Court Opinion

ID: 9901383
Source: CourtListenerOpinion
Date Created: 2023-11-21 18:03:33.797045+00
Date Added: 2024-06-11T09:21:31.684631
License: Public Domain

Filed 11/21/23 Astone v. Global Mortgage Group CA1/1
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                   DIVISION ONE

 ANTHONY ASTONE,
           Plaintiff and Appellant,
                                                                        A166858
 v.
 GLOBAL MORTGAGE GROUP,                                                 (Contra Costa County
 LLC,                                                                   Super. Ct. No. C22-01745)
           Defendant and Respondent.

         Anthony Astone appeals from a trial court order under Code of Civil
Procedure section 410.30 (section 410.30) staying his lawsuit against Global
Mortgage Group, LLC, d/b/a MoXi (MoXi), based on a forum-selection clause
in a loan agreement requiring claims that “result from” the agreement or a
related trust agreement to be litigated in Mexico. We agree with Astone that
the clause does not apply to his claims against MoXi because they did not
result from the loan or trust agreements.1 We therefore reverse the stay
order and remand for further proceedings.

         1 As a result of this conclusion, we need not address Astone’s numerous

other arguments for reversal, including that MoXi lacks standing to enforce
the forum-selection clause and that the loan agreement was subsequently
rescinded.

                                                               1
                                    I.
                          FACTUAL AND PROCEDURAL
                               BACKGROUND
      This case arises from a real estate transaction gone wrong, and it
highlights the perils of Internet fraud. Around January 2022, Astone, a
California resident, entered a purchase and sale agreement (purchase
agreement) with an individual seller to buy real property in Cabo San Lucas,
Mexico.2 The purchase price was $345,900, including “an initial earnest
money deposit of $35,340.”
      Astone’s real estate agents had referred Astone to MoXi, a Delaware
limited liability company, “to [use] as the lender” for the transaction. The
purchase agreement provided that it was “contingent upon [Astone’s]
obtaining financing . . . through MoXi,” and it also stated that MoXi would
“ ‘handle the closing’ ” of the transaction. The purchase agreement itself is
not in our record.
      Soon after entering the purchase agreement, Astone wired the earnest
money deposit to the seller and applied for a loan through MoXi. He was
approved for a loan of $172,400, to be repaid over 25 years at an interest rate
of 8.19 percent. The lender was a Mexican company that Astone alleges is
“an affiliate” of MoXi. MoXi was to set up a trust in which the property
would be held until the loan was paid, with the lender as the primary
beneficiary and Astone as the secondary beneficiary.
      As the date for Astone to appear in Mexico to sign the closing
documents approached, he still had not received either an estimated closing
statement, identifying the amount he needed to deposit into escrow, or wire
instructions for the deposit. On April 11, 2022, he sent an email requesting

      2 We draw most of the underlying facts from the allegations of Astone’s

complaint.

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these materials to two MoXi employees with whom he had been
communicating. The next morning, he received an email purporting to be
from one of the employees, Divina Espinoza Sauceda (Espinoza), instructing
him to wire $164,004.04 to an account at PNC Bank. In fact, MoXi’s email
server had been hacked, and the email was fraudulent and sent from a
different domain than MoXi’s.
      Later on April 12, Astone wired the full $164,004.04 to the PNC Bank
account. He then received a message from the fraudulent email account
confirming the wire transfer. Astone forwarded the confirmation email to the
correct email address for the other MoXi employee with whom he had been
corresponding, who responded positively and “gave no indication that the
[money] had actually not been received by the proper escrow account.” Later
that day, Astone received a copy of the escrow agreement for the first time,
but it did not include the wire instructions.
      On April 18, Astone arrived in Mexico to sign the closing documents,
having still not received any “communication from MoXi or escrow that [his]
deposit had not been received.” The next day, he executed all the necessary
closing documents. The complaint alleges that “MoXi drafted all of the
closing documents, including . . . the loan documents, trust establishment
documents, [and] title transfer and vesting documents[,] and arranged for the
trustee for the trust holding title to the [p]roperty.”
      One of the documents Astone signed was an agreement between him
and the lender entitled “Opening of Credit Line for Loan Agreement” (loan
agreement). Astone signed the loan agreement on his own behalf, and
Espinoza signed it as “attorney-in-fact” for the lender. MoXi was not a party
to this contract.

                                         3
      This loan agreement contains the forum-selection clause at the center
of this case. The clause, which is translated from the original Spanish, states
as follows (all errors in original):
            “SEVENTH.- GOVERNING LAW AND VENUE. The
      LOAN AGREEMENT and the TRUST AGREEMENT[3] shall be
      governed by and construed to in accordance to the applicable
      norms and regulations in the United Mexican States. The
      Parties hereby submit themselves to the jurisdiction of the
      competent courts in the Mexico City, in the United Mexican
      States, in connection with any dispute, claim or legal procedure
      which may result from such agreements, waiving to any other
      jurisdiction to which they may be entitled to due to their present
      or future domiciles or for any other reason.”
      On April 20, Espinoza notified Astone that the real estate transaction
could not close because the escrow account had not received his deposit.
Astone immediately contacted law enforcement and unsuccessfully attempted
to reverse the wire transfer. MoXi told Astone that the transaction would be
terminated unless he paid the $164,004.04 balance, which he was unable to
do. Although Astone “attempted to work with the [s]eller to cancel the
transaction and obtain his initial deposit back,” MoXi “insist[ed] that it, and
all of its affiliates, be provided with a full release from [him] before the
transaction could be cancelled,” and he was unable to recover his initial
deposit either.
      Astone filed this suit against MoXi and PNC Bank in August 2022.4 He
alleged causes of action against MoXi for breach of fiduciary duty,
professional negligence, fraud, and constructive fraud. MoXi responded by

      3 The loan agreement does not define “TRUST AGREEMENT,” but the

term presumably refers to an agreement establishing the trust in which the
property was to be held. We will refer to this agreement as the trust
agreement, although no such document appears in our record.
      4 PNC Bank is not a party to this appeal.

                                         4
filing a motion to stay or dismiss the action under section 410.30 based on the
loan agreement’s forum-selection clause. Astone opposed the motion on
several grounds, including that the clause did not apply to his claims against
MoXi.
        After a hearing, the trial court granted MoXi’s section 410.30 motion
and stayed the action as to MoXi “pending resolution of [Astone’s] claims by a
Mexican court.” Having determined that MoXi had standing to enforce the
forum-selection clause even though it was not a party to the loan agreement,
the court then concluded that the clause encompassed Astone’s claims
because of the clause’s perceived expansive breadth:
               “[T]he phrase ‘which may result from such agreements’ is
        not so limited as to apply only to those claims that rely on
        interpretation of the agreements. Plaintiff’s relationship with
        [MoXi] is a ‘result from’ the agreements at issue. Plaintiff was
        referred to [MoXi] to assist with the purchase of the [p]roperty
        and [MoXi] would not have any relationship with Plaintiff but-for
        the [l]oan [a]greement and other document[s] surrounding the
        sale of the [p]roperty. As noted at length above, [MoXi] had a
        significant relationship with Plaintiff and the transactions at
        issue.

               “For example, the Complaint alleges that [MoXi] owed
        Plaintiff a fiduciary duty . . . because it acted as ‘Plaintiff’s
        mortgage broker and real estate closing agent.’ [Citation
        omitted.] This relationship, however, only comes into existence
        due to [the l]oan [a]greement relating to the purchase/sale of the
        [p]roperty. Without these agreements, [MoXi] would have no[]
        relationship at all with Plaintiff[]. Thus, the claims [which]
        ‘result from’ the attempted purchase of the [p]roperty all fall
        within the scope of the [loan a]greement.”

                                         5
                                       II.
                                  DISCUSSION
      A.    General Legal Standards
      Section 410.30, subdivision (a), authorizes a court to “stay or dismiss
the action in whole or in part on any conditions that may be just” when it
“finds that in the interest of substantial justice [the] action should be heard
in a forum outside [California].” Thus, the statute “codifies the doctrine of
forum non conveniens,” which “ ‘is an equitable doctrine invoking the
discretionary power of a court to decline to exercise the jurisdiction it has
over a transitory cause of action when it believes that the action may be more
appropriately and justly tried elsewhere.’ ” (Grove v. Juul Labs, Inc. (2022)
77 Cal.App.5th 1081, 1090 (Grove).)
      A motion under section 410.30 “is a proper vehicle for enforcing a forum
selection clause” in a contract. (Grove, supra, 77 Cal.App.5th at p. 1090;
Lu v. Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490, 1492,
fn. 1.) “ ‘Both California and federal law presume a contractual forum
selection clause is valid and place the burden on the party seeking to
overturn the forum selection clause.’ ” (Grove, at p. 1090.)
      Generally, we review a trial court’s ruling enforcing a forum-selection
clause for an abuse of discretion. (Grove, supra, 77 Cal.App.5th at p. 1090;
Quanta Computer Inc. v. Japan Communications Inc. (2018) 21 Cal.App.5th
438, 446.) Under this standard, reversal is unwarranted unless “ ‘the ruling
made “ ‘exceed[s] the bounds of reason,’ ” all circumstances before [the court]
being considered.’ ” (Quanta Computer, at p. 447.) Here, however, the only
issue we need resolve is the scope of the forum-selection clause, a question of
contract interpretation that we review de novo. (See Animal Film, LLC v.
D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 471; Intershop
Communications AG v. Superior Court (2002) 104 Cal.App.4th 191, 196.)

                                        6
      B.    The Forum-selection Clause Does Not Apply to Astone’s Causes of
            Action Against MoXi.
      Astone argues that the trial court erred by concluding the forum-
selection clause encompasses his claims against MoXi. We agree.
      Initially, we note that the loan agreement provides that it “shall be
governed by and construed to in accordance to the applicable norms and
regulations in the United Mexican States.” The parties do not mention this
choice-of-law provision, much less argue that it affects our analysis of the
forum-selection clause’s scope. As a result, we will assume that the result is
the same whether we interpret the loan agreement under California law or
Mexican law.
      “ ‘In interpreting an unambiguous contractual provision we are bound
to give effect to the plain and ordinary meaning of the language used by the
parties.’ [Citation.] Thus, where ‘ “contract language is clear and explicit
and does not lead to absurd results, we ascertain intent from the written
terms and go no further.” ’ ” (People ex rel. Lockyer v. R.J. Reynolds Tobacco
Co. (2003) 107 Cal.App.4th 516, 524.) Ultimately, our goal “ ‘is to determine
and give effect to the mutual intention of the parties,’ ” which “ ‘is to be
inferred, if possible, solely from the written provisions of the contract.’ ” (Id.
at p. 525.) Here, neither party contends that the forum-selection clause is
ambiguous in scope, and no extrinsic evidence has been offered on the
clause’s meaning. Accordingly, we focus on the language of the clause itself.
      The forum-selection clause applies to “any dispute, claim or legal
procedure which may result from such agreements,” i.e., the loan and trust
agreements. We agree with Astone that his claims against MoXi did not
“result from” the loan and trust agreements within the ordinary meaning of
that phrase. The money out of which Astone was defrauded was his own
deposit into escrow, not the loan money, and MoXi’s alleged failure to take

                                         7
proper security precautions or discover and inform him that he sent the
money to the wrong account occurred before he even entered into the loan
agreement. Although we agree with MoXi that a forum-selection clause is
not necessarily inapplicable simply because the allegedly tortious conduct
happened before the contract at issue was signed, there still must be some
relationship between the pre-contract conduct and the contract. Here, the
fact that Astone needed a loan to complete the property purchase had no
bearing on the events underlying his claims against MoXi.
      In concluding that the forum-selection clause applied, the trial court
determined that Astone’s “relationship with [MoXi] is a ‘result from’ the
agreements at issue” because MoXi “would not have any relationship with
[Astone] but-for the [l]oan [a]greement and other document[s] surrounding
the sale of the [p]roperty.” But the forum-selection clause applies only to
legal claims that “result from” the loan and trust agreements, not to those
that result from other documents involved in the real estate transaction. And
MoXi’s relationship with Astone clearly predated the loan and trust
agreements. Indeed, the relationship was established in the purchase
agreement, which provided that Astone would obtain financing through MoXi
and MoXi would handle the transaction’s closing. If the forum-selection
clause also referred to the purchase agreement, we might agree with the
court’s conclusion. But it does not. The court gave the clause too expansive
of a reach by conflating the loan and trust agreements with the other
documents involved in the real estate transaction.
      We also disagree with MoXi that Astone’s relationship with it
“result[ed] from” the loan agreement because his “only connection to MoXi
was through the purchase of the property, which would not have occurred
without the [l]oan [a]greement.” Nothing in the record establishes that MoXi

                                       8
would not have participated in the real estate transaction if Astone had not
needed a loan. As MoXi recognizes, it acted not just as his mortgage broker
but also as his closing agent. And as discussed above, MoXi’s allegedly
tortious conduct occurred in connection with the latter role, not the former.
      Moreover, even if Astone could not have purchased the property
without obtaining a loan, we agree with him that it would lead to absurd
results to conclude that any claim related to the real estate transaction
therefore “result[ed] from” the loan agreement. Under such an
interpretation, the forum-selection clause would cover any claim Astone had
against any entity or individual with whom he would not have had a
relationship but for the transaction. This stretches the contractual language
too far.
      In short, Astone’s claims against MoXi did not “result[] from” the loan
agreement or trust agreement, meaning that the forum-selection clause does
not apply to those claims. As a result, the trial court was mistaken in staying
those claims under section 410.30.
                                     III.
                                 DISPOSITION
      The order staying the action as to MoXi is reversed, and the matter is
remanded for further proceedings. Astone is entitled to his costs on appeal.

                                       9
                                       _________________________
                                       Humes, P.J.

WE CONCUR:

_________________________
Margulies, J.

_________________________
Banke, J.

Astone v. Global Mortgage Group, LLC A166858

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