Filed 9/17/14 Starbbucks v. Outdoor Lifestyle CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

STARBUCKS CORPORATION, Plaintiff and Appellant,

v. OUTDOOR LIFESTYLE, INC., Defendant and Respondent. D064637

(Super. Ct. No. 37-2013-00033844- CU-BC-CTL)

APPEAL from a judgment of the Supe rior Court of San Diego County, Randa Trapp, Judge. Reversed. G&P Schick, Malcolm D. Schick and Tiffany A. LeMelle for Plaintiff and Appellant. Law Offices of Robert Tauler and Robe rt Tauler for Defendant and Respondent. This action arises from a warranty clai m that plaintiff Starbucks Corporation (Starbucks) made against Outdoor Lifestyle, In c. (Outdoor Lifestyle) based upon alleged defects in chairs that Starbucks purchase d from Outdoor Lifestyl e. When Outdoor Lifestyle rejected Starbuck's warranty claim, Starbucks filed an action in the Superior2 Court of San Diego County. In response, Ou tdoor Lifestyle brought a motion to stay or dismiss for forum non co nveniens, based upon a forum sel ection clause in the warranty. The court granted the motion. Starbucks appeals, asserting that the foru m selection clause on its face only applies to arbitration, not civil actions. We conclude that Starbuck's interpretation of the forum selection clause is correct. Accordingly, we reverse. FACTUAL AND PROCEDUR AL BACKGROUND Outdoor Lifestyle is a No rth Carolina-based furniture company that assembles and distributes residential and comme rcial furniture to various places, including California. Between September 2008 and early 2012, St arbucks purchased patio furniture from Outdoor Lifestyle, including ch airs, for the purpose of providing outdoor seating to patrons of its stores located in Southern California. Outdoor Lifestyle expressly warranted its patio furniture as long-lasting and free from defect. The express warranty specified the pr ocedure whereby customers could submit warranty claims to the company in the ev ent of product failures. Following these instructions is a forum selection clause which reads as follows: "Those purchasing furnishing from Outdoor Lifestyle, or obtaining services from the company, agree th at should conditio ns arise where a situation needs to be redre ssed through arbitration, legal proceedings shall be pursued sole ly through the local courts of Gaston County, North Carolina." According to Starbucks, on about Dece mber 28, 2011, a Starbucks patron was sitting in an Outdoor Lifestyle chair when it collapsed, causin g injuries to the patron. Starbucks's subsequent inspec tion of the failed chair and additional Outdoor Lifestyle3 furniture revealed the existence of a welding defect in each piece of furniture inspected. Upon discovery of the defect, Starbucks rem oved all Outdoor Lifest yle furniture from its

stores. Starbucks submitted a warrant y claim to Outdoor Lifest yle, which Outdoor Life rejected. Thereafter, Starbucks filed a co mplaint against Outdoo r Lifestyle in the Superior Court of San Diego County, asserting causes of action for breach of warranty. Outdoor Lifestyle specially a ppeared on April 8, 2013, to file a motion to stay or dismiss the action for forum non conveniens Outdoor Life style argued that the forum selection clause applied not only to arbitral matters, but civ il actions as well. Starbucks opposed the motion, arguing the plain meani ng of the forum selec tion clause meant it applied only to arbitration, no t civil actions. Starbuck also argued that rules of grammar limited its application to arbitration. The court granted the motion, and dismisse d the action. In granting the motion, the court stated: "Construing the warranty at issue here as a whole and construed to effectuate the obvious intention, the court fi nds there is a forum selection clause in the warranty provided to plaintiff Starbucks by Outdoor Lifestyle that contains language showing the jurisdiction of this action is appropriate only in Gaston County, North Carolina." DISCUSSION
I. STANDARD OF REVIEW There is a split of authority as to the appr opriate standard of review on a motion to enforce a forum selection clau se. Some courts have applied the abuse of discretion4 standard. (See Schlessinger v. Holland America (2004) 120 Cal.App.4th 552, 557; America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 9; Bancomer, S.A. v. Superior Court (1996) 44 Cal.App.4th 1450, 1457.) Others have applied the substantial evidence standard of review. ( Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1680-1681; CQJ Original Products, Inc v. National Hockey League Players' Assn. (1995) 39 Cal.App.4th 1347, 13 54.) Starbucks asserts that because the underlying facts of this case ar e undisputed, the standard of review is de

novo. We conclude that under any standard of review, the court erred in granting Outdoor Life Style's motion to di smiss for forum non conveniens.
II. DISCUSSION A. Law Governing Forum Selection Clauses Under California law, mandatory forum sele ction clauses such as the one at issue in the present appeal are given effect unle ss they are deemed unfair or unreasonable. ( Berg v. MTC Electronics Technologies Co. (1998) 61 Cal.App.4t h 349, 358.) A forum selection clause is mandatory when it "conta ins clear language showing that jurisdiction is appropriate in the designate d forum and none other." ( Id. at p. 360.) The burden of proof for enforcement of a ma ndatory enforcement clause re sts with the party opposing the enforcement. ( Cal-State Business Products & Serv ices, Inc. v. Ricoh, supra, 12 Cal.App.4th at p. 1680.)5 B. Analysis The definition of the term "a rbitration" is "[s]ettling an issue with a third party to avoid court." (Black's La w Dictionary Free Online Le gal Dictionary (2d ed.) http://www.thelawdictionary.org /arbitration-2/ (as of Sept. 15, 2014).) Thus, by definition, arbitration is not a proceeding in court. It is true that the forum selection clause at issue here is not a model of clarity. However, because Outdoor Lifestyle drafted th e warranty, including the forum selection clause, any uncertainty must be constr ued against it. (Civ. Code, § 1654; Victoria v. Superior Court (1985) 40 Cal.3d 734, 739; Maggio v. Winward Capital Management Co. (2000) 80 Cal.App.4th 1210, 1215.) Here we conclude, construing the forum selection clause in Starbuck's favor, it applies only to arbitral matters, not civil actions such as this matter. If Outdoor Lifestyle had intended it to a pply to civil actions it c ould have easily omitted reference to the term "arbitration" altogether so th at the forum selection clause read "should conditions arise where a situation needs to be redressed, lega l proceedings shall be pursued solely through the courts of Gaston Coun ty, North Carolina." Of course we must give a meaning to the phrase "legal proceedings." We interpret that to merely be referring to where the arbitration will take place. Moreover, when a phrase is set off from the rest of the main sentence by two commas, such as here, it should be read as a parenthetical phrase because "such a grammatical structure 'indicates an intent to segregate th[e phrase] from the rest of the sentence.'" ( Dow v. Lassen Irrigation Co. (2013) 216 Cal.Ap p.4th 766, 783 ( Dow ).)6 In Dow, the Court of Appeal reviewed a tr ial court's ruling which concerned the interpretation of a decree in the adjudicatio n of water rights between Jay Dow and Lassen Irrigation Company. The trial court held th at the decree gave Lassen Irrigation Company the right to divert water from a river for direct application to beneficial use. The Court of Appeal held that the trial court incorrectly interpreted the decree with respect to the reservoir owner's rights. At issue was the meaning of a contract ual clause which utilized a parenthetical phrase, as follows: "'Irrigation Co mpany shall be entitled to divert, or store up to the present capacity of its reservoirs, estimated at 31,500 acre-feet , from the natural flow of Susan River.'" ( Dow, supra, 216 Cal.App.4th at p. 783, italics added.) Lassen Irrigation Company argued that the contractual clause expressly gave it the right to either divert water from the Susan River or store water from the river up to the capacity of its reservoirs. Jay Dow argued th at the provision should be construed as "'a parenthetical phrase explaining the meaning of the word "divert, "'" and as such, the clause meant that Lassen Irrigation Company could "divert, in other words, store up to the present capacity of its reservoirs." ( Dow, supra, 216 Cal.App.4th at p. 783.) The trial court ruled in favor of Lassen Irrigation Company's in terpretation, and Jay Dow appealed. The Court of Appeal concluded that La ssen Irrigation Company's, and the trial court's, interpretation of the clause "fails to account for the two co mmas that set off the phrase 'or store up to the present capacity of its reservoirs, estimate d at 31,500 acre-feet' from the remainder of the sentence." ( Dow, supra, 216 Cal.App.4th at p. 783.) As the7 Court of Appeal explained: "Had the drafters of the decree intended the meaning that the Irrigation Company advances (and that the tria l court found), there would have been no need for the comma before the word 'or.'" ( Ibid. ) The Court of Appeal concluded that the parenthetical phrase operated to give the word "or" its ordinary meaning (as a c hoice between alternatives). Under this interpretation, the parenthetical phrase was treated to mean "or store up to the present capacity of its reservoirs" as an al ternative to the word "divert." ( Dow, supra, 216 Cal.App.4th at p. 784.) Read in this ma nner, Lassen Irrigation Comp any did not have the broad scope in water rights it claimed. Likewise, in this case the court should ha ve construed the forum selection clause as containing a parenthetical phrase which explained the subject of the provision. The following clause constitutes the parenthetical phr ase in this case because it is separated from the rest of the sentence by two (2) co mmas: "agree that should conditions arise where a situation needs to be redressed through arbitration." Read in its segregated state, the parenthetical phrase demonstrates that th e topic of the forum selection clause is arbitration, not civil lawsuits. Not only is the term "arbitr ation" isolated from the rest of the sentence, it is the only dispute process referred to in the parent hetical. Had Outdoor Li festyle intended this clause to apply to proceedings other than arbitration, there wo uld be no need to isolate the phrase with the use of two (2) commas. Instea d, the clause would have simply stated the applicable proceedings were "a rbitration, mediation, legal pr oceedings, or ot her actions."8 As drafted, the commas separating the pa renthetical phrase from the rest of the sentence create an order to the sequential el ements of the sentence, as follows: (1) furnishings are purchased or services are obt ained from Outdoor Life style; (2) should a situation occur which needs to be redressed through arbitration; (3) legal proceedings shall be commenced in Gaston County, North Carolina. In ot her words, by isolating the clause concerning arbitration in a parenthe tical, the sentence operates to instruct buyers of Outdoor Lifestyle furniture that, if conditions arise where grievances need redress through arbitration, then legal proceedings must be pursued in North Carolina. Moreover, the omission of the terms "and" and "or" evidence Outdoor Lifestyle's intent to limit the application of the forum se lection clause. Outdoor Lifestyle could have included "and" or "or" in the forum selection cl ause so that it read " . . . should conditions arise where a situation needs to be redressed through arbitration and/or legal proceedings." Had the clause been construc ted in this manner, the terms "and" and "or" would have distinguished arbitr ation from "legal proceedings " as separate and distinct dispute processes. In this light, the forum selection clause would have made clear its intention to encompass all legal proceedings. In sum, we conclude the court erred in granting Outdoor Lifestyle's motion to dismiss for forum non conveniens, and dismissing the action.9 DISPOSITION The judgment is reversed. Starbuck s shall recover its costs on appeal.

NARES, J. WE CONCUR:
HUFFMAN, Acting P. J.

AARON, J.