Court Opinion

ID: 1039231
Source: CourtListenerOpinion
Date Created: 2013-08-28 22:31:44.578876+00
Date Added: 2024-06-11T15:27:34.671359
License: Public Domain

p- 160 Wn.2d 826, 833, 161 P.3d 1016 (2007).
       3 Dix, 160 Wn.2d at 833 (citing Wash. State Physicians Ins. Exch. &Ass'n
v. Fisons Corp., 122 Wn.2d 299, 339, 858 P.2d 1054 (1993)).
       4 Dix, 160Wn.2dat833.
       5 Dix, 160 Wn.2d at 833-34.
       6 Hulbert v. Port of Everett, 159 Wn. App. 389, 407, 245 P.3d 779, review
denied. 171 Wn.2d 1024 (2011) (citing Scott Fetzer Co. v. Weeks, 122 Wn.2d
141, 147, 859 P.2d 1210 (1993)).
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the following analysis.   A&E and Deltek are partners.        The A&E purchase

agreement provision establishing venue in King County binds its partner, Deltek.

The forum selection clause in Deltek's license agreement modifies the purchase

agreement provision without consideration. This lack of consideration makes the

modification unenforceable.     We reject West's analysis because it fails to

recognize the "layered contract" nature of this transaction. We also reject West's

policy arguments and its challenge to a fee award in Deltek's favor.

      In M.A. Mortenson Co., Inc. v. Timberline Software Corp..7 our Supreme

Court approved the formation of "layered contracts" between a merchant and an

end user.8 Mortenson, a contractor, issued a purchase order to Timberline for
the purchase of software.9 Timberline shipped the software with a shrink-wrap
license, which included a limitation of remedies provision.10 When Mortenson

experienced problems with the software, Timberline invoked the limitation

provisions. Mortenson contended that the parties' contract consisted only of its

purchase order because it never saw or agreed to the provisions of the license

      7140 Wn.2d 568, 998 P.2d 305 (2000).
      8The court stated that Article 2 of the Uniform Commercial Code, chapter
62A RCW, which applies to transactions in goods, applies to software licensing.
Based upon facts similar to this case, the court concluded in Mortenson that
RCW 62A.2-207 did not apply because the case concerned contract formation,
not contract alteration. Additionally, RCW 62A.2-207 applies only to contracts
between merchants. 140 Wn.2d at 582 & n.9.
      9 Mortenson. 140 Wn.2d at 571.
      10 Mortenson. 140 Wn.2d at 574-75.
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NO. 68309-8-1 / 7

agreement at the time the parties made their contract.11 It also argued that

delivery of the license was a request to add terms to the contract, to which the

parties never agreed.12 Our Supreme Court disagreed, holding that the license
provisions were part of the parties' contract and use of the software constituted

assent to the license terms.13 The court concluded, "[B]ecause RCW 62.A2-204

allows a contract to be formed 'in any manner sufficient to show agreement . . .

even though the moment of its making is undetermined,' it allows the formation of

layered contracts.'"14

      West's complaint asserts that Deltek breached implied warranties of

merchantability and fitness for a particular purpose. It also alleges that Deltek

violated the CPA "by selling a poor quality product to Plaintiff WEST and failed to

provide adequate installation, training and maintenance services to render the

product useful for any purposes, let alone the special and particular purposes of

the Plaintiff." West does not dispute that its claims relate in whole or in part to

the license agreement, particularly the agreement's warranties and disclaimers,

and it does not seek to rescind the license agreement. West does not allege any

breach of the purchase agreement's provisions.

      11 Mortenson, 140 Wn.2d at 577.
      12 Mortenson. 140 Wn.2d at 578.
       13
            Mortenson. 140 Wn.2d at 584.
      14 Mortenson, 140 Wn.2d at 584 (alteration in original).
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NO. 68309-8-1 / 8

      As West appropriately acknowledged at oral argument, here, as in

Mortenson, the purchase order is not an integrated contract.         West's claims

cannot arise under the purchase agreement, which provides no express

warranties regarding the software and disclaims any implied warranties. West

had previously purchased software from A&E, although it had not previously

used Deltek's products. West does not dispute that the license and purchase

contract terms were clear.     When West purchased Deltek's software, it had

notice that it would be subject to a license. The purchase agreement between

West and A&E recited that West was purchasing a license to use the software

and noted that Deltek would provide any warranties for the software. The record

indicates that a scroll box would have appeared on the computer screen during

the software installation process, setting forth the terms of the license agreement,

and that the installer would have been required to affirmatively select the option "I

accept the terms of the license agreement" to proceed. The work order that

Hadley signed stated explicitly that those same terms governed the work order.

       West contends that it agreed to this contract without reading it. We follow

the court's reasoning in Mortenson that "it was not necessary ... to actually read

the agreement in order to be bound by it" and that West assented to the license

agreement's terms by using the software.15 West could have declined the terms

       15 Mortenson, 140 Wn.2d at 584.
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NO. 68309-8-1 / 9

of the license agreement, chosen not to install the software, and returned the

software for a full refund. Because the purchase order and license agreement

constituted a layered contract and West's claims "relate in whole or in part" to the

license agreement, the       license agreement's terms govern this dispute.

Therefore, the license agreement's forum selection clause applies if it is valid.

       "A forum selection clause is presumptively valid unless it violates

fundamental public policy of the State of Washington and Washington's interest

in the determination of the issue materially outweighs the chosen state's

interest."16 We generally enforce a forum selection clause "even if it is in a

standard form consumer contract not subject to negotiation."17            The party

resisting the forum selection clause has the burden of demonstrating that it is

unreasonable, even where the clause establishes a remote forum for resolving

disputes.18 Absent evidence of fraud, undue influence, or unfair bargaining
power, courts in Washington are reluctant to invalidate forum selection clauses

because they increase contractual predictability and may reduce costs of doing

business.19

      16 Saleemi v. Doctor's Assocs.. Inc.. 176 Wn.2d 368, 384, 292 P.3d 108
(2013) (citing McKee v. AT&T Corp., 164 Wn.2d 372, 384, 191 P.3d 845 (2008)).
      17 Dix, 160Wn.2dat834.
      18 Dix, 160 Wn.2d at 834-35; Voicelink Data Servs., Inc. v. Datapulse, Inc.,
86 Wn. App. 613, 617, 937 P.2d 1158 (1997).
      19 Dix. 160 Wn.2d at 834-35.
NO. 68309-8-1/10

      West asserts that the license agreement's forum selection clause is invalid

because "Deltek cannot force a new agreement upon Plaintiff WEST without new

consideration."    But,   under Mortenson, the purchase order and license

agreement constituted a single "layered contract," not separate agreements.

      West also contends that enforcing the license agreement's forum selection

clause would violate the CPA's public policy goals and "deny Plaintiff WEST and

any other injured Washington 'persons' a forum for its claims against Deltek." In

support of this argument, West cites Dix v. ICT Group, Inc.20 But, in Dix, a class

action, the plaintiffs claimed that the forum selection clause requiring venue in

Virginia violated the CPA's public policy goals because class action suits were

not available in Virginia.21 The court held that "a forum selection clause that

seriously impairs the plaintiff's ability to go forward on a claim of small value by

eliminating class suits in circumstances where there is no feasible alternative for

seeking relief violates public policy and is unenforceable."22 Here, West seeks
$119,544 in damages, it does not seek to bring a class action, and it presented

no evidence to the trial court that it has no feasible alternative for seeking relief.

Therefore, we reject its argument.

       20 160 Wn.2d 826, 161 P.3d 1016 (2007).
       21 Dix, 160Wn.2dat835.
       22 Djx, 160Wn.2dat837.
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NO. 68309-8-1/11

       On appeal, West argues that its claims against Deltek are time barred in

Virginia and "that pursuing such claims in either state or federal court in Virginia

would be cost prohibitive." It first presented a similar argument to the trial court

in response to Deltek's notice of presentation. But the trial court did not consider

this contention timely and entered a final judgment "as set forth in the Court's

May 25, 2010 Order Granting Certain Defendants' Motion to Dismiss for

Improper Venue," and "as set forth in the Court's June 14, 2010 Order Granting

Attorneys' Fees and Costs." Therefore, we also decline to address it.23 Because

West's claims arise under the license agreement and it fails to demonstrate that

the license agreement's forum selection clause is unreasonable, we hold that the

trial court properly required West to litigate its claims against Deltek in Virginia.

       West also claims that the trial court's order awarding attorney fees and

costs to Deltek "was only authorized by [RCW 4.28.185(5)] if the error had not

occurred on the ruling granting Deltek's motion to dismiss." RCW 4.28.185(5)

allows a prevailing defendant to recover reasonable attorney fees and costs "[i]n

the event the defendant is personally served outside the state on causes of

action enumerated in this section." West does not dispute that it caused Deltek

to be served personally in Delaware under Washington's long-arm statute.

       23 See RAP 2.5(a) ("The appellate court may refuse to review any claim of
error which was not raised in the trial court.").
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NO. 68309-8-1 /12

Because the trial court properly granted Deltek's motion under RCW 4.28.185(5),

we affirm the fee award.

       Deltek requests attorney fees and costs on appeal under RAP 18.1 and

RCW 4.28.185(5). "Such an award is discretionary and is limited to the amount

necessary to compensate a foreign defendant for the added costs of litigating in

Washington."24 Because Deltek prevails in this action, we award attorney fees

and costs to Deltek, limited to the amount necessary to compensate it for any

additional costs of defending in Washington.25

       In a cross appeal, Deltek asserts that the trial court erred in denying its

motion to strike Seward's declaration, which West offered in response to Deltek's

notice of presentation.    Because West does not prevail, we need not consider

this issue.

                                  CONCLUSION

       Because West's claims against Deltek arise under the license agreement,

we affirm the trial court's order dismissing its claims for improper venue and

awarding attorney fees and costs to Deltek.      Because Deltek prevails in this

appeal, we also award costs and reasonable attorney fees to Deltek incurred on

       24 Pavne v. Saberhaqen Holdings, Inc.. 147 Wn. App. 17, 36, 190 P.3d
102 (2008) (citing Scott Fetzer Co.. Kirbv Co. Div. v. Weeks, 114 Wn.2d 109,
120-21, 786 P.2d 265 (1990)).
       25 See Pavne. 147 Wn. App. at 36.
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NO. 68309-8-1/13

this appeal, limited to the amount necessary to compensate it for any additional

costs of defending in Washington, upon its compliance with RAP 18.1.

                                                    /-£^c^A_ (T .
WE CONCUR:

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