Opinion
G056491
09-09-2019
BO LI et al., Plaintiffs and Appellants, v. SUN CAPITAL MANAGEMENT LLC et al., Defendants and Respondents.
Law Offices of Eugene S. Alkana and Eugene S. Alkana for Plaintiffs and Appellants. Greenberg Traurig and Tyler R. Andrews for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2017-00951547) OPINION Appeal from an order of the Superior Court of Orange County, Theodore R. Howard, Judge. Affirmed. Law Offices of Eugene S. Alkana and Eugene S. Alkana for Plaintiffs and Appellants. Greenberg Traurig and Tyler R. Andrews for Defendants and Respondents.
Plaintiffs Bo Li, Xibing Luo, Xiu Lian Liu, and Shi Xian Zhao (collectively, plaintiffs) appeal from an order granting a motion to dismiss brought by defendants Sun Capital Management LLC and John Zhang (collectively, defendants). The order resulted from the trial court exercising its discretion to enforce a forum selection clause which designates Chicago, Illinois as the exclusive forum for disputes between the plaintiffs and defendants. Plaintiffs claim the court erred by ignoring evidence and argument concerning the validity of the agreement within which the clause appears and by erroneously shifting the initial burden of proof from defendants to them. We disagree with both contentions and affirm the trial court's order.
FACTS
During the time period relevant to this case, defendants acted as introducing brokers in the investment arena of commodities futures trading. In that role, they would introduce people to merchants accepting orders to buy or sell futures contracts. Plaintiffs were among the people with whom defendants did business. Defendants facilitated plaintiffs' opening of investment accounts with Knight Capital Americas, LLC, which later became Wedbush Securities Inc. (Wedbush).
After plaintiffs' cash investments totaling approximately $600,000 purportedly decreased to about $10,000, plaintiffs sued defendants. The complaint alleges intentional misrepresentation, negligent misrepresentation, fraud, conversion and unfair business practices.
In response to the complaint, defendants filed a motion to dismiss or, alternatively, stay the action based on a contractual forum selection. They brought to the court's attention a forum selection clause contained within a futures account agreement (Agreement) attached to, and referenced in, plaintiffs' account applications. It specified all disputes must be litigated in Chicago, Illinois, and defendants claimed plaintiffs agreed to it when they filled out the paperwork to open their accounts.
Plaintiffs opposed the motion. They claimed the signatures on their account applications were forged, and argued the Agreement provided to the trial court could not have been the one attached to their applications because it was three pages long, whereas the account applications referenced a two-page futures account agreement.
After the originally scheduled hearing on the motion to dismiss, the trial court issued a minute order indicating the hearing would be continued to a specified date to allow the parties an opportunity to provide supplemental briefing on certain issues. The order explained some of the court's questions and areas of concern, providing the allowable scope for the parties' further briefing.
The trial court took the parties' supplemental briefing into consideration, and at the continued hearing it granted defendants' motion to dismiss. It found each plaintiff signed an account application which referenced the Agreement and was provided with a copy of the Agreement prior to signing. And it concluded the forum selection clause should be enforced because plaintiffs made no showing doing so would be unreasonable.
Plaintiffs filed a notice of appeal following the trial court's issuance of an unsigned minute order granting defendants' motion to dismiss, which is not an appealable order. (Powell v. County of Orange (2011) 197 Cal.App.4th 1573, 1578 [signed judgment or order of dismissal required for appellate jurisdiction].) However, in response to an order from this court, plaintiffs later filed a signed order of dismissal. We deem the appeal to be from the signed order, meaning plaintiffs' appeal is timely.
DISCUSSION
Plaintiffs contend the trial court unwarrantedly ignored evidence showing they never agreed to the forum selection clause and erroneously placed the initial burden of proof on them instead of on defendants. We disagree.
"The proper procedure for enforcing a contractual forum selection clause in California is a motion pursuant to section 410.30. [Citation.] That provision codifies the forum non conveniens doctrine, under which a trial court has discretion to decline to exercise its jurisdiction over a cause of action that it believes may be more appropriately and justly tried elsewhere. [Citations.] Where a section 410.30 motion is 'based on a forum selection clause[,] . . . factors that apply generally to a forum non conveniens motion do not control . . . .' [Citation.] Instead, 'the test is simply whether application of the clause is unfair or unreasonable[; if not,] the clause is usually given effect.'" (Drulias v. 1st Century Bancshares, Inc. (2018) 30 Cal.App.5th 696, 703, fn. omitted.) Subject to exceptions not applicable here, "the party seeking to avoid enforcement of a forum selection clause bears the 'burden of establishing that [its] enforcement . . . would be unreasonable.'" (Ibid.)
All statutory references are to the Code of Civil Procedure. --------
The Agreement, to which plaintiffs (customer) and Wedbush (broker) are parties, provides that if a customer's account was opened through an introducing broker, "then [the introducing broker] shall share equally with Broker all of Broker's rights conferred hereunder, as if [the introducing broker] were a co-party with Broker to this Agreement." Among the specified "rights" is the following: "Any dispute between Customer and Broker not resolved through Customer Initiated arbitration or reparations shall be litigated in a court located in Chicago, Illinois, to the jurisdiction and venue of which Customer hereby consents."
The language in these two provisions unambiguously makes Chicago the mandatory forum for any dispute between plaintiffs and defendants.
Plaintiffs did not below, and do not on appeal, contend the forum selection clause is unfair or unreasonable. Instead, two of them argued they never signed the account application to which the Agreement was attached, and all four plaintiffs denied ever seeing or agreeing to the Agreement's terms.
But in exercising its discretion, the trial court assessed the credibility of all declarants and weighed the parties' evidence. In these circumstances, our review is limited to determining whether substantial evidence supports the factual findings made by the trial court (Vita Planning & Landscape Architecture, Inc. v. HKS Architects, Inc. (2015) 240 Cal.App.4th 763, 771-772), and whether the court abused its discretion in concluding the forum selection clause should be enforced (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 148).
Regarding the facts, the trial court found plaintiffs signed the account application documents and received a copy of the Agreement before they signed. Those findings are supported by evidence which showed: (1) one plaintiff who denied signing the account application personally gave the executed document to defendants; (2) the other plaintiff who denied signing the account application authorized his wife to sign it on his behalf; and (3) immediately above the signature line on the account application it said "[c]ustomer hereby acknowledges that he has received, read and understands the futures account agreement . . . that will govern this account[, and] customer agrees to be bound by these terms and conditions." (Capitalization omitted.)
Contrary to plaintiffs' assertion, there is no evidence in the record indicating the court ignored any evidence. Quite the opposite, it expressly acknowledged plaintiffs' contrary evidence and nevertheless concluded the evidence, "on balance," supported defendants' position. Thus, though plaintiffs provided declarations which conflicted with defendants' assertions, we must conclude the trial court did not err because substantial evidence supports its factual findings.
Likewise, we conclude the court did not abuse its discretion by enforcing the forum selection clause. Plaintiffs made no showing it would be unfair or unreasonable to enforce it, so the court appropriately followed the law to give it effect. (Drulias, supra, 30 Cal.App.5th at p. 703.)
DISPOSITION
The order is affirmed. Defendants are entitled to their costs on appeal.
THOMPSON, J. WE CONCUR: O'LEARY, P. J. FYBEL, J.