Opinion ID: 1115807
Heading Depth: 4
Heading Rank: 1

Heading: Equipment Lease

Text: In Volkswagenwerk v. Klippan, 611 P.2d 498, 503 (Alaska 1980), this court rejected the common law rule that forum selection clauses are per se invalid and adopted in its place the reasonableness approach set out in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). In that case the United States Supreme Court stated that such clauses are enforceable absent a clear showing that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching. 407 U.S. at 15, 92 S.Ct. at 1916, 32 L.Ed.2d at 523. In a latter case, the Court specifically noted that it did not intend to imply in Bremen that any time a dispute arising out of a transaction is based upon an allegation of fraud, the clause is unenforceable. Rather, the clause is enforceable unless the inclusion of that clause in the contract was the product of fraud or coercion. Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 n. 14, 94 S.Ct. 2449, 2457 n. 14, 41 L.Ed.2d 270, 281 (1974) (emphasis in original). This rule necessarily follows from the premise that the intent of the parties is to be respected. It would be illogical for a court to say that the parties, bargaining with each other at arm's length, negotiated for a forum selection clause which specifically encompasses all possible actions relating to the contract, including suits to rescind on the ground of fraud in the inducement of the contract, and then hold that the clause is invalid because of fraud in the inducement of the contract. Sealaska argues, nevertheless, that it should only be required to present evidence indicating that Crowson did in fact bribe the top executive officers of Pacific Western. It should not, it contends, be saddled with the almost impossible burden of proving that some portion of the bribe payments are specifically allocable to the forum selection clauses. We agree with Sealaska on this point. If the allegations of bribery are correct, then there was no freely negotiated agreement between the parties. This is not a typical intentional misrepresentation case in which the negotiators are aggressively pursuing the best interests of the side they purport to represent. Here it appears that only one interest was represented at the bargaining table. Sealaska was allegedly misled by its own employees, individuals it thought, and had good reason to think, it could trust. Strong evidence indicates that Marshall, who signed the charters and equipment lease in Pacific Western's behalf, was really a covert agent of Crowson. Thus, everything in the contracts that works to Crowson's advantage was presumably done in return for the bribe payments. Crowson has the burden of establishing otherwise, a burden he clearly has not carried. [11] The petitioners also argue that the triable issue of fact burden of proof placed on Sealaska was too low. They cite Bremen, supra, which requires that a party  clearly show that... the clause was invalid for reasons such as fraud. 407 U.S. at 15, 92 S.Ct. at 1916, 32 L.Ed.2d at 523 (emphasis added). [12] We agree that this higher standard should have been used, but, given the great and uncontradicted evidence of fraud in this case, conclude that the error was harmless and no remand on this point is necessary. [13] The forum selection clause in the equipment lease is not enforceable. Therefore, Sealaska may litigate the validity of the equipment lease in Alaska.