Court Opinion

ID: 2726792
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:08:53.675412+00
Date Added: 2024-06-11T10:13:15.170909
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

                                NO. COA13-1449
                       NORTH CAROLINA COURT OF APPEALS

                              Filed: 19 August 2014

PACKERS PRINTING AND PUBLISHING
COMPANY, INC. and PACKERS PRINTING
AND PUBLISHING COMPANY, INC.
t/d/b/a BUDGET PRINTING, CO.,
     Plaintiff,

      v.                                      Columbus County
                                              No. 13 CVS 675
ANAJET, LLC; and ANAJET, LLC
t/d/b/a ANAJET, INC.,
     Defendant.

      Appeal by defendant from order entered 24 October 2013 by

Judge Phyllis Gorham in Columbus County Superior Court.                       Heard

in the Court of Appeals 21 May 2014.

      Wright, Worley, Pope, Ekster, & Moss, PLLC, by                      Boyd T.
      Worley, for plaintiff-appellee.

      McAngus, Goudelock & Courie, PLLC, by John P. Barringer and
      Jeffrey B. Kuykendal, for defendant-appellant.

      BRYANT, Judge.

      Where the forum selection clause included in the contract

between     plaintiff      and     defendant      was     not    mandatory      but

permissive, the trial court did not err in denying defendant’s

motion to dismiss on the basis of venue.
                                                -2-
       In Columbus County Superior Court, on 21 May 2013 and later

on    13    August       2013       (amended),     plaintiff        Packers      Printing       and

Publishing Company, Inc., filed a complaint against defendant

Anajet,      LLC.            Plaintiff       was      located       in     Columbus      County;

defendant in Costa Mesa, California.

       In its complaint, plaintiff alleged that on 12 June 2012,

it purchased from defendant an Anajet Mp5 printer.                                     To set up

the    printer          upon    delivery,         plaintiff     was        provided      only    a

training         CD.    Despite       the    CD    instructions           and    support    from

defendant’s            technical       staff,      the   printer          did    not    function

properly         upon     assembly.            Ultimately,      plaintiff           demanded      a

rescission        of     the    contract.           Defendant       refused.           Plaintiff

sought recovery on the following grounds: breach of contract;

breach      of    express       warranty;       fraud    and    punitive         damages;       and

unfair and deceptive trade practices.

       In    lieu       of     an    answer,      defendant     moved       to    dismiss       the

complaint pursuant to Civil Procedure Rule 12(b), subsections

(1), (2), (3), and (6).                     Defendant asserted that the contract

between      plaintiff          and     defendant—the         Anajet        Apparel      Printer

Customer         Order       Form,     which       included     a        purchase      agreement

(hereinafter “the contract”)—contained a forum selection clause

requiring application of California law and requiring that the
                                       -3-
dispute be settled in Orange County, California.                   The matter

came on for hearing on 16 September 2013.              On 24 October 2013,

the trial court denied defendant’s motion to dismiss.                 Defendant

appeals.

                      _________________________________

    On     appeal,   defendant    contends     the   trial   court    erred   in

denying defendant’s motion to dismiss the action for improper

venue.

                                 Motion to dismiss

    Initially, we note that plaintiff filed with this Court a

motion to dismiss defendant’s appeal on the grounds that the

appeal     is   interlocutory    and    that   defendant     has     failed   to

demonstrate any basis which meets the criteria for which this

Court will address an interlocutory appeal.

                 [I]mmediate appellate review of an
            interlocutory order is available when the
            trial court enters a final judgment as to
            one or more, but fewer than all, claims or
            parties and certifies that there is no just
            reason for delay pursuant to N.C. Gen. Stat.
            § 1A–1, Rule 54(b) or when the interlocutory
            order affects a substantial right under N.C.
            Gen. Stat. § 1–277(a) and N.C. Gen. Stat. §
            7A–27(d).

Hill v. StubHub, Inc., ___ N.C. App. ___, ___, 727 S.E.2d 550,

554 (2012), review denied, 366 N.C. 424, 736 S.E.2d 757 (2013)

(citation and quotations omitted).             Plaintiff asserts that the
                                         -4-
trial    court   did     not   provide   a     Rule   54(b)   certification     for

appeal and that the court order does not affect a substantial

right.

    While Rule 54(b) was inapplicable to the appealed order,

see N.C. R. Civ. P. § 1A-1, Rule 54(b) (“Judgment upon multiple

claims or involving multiple parties”), plaintiff’s assertions

that the trial court order does not affect a substantial right

are incorrect.         In Mark Grp. Int'l, Inc. v. Still, this Court

held that “our case law establishes firmly that an appeal from a

motion to dismiss for improper venue based upon a jurisdiction

or venue selection clause dispute deprives the appellant of a

substantial right that would be lost.”                151 N.C. App. 565, 566,

566 S.E.2d 160, 161 n.1 (2002). Accordingly, we deny plaintiff’s

motion to dismiss defendant’s appeal.

                                         Argument

    On appeal, defendant argues that the trial court erred in

denying its motion to dismiss for improper venue.                     Defendant

contends the forum selection clause in the contract named the

appropriate      venue    as    Orange    County,      California,   and   is    a

mandatory forum selection clause.              We disagree.

                 Generally, there are three types of
            contractual provisions that parties use to
            avoid litigation concerning jurisdiction and
            governing law: (1) choice of law clauses,
                                            -5-
            (2) consent to jurisdiction clauses, and (3)
            forum selection clauses.

                       [(1)] Choice of law clauses specify
                   which state's substantive laws will
                   apply to any arising disputes. [(2)]
                   Consent to jurisdiction clauses grant a
                   particular state or court personal
                   jurisdiction over those consenting to
                   it, authorizing that court or state to
                   act against him. [(3)] A true forum
                   selection   provision   goes   one   step
                   further than a consent to jurisdiction
                   provision. A forum selection provision
                   designates a particular state or court
                   as   the  jurisdiction   in   which   the
                   parties will litigate disputes arising
                   out    of  the    contract   and    their
                   contractual relationship.

Capital   Bank,        N.A.    v.    Cameron,     ___   N.C.    App.   ___,   ___,   753

S.E.2d    153,    156     (2013)       (citations       and    quotations     omitted),

withdrawn,       ___     N.C.       ___,   ___    S.E.2d       ___   (Apr.    8,   2014)

(No.28P14-1), withdrawn, ___ N.C. ___, ___ S.E.2d ___ (Apr. 14,

2014) (No.28P14) (2014).

    “We    employ        the    abuse-of-discretion           standard   to   review   a

trial court's decision concerning clauses on [forum] selection.

Under the abuse-of-discretion standard, we review to determine

whether a decision is manifestly unsupported by reason, or so

arbitrary that it could not have been the result of a reasoned

decision.”       Gary L. Davis, CPA, P.A., v. Hall, ___ N.C. App.
                                 -6-
___, ___, 733 S.E.2d 878, 880 (2012) (citation and quotations

omitted).

       We look to the terms of the contract, particularly, the

section identifying the “Governing Law and Jurisdiction.”

            8.   Governing Law and Jurisdiction. This
            Agreement shall be governed by the laws of
            the State of California. In the event of
            disputes, the venue is an appropriate Court
            in Orange County, CA.

It is apparent the parties agreed—as the first sentence, the

choice of laws clause, provides—that the laws of the State of

California will govern the interpretation of the contract.     The

dispute is only as to the forum selection clause: whether it is

mandatory or permissive.1

       We consider the forum selection clause in accordance with

California law.

                 The California Supreme Court has held
            that contractual forum selection clauses are
            valid and should be given effect unless
            enforcement   of   the   clause   would   be
            unreasonable. (Smith, Valentino & Smith,
            Inc. v. Superior Court (1976) 17 Cal.3d 491,
            495–496 . . . (Smith ) . . . .    However, a
            distinction   has  been   drawn  between   a
            mandatory and a permissive forum selection
            clause for purposes of analyzing whether the
            clause should be enforced. A mandatory
            clause will ordinarily be given effect
            without any analysis of convenience; the
            only question is whether enforcement of the

1
    The contract contains no consent to jurisdiction clause.
                                   -7-
            clause would be unreasonable. On the other
            hand, when the clause merely provides for
            submission to jurisdiction and does not
            expressly mandate litigation exclusively in
            a particular forum, then the traditional
            forum non conveniens analysis applies. (Berg
            v. MTC Electronic Technologies Co., 61
            Cal.App.4th 349, 358–360 . . . (1998) (Berg
            ).)

Intershop Commc'ns AG v. Superior Court, 104 Cal. App. 4th 191,

196 (2002) (citation omitted).

    In Berg v. MTC Electronics Technologies Co., 61 Cal. App.

4th 349 (1998), the California Court of Appeals for the Second

District,    Division   2,   reviewed   the   following   provision:   “The

company MTC has expressly submitted to the jurisdiction of the

State of California and United States Federal courts sitting in

the City of Los Angeles, California, for the purpose of any

suit, action or proceedings arising out of this Offering.”             Id.

at 357.     The plaintiffs contended that the provision amounted to

a mandatory forum selection clause.           The Berg Court compared the

clause to three forum selection clauses previously determined to

be mandatory: “any and all litigation that may arise as a result

of this Agreement shall be litigated in Dade County, Florida[,]”

(quoting Lu v. Dryclean-U.S.A. of California, Inc., 11 Cal. App.

4th 1490, 1492 (1992)); “any claims shall be prosecuted in the

appropriate court of Ontario[,]” (quoting CQL Original Products,
                                                 -8-
Inc. v. National Hockey League Players' Assn., 39 Cal. App. 4th

1347,    1352     (1995));         and    “[a]ny        appropriate        state      or   federal

district court located in the Borough of Manhattan, New York

City, New York shall have exclusive jurisdiction over any case

of    controversy          arising        under         or    in    connection         with    this

Agreement[,]” (quoting Cal-State Business Products & Services,

Inc. v. Ricoh, 12 Cal. App. 4th 1666, 1672 fn. 4 (1993)).                                      Berg,

61 Cal. App. 4th at 357—58.                         The Berg Court observed that by

comparison,       the      clause        before      them     did    not   “contain        express

language of exclusivity of jurisdiction or a mandatory place of

litigation.”         Id. at 358.           “Clauses that grant jurisdiction to a

particular        forum       without          expressly       making      that        forum    the

mandatory        situs       for    resolution           of    disputes       are      considered

permissive only.”             Id. at 359 (citations omitted).                        In comparing

the     clause       under     review       to      a    permissive        selection          clause

discussed       in    Appalachian          Ins.      Co.      v.    Superior     Court,        which

“call[ed] for a party to submit to the jurisdiction of ‘any

court     of     competent          jurisdiction[,]’”                Id.   at        359   (citing

Appalachian Ins. Co., 162 Cal. App. 3d 427 (1984)), the Berg

Court reasoned that “[t]he clause at issue in the instant case

varies    from       the   broad     .     .    .   clause         involved     in    Appalachian

Insurance Co. only in that [it] is more narrowly focused. . . .
                                          -9-
[T]he clause does not expressly provide that any dispute must be

resolved exclusively in Los Angeles regardless of what other

factors might exist.”        Id. at 359.

    Guided by the precedent of the California State Supreme

Court   and    the    California     Court      of    Appeals,    we        consider   the

language of the forum selection clause under our review: “In the

event of disputes, the venue is an appropriate Court in Orange

County, CA.”         We note that the clause “does not contain express

language of exclusivity of jurisdiction or a mandatory place of

litigation.”         Id. at 358.       Furthermore, the clause does not

expressly provide that any dispute must be resolved exclusively

in Orange County, California regardless of what other factors

might exist.      See id. at 359.         Therefore, we hold that the forum

selection      clause    contained    in     the      document        entitled    Anajet

Apparel   Printer       Purchase    Terms       and   Condition        is    permissive.

And, as plaintiff’s principal place of business is located in

Columbus County, North Carolina, as well as the witnesses to the

conduct   of    both    parties,    the    trial      court     did    not     abuse   its

discretion      in     denying     defendant’s         motion     to        dismiss    the

complaint      for      grounds      associated         with      improper        venue.

Accordingly, defendant’s argument is overruled.                         We affirm the
                                  -10-
trial   court’s   denial   of   defendant’s   motion   to   dismiss   for

improper venue.

    Affirm.

    Judges CALABRIA and GEER concur.

    Report per Rule 30(e).