
Hill v. StubHub, Inc., ___ N.C. App. ___, ___, 727 S.E.2d 550,
554 (2012), review denied, 366 N.C. 424, 736 S.E.2d 757 (2013)
(citation and quotations omitted). Plaintiff asserts that the
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trial court did not provide a Rule 54(b) certification for
appeal and that the court order does not affect a substantial
right.
While Rule 54(b) was inapplicable to the appealed order,
see N.C. R. Civ. P. § 1A-1, Rule 54(b) (“Judgment upon multiple
claims or involving multiple parties”), plaintiff’s assertions
that the trial court order does not affect a substantial right
are incorrect. In Mark Grp. Int'l, Inc. v. Still, this Court
held that “our case law establishes firmly that an appeal from a
motion to dismiss for improper venue based upon a jurisdiction
or venue selection clause dispute deprives the appellant of a
substantial right that would be lost.” 151 N.C. App. 565, 566,
566 S.E.2d 160, 161 n.1 (2002). Accordingly, we deny plaintiff’s
motion to dismiss defendant’s appeal.
Argument
On appeal, defendant argues that the trial court erred in
denying its motion to dismiss for improper venue. Defendant
contends the forum selection clause in the contract named the
appropriate venue as Orange County, California, and is a
mandatory forum selection clause. We disagree.
Generally, there are three types of
contractual provisions that parties use to
avoid litigation concerning jurisdiction and
governing law: (1) choice of law clauses,
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(2) consent to jurisdiction clauses, and (3)
forum selection clauses.
[(1)] Choice of law clauses specify
which state's substantive laws will
apply to any arising disputes. [(2)]
Consent to jurisdiction clauses grant a
particular state or court personal
jurisdiction over those consenting to
it, authorizing that court or state to
act against him. [(3)] A true forum
selection provision goes one step
further than a consent to jurisdiction
provision. A forum selection provision
designates a particular state or court
as the jurisdiction in which the
parties will litigate disputes arising
out of the contract and their
contractual relationship.
Capital Bank, N.A. v. Cameron, ___ N.C. App. ___, ___, 753
S.E.2d 153, 156 (2013) (citations and quotations omitted),
withdrawn, ___ N.C. ___, ___ S.E.2d ___ (Apr. 8, 2014)
(No.28P14-1), withdrawn, ___ N.C. ___, ___ S.E.2d ___ (Apr. 14,
2014) (No.28P14) (2014).
“We employ the abuse-of-discretion standard to review a
trial court's decision concerning clauses on [forum] selection.
Under the abuse-of-discretion standard, we review to determine
whether a decision is manifestly unsupported by reason, or so
arbitrary that it could not have been the result of a reasoned
decision.” Gary L. Davis, CPA, P.A., v. Hall, ___ N.C. App.
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___, ___, 733 S.E.2d 878, 880 (2012) (citation and quotations
omitted).
We look to the terms of the contract, particularly, the
section identifying the “Governing Law and Jurisdiction.”
8. Governing Law and Jurisdiction. This
Agreement shall be governed by the laws of
the State of California. In the event of
disputes, the venue is an appropriate Court
in Orange County, CA.
It is apparent the parties agreed—as the first sentence, the
choice of laws clause, provides—that the laws of the State of
California will govern the interpretation of the contract. The
dispute is only as to the forum selection clause: whether it is
mandatory or permissive.1
We consider the forum selection clause in accordance with
California law.
The California Supreme Court has held
that contractual forum selection clauses are
valid and should be given effect unless
enforcement of the clause would be
unreasonable. (Smith, Valentino & Smith,
Inc. v. Superior Court (1976) 17 Cal.3d 491,
495–496 . . . (Smith ) . . . . However, a
distinction has been drawn between a
mandatory and a permissive forum selection
clause for purposes of analyzing whether the
clause should be enforced. A mandatory
clause will ordinarily be given effect
without any analysis of convenience; the
only question is whether enforcement of the
1
The contract contains no consent to jurisdiction clause.
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clause would be unreasonable. On the other
hand, when the clause merely provides for
submission to jurisdiction and does not
expressly mandate litigation exclusively in
a particular forum, then the traditional
forum non conveniens analysis applies. (Berg
v. MTC Electronic Technologies Co., 61
Cal.App.4th 349, 358–360 . . . (1998) (Berg
).)
Intershop Commc'ns AG v. Superior Court, 104 Cal. App. 4th 191,
196 (2002) (citation omitted).
In Berg v. MTC Electronics Technologies Co., 61 Cal. App.
4th 349 (1998), the California Court of Appeals for the Second
District, Division 2, reviewed the following provision: “The
company MTC has expressly submitted to the jurisdiction of the
State of California and United States Federal courts sitting in
the City of Los Angeles, California, for the purpose of any
suit, action or proceedings arising out of this Offering.” Id.
at 357. The plaintiffs contended that the provision amounted to
a mandatory forum selection clause. The Berg Court compared the
clause to three forum selection clauses previously determined to
be mandatory: “any and all litigation that may arise as a result
of this Agreement shall be litigated in Dade County, Florida[,]”
(quoting Lu v. Dryclean-U.S.A. of California, Inc., 11 Cal. App.
4th 1490, 1492 (1992)); “any claims shall be prosecuted in the
appropriate court of Ontario[,]” (quoting CQL Original Products,
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Inc. v. National Hockey League Players' Assn., 39 Cal. App. 4th
1347, 1352 (1995)); and “[a]ny appropriate state or federal
district court located in the Borough of Manhattan, New York
City, New York shall have exclusive jurisdiction over any case
of controversy arising under or in connection with this
Agreement[,]” (quoting Cal-State Business Products & Services,
Inc. v. Ricoh, 12 Cal. App. 4th 1666, 1672 fn. 4 (1993)). Berg,
61 Cal. App. 4th at 357—58. The Berg Court observed that by
comparison, the clause before them did not “contain express
language of exclusivity of jurisdiction or a mandatory place of
litigation.” Id. at 358. “Clauses that grant jurisdiction to a
particular forum without expressly making that forum the
mandatory situs for resolution of disputes are considered
permissive only.” Id. at 359 (citations omitted). In comparing
the clause under review to a permissive selection clause
discussed in Appalachian Ins. Co. v. Superior Court, which
“call[ed] for a party to submit to the jurisdiction of ‘any
court of competent jurisdiction[,]’” Id. at 359 (citing
Appalachian Ins. Co., 162 Cal. App. 3d 427 (1984)), the Berg
Court reasoned that “[t]he clause at issue in the instant case
varies from the broad . . . clause involved in Appalachian
Insurance Co. only in that [it] is more narrowly focused. . . .
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[T]he clause does not expressly provide that any dispute must be
resolved exclusively in Los Angeles regardless of what other
factors might exist.” Id. at 359.
Guided by the precedent of the California State Supreme
Court and the California Court of Appeals, we consider the
language of the forum selection clause under our review: “In the
event of disputes, the venue is an appropriate Court in Orange
County, CA.” We note that the clause “does not contain express
language of exclusivity of jurisdiction or a mandatory place of
litigation.” Id. at 358. Furthermore, the clause does not
expressly provide that any dispute must be resolved exclusively
in Orange County, California regardless of what other factors
might exist. See id. at 359. Therefore, we hold that the forum
selection clause contained in the document entitled Anajet
Apparel Printer Purchase Terms and Condition is permissive.
And, as plaintiff’s principal place of business is located in
Columbus County, North Carolina, as well as the witnesses to the
conduct of both parties, the trial court did not abuse its
discretion in denying defendant’s motion to dismiss the
complaint for grounds associated with improper venue.
Accordingly, defendant’s argument is overruled. We affirm the
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trial court’s denial of defendant’s motion to dismiss for
improper venue.
Affirm.
Judges CALABRIA and GEER concur.
Report per Rule 30(e).