Opinion
NOT TO BE PUBLISHED
Appeal from orders of the Superior Court of Orange County, Mary Fingal Schulte, Judge. Order dismissing action reversed., Super. Ct. No. 06CC02576.
Law Offices of Hemar Rousso & Heald and Jeannine E. Del Monte for Plaintiff and Appellant.
Attlesey & Thomlinson, Keith A. Attlesey and Suzanne M. Shaw for Defendants and Appellants.
FYBEL, J.
INTRODUCTION
Plaintiff Genesis Commercial Capital, LLC (Genesis), a California limited liability company, sued defendants Olivier Video Productions, Inc., a Texas corporation, and Jay Olivier, a Texas resident, doing business as Olivier Productions (collectively the defendants), for the return of motion picture equipment leased to the defendants, as well as additional rent allegedly incurred by the defendants since the original equipment lease terms ended. The defendants filed a motion seeking, inter alia, dismissal of the complaint based on the doctrine of forum non conveniens. The trial court granted the defendants’ motion on that ground, ordered the action dismissed without prejudice, and denied the defendants’ subsequent motion seeking prevailing party attorney fees pursuant to the subject equipment lease agreements. Genesis appealed from the order of dismissal, and the defendants appealed from the order denying them prevailing party attorney fees.
We reverse the trial court’s order dismissing the action based on the doctrine of forum non conveniens. In Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751 (Stangvik), the California Supreme Court set forth several factors that must be considered by the trial court in determining whether a motion based on the doctrine of forum non conveniens should be granted. Reviewing the record in light of those factors, we conclude the defendants failed to meet their burden of producing evidence that California is a seriously inconvenient forum in which to try this lawsuit. Consequently, the trial court erred in granting the motion and dismissing Genesis’s complaint.
Because we reverse the trial court’s order dismissing the action, the defendants’ contention the trial court erred by failing to award them prevailing party attorney fees is moot.
BACKGROUND
In January 2006, Genesis filed a lawsuit in Orange County Superior Court against the defendants. Genesis alleged the parties entered into two written lease agreements (lease agreements 01004-01 and 01004-02) whereby Genesis “agreed to finance the purchase of certain equipment to [the d]efendants for a term of sixty (60) months” for a monthly lease payment of $933.28, relating to $10,000 worth of equipment under agreement 01004-01, and for a separate monthly lease payment of $887.28, relating to $10,000 worth of equipment under agreement 01004-02.
The complaint alleged that under each agreement, the lease term would be automatically extended unless the defendants provided Genesis with written notice of their election to purchase the equipment or return it to Genesis, at least 180 days prior to the expiration of the lease term. The complaint alleged with regard to each lease agreement (1) the defendants neither provided Genesis with written notice nor returned the equipment to it; (2) renewal rentals had continued to accrue; and (3) the defendants had not paid the renewal rent amounts or returned the equipment to Genesis. Based on these allegations, Genesis alleged separate claims for breach of contract, claim and delivery, and unjust enrichment against the defendants as to each lease agreement.
In May 2006, the court entered a default judgment against the defendants and in favor of Genesis in the amount of $41,846.72, plus attorney fees and costs. The defendants filed a motion to vacate the default judgment under section 473 of the Code of Civil Procedure, which was granted by the trial court.
The defendants thereafter filed a motion seeking to “quash service of summons and/or to dismiss for lack of jurisdiction, improper venue and to stay or dismiss for forum non conveniens.” The motion was based on grounds that (1) Olivier Video Productions is a Texas corporation with its principal place of business in Texas; (2) the subject lease agreements were executed by the defendants in Texas and the alleged breach of the agreements occurred in Texas or South Dakota; (3) Genesis assigned at least part of its interest in the lease agreements to entities located in South Dakota and Texas; (4) the forum selection clauses in the lease agreements are “not specific”; and (5) “[i]mposing jurisdiction in California would not comport with fair play and substantial justice.”
Defendant Jay Olivier filed a declaration in support of the defendants’ motion, which stated in relevant part (1) Olivier is the chief executive officer and owner of Olivier Video Productions, Inc., a Texas corporation; (2) the defendants are in the business of providing production services to the motion picture and television industry; (3) the majority of the defendants’ business is transacted within Texas; (4) the defendants do not do business in California and do not own real property in California; (5) all of the defendants’ records are located in Texas; (6) Olivier signed the subject lease agreements; (7) Olivier was informed that agreement 01004-01 had been assigned by Genesis to The Manifest Group in Minnesota and agreement 01004-02 had been assigned to United Capital in Austin, Texas; (8) Olivier remitted payments under agreement 01004-01 to Manifest Funding Services in Sioux Falls, South Dakota, and remitted payments under agreement 01004-02 to GE Capital in Dallas, Texas; and (9) “[a]ll of the designated recipients of the alleged deficient payments are non residents of California and their records and knowledgeable persons are assumed to be non-California residents.”
In opposition, Eric Sidebotham, vice president of Genesis, filed a declaration stating (1) Genesis is an equipment lease financing company located in Irvine, California which does not have offices or employees in Texas; (2) the parties negotiated the lease agreements over the telephone, mail, and fax; (3) Sidebotham explained to Olivier that “the monthly lease payments due under the initial lease term would be assigned to third parties, and that Defendant would be directed to make payments to the third parties”; (4) Sidebotham told Olivier “the end of the lease residual and renewal rights remained with Genesis”; (5) Genesis mailed the lease agreements to the defendants; (6) Jay Olivier executed the agreements and mailed them back to Genesis in Irvine; (7) the agreements were executed by a Genesis representative in Irvine; (8) the lease payment streams were assigned to Manifest Funding and GE Capital and the defendants made the lease payments accordingly; (9) under the lease agreements, unless the defendants give Genesis written notice at least 180 days in advance of the end of the lease term that the defendants terminate the lease, and return the leased equipment to Genesis, the lease terms will be automatically extended; (10) the defendants did not provide such notice and did not return the equipment to Genesis; (11) consequently, it was Genesis’s position that the lease agreements continued to be extended and the defendants continued to incur and owe to Genesis renewal rent amounts but had defaulted in making their payments; (12) Genesis and the defendants agreed that at the end of the initial lease terms, the defendants would have the option of purchasing the equipment for actual fair market value as determined by Olivier Productions; (13) Genesis received a letter from Jay Olivier along with a check for $10.00 purporting to constitute payment for the purchase of the leased equipment; (14) Genesis contacted the defendants and explained that although the defendants had the right to determine the fair market value of the equipment, it had to be based upon market valuations, and the resale value of all the equipment at issue was $20,000; and (15) the defendants did not return the equipment or pay the renewal rental payments as requested by Genesis.
In reply, Olivier filed a declaration stating, inter alia, (1) during negotiations, Olivier told Sidebotham he wanted a one-dollar buyout term for the equipment at the end of the lease; (2) Sidebotham told him he could not offer a one-dollar buyout, but that Sidebotham could write a letter that gave Olivier the uncontested right to name the fair market value of the equipment at the end of the lease; (3) the lease agreements failed to include the start and end dates of the original lease terms; and (4) after Olivier inquired as to the dates of the lease term and advised Sidebotham he wanted to end the lease agreements and make a buyout of the equipment, he was told it was “too late” and that Genesis was automatically renewing the leases for another year.
The trial court granted the defendants’ motion “as to Forum Non Conveniens,” and ordered that “[a]ll complaints and cross-complaints not reduced to judgment are ordered dismissed without prejudice.” The trial court did not state on the record its reasons for granting the motion. Genesis appealed from the trial court’s order.
The trial court’s order dismissing the action on the ground of forum non conveniens is an appealable order. (Code Civ. Proc., § 904.1, subd. (a)(3).)
The defendants moved to recover attorney fees in light of the trial court’s dismissal of Genesis’s complaint pursuant to attorney fee provisions contained in the lease agreements.
In a minute order, the trial court denied the defendants’ attorney fees motion, concluding “there was no prevailing party on the merits.” The trial court stated, “[d]efendant won the motion, but the Court’s initial inclination was to stay the action (based on forum non conveniens) and allow suit to be filed in Texas. The dismissal was without prejudice, and, perhaps, in retrospect, the Court should have stayed the action or quashed service for lack of personal jurisdiction. No party, for now, has prevailed on the subject contract, so the attorney fee motion is denied.” The defendants appealed from the order denying attorney fees.
DISCUSSION
Section 410.30, subdivision (a) of the Code of Civil Procedure 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.” The Judicial Council comment to section 410.30 states, “[s]ection 410.30 gives statutory recognition to the doctrine of forum non conveniens, which authorizes a court to decline to exercise its jurisdiction in appropriate instances on the ground that the plaintiff has unfairly or unreasonably invoked the jurisdiction of an inconvenient forum.” (Cal. Judicial Council com., 14A West’s Ann. Code Civ. Proc. (2004 ed.) foll. § 410.30, p. 486.)
The California Supreme Court has explained, “[f]orum non conveniens is an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere. [Citation.] . . . [¶] In determining whether to grant a motion based on forum non conveniens, a court must first determine whether the alternate forum is a ‘suitable’ place for trial. If it is, the next step is to consider the private interests of the litigants and the interests of the public in retaining the action for trial in California. The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses. The public interest factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternate jurisdiction in the litigation. [Citations.]” (Stangvik, supra, 54 Cal.3d at p. 751.)
“On a motion for forum non conveniens, the defendant, as the moving party, bears the burden of proof. The granting or denial of such a motion is within the trial court’s discretion, and substantial deference is accorded its determination in this regard. [Citations.]” (Stangvik, supra, 54 Cal.3d at p. 751.) “In exercising its discretion, however, the court must bear in mind that the moving party bears the burden of proving that California is an inconvenient forum. [Citations.]” (Ford Motor Co. v. Insurance Co. of North America (1995) 35 Cal.App.4th 604, 610.) “‘[U]nless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.’ [Citations.]” (Id. at pp. 610-611.) A trial court has no discretion to dismiss (as opposed to staying) an action filed in California by a California resident on grounds of forum non conveniens except in extraordinary cases. (Archibald v. Cinerama Hotels (1976) 15 Cal.3d 853, 858; Century Indemnity Co. v. Bank of America (1997) 58 Cal.App.4th 408, 411.) Even “a stay of an action filed by a California resident is rare.” (Berg v. MTC Electronics Technologies Co. (1998) 61 Cal.App.4th 349, 362.)
Here, the trial court granted the defendants’ forum non conveniens motion and dismissed the action. Regardless of whether the trial court dismissed or merely stayed the action, as discussed post, the trial court abused its discretion by granting the defendant’s motion in the first instance.
Before reviewing the various factors set forth in Stangvik, supra, 54 Cal.3d 744, we identify the purported forum selection clauses that appear in various forms in the subject lease agreements. “The procedure for enforcing a forum selection clause is a motion to stay or dismiss for forum non conveniens. [Citation.]” (Olinick v. BMG Entertainment (2006) 138 Cal.App.4th 1286, 1294.) “‘Although not even a “mandatory” forum selection clause can completely eliminate a court’s discretion to make appropriate rulings regarding choice of forum, the modern trend is to enforce mandatory forum selection clauses unless they are unfair or unreasonable. [Citations.] . . . [¶] If there is no mandatory forum selection clause, a forum non conveniens motion “requires the weighing of a gamut of factors of public and private convenience . . . .” [Citation.] However if there is a mandatory forum section clause, the test is simply whether application of the clause is unfair or unreasonable, and the clause is usually given effect.’” (Ibid.)
Here, lease agreement 01004-01 states that in any action arising out of the agreement “venue shall be laid in the state and county of lessor’s principal place of business, or in the state and county of whoever holds the lessor’s interest.” In contrast, an equipment lease guaranty signed by Jay Olivier with regard to the same lease agreement states, “[i]n any action, suit or proceeding regarding this Guaranty, Guarantor agrees to exclusive jurisdiction and venue in the State of Texas, County of Travis, or in the state and county of Lessor’s then principal place of business (or the princip[al] place of business of whoever then holds the Lessor’s interest in the subject Lease).”
Lease agreement 01004-02 states “you agree that this lease will be governed by the laws of the state of California and you consent to jurisdiction in the county of Orange.” An addendum to the same agreement states, “[t]he lease agreement shall be subject to the personal jurisdiction of the state of the lessor’s or assignee’s principal place of business or any state selected by lessor or its assignee where they do business including any state or federal court sitting therein, and all courts thereof,” and “[l]essee(s) shall accept venue in . . . any federal or state court selected by lessor or its assignee.”
Neither party has taken the position that any one of those forum selection clauses is enforceable and mandatory. Instead, each party merely cites those portions of each agreement which favor its preferred forum in analyzing the factors set forth in Stangvik, supra, 54 Cal.3d 744. Thus, we conclude mandatory forum selection clause standards do not apply to this case. Furthermore, the inconsistent forum selection clauses are of limited use in determining whether California constitutes a seriously inconvenient forum for this litigation.
With regard to the preliminary determination set forth in Stangvik, supra, 54 Cal.3d 744, 751, of whether Texas would provide a suitable alternate forum for the adjudication of this dispute, Genesis does not argue that Texas would fail to do so. We therefore turn to the Stangvik factors regarding the private interests of the litigants and the interests of the public in retaining the action for trial in California.
As to the private interests of the litigants, the record shows this case involves a single plaintiff which is a California limited liability company located in Irvine, California. The record also shows Olivier is a Texas resident and Olivier Video Productions, Inc. is a Texas corporation.
The issues raised in this litigation are the parties’ respective rights to leased equipment and alleged amounts of rent incurred by the defendants as a result of their failure to return the leased equipment at the end of the initial lease terms. Thus, this case will essentially turn on the interpretation of the lease agreements themselves.
The proof involved in this case appears to be primarily documentary, and many of the documents, if not all, may have already been provided as attachments to the complaint and the declarations filed in connection with the defendants’ motion. The defendants have not identified any other sources of evidence and have not shown how a Texas forum would facilitate access to such evidence. (See Stangvik, supra, 54 Cal.3d at p. 751.) Other than Jay Olivier, the defendants have not identified any prospective witnesses whose testimony would be needed at trial in this case. It is quite possible that only the parties and their agents would be called as witnesses at trial. Even if the testimony of a handful of nonparty witnesses were necessary, the defendants have failed to show that the availability of such witnesses would be compromised by litigating this matter in California.
While the record shows Genesis assigned the right to collect rent from the defendants for the original lease terms to two non-California entities, the claims asserted in this case appear to be based entirely on unassigned rights to rent due Genesis as a result of the automatic renewal of the lease agreements as well as Genesis’s unassigned right to the return of the equipment. Furthermore, Genesis’s assignees are not parties to this litigation. The defendants do not contend on appeal that the assignees would be necessary witnesses, and no such reason appears from the record. Furthermore, the parties do not dispute that the defendants paid all amounts due under the lease agreements to the assignees.
The defendants contend “[i]f this matter is tried in California, and assuming arguendo that Genesis prevailed, Genesis will be forced to collect its judgment in Texas. However, if this matter is heard in the state of Texas, any judgment would be easily enforced against Jay Olivier because he is a resident of Texas and on Olivier Video Productions, Inc. because it is a Texas corporation.” Although the defendants suggest the enforcement of a California judgment in Texas would be significantly more onerous than the enforcement of a Texas judgment, the defendants have produced neither evidence nor legal authority supporting their assertion. In any event, any such inconvenience would be borne by Genesis, not the defendants.
The defendants argue Genesis filed its lawsuit in California to harass them. The defendants’ argument finds no support in the record. Genesis is located in Irvine, California and it appears rather logical it filed the lawsuit in Orange County Superior Court. The record does not suggest this is a case in which a nonresident plaintiff selected California as a forum for the purpose of creating a hardship for a defendant.
Turning to the public interest factors, we consider the public’s interest in the “avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternate jurisdiction in the litigation.” (Stangvik, supra, 54 Cal.3d at p. 751.)
California and Texas have comparable interests in the resolution of a business dispute between their respective residents. As discussed ante, this case presents what appear to be relatively straightforward issues of contract interpretation and would not involve extensive evidence or a lengthy or complex trial. (See Roulier v. Cannondale (2002) 101 Cal.App.4th 1180, 1190 [in case involving a single plaintiff and two defendants, represented by the same counsel, the trial court concluded “little or no impact on court congestion may be expected to result from a trial in this state”].)
In light of the foregoing, the defendants failed to meet their burden of producing evidence showing California is a seriously inconvenient forum to try this lawsuit, much less establish the extraordinary circumstances necessary to justify dismissing Genesis’s lawsuit on that basis. Consequently, the trial court erred in dismissing the complaint.
DISPOSITION
The order dismissing the complaint based on the doctrine of forum non conveniens is reversed and the matter is remanded to the trial court. Genesis shall recover costs incurred on appeal.
WE CONCUR: RYLAARSDAM, ACTING P. J., BEDSWORTH, J.