Opinion
No. CV05-5002441S
April 10, 2007
MEMORANDUM OF DECISION RE MOTION TO DISMISS
Before the court is the defendant's motion to dismiss the plaintiff's complaint for improper venue. The plaintiff (Alliance) alleges that the parties entered into a written Food Service and Vending Agreement in April 2005 whereby Alliance provided vending services for the defendant (Rensselaer Hartford) in return for a guaranteed management and commission. Alliance alleges that it performed each of its obligations under the contract, and Rensselaer has failed or refused to pay the invoices submitted by Alliance. Both parties are Connecticut Corporations. The plaintiff alleges that the defendant has breached its contract by failing to pay for plaintiff's services and has been unjustly enriched.
Attached to the signed agreement is a document referred to by the defendant as "Rensselaer's General Terms and Conditions." Paragraph 15 of this document contains the following language: "This purchase order shall be construed and enforced in accordance with the laws of the State of New York and any legal action or proceeding concerning this purchase order shall be brought in New York State in Rensselaer County, in the case of any New York State court action or proceeding, in the Northern District of New York, Albany Division, in the case of any Federal Court action or proceeding." Based on this language, Rensselaer urges the court to dismiss the action for improper venue. Rensselaer concedes that this court has jurisdiction. "The existence of such a clause does not deprive the trial court of personal jurisdiction over the parties, but presents the question whether it is reasonable for the court to exercise its jurisdiction in the particular circumstances of the case." Reiner, Reiner Bendett, P.C. v. Cadle Co., 278 Conn. 92, 103, 897 A.2d 58 (2006). Thus, "[A] court addressing the enforceability of a forum selection clause is to consider whether it must, in its discretion, decline jurisdiction and defer to the selected forum." Id.
Rensselaer's argument for enforcement is premised on Connecticut's policy of enforcing forum selection clauses incorporated into contracts, especially in commercial transactions absent a showing of fraud or overreaching. "When the court selected is reasonably appropriate, and where there is no indication that "the parties had such greatly disproportionate bargaining power that the agreement could be regarded as unconscionable, the tendency is to give effect to such agreements." Fairfield Lease Corp. v. Romano's Auto Service, 4 Conn.App. 495, 498, 495 A.2d 286 (1985), citing James Hazard, Civil Procedure (2d Ed. 1977) 12.21.
Alliance argues against enforcement of the forum selection clause, claiming that the language in the clause is inadequate to create exclusive venue in New York. Additionally, Alliance argues that the forum selection clause should not be enforced because the parties had unequal bargaining power in the formation of the contract, and enforcement would result in great inconvenience and unfairness to the plaintiff.
Regarding its first argument, Alliance misconstrues the holding in John Boutari And Son v. Attiki Importers, 22 F.3d 51 (2nd Cir. 1994). Boutari does not support Alliance's assertion that the language in this particular clause is permissive. In Boutari, the court stated: "The general rule in cases containing forum selection clauses is that when only jurisdiction is specified the clause will generally not be enforced without some further language indicating the parties' intent to make jurisdiction exclusive . . . Of course if mandatory venue language is employed, the clause will be enforced . . . The choice of forum must be mandatory rather than permissive . . . Although the word `shall' is a mandatory term, here it mandates nothing more than that the [Greek courts] have jurisdiction." (Internal citations omitted; internal quotation marks omitted; emphasis supplied.) Boutari, 22 P.3d at 52-53. The clear import of Boutari is that, although the word "shall" is insufficient in and of itself to confer exclusivity, exclusivity is nonetheless conferred when the language refers to venue rather than jurisdiction. The language in the subject forum selection clause " shall be brought in New York State" clearly refers to venue.
In Total Telecommunications, Inc. v. Target Telecommunications, Inc., Superior Court, judicial district of Ansonia-Milford at Milford, Docket No. CV 96 053516 (March 11, 1997, Corradino, J.), the court adopted a two-step analysis in order to determine whether the forum selection clause should be enforced. First, the court looked to the contract formation in order to determine whether the clause was the product of fraud or deception or whether the bargaining power of the parties was so out of balance that the clause should not be enforced. Second, the court determined whether, even if there existed no fraud, deception, or significantly uneven bargaining power, enforcement of the clause would cause such inconvenience to the party bringing suit that the otherwise valid contractual provision should not be enforced.
"The rules governing contract formation are well settled. To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties . . . To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties . . . If the minds of the parties have not truly met, no enforceable contract exists . . ." (Internal citations omitted.) Duplissie v. Devino, 96 Conn.App. 673, 688, 902 A.2d 30 (2006).
In analyzing the formation of the contract between the parties here, the court notes that the agreement which both parties signed contains no information about a forum selection clause. Instead, the first page of the agreement sets out the following language: "This Agreement along with Request for Proposal for dining services, including Rensselaer's General Terms and Conditions a copy of which is attached hereto, made and entered into this 29th day of April 2005 between Rensselaer Hartford, Hartford, Ct. 06120 hereinafter called `Company', and Alliance Food Management Corporation, hereinafter called `Vendor.' " The last page of the referenced five-page document entitled "Rensselaer Request for Proposal Hospitality Cafe/Catering/Vending" is signed by an Alliance representative. The one-page document which is purported to be Rensselaer's general terms and conditions is not identified as such on the document. The print is very small. There are no signatures on the document. There is no evidence that the forum selection clause was bargained over. It is clear, however, that it was made part of the contract and referred to in the opening paragraph of the Food Service and Vending Agreement. Moreover, this agreement was between two relatively equal parties, both businesses. Alliance is accustomed to negotiating contracts with other businesses. In court, Roger Malagutti, Alliance's president, indicated that he did not read the "terms and conditions" document, but he did not say that he did not have an opportunity to read it. "The general rule is that where a person of mature years and who can read and write, signs or accepts a formal written contract affecting his pecuniary interests, it is [that person's] duty to read it and notice of its contents will be imputed to [that person] if [that person] negligently fails to do so . . ." Phoenix Leasing, Inc. v. Kosinski, supra, at 654.
Alliance argues that the court should decline to enforce the forum selection clause because, under the circumstances presently existing, enforcement would be unreasonable, unfair, and inconvenient. Addressing this issue, the United States Supreme Court has stated: "Whatever inconvenience [the contracting party] would suffer by being forced to litigate in the Contractual forum as it agreed to do was clearly foreseeable at the time of contracting. In such circumstances it should be incumbent on the party seeking to escape his contract to show that trial in the contractual forum will be so gravely difficult and inconvenient that he will for all practical purposes be deprived of his day in court. Absent that, there is no basis for concluding that it would be unfair, unjust, or unreasonable to hold that party to his bargain." The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 17-18, 92 S.Ct. 1907 (1972).
Mr. Malagutti testified that Alliance had seventeen employees when the contract with Rensselaer was made. Now the company has four or five. He, his wife and two sons work for the company. The company has sized down considerably since the contract with Rensselaer was made. He testified further that he would not be able to afford to pursue a case against Rensselaer would not be able to afford to pursue a case against Rensselaer if compelled to bring his case in New York.
Ordinarily, the additional travel and costs associated in bringing the case to the contractual forum would not amount to a hardship to the party bringing suit if that party were, as in this case, a corporate entity. This case is different. Based on Malagutti's testimony, the court finds that the inconvenience would be such that the plaintiff would be denied its day in court. Moreover, since the services were rendered in Connecticut and most, if not all, of the witnesses are Connecticut residents, the inconvenience to the defendant is minimal. For these reasons, the court will not enforce the otherwise valid contractual provision concerning forum selection. Accordingly, the motion to dismiss is denied.