No. 64130 

FILED 

SEP 2 4 2015 

131 Nev., Advance Opinion 13 

IN THE SUPREME COURT OF THE STATE OF NEVADA 

AMERICA FIRST FEDERAL CREDIT 

UNION, A FEDERALLY CHARTERED 

CREDIT UNION, 

Appellant, 

vs. 

FRANCO SORO, AN INDIVIDUAL; 

MYRA TAIGMAN-FARRELL, AN 

INDIVIDUAL; ISAAC FARRELL, AN 

INDIVIDUAL; KATHY ARRINGTON, 

AN INDIVIDUAL; AND AUDIE 

EMBESTRO, AN INDIVIDUAL, 

Respondents. 

Appeal from a district court order dismissing a deficiency 

judgment action. Eighth Judicial District Court, Clark County; Jerry A. 

Wiese, Judge. 

Reversed and remanded. 

Ballard Spahr, LLP, and Stanley W. Parry, Timothy R. Mulliner, and 

Matthew D. Lamb, Las Vegas, 

for Appellant. 

Bogatz Law Group and I. Scott Bogatz and Charles M. Vlasic III, Las 

Vegas, 

for Respondents. 

BEFORE THE COURT EN BANC. 

OPINION 

By the Court, HARDESTY, CA.: 

In this opinion, we must determine whether a contract clause 

stating that the parties "submit themselves to the jurisdiction of' another 

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state results in a mandatory forum selection clause requiring dismissal of 

the Nevada action. We hold that such a clause consenting to jurisdiction 

is permissive and therefore reverse the district court's order granting a 

motion to dismiss based on lack of subject matter jurisdiction in Nevada. 

FACTS AND PROCEDURAL HISTORY 

In 2002, appellant America First Federal Credit Union (the 

credit union) loaned $2 9 million, secured by real property in Mesquite, 

Nevada, to respondents (borrowers) 1for the purchase of a liquor/minimart. The borrowers defaulted, and the credit union held a trustee's sale, 

resulting in a deficiency on the loan balance of approximately $2.4 million. 

The Utah-based credit union sued the borrowers in Clark County to 

recover the deficiency. 

The borrowers moved to dismiss the action under NRCP 

12(b)(1), arguing that the credit union could not sue to recover the 

deficiency in Nevada and citing several clauses in the "Commercial 

Promissory Note" and "Business Loan Agreement" to support their 

argument. An "Applicable Law" clause in the loan agreement stated that 

"[t]his Agreement (and all loan documents in connection with this 

transaction) shall be governed by and construed in accordance with the 

laws of the State of Utah." The loan agreement also contained the 

following: "Jurisdiction. The parties agree and submit themselves to the 

jurisdiction of the courts of the State of Utah with regard to the subject 

matter of this agreement." A clause in the note stated: "If there is a 

'While eight individuals signed the note and loan agreement, the 

only borrowers in the instant action are Franco Soro, Myra TaigmanFarrell, Isaac Farrell, Kathy Arrington, and Audie Embestro. 

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lawsuit, Borrower(s) agrees to submit to the jurisdiction of the court in the 

county in which Lender is located." 

The district court agreed with the borrowers and granted the 

motion to dismiss. The district court found that the note and loan 

agreement "contain language which clearly expresses the parties' intent to 

submit litigation relating to the Agreement and the Note, to the 

jurisdiction of the State of Utah. . . . [T]he language clearly enough 

identifies Utah as the forum[,] which they selected for purposes of subject 

matter jurisdiction." This appeal followed. 

DISCUSSION 

On appeal, the credit union argues that the district court erred 

in enforcing the clauses in question to preclude its complaint for a 

deficiency action. 2More specifically, the credit union argues that the 

jurisdiction clauses here were permissive, and while the complaint could 

have been brought in Utah, the clauses do not mandate that Utah was the 

exclusive forum. In response, the borrowers contend that whether a forum 

selection clause is mandatory or permissive is a matter of contract 

interpretation, and therefore, the clauses are ambiguous and must be 

construed against the credit union as the contract drafter. Whether forum 

selection clauses may be mandatory or permissive is an issue of first 

impression for this court. 

2Additionally, the credit union argues that Nevada's six-month 

statute of limitations for recovery of deficiency judgments applies to the 

action, not Utah's three-month statute of limitations. However, because 

the district court did not decide this issue, we do not address it here. 

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Standard of review 

This court reviews a district court's decision regarding subject 

matter jurisdiction de novo. Ogawa v. Ogawa, 125 Nev. 660, 667, 221 P.3d 

699, 704 (2009). Additionally, "[c]ontract interpretation is a question of 

law and, as long as no facts are in dispute, this court reviews contract 

issues de novo, looking to the language of the agreement and the 

surrounding circumstances." Redrock Valley Ranch, LLC v. Washoe Cnty., 

127 Nev., Adv. Op. 38, 254 P.3d 641, 647-48 (2011). The objective of 

interpreting contracts "is to discern the intent of the contracting parties. 

Traditional rules of contract interpretation are employed to accomplish 

that result." Davis v. Beling, 128 Nev., Adv. Op. 28, 278 P.3d 501, 515 

(2012) (citation and internal quotation marks omitted). This court 

initially determines whether the "language of the contract is clear and 

unambiguous; if it is, the contract will be enforced as written." Id. An 

ambiguous contract is susceptible to more than one reasonable 

interpretation, and "[ably ambiguity, moreover, should be construed 

against the drafter." Anvui, LLC v. G.L. Dragon, LLC, 123 Nev. 212, 215- 

16, 163 P.3d 405, 407 (2007). 

The district court erred when it dismissed the case based on the forum 

selection clauses 

The credit union argues that the clauses do not contain any 

mandatory language and, therefore, all of the forum selection clauses are 

merely permissive. We agree. 

We have not yet distinguished between mandatory and 

permissive forum selection clauses. In Tuxedo International, Inc. v. 

Rosenberg, 127 Nev. 11, 251 P.3d 690 (2011), we reversed a district court's 

grant of a motion to dismiss based on the defendants' argument that any 

litigation must be brought in Peru. Id. at 14, 24-25, 251 P.3d at 692, 699. 

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There, we remanded the case to the district court to determine which of 

three separate forum selection clauses potentially controlled the dispute. 

Id. at 26, 251 P.3d at 699-700. In analyzing the clauses, we noted that one 

of the clauses contained both a consent to jurisdiction in Peru and a 

Peruvian choice-of-law provision. Id. at 22-23, 251 P.3d at 697. We then 

stated: 

It can be argued, however, that there is no 

requirement contained in this clause that Peru is 

the exclusive forum for jurisdiction over any 

dispute between the parties. See, e.g., Hunt 

Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 

75, 76-77 (9th Cir. 1987) (distinguishing between 

exclusive and nonexclusive forum selection 

clauses). If it is determined that the parties did 

not intend for the clause to act as an exclusive 

forum selection clause, then arguably, there is no 

contractual bar to [plaintiff] bringing its tort 

claims in the Nevada district court. 

Id. at 23-24, 251 P.3d at 698 (second emphasis added). We also noted that 

another clause "resemble [d] a traditional exclusive forum selection 

clause," containing language that "any action. . . must be brought in a 

court in the Country of Peru." Id. at 24, 251 P.3d at 698. Thus, Tuxedo 

International observed the distinctions between mandatory and 

permissive forum selection clauses, but the facts of the case did not 

provide an opportunity for us to affirmatively adopt a rule. See id. at 26 

n.5, 251 P.3d at 700 n.5. 

Other state courts have distinguished between mandatory and 

permissive forum selection clauses. See, e.g., Garcia Granados Quinones 

v. Swiss Bank Corp. (Overseas), S.A., 509 So. 2d 273, 274 (Fla. 1987) 

(recognizing that a mandatory jurisdiction clause requires "a particular 

forum be the exclusive jurisdiction for litigation," while permissive 

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jurisdiction is merely a consent to jurisdiction in a venue (internal 

quotation marks omitted)); Polk Cnty. Recreational Ass'n v. Susquehanna 

Patriot Commercial Leasing Co., 734 N.W.2d 750, 758-59 (Neb. 2007) 

(distinguishing a mandatory forum selection clause based on the words 

"shall be brought only in" a particular jurisdiction from a permissive 

forum selection clause where parties only "consent and submit to the 

jurisdiction" of other courts); Caperton v. A.T. Massey Coal Co., 690 S.E.2d 

322, 338-39 (W. Va. 2009) ("[T]o be enforced as mandatory, a forumselection clause must do more than simply mention or list a jurisdiction; in 

addition, it must either specify venue in mandatory language, or contain 

other language demonstrating the parties' intent to make jurisdiction 

exclusive."). For example, the Wisconsin Court of Appeals stated: 

Clauses in which a party agrees to submit to 

jurisdiction are not necessarily mandatory. Such 

language means that the party agrees to be 

subject to that forum's jurisdiction if sued there. It 

does not prevent the party from bringing suit in 

another forum. The language of a mandatory 

clause shows more than that jurisdiction is 

appropriate in a designated forum; it 

unequivocally mandates exclusive jurisdiction. 

Absent specific language of exclusion, an 

agreement conferring jurisdiction in one forum 

will not be interpreted as excluding jurisdiction 

elsewhere. 

Converting I Biophile Labs., Inc. v. Ludlow Composites Corp., 722 N.W.2d 

633, 640-41 (Wis. Ct. App. 2006) (citations and internal quotation marks 

omitted). 

Similarly, federal circuit courts generally agree that 

where venue is specified [in a forum selection 

clause] with mandatory or obligatory language, 

the clause will be enforced; where only jurisdiction 

is specified [in a forum selection clause], the clause 

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will generally not be enforced unless there is some 

further language indicating the parties' intent to 

make venue exclusive. 

Paper Express, Ltd. v. Pfankuch Maschinen GmbH, 972 F.2d 753, 757 (7th 

Cir. 1992); see Excell, Inc. v. Sterling Boiler & Mech., Inc., 106 F.3d 318, 

321 (10th Cir. 1997) (describing the "mandatory/permissive dichotomy" 

and concluding that the clause, "jurisdiction shall be in the StateS of 

Colorado, and venue shall lie in the County of El Paso, Colorado," was 

mandatory (internal quotation marks omitted)); John Bout an & Son, 

Wines & Spirits, S.A. v. Attiki Imps. & Distribs. Inc., 22 F.3d 51, 52-53 (2d 

Cir. 1994) (holding the forum selection clause, "[a]ny dispute arising 

between the parties hereunder shall come within the jurisdiction of the 

competent Greek Courts, specifically of the Thessaloniki Courts," as 

permissive (internal quotation marks omitted)); Hunt Wesson Foods, Inc. 

v. Supreme Oil Co., 817 F.2d 75, 76-78 (9th Cir. 1987) (holding the forum 

selection clause, "Whe courts of California, County of Orange, shall have 

jurisdiction over the parties in any action at law relating to the subject 

matter or the interpretation of this contract," as permissive, and noting 

that to be considered mandatory, a forum selection clause must clearly 

require that a particular court is the only one that has jurisdiction 

(internal quotation marks omitted)); Keaty v. Freeport Indon., Inc., 503 

F.2d 955, 956-57 (5th Cir. 1974) (holding the forum selection clause, "[t]his 

agreement shall be construed and enforceable according to the law of the 

State of New York and the parties submit to the jurisdiction of the courts 

of New York," as permissive (internal quotation marks omitted)). 

We agree with the distinctions made by other state and 

federal courts regarding mandatory and permissive forum selection 

clauses described above. Here, there are two jurisdictional clauses at 

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issue. First, the loan agreement contains a clause entitled "Jurisdiction," 

which provides that "Nhe parties agree and submit themselves to the 

jurisdiction of the courts of the State of Utah with regard to the subject 

matter of this agreement." We conclude that this language is permissive 

as there is no language within the clause containing words of exclusivity. 

Absent such language, we deem the clause permissive. 

Second, a clause in the note stated: "If there is a lawsuit, 

Borrower(s) agrees to submit to the jurisdiction of the court in the county 

in which Lender is located." This language is also permissive as there is 

no language within the clause containing words of exclusivity. See Golden 

Palm Hospitality, Inc. v. Stearns Bank Nat'l Ass'n, 874 So. 2d 1231, 1233- 

37 (Fla. Dist. Ct. App. 2004) (concluding that the language, "WI' there is a 

lawsuit, Borrower agrees upon Lender's request to submit to the 

jurisdiction of the courts of STEARNS County, the State of Minnesota" as 

permissive, and thus permitted, but did not require, that the action be 

brought in Minnesota (internal quotation marks omitted)). Thus, the case 

may be heard in another appropriate venue besides the courts in Utah. 

Without articulating why, the borrowers argue that the forum 

selection clauses are ambiguous and therefore must be construed against 

the credit union. We conclude that this argument is without merit as the 

clauses are clear and unambiguous and this court need not interpret the 

contract any differently from the contract's plain meaning. See, e.g., Hunt 

Wesson Foods, 817 F.2d at 77 ("A primary rule of interpretation is that 

`[t] he common or normal meaning of language will be given to the words of 

a contract unless circumstances show that in a particular case a special 

meaning should be attached to it." (quoting 4 Samuel Williston & Walter 

H. E. Jaeger, A Treatise on the Law of Contracts § 618 (3d ed. 1961)). The 

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Saitta 

J. 

clauses provide no words of exclusivity and to interpret the clauses as 

mandatory forum selection clauses would read language into the contract 

that is not there. 

CONCLUSION 

In this case, none of the clauses contain exclusive language. 

Accordingly, all clauses are permissive forum selection clauses, and the 

district court erred when it found Utah was the sole forum for any 

controversy and dismissed the case for lack of subject matter jurisdiction. 

We therefore reverse the district court's order dismissing the case and 

remand this matter to the district court for further proceedings 

, C.J. 

Hardesty 

-2942) 5%n 

Parraguirre 

Thut-e Ai3 

Douglas 

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