Opinion
NOT TO BE PUBLISHED
San Francisco County Super. Ct. No. CGC-08-473893
Marchiano, P.J.
South 125 Dealer (South) appeals from the order dismissing its cross-complaint against Vehicle Inspection Systems, Inc. (VIS). The motion was granted based on a forum selection clause in the parties’ contract. The principal contention on appeal is that the court erred in enforcing the forum selection provision because it is unreasonable. We find no merit to this argument or the other arguments raised by South, and therefore affirm the order.
Juana Silvia Aceves is listed as an additional appellant in the notice of appeal, but it does not appear that she was a party to the cross-complaint and her purported appeal is hereby dismissed.
I. BACKGROUND
South is a small family-owned business in San Diego that buys and sells used trucks and provides truck wheel rim polishing services. VIS is a company headquartered in Orlando, Florida that manufactures and sells a rim polishing machine known as the “VIS-Polish Machine.” According to the declaration of Gerardo Aceves, South’s Office Manager, in opposition to the motion to dismiss, he learned about VIS on the internet, and had his daughter contact VIS to inquire about the machine. Wayne Marshall of VIS responded and “quickly convinced” Mr. Aceves “of the machine’s capability.” Marshall faxed Mr. Aceves a factory order agreement for purchase of the machine pursuant to a “60 month lease to own” arrangement. The three-page agreement identified South and Sylvia Aceves, Mr. Aceves’s wife and South’s Chief Executive Officer, as “The Purchaser,” and provided: “Resolution of Disputes: Any controversy or dispute between the Parties with respect to this Agreement or any Schedule or any of the Equipment shall be resolved in a court of competent jurisdiction sitting in Orange County, Florida and the Purchaser herewith consents to jurisdiction in such court.” Mrs. Aceves executed the agreement on behalf of South. VIS Vice-President Dan Pollock declared in support of the motion to dismiss that VIS would not have sold the machine to South “without the inclusion of the forum selection clause in the contract. VIS has never sold a VIS-Polish Machine in North America without the inclusion of this forum selection clause.”
Mr. Aceves stated that Marshall insisted that the transaction be financed through Bank of the West (Bank), which had financed many leases for other VIS customers. South entered into a 60-month lease for the machine with a division of the Bank; Mrs. Aceves personally guaranteed South’s performance under the lease. The lease required that litigation arising from the agreement be brought in San Francisco.
Mr. Aceves stated that he “felt a great deal of pressure” from Marshall to acquire the machine. He and Mrs. Aceves said that they were not sophisticated business people and that English was their second language. Mr. Aceves said that “it was clear, due to the language barrier, that I did not fully understand the terms of the transaction,” but that Marshall “never offered to have the [factory order agreement] translated into Spanish to ensure that I understood the terms.... [N]or did he explain the forum selection clause to me.”
Mr. Aceves said that the machine was broken when it arrived at South in February 2007. He said that the machine never worked properly and never performed as VIS represented it would. He wrote VIS a letter in June 2007, which stated in part: “I have written to your company before describing my dissatisfaction with your product and have also followed up with several phone calls and yet nothing has been done. I have spoken to several individuals in your company that have all, in one way or another, have reassured me every time that from then on I would have no more problems. I have been consistent in paying for this machine since the day it was purchased and yet the machine that I was promised would ‘pay for itself’ has yet to do so. Due to the high inconsistency in the performance of your machine I am losing out on customers and profit.”
The Bank filed suit against South and Mrs. Aceves for breach of the lease, alleging that they had defaulted on the payments owed. South filed a cross-complaint against VIS and the Bank, which alleged among other things that VIS had misrepresented the machine’s performance, and sought among other things indemnity from VIS for any liability of South to the Bank. VIS moved to dismiss the cross-complaint against it based on the forum selection clause in its contract with South.
At the hearing on the motion, the court stated that the forum selection clause “does cover this dispute and it is enforceable... so I am inclined to grant [the motion].” When South’s counsel argued that the court had “discretion in order to determine, based upon the totality of the circumstances... if it would be reasonable to enforce such a burden on a party,” the court responded, “I don’t think that I have discretion. I don’t think I have discretion to ignore the parties’ agreement but even if I did, I wouldn’t exercise it here. I think it’s a reasonable agreement under the circumstances....” South’s counsel next argued that South’s claim for “fraud and misrepresentation in the inducement of the agreement” fell outside the forum selection clause. VIS’s counsel argued that South had not pled a cause of action for “fraudulent inducement” in the cross-complaint, and that the forum selection clause was broad enough to cover South’s contention that the machine did not perform as represented. South’s counsel then asked for leave to amend the cross-complaint to include a claim for “misrepresentation in the inducement.” The court denied the request for leave to amend and granted the motion to dismiss, finding that the cross-complaint against South would be “properly governed by the forum selection clause even if it were amended in that way.”
We have granted VIS’s request for judicial notice of trial court documents showing that, after the notice of appeal was filed, the court ordered South’s cross-complaint against VIS severed for purposes of trial from the litigation between the Bank and South and Mrs. Aceves, and that the claims between the Bank and South have been settled.
II. DISCUSSION
A. Scope of Review and the Court’s Discretion
Cases are split on the scope of appellate review of a decision on a motion to enforce a contractual forum selection clause. (Intershop Communications AG v. Superior Court (2002) 104 Cal.App.4th 191, 198-199 (Intershop) [some courts have applied the substantial evidence test, others abuse of discretion].) South contends that de novo review is appropriate here because the facts are essentially undisputed. We agree with the cases that have, consistent with the decision in Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 496 (Smith), applied the abuse of discretion standard. (See Intershop, supra, 104 Cal.App.4th at p. 199.) The issue is immaterial here, in any event, because we would reach the same conclusion under any of the potentially applicable standards: the decision to grant the motion to dismiss was reasonable, it was supported by the evidence, and we independently agree with it.
We are not persuaded by South’s contention that the trial court misunderstood its discretion in the matter. In our view, the court’s statement at the hearing on the motion that it did not have discretion to “ignore the parties’ agreement” to the forum selection clause merely reflected the high burden of proof, discussed below, borne by the party seeking to deny enforcement of such an agreement. The court, at any rate, went on to confirm that its decision would have been the same “even if [it] did” have the broad discretion South suggested.
The parties agree that denial of leave to amend the cross-complaint is reviewed for abuse of discretion.
B. Motion to Dismiss
Forum selection clauses such as the one here “play an important role in both national and international commerce” (Lu v. Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490, 1493 (Lu)) and are “usually given effect” (Berg v. MTC Electronics Technologies Co. (1998) 61 Cal.App.4th 349, 358). “[T]he courts have placed a substantial burden on a plaintiff seeking to defeat such a clause, requiring it to demonstrate enforcement of the clause would be unreasonable under the circumstances of the case.” (CQL Original Products, Inc. v. National Hockey League Players’ Assn. (1995) 39 Cal.App.4th 1347, 1354 (CQL); see also Bancomer, S. A. v. Superior Court (1996) 44 Cal.App.4th 1450, 1457 [opponent of enforcement bears a “heavy” burden].)
“Unreasonable” in this context means 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, supra, 104 Cal.App.4th at p. 199.) South argues that inconvenience and expense are relevant considerations, but it is settled that “[n]either inconvenience nor the additional expense of litigating in the selected forum is a factor to be considered.” (Ibid.; see also e.g., Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1679 (Cal-State); Lu, supra, 11 Cal.App.4th at p. 1493.)
South seeks support in a passage from Lifeco Services Corp. v. Superior Court (1990) 222 Cal.App.3d 331, 335 (Lifeco), stating that “relevant factors” in determining whether to enforce a forum selection clause include: “the relative availability of evidence and burden of trial in one place rather than another; a state’s interest in providing its residents a forum or regulating the activity involved; ease of access to alternative forums; avoidance of multiplicity of suits and conflicting adjudications; and closeness of connection between the cause of action and the defendant’s local activities.” However, as noted in Cal-State, supra, 12 Cal.App.4th at page 1683, the Lifeco court was mistaken in its opinion that these considerations apply. In deciding whether enforcement of a forum selection clause is reasonable, the sole issues are whether the forum is available, capable of deciding the case, and rationally related to the transaction. (Intershop, supra, 104 Cal.App.4th at p. 199.)
Even if the risk of inconsistent results were a relevant factor, South’s settlement with the Bank eliminated any chance of inconsistent resolutions of South’s cases against the Bank and VIS.
The forum selected here satisfies all of these criteria. South did not show that the Florida court is unavailable, and while South maintains that the Bank is an indispensible party in its case against VIS, South has not shown that the Bank could not be joined in a Florida action. South submits that VIS selected the Florida forum to discourage claims against it, but VIS had a rational reason for selecting a court in the state of its headquarters to resolve disputes arising from its nationwide business operations. In this respect, this case is no different from others that have enforced comparable forum selection clauses. “This is not a case in which one party has imposed a remote alien forum bearing no relationship to the contract at issue in order to discourage the other party from pursuing legitimate claims.... Given the nationwide scope of their operations, it is perfectly reasonable for defendants to have desired to limit the fora in which they are potentially subject to suit to their nationwide hub in Miami.” (Lu, supra, 11 Cal.App.4th at pp. 1493-1494, fn. 2; see also CQL, supra, 39 Cal.App.4th at p. 1355 [Canadian defendant reasonably provided for Canadian forum; reasonableness of forum selection clause was underscored by “the rational relationship [the forum] has to the parties’ business relationship”]; Cal-State, supra, 12 Cal.App.4th at pp. 1681-1682 [New Jersey domiciliary rationally specified New York City forum, and “there is no evidence the forum was selected with the design to thwart an opponent’s ability to litigate”].)
South contends that its misrepresentation and equitable indemnity claims are outside the scope of the forum selection clause. However, the provision broadly covered “[a]ny controversy or dispute between the parties with respect to... the Equipment,” and thereby extended to South’s tort and equitable causes of action. Here again, this case is no different from others that have given clauses of similar scope comparable effect. (Smith, supra, 17 Cal.3d at p. 497, italics omitted [forum selection clause governing “any matters arising under or growing out of this agreement” covered tort as well as contract claims]; Cal-State, supra, 12 Cal.App.4th at pp. 1676-1677 [clause governing “ ‘any case or controversy arising under or in connection with’...” agreement covered all causes of action “relat[ing] to allegedly false promises made in the course of negotiations... and the subsequent conduct of the relationship between the parties created by the contracts”].)
South contends that the forum selection clause should not be enforced because it was part of a contract of adhesion and was not within South’s reasonable expectations as the weaker party. Once again, case law is to the contrary. (CQL, supra, 39 Cal.App.4th at p. 1355 [Canada forum selection was “completely consistent with the reasonable expectations of [the California plaintiff] given that [the defendant] is an Ontario, Canada domiciliary, [the plaintiff] inferentially recognizing this was part of the price of doing business with [the defendant]”]; Cal-State, supra, 12 Cal.App.4th at p. 1681 [selection of New York forum was within reasonable expectations of California plaintiff; “obviously if two parties to a contract are domiciled on opposite coasts, either one party or the other will wind up with the home-court advantage... so the plaintiff would have to recognize this would be part of the price of doing business with [the New Jersey defendant]”].)
South’s other arguments based on the adhesive nature of the contract are also unavailing. “A forum selection clause within an adhesion contract will be enforced ‘as long as the clause provided adequate notice to the [party] that he was agreeing to the jurisdiction cited in the contract.’ ” (Intershop, supra, 104 Cal.App.4th at pp. 201-202.) South asserts that the clause here was “hidden at the end of the contract,” but the contract was short and the clause was unambiguous. Thus, the situation here cannot be distinguished from that in Intershop, where “the forum selection clause plainly says that Hamburg, Germany is the selected forum. Plaintiff had full notice that he was agreeing to Hamburg as the place of trial, even though he may have chosen not to read the four-page contract.” (Id. at p. 202.) South submits that the clause was ambiguous because it applied to the “Purchaser” of the equipment, and the equipment was purchased by the Bank and merely leased by South. However, South and Mrs. Aceves are clearly identified as “The Purchaser” in the agreement.
South contends that the clause should not be enforced because South did not “knowingly and voluntarily” enter into the contract. South concedes that “[g]enerally, parties are responsible for protecting themselves while contracting,” and that “general contract principles did not require VIS to translate the agreement” into Spanish for South’s benefit. But South complains that “VIS did not take prudent steps to ensure that South understood the terms and conditions of the transaction which would have been warranted because a language barrier clearly existed between the parties.” However, “[r]easonable diligence requires the reading of a contract before signing it,” and “[n]o law requires that parties dealing at arm’s length have a duty to explain to each other the terms of a written contract.” (Rowland v. Paine Webber Inc. (1992) 4 Cal.App.4th 279, 286.) South could have had the contract translated before signing it if prudence so required. Nor did South lack “the power to walk away from negotiations if displeased with the provision” at issue. (Cal-State, supra, 12 Cal.App.4th at p. 1681 [discussing when a contract is signed “freely and voluntarily”].) The purchase agreement was faxed to South which considered the terms in the unhurried confines of its own office free of outside pressures. Accordingly, the court could reasonably find that South did not enter into the contract unknowingly or involuntarily.
C. Leave to Amend
South argues that the court should have given it an opportunity to amend the cross-complaint to add a cause of action for “fraud in the inception.” However, South did not seek leave to state that cause of action. South asked for permission to add a cause of action for “misrepresentation in the inducement,” not in the inception, of the contract. As VIS points out, these causes of action are not synonymous. “In the usual case of fraud, where the promisor knows what he or she is signing but consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.” (1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 297, p. 324, italics in original.) “If the fraud goes to the inception or execution of the agreement, so that the promisor is deceived as to the nature of his or her act, and actually does not know what is being signed, or does not intend to enter into a contract at all, mutual assent is lacking, and the contract is void.” (Id. at § 299, p. 325, italics in original.) The distinction is relevant here because while the forum selection clause would cover a claim of fraud in the inducement (see Cal-State, supra, 12 Cal.App.4th at pp. 1676-1677 [clause covered causes of action based on allegedly false promises in negotiations]), the clause would not apply in the event of fraud in the inception—in that event, no contract was formed and the clause could be “disregarded.” (1 Witkin, Summary of Cal. Law, supra, § 299, p. 325.)
Thus, in arguing for leave to plead fraud in the inception, South is impermissibly advancing a new theory for the first time on appeal. We must decline to reverse the trial court for failing to make a ruling that was never requested. (Brown v. Boren (1999) 74 Cal.App.4th 1303, 1316.) Moreover, no evidence supported a cause of action for fraud in the inception. South may have been deceived as to how the machine would perform, but nothing suggests that South did not realize it was signing a machine purchase contract. (See also Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 423 [no fraud in the inception if party had a “reasonable opportunity to obtain knowledge of the character or essential terms of the proposed contract”].)
III. DISPOSITION
The judgment is affirmed.
We concur: Margulies, J., Graham, J.
Retired judge of the Superior Court of Marin County assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.