Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, Super. Ct. No. SC075491, Valerie Baker, Judge.
Fagelbaum & Heller, Jerold Fagelbaum and Philip Heller for Plaintiff and Appellant.
McKenna Long & Aldridge, Gary Owen Caris and Lesley Anne Hawes for Defendant and Respondent.
WOODS, J.
Eve Sternlight Cohen, co-special administrator of the Estate of Sara Sternlight and co-trustee of the Sternlight Family Trust, sued Bank Leumi le-Israel (Switzerland) (Bank Leumi) for damages allegedly caused by Bank Leumi’s negligent administration of bank accounts holding assets of Sara Sternlight and the trust. This court reversed the trial court’s order dismissing the action for lack of personal jurisdiction over Bank Leumi and remanded for the trial court to consider Bank Leumi’s alternative argument that the forum selection clauses in the bank account agreements at issue, which designated Zurich, Switzerland as the jurisdiction for all legal proceedings against the bank, should be enforced. The trial court granted Bank Leumi’s motion to quash and dismissed the action finding that the forum selection clauses were valid and enforceable.
In this appeal, Cohen contends that the trial court erred in granting the motion to dismiss based on the forum selection clauses. Specifically, she claims the trial court: (1) applied the wrong law in granting the motion; and (2) failed to consider all of the evidence and legal theories she presented, in particular the evidence supporting her theory Sara Sternlight entered the account agreements under undue influence. Cohen asserts that, if the trial court had considered undue influence, it would have been compelled to find the forum selection clauses invalid as a matter of law. As we shall explain, Cohen failed to overcome the presumption that the forum selection clauses were valid. Contrary to Cohen’s assertions, the record before this court indicates the trial court considered the evidence before it, including that which she claims supported her undue influence theory. In our view the court acted within its authority when it found that Sara Sternlight freely and voluntarily entered into the account opening agreements. Accordingly, we affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
This opinion relies in part upon the Factual and Procedural Background in our prior 2005 opinion in this case (No. B174254).
1. The Parties
Sara Sternlight and her husband Morris Sternlight, affluent residents of Los Angeles County, California, established the Sternlight Family Trust in 1986 to benefit the surviving spouse when one of them died and then to benefit their three adult children, Eve Sternlight Cohen, Joseph Sternlight, and Helen Fabe. Morris Sternlight died in November 1993. Sara Sternlight died in April 2000. Cohen and Joseph Sternlight are the co-special administrators of Sara Sternlight’s estate and co-trustees of the Sternlight Family Trust, including the three subtrusts created on the death of both Sara and Morris Sternlight. Bank Leumi is a Swiss banking corporation with offices only in Geneva and Zurich, Switzerland.
2. Creation of the 1993 Account in Sara Sternlight’s Name
On January 27, 1993, Sara Sternlight and her daughter Helen Fabe traveled from California to Zurich, Switzerland, to open an individual account at Bank Leumi in Sara Sternlight’s name, account number 10.014 (“1993 account”). According to the allegations of the complaint, the sole assets deposited in the account were approximately $1.7 million in high-interest, tax-free government bonds that belonged to the Sternlight Family Trust. The bonds stated on their face they had been issued to the trust or to Morris and Sara Sternlight. Sara Sternlight apparently signed the bonds. Helen Fabe signed for Morris Sternlight as his conservator, although the complaint alleges the limited conservatorship did not authorize Fabe to control the finances of her father, either individually or on behalf of the trust.
The account documentation executed by Sara Sternlight contained, as one of its “general banking conditions,” a provision requiring all lawsuits by the customer against Bank Leumi to be filed in Zurich: “Applicable Law and Jurisdiction. All legal relationships between customer and Bank shall be governed by Swiss law. Place of performance, place for collection proceedings against customers domiciled abroad and exclusive place of jurisdiction for legal proceedings of any kind shall be the domicile of the Bank in Zurich. The Bank, however, is also entitled to sue the customer in any competent court in his domicile or any other court having jurisdiction.” The documentation also included a power of attorney authorizing Helen Fabe to act on behalf of her mother.
3. Creation of the 1995 Joint Account
On March 21, 1995, Fabe again traveled with Sara Sternlight to Switzerland, this time to open a joint account at Bank Leumi in both their names, account number 10.398 (“1995 account”). Fabe directed Bank Leumi to transfer all funds from the 1993 account to the 1995 account and to close the 1993 account. The 1995 account documentation contains the identical choice of forum provision as the 1993 account documentation that limits jurisdiction for legal proceedings against Bank Leumi to Zurich.
According to the complaint, prior to opening the 1995 joint account, Fabe had improperly withdrawn funds from the 1993 account for her own personal benefit. Upon returning home to California following the creation of the 1995 account, Fabe, communicating with Bank Leumi via telephone, facsimile transmission and mail, used funds in the 1995 account for her own benefit without her mother’s knowledge. Specifically, between 1996 and 1998, at Fabe’s request, Bank Leumi made at least 30 wire transfers from the 1995 account to Fabe’s personal bank in California.
4. Creation of the 1998 Account in Helen Fabe’s Name Alone
In June 1998, at her request, Bank Leumi sent Fabe the material needed to open a new bank account to her home in Beverly Hills. Using those forms, Fabe opened, via mail from California, a third account with Bank Leumi, account number 10.902 (1998 account). This account was in Fabe’s name only. Once it had been opened, Fabe directed Bank Leumi to transfer all but $100,000 from the 1995 account to the 1998 account. Subsequently, at Fabe’s request, Bank Leumi wired funds from the 1998 account to Fabe’s personal bank in California.
5. Discovery of the Accounts and Criminal Proceedings Against Fabe
After Sara Sternlight’s death in 2000, Fabe’s brother and sister, Eve Sternlight Cohen and Joseph Sternlight, discovered the Bank Leumi accounts. Joseph Sternlight filed a lawsuit in Switzerland against Bank Leumi to recover the assets remaining in the 1998 account and a Swiss court froze the accounts and ordered the return of the remaining money, about $900,000, to the trust.
Fabe was charged with several crimes, including grand theft and elder abuse, relating to the misappropriation of funds belonging to her mother. Based on her plea of no contest, she was convicted of one count of felony elder abuse.
6. Cohen’s Lawsuit and Bank Leumi’s Motions to Quash Summons and to Dismiss
On January 24, 2003, in her capacity as co-special administrator of the Estate of Sara Sternlight and co-trustee of the Sternlight family trust, Cohen filed suit against Bank Leumi. The complaint alleges Bank Leumi had a duty to exercise reasonable care to protect the assets of Sara Sternlight and the Sternlight Family Trust in its control and that it breached that duty by failing to take reasonable measures to determine whether Sara Sternlight had the legal capacity to enter into any contractual relationship with the bank. The complaint further alleges that Bank Leumi failed to investigate the limited nature of the conservatorship of the person of Morris Sternlight that Fabe had obtained and negligently permitted, without Sara Sternlight’s knowledge or approval, the transfer of assets from the 1993 account into the 1995 account, and from the 1995 account into the 1998 account. Lastly, the complaint alleges that Bank Leumi facilitated the transfer of funds belonging to Sara Sternlight and the Sternlight Family Trust from the accounts at Bank Leumi to Fabe’s personal bank accounts in California.
After an initial default judgment was set aside, Bank Leumi filed a motion to quash service of summons based on lack of personal jurisdiction (Code Civ. Proc., § 418.10) and, alternatively, to dismiss the action on the ground that the forum selection clauses in the account agreements identified Switzerland as the appropriate and exclusive forum in which the action could be litigated. (Code Civ. Proc., § 410.30.)
On January 22, 2004, the trial court granted Bank Leumi’s motion on the ground that the court could not exercise personal jurisdiction over the bank. Cohen appealed. On July 28, 2005, this court reversed, finding that the trial court had personal jurisdiction over the bank. This court further concluded that the trial court had not ruled upon the alternative basis for the motion, namely, the forum selection clauses. This court found that factual findings were necessary to consider Cohen’s contention that Fabe exerted undue influence over Sara Sternlight to induce her to open the account, which, if true, would invalidate the forum selection clause contained in the 1993 and 1995 account opening agreements. Consequently, this court remanded for the trial court to consider Bank Leumi’s motion to quash on the ground that the forum selection clause contained in the 1993 and 1995 account opening agreements precluded the trial court from hearing the case.
After supplemental briefing and a hearing, the trial court found the forum selection clauses enforceable and dismissed the complaint. Cohen appeals.
DISCUSSION
On appeal, Cohen asserts that the trial court based its holding on an inaccurate interpretation of case law, did not consider all of the evidence undermining the forum selection clause and specifically failed to consider her legal theory of undue influence or the evidence that she offers in support of that theory. Cohen further contends that, if the trial court had considered undue influence, it would have been compelled to refuse to enforce the forum selection clauses as a matter of law.
1. Standard of Review and Law Governing the Enforceability of a Forum Selection Clause
A split of authority exists as to the appropriate standard of review for a motion to enforce a forum selection clause. In Schlessinger v. Holland America (2004) 120 Cal.App.4th 552, 557, this division followed America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 9, and held that a trial court’s decision to enforce or to decline to enforce a forum selection clause is reviewed for an abuse of discretion. However, in CQL Original Products, Inc. v. National Hockey League Players’ Assn. (1995) 39 Cal.App.4th 1347, 1354, Division One of the Fourth District held that the trial court’s order denying a motion to stay or dismiss based on a contractual forum selection clause should be reviewed for substantial evidence. This split is not outcome determinative, here, however, because under either of these deferential standards, this court would uphold the trial court’s conclusion with respect to the forum selection clauses at issue.
California courts presume the validity of forum selection clauses and consistently enforce them because they provide a degree of certainty for both businesses and their customers that contractual disputes will be resolved in a particular forum. [Citations.] California courts routinely enforce forum selection clauses even when the plaintiff lives far from the chosen forum. (See Intershop Communications AG v. Superior Court (2002) 104 Cal.App.4th 191, 196-202 [Hamburg, Germany forum].)
A forum selection clause in a form contract such as the account documentation that is the subject matter of this lawsuit, even though not separately negotiated, is nonetheless enforceable (Carnival Cruise Lines v. Shute (1991) 499 U.S. 585, 593-595); and such clauses may be enforced against non-signatories who are closely related to the contractual relationship. (Net2Phone, Inc. v. Superior Court (2003) 109 Cal.App.4th 583, 587-588.)
When a forum selection clause has been “entered into freely and voluntarily by parties who have negotiated at arms’ length,” the clause will be enforced “in the absence of a showing that enforcement of such a clause would be unreasonable.” (Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 496.) The party seeking to avoid application of the forum selection clause -- in this case, Cohen -- bears a “substantial burden” to prove unreasonableness. (Net2Phone, Inc.v. Superior Court, supra, 109 Cal.App.4th at p. 588; see Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1680 [The burden of proof falls on the party challenging the validity of the forum selection clause].) With these legal concepts in mind, we turn to the merits.
2. The trial court did not base its holding on an inaccurate interpretation of case law.
Contrary to Cohen’s assertion, the trial court did not rely on a faulty analysis of Furda v. Superior Court (1984) 161 Cal.App.3d 418 or Rosenthal v. Great Western Financial Securities Corporation (1996) 14 Cal.4th 394 in reaching its conclusion. While Cohen correctly observes that Furda does not dictate the outcome in the present case, the trial court did not rely on Furda in reaching its holding. Rather, the trial court identified Furda as an example of an “instructive” case. Like this case, Furda contains both personal jurisdiction and forum selection clause enforcement issues and it also summarizes the law in California concerning forum selection clause enforcement. (See Furda, supra, 161 Cal.App.3d at pp. 423-427.)
Furthermore, the trial court did not rely on a faulty analysis of Rosenthal v. Great Western Financial Securities Corporation, supra, 14 Cal.4th 394. While the trial court noted that Rosenthal is similar to the present case because it involved plaintiffs with vision impairments and limited knowledge of English, it did not rely directly on this observation in reaching its holding.
3. The trial court considered all relevant evidence submitted by the parties.
On appeal, a presumption exists that the trial court considered all of the evidence in the record before reaching its decision. (See Richter v. Walker (1951) 36 Cal.2d 634, 640.) The record of the hearing in the trial court suggests that the court considered all of the evidence presented to it. Although the court stated it would concentrate questions during the hearing on the parties’ supplemental briefs, at the conclusion of the hearing the court assured the parties that it would consider the evidence presented to the court in reaching its decision. Moreover, there is nothing in the record to support Cohen’s contention that the trial court did not consider Exhibit H (the 1999 police interview of Sara Sternlight) or Fabe’s conviction. The court said it would view the videotape before reaching its decision and we presume that it did.
Cohen also submitted a transcript of the videotaped interview to the trial court which appears in the record on appeal.
4. The trial court considered Cohen’s undue influence theory and the evidence submitted in support of it and did not err in dismissing the complaint.
Undue influence consists of the use of excessive pressure by one party to persuade a party vulnerable to such pressure to consent to an agreement to which they would not otherwise consent, in effect, substituting the will of the subservient person with that of the dominant person. (Ordorozzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 131.) A finder of fact must look at the totality of the facts and circumstances to determine whether undue influence occurred. (Wells Fargo Bank & Union Trust Co. v. Brady (1953) 116 Cal.App.2d 381, 399.) Cohen claims that evidence of Sara Sternlight’s mental condition in 1999 and Fabe’s conviction of elder abuse necessitates a finding that Sara Sternlight entered into the account opening agreements under undue influence and as such the court could not reasonably conclude Sara Sternlight freely and voluntarily entered into the account agreements.
a. Mother’s Condition in 1993 and 1995
The evidence offered by Cohen of Sara Sternlight’s physical and mental condition in 1999 does not preclude a finding that she acted freely and voluntarily when she entered into the account opening agreements at issue several years earlier. While the 1999 police interview shows Sara Sternlight’s lack of education and lack of financial sophistication, those factors alone do not necessitate a finding that she entered into the account opening agreements involuntarily.
In fact, the evidence before the trial court showed that Sara spoke five languages, had a driver’s license, traveled abroad before her 1993 trip to Switzerland, and was living independently at the time she entered into the account opening agreements—all factors that support a finding that Sara was actually capable of entering into the account opening agreements freely and voluntarily. The trial court did not merely conclude, as Cohen contends, that the evidence presented failed to establish that Sara lacked the capacity to freely and voluntarily enter into the account opening agreements. Rather, the trial court found that Sara actually had the capacity to freely and voluntarily enter into the contracts at issue. The court ruled: “[p]laintiff did not show that Sara Sternlight failed to understand and voluntarily agree to the terms of the account agreements containing the clause. The weight of the evidence shows the contrary .” (Italics added.)
Most significantly, Cohen did not present evidence showing that the 1999 interview, one year before Sara’s death, was probative of Sara’s mental capacity in 1993 or 1995. Thus, the trial court could reasonably find that, in the absence of evidence to the contrary, Sara was capable of entering into an account opening agreement freely and voluntarily in 1993 and 1995.
Cohen’s use of the 1999 interview for two conflicting purposes is problematic. On the one hand, Cohen characterizes the 1999 interview as a reliable recollection of the signing of the 1993 account opening agreement to support her contention that Sara acted under undue influence. However, on the other hand, Cohen claims that the 1999 interview and Dr. Trader’s Psychiatric Evaluation suggest that Sara could not enter into the account opening agreements freely and voluntarily years earlier. If Sara had the mental acuity in 1999 to accurately recall the events surrounding the opening of the 1993 account, she likely had the capacity to enter into the opening agreement of that account freely and voluntarily six years earlier. However, her recollection of the 1993 account opening seems less reliable if evidence of her diminished capacity in 1999 provides probative evidence of her diminished capacity in 1993.
b. Helen Fabe’s Elder Abuse Conviction
In 2003, Fabe was convicted of theft by caretaker of an elder adultunder former Penal Code section 368. It was alleged that she committed financial elder abuse – a crime consisting of the theft or embezzlement by the caretaker of a dependent adult of property belonging to that dependent adult. Helen Fabe admitted a special allegation that she took property of value exceeding $1 million under Penal Code section 12022.6, subdivision (c).
The factual admissions made by Fabe when she pled no contest to these charges demonstrate that she had a plan to steal money from her mother and that she carried out her plan. However, her admissions do not prove Fabe exercised undue influence upon her mother. Nothing in the allegation demonstrates that Sara Sternlight took actions (i.e., opened the bank accounts) to which she would not otherwise have consented absent excessive pressure by Fabe. Neither the conviction of elder abuse nor Fabe’s factual admissions directly address any actions taken by Fabe to coerce Sara into signing the account opening agreements for the 1993 or 1995 accounts. Thus, Fabe’s conviction for stealing from Sara did not require a finding, as a matter of law, that Sara was coerced into opening the Swiss bank accounts.
In view of the deferential standard of review, we conclude Cohen did not satisfy her substantial burden to prove it would be unreasonable to enforce the forum selection clauses. Considering all of the evidence, the trial court could reasonably reach the conclusion that Sara had the capacity to freely and voluntarily enter into the account opening agreements. Therefore, the trial court did not commit reversible error in finding the forum selection clauses contained in the account agreements were enforceable and valid, and thus did not err in sustaining the demurrer.
DISPOSITION
The judgment is affirmed. Respondent entitled to its costs on appeal.
We concur: PERLUSS, P.J. JOHNSON, J.