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Jeffrey M. Goldman (SBN 233840)
E-mail: goldmanj@pepperlaw.com
PEPPER HAMILTON LLP
4 Park Plaza, Suite 1200
Irvine, California 92614
Telephone: (949) 567-3500
Fax: (949) 863-0151
Specially Appearing for Defendant
OMNISURE GROUP, LLC
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF ORANGE
VEHICLE PROTECTION SPECIALISTS,
LLC, a Nevada limited liability company;
and DANIEL M. LAURENT, an
individual,
Plaintiffs,
Vv.
OMNISURE GROUP, LLC, corporation;
and DOES 1 through 50, inclusive
Defendants.
Case No. 30-2018-01022977
Assigned to: Hon. Glenda Sanders, CX101
SPECIALLY APPEARING DEFENDANT
OMNISURE GROUP, LLC’S NOTICE OF
MOTION AND MOTION TO DISMISS OR
STAY COMPLAINT ON FORUMNON
CONVENIENS GROUNDS, AND
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT THEREOF
[filed concurrently with Declaration ofArmon
Withey; Request for Judicial Notice; and
[Proposed] Order]
Date: February 1, 2019
Time: 1:30 p.m.
Crtrm: CX101
Complaint Filed: October 3, 2018
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TO THE COURT, TO PLAINTIFFS, AND TO THEIR ATTORNEYS OF
RECORD:
PLEASE TAKE NOTICEthat, on February 1, 2019, at 1:30 p.m. or as soon
thereafter as the matter may be heard, in Department CX 101 of the above-entitled court, located
at Central Justice Center, Complex Civil Panel, 751 West Santa Ana Boulevard, Santa Ana,
California 92701, Defendant Omnisure Group, LLC (“Omnisure”) shall and hereby does specially
appear and move this Court for an order dismissing and/or staying this action onforum non
conveniens grounds.’
Omnisure makes this motion pursuant to California Code of Civil Procedure
Sections 418.10 and 430.10(e) seeking dismissal of the claims asserted by Plaintiff Vehicle
Protection Specialists, LLC (“VPS”) on the grounds that VPSis not a California citizen and does
not maintain a principal place of business in California and it executed the Seller Agreement and
the Security Agreement referenced in the Complaint, which contains a forum selection clause
requiring “all actions or proceedings in any way, manner or respect,” related to those agreements
to be litigated in courts located within Cook County, Illinois.
Omnisure makes this motion pursuant to California Code of Civil Procedure
Sections 418.10 and 430.10(e) seeking a stay of the claims asserted by Plaintiff Daniel M.
Laurent (“Laurent”) who executed a Guaranty Agreement requiring “all actions or proceedings in
any way, manner or respect,” located within the City of Chicago.
Further support for this motion is based on the fact that both VPS and Laurent are
already involved in a pending lawsuit in Cook County, Illinois in the matter entitled, Omnisure
Group, LLC v. Vehicle Protection Specialists, LLC, et al., Docket No. 2018-L-7860.
Omnisure relies upon this Notice; the Memorandum of Points and Authorities
attached hereto; the Declaration ofArmon Withey; Request for Judicial Notice; the pleadings,
"On December 14, 2018, which wasat least five days before any responsive pleading was
due, Jeffrey M. Goldman, Esq. conferred by telephone with William Chapman, counsel for
Plaintiffs Vehicle Protection Specialists, LLC and Daniel M. Laurent, to determine whether an
agreement could be reached that would resolve the issues and objections raised in this Motion.
Mr. Goldman clearly identified the legal support for the arguments presented in this Motion;
however, the parties were not able to reach an agreement resolving this Motion. NOTICE OF MOTION AND MOTION TO DISMISS OR STAY ON FORUMNON CONVENIENS GROUNDS
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records and files in this action; and such other oral and documentary evidence as may be
presented at or before the hearing on this Motion.
Date: January 3, 2019 PEPPER HAMILTON LLP
By: AdMbl_—
Jeffiley M. Goldman
Specially Appearing for OMNISURE
GROUP, LLC
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TABLE OF CONTENTS
LL INTRODUCTIONcitiesesteete shee sees teseesbeeetesb esas ne enie ens 1
II. STATEMENT OF FACTSooosateseeesees 2
A. TRE PaTti@S.coveteeeeeeeerste eaeseer 2
B. The Seller Agreement and Amendment. ............coeeeeeiieeriiiniienie ceceeee2
C. The Forum Selection Provision in the Seller Agreement..............ccceeeveeviieniieennennne. 3
D. The Forum Selection Provision in the Guaranty Agreement.............ccccceevuveeunennne. 3
E. The Plaintiffs and Defendant are Already Litigating in a Court located in
TINS. eeveeeectseeseesreeeste seen ea 4
III. LEGAL ARGUMENT ....cotiitiiiiitiitceceeeesetesate seeseeesaan 5
A. The Forum Selection Clauses in the Seller Agreement and Guaranty
Agreement are Mandatory and Cover the Claims Plaintiffs Assert In this
ACTION.«eectserectsee sae eae eae eaten ee seen 6
B. Mandatory Forum Selection Clauses Are Presumed Valid in California. .............. 7
C. Plaintiffs Cannot Meet their Burden of Showing the Forum Selection
Clauses are Unreasonable or Unfair. .........ccccoveeveniiiiiienieniecccciecence 7
IV. CONCLUSION ....ootiitiitcieseeeestes eee ees sates t estates be sate sae e nae s ease ene eaees 10
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TABLE OF AUTHORITIES
Page(s)
CASES
Appalachian Ins. Co. v. Super. Ct., 162 Cal. App. 3rd 427 (1994) ...ooeviiiieieeieeeeeeeeeee6
Berg v. MTC Elec. Technologies, 61 Cal. App. 4th 349 (1998) ....cevriiiiiiieieceeeeeeee.6
Cal-State Bus. Prods. & Servs., Inc. v. Ricoh, 12 Cal. App. 4th 1666 (1993).......ccccccvvevveneen.5,7, 8
CQL Original Products, Inc. v. Nat'l Hockey League Players’ Ass'n, 39 Cal. App.
A 1347 (1995)cancershee eae ete t ee shee sheets s eee ne anaes 8
Gorman v. Wells Fargo Bank, N.A., 2015 U.S. Dist. LEXIS 54964 (C.D. Cal. Apr.
20, 20015)ceeeeeeteeaeetehehe eh tees beeen stent eh testes te teste nn ene eee 9
Graves v. Southwestern & Pacific Specialty Finance, Inc.,2013 U.S. Dist. LEXIS
158512 (N.D. Cal. NOV. 4, 2013)cuitsetter steerseatenene sees9
Hiram Lodge Enters. Corp. v. TSN, LLC, 2018 U.S. Dist. LEXIS 16300 (D.N.H.
2018) teetateethhee a ete ete heehee estat ante heeh tents beeen teeta be eh tent estates bene enae ene 7
Intershop Comm’s AG v. Super. Ct., 104 Cal. App. 4th 191 (2002).....ccoviiriieiiiiiieiieeie cece.5
Luv. Dryclean-U.S.A. ofCal., Inc., 11 Cal. App. 4th 1490 (1992) ....coovriiiiiiiiiieieeeeee.8
Lyons v. Turner Const. Co., 551 N.E.2d 1062 (Ill. App. Ct. 1990) ....cceeeoriiiiiiiieeieeieeeeeieeee 10
Olinick v. BMG Entm’t, 138 Cal. App. 4th 1286 (2d Dist. 2006).......ccceererririeieieienieie serene5
Paolino v. Equities, 2005 U.S. Dist. LEXIS 21240 (W.D. TeX. 2005) ...cceovierieeiieiiieiieeieeee7
Playboy Enters. Int’l, Inc. v. Smartitan (Singapore) Pte. Ltd., 804 F. Supp. 2d 730
(NLD. TIL 2071)cuteeeeeeaeeeeestes bese eben es tetas bese enbeebese enemas 6
Smith, Valentino & Smith, Inc. v. Super. Ct., 17 Cal. 3d 491 (1976) ...ccoceviivviiiieeiieeeeeeeee 8
The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) c.eooiieiiieiiieieee ters8
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MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
Defendant Omnisure Group, LLC (“Omnisure”) submits this Memorandum of
Points and Authorities in support of its motion to dismiss, or in the alternative, stay the present
action based on the existence of mandatory forum selection clauses the Plaintiffs Vehicle
Protection Specialists, LLC (“VPS”) and Daniel M. Laurent (“Laurent”) agreed upon, and the fact
that there is an on-going litigation between Omnisure and Plaintiffs involving the same subject
matter at issue here that is pending in Illinois State Court.
Asset forth below, the Plaintiffs and Omnisure agreed, in three separate
documents,to litigate all their claims in Illinois. This agreement is memorialized in a September
24,2015 seller agreement (the “Seller Agreement”), a September 25, 2015 security agreement
(the “Security Agreement), and a September 25, 2015 guaranty agreement (the “Guaranty
Agreement”). There is no dispute that the clause in each agreement contains a mandatory forum
selection provision; there is no dispute that the clause is reasonable; and there is no dispute that
Plaintiffs and Defendants have litigation involving the same subject-matter that has been pending
in Illinois since July 2018.
Plaintiffs, however, contend that this Court can ignore the three forum selection
clauses and the pending litigation, and make a determination as to whether Omnisure is a lender
and whether the transaction at issue was a finance transaction because the California Finance
Lenders Law is a public policy of the State, and only a Court in California can rule on that law.
The problem with this argumentis that California courts have recognized that there is no private
right of action for a violation of the California Finance Lenders Law. Moreover, there is nothing
preventing an Illinois Court from making a factual determination as to whether Omnisure is even
a lender — which it is not — that was required to obtain a license.
Thus, because of California’s policy in enforcing mandatory forum selection
provisions and because there is no private right of action for an alleged violation of the California
Lenders Law,this court should not was judicial resources and either dismiss or stay the present
action until the action pending in Illinois State Court is resolved.
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IL. STATEMENT OF FACTS
A. The Parties.
According to the California Secretary of State, plaintiffVPS is a Nevada limited
liability company, with its principal place of business located at 5348 Vegas Drive #964, Las
Vegas, Nevada. (See Request for Judicial Notice (“RIN”), Exh. B, Vehicle Protection Specialists,
LLC’s Statement of Information filed on August 25, 2017 with the California Secretary of State,
hereinafter referred to as the “VPS’ Statement of Information). VPSis in the business of selling
vehicle warranty products to consumers on installment payment plans. (Compl. at 4 5). Plaintiff
Laurent is the chief executive officer of VPS. (Compl. at § 4; Compl., Ex. A (the “Illinois
Complaint”), at § 3). Defendant Omnisure is a Delaware limited liability company with a
principal place of business in Chicago, Illinois. Pursuant to an agreementit had with VPS,
Omnisure agreed, among other things, to advance money to VPS and maintain its Payment Plan
Program by providing accounts receivable collections services for automobile warranty products
that VPS sold to consumers. Illinois Complaint, Ex. A (Seller Agreement).
B. The Seller Agreement and Amendment.
On or about September 25, 2015, Omnisure and VPS entered into the Seller
Agreement, which the parties amended on November 18, 2015 (the “Amendment”). (Id. at qq 7
and 9, Exs. A and C). Pursuant to the terms of the Seller Agreement, VPS sold vehicle warranty
products to consumers, and Omnisure would, in turn, advance payments to VPS whenit sold the
vehicle warranty products even though the consumers had not fully paid for the vehicle warranty
products (the “Advanced Amounts”). (Id. at 10, Ex. A). Omnisure would then enter into an
agreement with each consumerthat required the consumer to pay for the cost of the vehicle
warranty protection under a payment plan. (Id. at Ex. A). Under the Seller Agreement,if the
consumerfailed to make all payments due and owing under the vehicle warranty contracts, (i.e., if
Omnisure did not receive consideration it paid to VPS), then VPS agreed to repay Omnisure for
the shortfall in the Advanced Amounts (the “Unearned Advanced Amounts”). (Id.).>
* Recognizing that certain receivables were not collectible, the Amendment permitted
Omnisure to withhold a portion of the amount paid for the receivables in a reserve account (the
“Reserve Account”). (The Illinois Complaint, at q 12). Under the Amendment, VPS was not
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C. The Forum Selection Provision in the Seller Agreement.
Section P of the Seller Agreement contains a forum selection provision whereby
VPS and Omnisure agreed “that all actions orproceedings in any way, manner or respect,
arising out oforfrom or related to this Agreement, shall be brought only in courts having situs
within Cook County, Illinois.” (Id., Ex. A, 4 P) (emphasis added). At the same time they signed
the Seller Agreement, VPS and Omnisure executed a Security Agreement, pursuant to the Seller
Agreement, that also contained a forum selection provision requiring all litigation to be brought in
the courts located in the City of Chicago, Illinois:
32. Jurisdiction and Venue. COMPANY IRREVOCABLY
AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY
WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM
OR RELATED TO THE SELLER AGREEMENT OR THIS
SECURITY AGREEMENT SHALL BE LITIGATED ONLY IN
COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO,
STATE OF ILLINOIS. COMPANY HEREBY CONSENT AND
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE
OR FEDERAL COURT LOCATED WITHIN SAID CITY AND
STATE. COMPANY HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO TRANSFER OR CHANGE VENUE OF ANY SUCH
ACTION OR PROCEEDING.
(Id, Ex. B, 32).
D. The Forum Selection Provision in the Guaranty Agreement
Also on September 25, 2015, Laurent entered into the Guaranty Agreement with
Omnisure, whereby he guaranteed the performance of all VPS’s obligations under the Seller
Agreement. (Id. at § 13, Ex. D, at 3). The Guaranty Agreement also memorialized a forum
selection clause requiring any action to be brought only in courts sitting in the City of Chicago,
State of Illinois:
EACH PARTY IRREVOCABLY AGREES THAT ALL
ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR
RESPECT, ARISING OUT OF OR FROM OR RELATED TO
THIS AGREEMENT SHALL BE LITIGATED ONLY IN
COURTS SITTING WITHIN THE CITY OF CHICAGO, STATE
permitted to receive the amounts in the Reserve Account until Omnisure was paid for the vehicle
service contracts. (/d., at J 12). Notably, Section 4 of the Amendment reaffirmed that the “the
Seller Agreement remain[ed] in full force and effect.” (Id. at 9 9, Ex. C, Sec. 4).
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OF ILLINOIS. EACH PARTY HEREBY CONSENTS AND
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE
OR FEDERAL COURT LOCATED WITHIN SAID CITY AND
STATE. EACH PARTY HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO TRANSFER OR CHANGE VENUE OF ANY
SUCH ACTION OR PROCEEDING.
ld.
Based on the Seller Agreement, Security Agreement and Guaranty Agreement, at
all times the parties to this litigation knew that all litigation arising out of or related to those
agreements had to be venued in a court located in Chicago, Illinois.
E. The Plaintiffs and Defendant are Already Litigating in a Court located in
Hlinois.
On July 24, 2018, Omnisure instituted a breach of contract action against VPS and
Laurentin Illinois State Court, Cook County, claiming VPS and Laurent breached the Seller
Agreement and Guaranty by failing and refusing to pay Omnisure more than $900,000 in
Advanced Amounts. (See The Illinois Complaint). Omnisure filed the lawsuit in Illinois in
accordance with Section P of the Seller Agreement and that lawsuit continues to this day, (/d. at
Ex. A); see also Omnisure Group, LLC v. Daniel Laurent, Illinois Circuit Court, Cook County,
Law Division, Docket No. 2018-L-7860.
Despite the pending Illinois Action, and the forum selection clauses in three
agreements, the Plaintiffs filed this action in California, and now seek to have this Court, as
opposed to the Illinois Court, declare that Omnisure is enjoined from recovering any ofthe
Advanced Amounts VPS received. (Compl. Prayer for Relief).
Leaving aside its lack of merit, the Complaint makes clear that Plaintiffs’ claims
arise from and are related to the Seller Agreement and the Guaranty that mandate all claims be
litigated in Illinois. See Compl., 9 9(a), 9(c), 9(e), 9(g), 9(i), 10, 12, 13, 17. As such, in
accordance with the express venue provisions in the Seller Agreement, the Security Agreement,
and the Guaranty Agreement, the only venue for bringing those claims is in Cook County,
Illinois, not California, where the parties to this action already have a pending litigation.
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III. LEGAL ARGUMENT
The procedure for enforcing a forum selection clause is by way of motion to stay
or dismiss forforum non conveniens under Code of Civil Procedure §§ 410.30 and 418.10. See
Olinick v. BMG Entm’t, 138 Cal. App. 4th 1286, 1294 (2006); Cal-State Bus. Prods. & Servs.,
Inc. v. Ricoh, 12 Cal. App. 4th 1666, 1670 (1993). Section 410.30(a) provides that when a court
“finds that in the interests 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 party on any conditions that may be
just.” Code Civ. Proc. § 410.30(a). Section 418.10(a) provides that a defendant may serve and
file a notice of motion to “stay or dismiss the action on the ground of inconvenient forum. Code
Civ. Proc. § 418.10(a).
In California, aforum non conveniens motion based on a forum selection clause is
a special type of motion that does not employ the typicalforum non conveniens motion analysis.
Rather, in cases with a contractual forum selection clause, the burden of proof is on the party
resisting the motion to show enforcement of the clause would be unreasonable under the
circumstances of the case.” Intershop Comm’s AG v. Super. Ct., 104 Cal. App. 4th 191, 198
(2002). And, when a mandatory forum selection clause is at issue, the clause is typically enforced
based on the parties’ acts in affirmatively choosing the forum. See Berg v. MTC Elec.
Technologies, 61 Cal. App. 4th 349, 358 (1998) (“if there is a mandatory forum selection clause,
the test is simply whether application ofthe clause is unfair or unreasonable, and the clause is
usually given effect. Claims that the previously chosen forum is unfair or inconvenient are
generally rejected.”); Appalachian Ins. Co. v. Super. Ct., 162 Cal. App. 3rd 427,439 (1994) (“A
court will usually honor a mandatory forum selection clause without extensive analysis of factors
relating to convenience.”).
As set forth below, the Court should enforce the forum selection clauses here
because they are mandatory, encompass all of Plaintiffs’ claims, and a dismissal or stay are not
unreasonable because the underlying dispute between these partiesis the subject of an on-going
litigation in Illinois state court, Cook County since July 24, 2018.
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A. The Forum Selection Clauses in the Seller Agreement and Guaranty
Agreement are Mandatory and Cover the Claims Plaintiffs Assert in this
Action.
There is no question that the forum selection clauses contained in each of the
Seller Agreement and Guaranty require any action to be litigated in Illinois. For example, under
the Seller Agreement, “all actions or proceedings in any way, manner or respect, arising out of or
from orrelated to this Agreement, shall be brought only in courts having situs within Cook
County, Illinois.” (The Illinois Complaint, Ex. A, § P) (emphasis added). The Guaranty contains
similar language: “ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR
RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT SHALL
BE LITIGATED ONLY IN COURTS SITTING WITHIN THE CITY OF CHICAGO, STATE
OF ILLINOIS.” (/d., Ex. D, at 3) (emphasis added). The use of the phrase “only in courts” has
been interpreted by courts as being a mandatory selection of venue by parties. See e.g., Playboy
Enters. Int'l, Inc. v. Smartitan (Singapore) Pte. Ltd., 804 F. Supp. 2d 730, 734 (N.D. 111. 2011)
(finding as clear and mandatory a forum selection clause requiring “any and all disputes arising
out of or relating in any way to this [PLA] shall be litigated only in courtssitting in Cook County,
Illinois.”); Paolino v. Equities, 2005 U.S. Dist. LEXIS 21240, * 1 (W.D. Tex. 2005) (finding a
forum selection clause requiring litigation “only in” courtssitting in Texas to be mandatory and
an unconditional waiver of venue); Hiram Lodge Enters. Corp. v. TSN, LLC, 2018 U.S. Dist.
LEXIS 16300, *6 (D.N.H. 2018) (venue provision deemed mandatory when it provided for action
“only in courts sitting in the State ofNew Hampshire.”).
There also is no question that the forum selection clauses cover Plaintiffs claim
here. These clauses cover “all actions or proceedings in any way, manner or respect, arising out
of or from or related to” either the Seller Agreement or Guaranty Agreement. (The Illinois
Complaint, Ex. C and Ex. D). Because a simple reading of the Complaint reveals that all ofVPS
claims arise from and relate to the Seller Agreement and all of Laurent’s claims arise from the
Guaranty Agreement, there is no question that the forum selection provisions in those agreements
mandate that the litigation must take place in Illinois. See Compl., 9 9(a), 9(c), 9(e), 9(g), 9(1),
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10, 12, 13, 17. Indeed, the California Appellate Division has found that the use of the words
“arising from or relating to” an agreement encompasses all claims regardless of how they are
characterized. Cal-State Bus. Prods. & Servs., Inc. v. Ricoh, 12 Cal. App. 4th 1666, 1667 (1993).
B. Mandatory Forum Selection Clauses Are Presumed Valid in California.
California favors contractual forum selection clauses as long as they are entered
into freely and voluntarily, and their enforcement would not be unreasonable. The reason for this
is that “[f]orum selection clauses play an important role in both national and international
commerce. Given the importance of forum selection clauses, 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 ofthe clause would be
unreasonable under the circumstances of the case.” Lu v. Dryclean-U.S.A. ofCal, Inc., 11 Cal.
App. 4th 1490, 1493 (1992) (emphasis added) (citing The Bremen v. Zapata Off-Shore Co., 407
U.S. 1, 10 (1972)); Smith, Valentino & Smith, Inc. v. Super. Ct., 17 Cal. 3d 491, 496 (1976)).
“[N]either inconvenience nor additional expense in litigating in a selected forum is part of the test
of unreasonability. CQL Original Products, Inc. v. Nat'l Hockey League Players’ Ass'n, 39 Cal.
App. 4th 1347, 1354 (1995). As long as the choice of forum has some rational basis in light of
the facts underlying the transaction, enforcement of the clause is reasonable. Id., see also
Cal-State Bus. Products & Services, Inc. v. Ricoh, 12 Cal. App. 4th 1666, 1679-80 (1993)(“ As a
further measure of reasonability,. . . the choice of forum [must] have some rational basis in light
of the facts underlying the transaction”).
C. Plaintiffs Cannot Meet their Burden of Showing the Forum Selection Clauses
are Unreasonable or Unfair.
Here, Plaintiffs cannot demonstrate that enforcement of the forum selection
clauses would be unreasonable or unfair. VPS is a mid-sized company that provides warranty
protection services throughout the country and negotiated and entered into a multi-million dollar
arrangement with Omnisure that enabled it to receive advances and accounts receivable services.
(See Compl., 9 3, 9; see also Reseller Agreement). Laurent is the CEO ofVPS and reviewed
and negotiated with counsel all of the underlying documents setting forth the arrangement, and
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did so freely and voluntarily. (See Compl., 4 4, 9; see also Reseller Agreement, and Guaranty
Agreement).
As part of the negotiations, VPS and Laurent, as signator, agreed three times to a
forum selection clause requiring disputes to be litigated in Illinois. Because VPS and Laurent are
sophisticated and received substantial value from their arrangement with Omnisure, they knew
they would be required to litigate disputes in Illinois, and there was nothing unfair or
unreasonable about the forum selection clause. See COL Original Products, 39 Cal. App. 4th at
1355 (“because the value it receive[d] from negotiating the deal [was] worth the chance [plaintiff]
may be required to litigate disputes elsewhere,” forum selection clause enforceable).
Indeed, Plaintiffs do not claim in the Complaint that the forum selection clauses
are unfair or unreasonable. Instead, they claim they violate the public policy of California
because Omnisure is required to be licensed in the State of California as a finance lender and the
“choice of law” provision in the Seller Agreement eliminates the ability of an Illinois court to
enforce California’s Finance Law. Compl., 49 17, 20. Plaintiffs, however, are conflating a
“forum selection” clause with a “choice of law” provision. The Illinois courts are equally
equipped to determine whether the transaction at issue is a finance transaction that would require
Omnisure to obtain a Lender’s license from the State of California, as are the California courts.
Beyond that, a fundamental problem that Plaintiffs must overcome, besides the
fact that Omnisure is not even a lender subject to the California Finance Lenders Law, is that
there is no private right of action for a violation ofthat law. Gorman v. Wells Fargo Bank, N.A.,
2015 U.S. Dist. LEXIS 54964, *17-18 (C.D. Cal. Apr. 21, 2015); see also Graves v.
Southwestern & Pacific Specialty Finance, Inc.,2013 U.S. Dist. LEXIS 158512, 2013 (N.D. Cal.
Nov. 4, 2013) (“The California Finance Lenders Law provides for enforcement ofits provisions
by the Commissioner of Business Oversight or the Attorney General. . . .Courts. . . have
concluded that there is no private right of action to enforce a violation of § 22302”).
The irrationality of Plaintiffs’ claims should not be lost in this Court’s analysis.
Plaintiff VPS, which is a Nevada limited liability company and registersits principal place of
business with the State of California as being in Nevada, and the guarantor of performance
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obligations of the Seller Agreement, are attempting to bring an out-of-state corporation into a
state in which it has no offices and does no business (see VPS’ Statement of Information), by
asserting a claim for which there is no private right of action and for which they have suffered no
loss,” while the underlying facts from the case are being litigated in the Illinois Action.
Moreover, even if a private cause of action exists, if Omnisure violated a public
policy by not obtaining a license — which it did not — an Illinois Court can make this
determination and disregard a choice of law provision for the purpose of interpreting a the
California Finance Law lenderlicense requirement. See, e.g., Lyons v. Turner Const. Co., 551
N.E.2d 1062, 1066 (Ill. App. Ct. 1990)(disregarding choice of law on basis that it violated a
fundamentalstate policy).
Regardless of the choice of law provision, before any determination as to whether
the California Finance Law contains a private cause of action, regardless of whether a lender
license requirement appliesto this transaction, the initial factual determination concerning the
parties’ disputes and whether Omnisure and VPS even engaged in a loan transaction — as opposed
to a factoring transaction — the court in the best position to make this determination is the court in
Illinois where this dispute has been litigated since July 2018.
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> Plaintiffs are seeking to avoid repaying $973,000.00 that Omnisure advanced to VPS and
VPS promised to repay if the service contracts were not paid. (Cmpl., 9). The only party that
sustained a loss in this situation is Omnisure. (See The Illinois Complaint).
9 NOTICE OF MOTION AND MOTION TO DISMISS OR STAY ON FORUMNON CONVENIENS GROUNDS
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IV. CONCLUSION
In light ofthe foregoing, the Court should enforce the forum selection clauses in
the Seller Agreement, the Security Agreement and the Guaranty Agreement and either dismiss or
stay this action pending resolution ofthe Illinois Action.
Date: January 3, 2019 PEPPER HAMILTON LLP
By: OuMAL—
Jeffrey M. Goldman
Specially Appearing for Defendant
OMNISURE GROUP, LLC
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NOTICE OF MOTION AND MOTION TO DISMISS OR STAY ON FORUMNON CONVENIENS GROUNDS
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PROOF OF SERVICE
F.R.C.P.5/C.C.P. § 1013a(3)/Cal. R. Ct. R. 2.260
I am a resident of, or employed in, the County of Orange. I am over the age of 18 and not a party
to this action. My business address is: Pepper Hamilton LLP, Suite 1200, 4 Park Plaza, Irvine,
CA 92614-5955.
On January 3, 2019, I served the following listed document(s), by method indicated below, on
the parties in this action:
SPECIALLY APPEARING DEFENDANT OMNISURE GROUP, LLC’S NOTICE OF
MOTION AND MOTION TO DISMISS OR STAY COMPLAINT ON FORUMNON
CONVENIENS GROUNDS, AND MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT THEREOF
SEEATTACHED SERVICE LIST
[1 BY U.S. MAIL [1 BY FACSIMILE
By placing [_] the original / [] a true copy thereof Before 5:00 p.m. on said date, I caused said
enclosed in a sealed envelope(s), with postage fully document(s) to be transmitted by facsimile. The
prepaid, addressed as per the attached service list, for telephone number ofthe sending facsimile machine
collection and mailing at Pepper Hamilton LLP, Suite was (949) 863-0151. The name(s) and facsimile
1200, 4 Park Plaza, Irvine, CA 92614-5955, following machine telephone number(s) of the person(s) served
ordinary business practices. | am readily familiar are set forth in the service list. The document was
with Pepper Hamilton LLP’s practice for collection transmitted by facsimile transmission, and the sending
and processing of documents for mailing. Under that facsimile machine properly issued a transmission
practice, the document is deposited with the United report confirming that the transmission was complete
States Postal Service on the same dayasit is collected and withouterror.
and processed for mailing in the ordinary course of
business. [] BY E-MAIL
By electronically transmitting the document(s) listed
XI BY OVERNIGHT DELIVERY above to the email address(es) of the person(s) set
By delivering the document(s) listed above in a sealed forth on the attached service list from the email
envelopes) or package(s) designated by the express address at
service carrier, with delivery fees paid or provided approximately . Tomy
for, addressed as per the attached service list, to a knowledge, the transmission was reported as
facility regularly maintained by the express service complete and without error. Service by email was
carrier or to an authorized courier or driver authorized made [_] pursuant to agreement ofthe parties,
by the express service carrier to receive documents. confirmed in writing, or [_] as an additional method
Note: Federal Court requirement: service by of service as a courtesyto the parties or [| pursuant
overnight delivery was made [| pursuant to to Court Order. See Cal. R. Ct. R. 2.260
agreement ofthe parties, confirmed in writing, or [_]
as an additional method ofservice as a courtesy to the
parties or [_] pursuant to Court Order.
I declare under penalty of perjury under the laws of the State of California and the United States
of America that the above is true and correct.
Executed on January 3, 2019, at Irvine, California.
Jennifer S. Allen hrfpSYllen
Type or Print Name SignatureJ :
1 PROOF OF SERVICE
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SERVICE LIST
William D. Chapman, Esq. Attorneys for Plaintiffs
LAW OFFICES OF WILLIAM D. VEHICLE PROTECTION SPECIALISTS,
CHAPMAN LLC and DANIEL M. LAURENT
114 Pacifica, Suite 450
Irvine, CA 92618
Telephone: (949) 754-4723
Email: wchapman@chapmanlawyer.com
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PROOF OF SERVICE
