Opinion
No. 12–P–1535.
2013-05-16
TRY SWITCH, LTD. v. ENDURANCE INTERNATIONAL GROUP.
The plaintiff contends that the judge erred in dismissing the complaint, because the defendant is not a third-party beneficiary of the contract and, therefore, is not entitled to enforce the forum selection clause. The defendant argues that the judge erred when he declined to award attorneys' fees, because the defendant “prevailed” when its motion to dismiss was allowed. Our review is de novo. Curtis v. Herb Chambers I–95, Inc., 458 Mass. 674, 676 (2011). We have found no Massachusetts case permitting a nonparty to a contract to enforce a forum selection clause against a party to the contract. However, even were we to assume that a nonparty may, in certain circumstances, enforce a forum selection clause against a party, there is no reason to think that our law would recognize a right broader than that recognized in other jurisdictions. More specifically, although courts in other jurisdictions have generally accepted that nonsignatory third parties can enforce a forum selection clause against a signatory, they have done so where the nonparty is a third-party beneficiary of the contract. See, e.g., BNY AIS Nominees Ltd. v. Quan, 609 F.Supp.2d 269, 275 (D.Conn.2009) (“One situation where a non-party may invoke a contractual forum selection clause, or it can be invoked against the non-party, is where the non-party is a third-party beneficiary of the contract”).
By the Court (TRAINOR, GRAHAM & WOLOHOJIAN, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
These cross appeals arise out of a Superior Court judge's interpretation and application of the following provision in a contract between the plaintiff and ValueClick International Limited, an entity that is not a party to this suit:
“The exclusive forum for any actions related to this [a]greement shall be in the [c]ourts in Dublin, Ireland. You consent to such venue and jurisdiction. A party that primarily prevails in an action brought under this [a]greement is entitled to recover from the other party its reasonable attorneys [ sic ] fees and costs.”
The plaintiff contends that the judge erred in dismissing the complaint, because the defendant is not a third-party beneficiary of the contract and, therefore, is not entitled to enforce the forum selection clause. The defendant argues that the judge erred when he declined to award attorneys' fees, because the defendant “prevailed” when its motion to dismiss was allowed. Our review is de novo. Curtis v. Herb Chambers I–95, Inc., 458 Mass. 674, 676 (2011). We have found no Massachusetts case permitting a nonparty to a contract to enforce a forum selection clause against a party to the contract. However, even were we to assume that a nonparty may, in certain circumstances, enforce a forum selection clause against a party, there is no reason to think that our law would recognize a right broader than that recognized in other jurisdictions. More specifically, although courts in other jurisdictions have generally accepted that nonsignatory third parties can enforce a forum selection clause against a signatory, they have done so where the nonparty is a third-party beneficiary of the contract. See, e.g., BNY AIS Nominees Ltd. v. Quan, 609 F.Supp.2d 269, 275 (D.Conn.2009) (“One situation where a non-party may invoke a contractual forum selection clause, or it can be invoked against the non-party, is where the non-party is a third-party beneficiary of the contract”).
“Under Massachusetts law,[ ] a contract does not confer third-party beneficiary status unless the ‘language and circumstances of the contract’ show that the parties to the contract ‘clearly and definitely’ intended the beneficiary to benefit from the promised performance.” Doherty v. Admiral's Flagship Condominium Trust, 80 Mass.App.Ct. 104, 111 (2011), quoting from Cumis Ins. Soc., Inc. v. BJ's Wholesale Club, Inc., 455 Mass. 458, 466 (2009). In order to be deemed a third-party beneficiary, the defendant was required to show that the contracting parties “intended to give [it] the benefit of the promised performance.” Anderson v. Fox Hill Village Homeowners Corp., 424 Mass. 365, 366 (1997). “We look at the language and circumstances of the contract for indicia of intention.” Ibid. There is nothing in the contract, or elsewhere in the record, to indicate that the parties to the contract had the defendant in mind in any way at the time the contract was drafted or entered into. For example, the defendant is not named in the contract, and there is no provision in the contract stating that it, or any provision contained in it, is “for the benefit” of the defendant. Compare Rae v. Air–Speed, Inc., 386 Mass. 187, 195 (1982). See also Constantino v. Frechette, 73 Mass.App.Ct. 352, 356 (2008). At best, the defendant is one of a group of potential future customers generically called “advertisers” in the contract. No member of this group is identified by name, and there is no sign that either party to the contract knew or expected at the time the contract was entered into that the defendant might eventually fall within that generic group. On this record, therefore, the defendant did not establish that it was an intended third-party beneficiary entitled to enforce the forum selection clause. We note as well that it would be difficult to conclude (both for reasons of logic and fairness) that the defendant, a Massachusetts company, was the intended beneficiary of a forum selection clause requiring suit be brought in Ireland. We accordingly reverse the judgment dismissing the complaint.
Although the contract specifies Irish law, neither party has argued either to us or to the motion judge that Irish law is to be applied.
It clearly follows that we must affirm the judge's denial of the defendant's request for attorneys' fees and costs, which the defendant predicated on the notion that it had prevailed in the action on the basis of the forum selection clause.
So ordered.