Case Name: MOON et al. v. CSA - CREDIT SOLUTIONS OF AMERICA, INC.
Court: Court of Appeals of Georgia
Jurisdiction: Georgia
Decision Date: 2010-06-22
Citations: 304 Ga. App. 555
Docket Number: A10A0597
Parties: MOON et al. v. CSA — CREDIT SOLUTIONS OF AMERICA, INC.
Judges: Doyle, J., concurs. Ellington, J., concurs specially.
Reporter: Georgia Appeals Reports
Volume: 304
Pages: 555–560

Head Matter:
A10A0597.
MOON et al. v. CSA — CREDIT SOLUTIONS OF AMERICA, INC.
(696 SE2d 486)

Opinion:
ANDREWS, Presiding Judge.
David and Glenda Moon, who reside in Georgia, entered into a contract in Georgia with CSA — Credit Solutions of America, Inc. (CSA), a Texas corporation, which provided for CSA to assist the Moons in negotiating or adjusting debts they owed to their creditors for less than the amount owed. The Moons sued CSA in Georgia claiming that the debt adjustment services CSA provided under the contract violated Georgia statutes specifically regulating the business of "debt adjusting" as set forth in OCGA § 18-5-1 et seq. The trial court granted CSA's motion to dismiss the Georgia suit on the basis that the contract contained a provision selecting Texas as the forum for any dispute regarding the agreement. The Moons appeal from this ruling, and for the following reasons we reverse.
At issue in the Moons' appeal is the applicability and validity of the forum selection provision and the related choice of law provision in the contract which state:
Choice of Law and Jurisdiction. In the event of any dispute regarding this AGREEMENT including but not limited to service fees and costs, CLIENT and CSA agree that venue of resolution shall be in the county and city of Dallas, Texas. Both CSA and CLIENT agree that the laws of the State of Texas shall govern any disputes arising from this AGREEMENT.
In ruling that the forum selection provision was valid and required that the suit be brought in Dallas, Texas, the trial court found that the provision broadly applied to the Moons' claim that services CSA provided under the contract violated Georgia statutes regulating debt adjustment. The Moons contend that the forum selection provision does not apply in this case because their cause of action asserts a violation of the Georgia debt adjustment statutes, and therefore this dispute does not regard or arise from the agreement. We rejected a similar narrow construction of a contractual forum selection provision in Brinson v. Martin, 220 Ga. App. 638, 640 (469 SE2d 537) (1996). In that case, the forum selection provision in Brinson's employment contract stated that "the exclusive venue for the pursuit of any legal proceeding or remedy arising out of this contract shall be Douglas County, Nebraska." Id. at 638. Brinson sued his employer (Woodmen of the World Life Insurance Society) for breach of contract and sued four Woodmen employees for tortious interference with economic relations and unjust enrichment. Id. at 638-640. We held that the tortious interference and unjust enrichment claims arose directly or indirectly from the contract and rejected Brinson's argument that the forum selection provision in the contract was not broad enough to apply to those claims. Id. at 640. "Regardless of the duty sought to be enforced in a particular cause of action, if the duty arises from the contract, the forum selection clause [in the contract] governs the action." Hugel v. Corp. of Lloyd's, 999 F2d 206, 209 (7th Cir. 1993). In the present case, the trial court correctly held that the forum selection provision, which was applicable to "any dispute regarding this Agreement," applied to the Moons' claim that CSA violated a duty to conform the services it provided under the contract to the Georgia "debt adjustment" statutes.
The trial court erred, however, by holding that the forum selection provision, as applied, was valid under the present facts and required the Moons to bring their action in Dallas, Texas. Because Georgia is the forum state in the present action, the rule of lex fori requires the application of Georgia law to determine the validity of the forum selection provision, despite the fact that the contract also contains a choice of Texas law provision. Brinson, 220 Ga. App. at 638-639. Under Georgia law, a forum selection provision in a contract is prima facie valid and enforceable unless the opposing party shows that enforcement would be unreasonable under the circumstances. Iero v. Mohawk Finishing Products, 243 Ga. App. 670, 671 (534 SE2d 136) (2000). The contract also contains a related choice of law provision stating that "the laws of the State of Texas shall govern any disputes arising from this agreement." "[T]he law of the jurisdiction chosen by parties to a contract to govern their contractual rights will be enforced unless application of the chosen law would be contrary to the public policy or prejudicial to the interests of this state." CS-Lakeview at Gwinnett v. Simon Property Group, 283 Ga. 426, 428 (659 SE2d 359) (2008). If enforced, the choice of law provision would operate to require that Texas substantive law be applied to the Moons' claims against CSA. Texas has adopted statutory protections for consumers, like the Moons, who contract with debt adjustment or management services, like CSA. Tex. Fin. Code § 394.201 et seq. The Texas statutory scheme, however, provides no protection to the Moons, who reside in Georgia, because it defines a protected consumer as "an individual who resides in [Texas] and seeks a debt management service or enters a debt management service agreement." Tex. Fin. Code § 394.202 (4).
It follows that, if enforced, the contract's forum selection and choice of law provisions requiring the Moons to bring their action before a Texas court applying Texas law would operate in tandem to deprive them of specific statutory protections set forth in OCGA § 18-5-1 et seq. relating to debt adjustment agreements. Because this would violate Georgia's public policy established in OCGA § 18-5-1 et seq. relating to debt adjustment agreements and encourage debt adjustment practices in Georgia contrary to that policy, the forum selection and choice of law provisions in the contract are invalid and unenforceable. Nasco, Inc. v. Gimbert, 239 Ga. 675, 676 (238 SE2d 368) (1977); Iero, 243 Ga. App. at 671-672. The trial court erred by dismissing the Moons' action.
Judgment reversed.
Doyle, J., concurs. Ellington, J., concurs specially.