Case Title: STATE v THIRTEENTH JUD DIST COUR

Citation: 

Docket Number: 84-454

State: montana

Court: Montana Supreme Court

Date: 1985-02-15T00:00:00Z

Document:
No. 84-454 I N THE SUPRELW COURT OF THE STATE OF MONTANA 1 9 8 5 STATE OF MONTANA, ex r e l . , POLARIS INDUSTRIES, I N C . , R e l a t o r , THE DISTRICT COURT OF THE THIRTEENTH JUDICIAL DISTRICT, I N AND FOR THE COUNTY OF YELLOWSTONE, THE HONORABLE DIANE G. BARZ, Judge p r e s i d i n g , R e s p o n d e n t s . ORIGINAL PROCEEDING : COUNSEL OF RECORD: F o r R e l a t o r : McNamer, T h o m p s o n & C a s h m o r e ; C h a r l e s R. C a s h m o r e , Jr. argued, B i l l i n g s , Montana F o r R e s p o n d e n t s : B e r g e r L a w F i r m ; A r n o l d B e r g e r argued, B i l l i n g s , M o n t a n a A n d e r s o n , E d w a r d s & Molloy, B i l l i n g s , Montana S u b m i t t e d : January 2 5 1 1 9 8 5 ~ ~ ~ i d ~ d : F e b r u a r y 1 5 , 1 9 8 5 F i l e d : : ( -.. . . : :7:j : ; Mr. Justice William E. Hunt, Sr., delivered the Opinion of the Court. Relator Polaris Tndustries, Inc. filed an application for e writ of supervisory control asking this Court to reverse the Yellowstone County District Court's Order which refused to grant Polaris' motion to dismiss an action filed against it by Midland Implement Company, Jnc. Three issues were raised: first, whether the District Court erre? in denying Polaris1 motion to dismiss; second, whether a provision in an Agreement providing an exclusive out-of-state forum for litigation is valid and enforceable in Montana; and third, whether the District Court erred in holding that Polaris' refusal to renew the Agreement rendered it void as a matter of law, thereby precluding Polaris from availing itself of the out-of-state forum provision of the Agreement. Because we hold the forum-selection clause is void, we need not address the remaining issues. On April 7, 1982, Midland entered into a written Distributor Agreement with Polaris. The Agreement provj-des Polaris would manufacture snowmobiles for commercial sale, and Midland would act as distributor for the products. The Agreement further provides that no action on claims arising from the Agreement may be maintained by Midland against Polaris in any court except in Hennepin County, Minnesota District Court, or in the United States District Court in Minneapolis, Minnesota. After one year, the Agreement expired of its own terms, leaving matters such as inventory and warranty claims between the parties unresolved. Midland. a.sserted that 5 28-2-708, MCA renders the forum-selection clause void. We agree. That statute provides : "Restraints upon 1ega.l proceedings void. Every stipulation or condition in a contract by which any parky thereto is restricted from enforcing his rights under the contract by the usual proceedings in the ordinary tribunals or which limits the time within which he may thus enforce his rights - i . s void." (Emphasis added.) - - The complaint of the plaintiff in this case comes within the provisions of the foregoing code section. The pla.intiff seeks to enforce its right under its contract with Polaris by a "usual proceeding" in the "ordinary tribunals" of Montana. We hold that the forum-selection clause of the Agreement is void under the statute a.s an improper restraint upon the pla.intiffls exercise of its rights. We, therefore, conclude that the District Court correct)-y denied Polaris' motion to dismiss. We deny the application for writ of supervisory control. /? We Concur: ,/ / kfq7'&)2- Chief Justice Justices Justice John C. Sheehy, special.1~ eo~curring: 1 concur in the foregoing opinion. The provisions of Art. I , Section 16, 1972 Montana Constitution, are further evidence of a strong public policy in this State that impedances to state courts may not be contenanced by us. The constitutional statement is that courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property or character. Forum selection clauses in contracts impede the right to judicial process and especially discourage a speedy remedy. A further reason for refusing validity to a forum selection clause may be found in the development of long-arm jurisdiction. Whereas formerly, a state could not make a Sinding judgment - in personam against an individual or corporate defendant with which the state had no contacts, fv' ties or relations (PeJdnoyer v. Neff (1877), 95 U.S. 714, 24 L.Ed 565), with the decisions of the U.S. Supreme Court beginning in 1945 (International. Shoe Co. v. State of Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 I..Ed. 95), it became recognized that due process is provided non-state residents if traditional notions of justice and fair play made them amenable to state jurisdictions away from home. See Travelers Health Associat.ion v. Virginia (1950), 339 U.S. 643, 70 S.Ct. 927, 94 L.Ed. 1154; Perkins v. Benguet Consolidated Mining Co. (1952), 342 U.S. 437, 72 S.Ct. 413, L / f 5 - / + 5 / 96 L.Ed. 4 ; McGee v. International Life Ins. Co. f39-52), 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; Hanson v. Denckla (1958), 357 U . S . 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283. Thus under McGee, supra., it was sufficient for due process that suit was based on a contract which had substantial connection with that state. 355 U.S., p. 223. 8 Hon, John C. Sheehy Justice, Supreme Court Room 414 Justice Building 215 North Sanders Helena, Montana 59620 March 12, 1985 CORRECTION. In preparing this opinion for pub- lication, we noted in our verification o f titles and citations the matters listed below. Corrections have been made on our copy o f the opinion. MAR 1 8 1985 ETHZ!.. M . &HI?]:i,ON State ex rel. Polaris Industries, Inc. v . District &WGts@LiZime couri Thirteenth Judicial District, Yellowstone County, ~o.StM.sQ@dh$anFeb. 15, 1985, specially concurring Page 4, line 15 --- Pehnoyer v . Neff should read Pennoyer v . Neff. Page 4, line 6 from bottom --- 97 L.Ed. - 469 should read 97 L.Ed. 485. $ / 7 Page 4, line 6 from bottom --- (1952) should read (1957). J Page 5, line 10 from bottom --- S - 27-2-708 should read § - 28-2-708. WEST PUBLISHING COMPANY Box 43526 St. Paul, MN 55164 Fere Polaris' contact with Midland constituted very substantial connections with Montana. Under any modern concept of - in personam jursidiction over non-state defendants, Polaris is plainly subject in this case to Montana's long-arm jurisdiction. It would be patently a step hack from the cases affording such jurisdiction to hold that forum selection clauses may set aside the significant growth of - in personam jursidiction law. Montana's rules of civil procedure take notice of the growth in the law pertaining to non-state defendants in state courts. Rule 4B provides that jurisdiction of the sta.te courts stretches to include any claim for relief from the doing personally or through employees of the transaction of any business in the state or entering into a contract for materials to be furnished in this state. Those activities provide the "minimum con.tactsW by the non-state resident which makes long-arm iursidiction of the non-state resident comportable with due process. international -- Shoe Co., supra. /d I therefore agree that S -2-7-2-708, MCA, states a public pol-icy that has existed in Montana. historically and has even more meaning with the d.evelopment of the newer concepts of 1-ong-arm jurisdiction. That policy makes forum-selection clauses in contracts in our state void. There i . s a measure of protection even so for non-state residents. If there a.re not the minimum contacts necessary for long-arm jurisdiction with the state by the non-state resident, no state jursidiction exists with or without the forum selection clause.