United States District Court, C.D. CaliforniaOct 16, 2002
No. CV 02-06397 PA (JTLx) (C.D. Cal. Oct. 16, 2002)

No. CV 02-06397 PA (JTLx)

October 16, 2002


PERCY ANDERSON, United States District Judge

Plaintiff DHX, Inc., ("DHX"), a California corporation, s d its English insurer, defendant Allianz AGE MAT Ltd., ("Allianz"), in the Los Angeles County Superior Court, for refusal to pay an insurance claim arising from the theft of two ocean shipping containers from DHX's premises. The complaint was filed on July 26, 2002, and Allianz filed a notice of removal in this Court on August 15, 2002. Allianz now moves this Court to dismiss the action on the basis of improper venue pursuant to a forum selection clause contained in the insurance contract.

Allianz points to clause 25 of the general policy terms of the insurance agreement entered into by the parties. "This policy shall be construed according to and governed by English law and any dispute between the Assured and Insurers shall be submitted to the exclusive jurisdiction of the High Court of Justice, England." (Rogers Decl., Ex. A, ¶ 25). DHX, however, argues that this clause should be invalidated by the court because it function to deprive it of its right to a trial by jury.

In M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513

(1972), the Supreme Court held that "in the light of present-day commercial realities and expanding international trade . . . the forum clause should control absent a strong showing that it should be set aside." Bremen, 407 U.S. at 15, 92 S.Ct. at 1916. However, in Vimar Seguros y Reaseguros. S. A. v. M/V Sky Reefer, 515 U.S. 528, 115 S.Ct. 2322, 132 LEd.2d 462 (1995), the Supreme Court stated that if contractual choice of law and choice of forum clauses operated together to effectively nullify a party's statutory rights, the agreement would not be upheld. Sky Reefer, 515 U.S. at 540, 115 S.Ct. at 2330. DHX argues that the British courts will not allow this case to be tried by a jury, therefore clause 25 should be void as against public policy. Allianz concedes that this case will be tried before the court, rather than a jury, if the case is transferred to the jurisdiction of the English courts.

Allianz argues that the Bremen decision allows this court to enforce the forum selection clause, and that the right to a jury trial is waivable. Although Allianz insists that an implied waiver can be found in DHX's agreement to a contract containing a forum selection clause, this Court disagrees. "Because the right to a jury trial is a fundamental right guaranteed to our citizenry by the Constitution, courts should indulge every reasonable presumption against waiver." Pradier v. Elespuru, 641 F.2d 808, 811 (9th Cir. 1981) (citing Aetna Insurance Co. v. Kennedy, 301 U.S. 389, 393, 57 S.Ct. 809, 811, 81 L.Ed. 1177 (1937)). DHX initially made a jury demand in its state court pleadings, and the insurance contract between the parties does not contain a jury waiver provision. Accordingly, this Court finds that DHX did not waive its right to a jury.

Moreover, while this Court recognizes that the Bremen decision presumptively validates forum selection clauses, Allianz has been unable to provide the court any post-Sky Reefer case law in support of its argument. It is clear that the agreement's choice of law and the choice of forum clauses work together to deprive DHX of its constitutional and statutory right to a trial by jury. Accordingly, under Sky Reefer, this Court must invalidate clause 25 of the agreement between the parties, and deny Allianz's motion to dismiss this case.