Opinion
Case Number: 117874
11-14-2019
JACK RAWDON; JACK C. RAWDON, as Trustee of the Jack Charles Rawdon Living Trust U/T/A dated April 11, 1999, as amended; and DIANA RAWDON, Plaintiffs/Appellants, v. STARWOOD CAPITAL GROUP; STARWOOD VEP CO-INVEST, LLC; EQUITY GROUP INVESTMENTS; EGI-FUND B, LLC; VENTANA EXPLORATION AND PRODUCTION, LLC; ANGRY BEAR INVESTMENTS, LLC; RUSSELL BENNETT, Individually; and HEATHER POWELL, Individually, Defendants/Appellees.
Joe E. White, Jr., Charles C. Weddle III, WHITE & WEDDLE, P.C., Oklahoma City, Oklahoma, and Melissa S. Hedrick, HEDRICK LAW FIRM, Oklahoma City, Oklahoma, for Plaintiffs/Appellants, Sam R. Fulkerson, Lori Fixley Winland, OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C., Oklahoma City, Oklahoma, and Benjamin T. Kurtz, Donna M. Welch, Jeffrey L. William, KIRKLAND & ELLIS LLP, Chicago, Illinois, for Defendants/Appellees.
APPEAL FROM THE DISTRICT COURT OF
OKLAHOMA COUNTY, OKLAHOMA
HONORABLE THOMAS E. PRINCE, JUDGE
AFFIRMED
Joe E. White, Jr., Charles C. Weddle III, WHITE & WEDDLE, P.C., Oklahoma City, Oklahoma,
and
Melissa S. Hedrick, HEDRICK LAW FIRM, Oklahoma City, Oklahoma, for Plaintiffs/Appellants,
Sam R. Fulkerson, Lori Fixley Winland, OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C., Oklahoma City, Oklahoma, and
Benjamin T. Kurtz, Donna M. Welch, Jeffrey L. William, KIRKLAND & ELLIS LLP, Chicago, Illinois, for Defendants/Appellees.
Kenneth L. Buettner, Judge:
¶1 Plaintiffs Jack C. Rawdon (Jack) and Diana Rawdon (Diana) (collectively "the Rawdons") appeal from an order dismissing their suit against Starwood Capital Group, Equity Group Investments, and others that had invested in a company founded by Jack (collectively "Investors"). The Rawdons sought claims including fraud, breach of fiduciary duty, and conspiracy against Investors. The trial court held that a forum selection clause contained in the LLC agreement between the Rawdons and Investors required the controversy be brought in a court seated in New York, New York. Finding that jurisdiction was therefore not proper in Oklahoma, the trial court granted Investors' motion to dismiss. The Rawdons appeal. We affirm the trial court.
¶2 In 2015, Jack formed an oil and gas business venture, Ventana Exploration and Production, LLC (VEP), of which he was the sole member. The Rawdons thereafter worked to build VEP and actively sought investors for the company. In 2016, the Rawdons allowed the first investor to join VEP, at which point VEP's company units were distributed in units categorized as "A" and "B" units. The Rawdons continued to seek additional investors for VEP.
This first investor, O/G Venture, LLC (a/k/a Mo Anderson), is not a defendant in this action.
¶3 In January 2017, VEP and Starwood Capital Group (Starwood) (one of the defendant Investors) entered into a Restricted Unit Award Agreement, where 10,000 "C" units were issued--5,000 to VEP and 5,000 to Starwood. Of the units allocated to VEP, 2,000 were awarded to Jack and 400 were awarded to Diana, with the rest going to other individual stakeholders in VEP. In return for the issuance of units, Starwood committed $10 million to VEP, with the intention of seeking and procuring additional investors in the company. Starwood then pitched VEP to Equity Group Investments (EGI) (another defendant Investor). During negotiations with EGI, the parties discussed the possibility of the creation of a second business venture--VEP II--in which EGI might have been willing to invest if the first VEP investment faired well.
¶4 On March 28, 2017, the Third Amended LLC Agreement (the LLC Agreement) was executed by Starwood, EGI, the Rawdons, and other individual stakeholders of VEP. The Agreement implemented a new "Equity Incentive Plan" whereby VEP's Board could issue additional "C" units to VEP stakeholders and executives. The new incentive plan specified that "C" units granted to executives would vest according to a certain schedule, beginning with 10% vesting at the initial grant (i.e., at the time of execution of the LLC Agreement on March 28, 2017) and an additional 10% vesting every 12 months thereafter. The plan stated that the final 40% would vest immediately upon the sale of VEP. The plan further stated that the units would cease to vest according to the schedule in the event that the "[e]xecutive is no longer a full-time employee of the Company." At the time the Agreement was executed, the "C" units were distributed in the following manner-- Starwood: 5,000 units (45%), EGI: 1,111 units (10%), Jack: 2,000 units (18%), Diana: 400 units (3.6%). Where the Rawdons were "executives" under the definition in the LLC Agreement, however, only 10% of the Rawdons' units vested at the time of the "initial grant." Yet, 100% of EGI and Starwood's units vested at that time. Calculations given in July 2017 gave the potential value for each type of unit upon the successful sale of VEP. According to these calculations, Jack's "C" units were worth approximately $18 million and Diana's were worth approximately $3.5 million.
The remaining "C" units were held by other individual stakeholders, only one of which is a named party in this action (Heather Powell). 400 "C" units (3.6%) were unallocated.
¶5 Following a series of disagreements amongst the parties, the Rawdons were terminated from their positions as executives at VEP June 13, 2018. According to the terms of the Agreement, all of the Rawdons' non-vested "C" units were reacquired by VEP upon their termination. As such, the Rawdons retained only 20% of their "C" units, which were those units that had vested at the time the Rawdons were removed from the company.
¶6 The Rawdons filed suit against Starwood, EGI, VEP, and other stakeholders October 31, 2018. In their petition, the Rawdons alleged fraud, breach of fiduciary duty, conspiracy, malicious wrong, interference with business relations, and unjust enrichment. The Rawdons claimed that Investors created and executed a scheme whereby Investors could defraud the Rawdons out of their "C" units, as well as the opportunity to pursue the VEP II venture, thus retaining the profits for themselves. Investors responded by filing a motion to dismiss for failure to state a claim based upon the inclusion of a forum selection clause in the LLC Agreement. The clause cited by Investors in their motion provided that "any action or proceeding arising out of, or relating to, this agreement" shall be subject to the "exclusive jurisdiction of any state or federal court sitting in New York, New York." The Rawdons opposed the motion to dismiss, arguing (1) that their claims were not encompassed by the Agreement; (2) that the LLC Agreement clause was procured by fraud; and (3) enforcing the forum selection clause would be unfair and unreasonable.
¶7 A hearing was held on the motion to dismiss February 8, 2019, after which the trial court permitted the filing of additional briefs by both parties. Following review of the additional briefs, the trial court granted Investors' motion to dismiss March 13, 2019. In its order granting dismissal, the trial court held that the Rawdons' claims were encompassed by the Agreement and the Rawdons had failed to demonstrate that the forum selection clause itself had been procured by fraud. The Rawdons appeal.
¶8 On appeal, the Rawdons argue the trial court erred in granting Investors' motion to dismiss because (1) the trial court failed to accord the Rawdons' allegations the proper review; (2) the trial court did not allow the Rawdons the opportunity to amend their petition; (3) the trial court erroneously determined that the Rawdons' claims were encompassed by the Third Amended LLC Agreement; and (4) the court failed to consider whether public interest factors weighed against enforcement of the forum selection clause, where the LLC Agreement was allegedly procured by fraud.
¶9 The United States Supreme Court has recognized that parties may agree to submit to the jurisdiction of a particular court by way of a contractual forum selection clause. Nat'l Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 316 (1964). The United States Supreme Court has acknowledged that parties to a contract may agree in advance to submit to the jurisdiction of a given court. Id. A forum selection clause acts as a stipulation wherein the parties ask the court to give effect to their agreement by declining to exercise its jurisdiction. Adams v. Bay, Ltd., 2002 OK CIV APP 117, ¶ 5, 60 P.3d 509. "Absent compelling reasons otherwise, forum selection clauses are enforceable." Id. (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991); The Bremen v. Zapata Off--Shore Co., 407 U.S. 1, 15 (1972) (party resisting the forum selection clause must "clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching")).
¶10 We first address whether the trial court afforded the Rawdons' petition the proper review when ruling upon Investors' motion to dismiss. A party's request to a court to decline jurisdiction in favor of a forum selection clause may be procedurally presented as either a motion to dismiss for failure to state a claim or a motion for summary judgment. Tucker v. Cochran Firm-Criminal Def. Birmingham L.L.C., 2014 OK 112, ¶ 21, 341 P.3d 673. An order granting a motion to dismiss for failure to state a claim according to 12 O.S. § 2012(B)(6) is reviewed de novo. Tuffy's, Inc. v. City of Okla. City, 2009 OK 4, ¶ 6, 212 P.3d 1158. "When reviewing a motion to dismiss, the Court must take as true all of the challenged pleading's allegations together with all reasonable inferences which may be drawn from them." Id. A party seeking to enforce a forum selection clause by way of a §2012(B)(6) motion to dismiss must first demonstrate prima facie validity of the forum-selection clause. Tucker, 2014 OK 112, ¶ 33, 341 P.3d 673. If the moving party meets its burden, the burden then shifts to the non-moving party to show that public interest factors support the non-enforcement of the forum selection clause such that "transfer to the forum for which the parties bargained is unwarranted." Id. ¶ 32.
¶11 In their petition below, the Rawdons alleged Investors engaged in a "tortious plan or scheme to defraud [the Rawdons] out of at least eighty percent (80%) of their 'C' units and cut them out of the joint venture 'VEP II.'" The Rawdons alleged that the Investors' plan began with the issuance of additional "C" units to EGI, thus diluting the Rawdons' "C" units, and then by requiring the Rawdons to sign the LLC Agreement, which provided for the new incentive plan that delayed vesting of "C" units for executives. The Rawdons argued the Investors committed fraud by inducing the Rawdons to sign the Agreement by assuring them that they would receive the benefit of the cash out of their "C" units upon the eventual sale of VEP, as well as the opportunity to participate in the future joint venture VEP II. The Rawdons allege that the Investors' actual incentive for presenting the Agreement was so the Investors could later terminate the Rawdons and strip them of the majority of their "C" units.
¶12 The Rawdons allege that the trial court failed to apply the proper standard in ruling upon Investors' motion to dismiss because the trial court did not accept the allegations in the Rawdons' petition as true. The Rawdons argue that, had the trial court accepted their petition on its face, the trial court would have considered their claims' connection to the Restricted Unit Award Agreement (the Award Agreement), which contained a forum selection clause designating Oklahoma as the forum. The Award Agreement was the document executed by EGI and VEP March 28, 2018 (the same day the LLC Agreement was executed), by which additional "C" units were issued to EGI. The Rawdons, in their individual capacities, were not parties to the Award Agreement. The forum selection clause in the Award Agreement provides only that "all actions brought to interpret or enforce [the Award Agreement] shall be brought in the courts located in Oklahoma City, Oklahoma . . . ." (emphasis added). The Rawdons' claims as alleged in their petition, however, do not require the interpretation or enforcement of the Award Agreement. In fact, their claims seek the opposite--the non-enforcement of the Award Agreement. Additionally, the Award Agreement is binding only between EGI and VEP, and does not apply to disputes between the Rawdons and Defendants. As such, the forum selection clause in the Award Agreement is inapplicable here and the trial court afforded the Rawdons the proper standard of review.
¶13 The Rawdons next argue that, in the event the trial court determined their claims to be insufficiently pled, the trial court should have granted them leave to amend their petition. The only place in the record on appeal that Rawdons request leave to amend their petition is in the conclusion of their response to Investors' motion to dismiss. There, the Rawdons asked that "[i]f . . . there is any doubt as to the [Rawdons'] claims, [the Rawdons] request leave of [the trial court] to amend and further plead any claims as necessary."
¶14 "The denial of leave to amend is a matter of discretion, which will not be disturbed unless the discretion is abused." City of Blackwell v. Wooderson, 2017 OK CIV APP 33, ¶ 5, 397 P.3d 491 (citing Prough v. Edinger, Inc., 1993 OK 130, ¶ 8, 862 P.2d 71). Under 12 O.S. Supp. 2018 § 2015(A), a trial court should freely give leave to amend where justice so requires. A trial court does not abuse its discretion by not granting leave to amend where the denial is based on "1) undue delay; 2) bad faith or dilatory motive by the movant; 3) repeated failure to cure deficiencies by amendments previously allowed; 4) undue prejudice to the opposing party; or 5) futility of amendment." Wooderson, 2017 OK CIV APP 33, ¶ 5, 397 P.3d 491 (citing Prough, 1993 OK 130, ¶ 9, 862 P.2d 71).
¶15 Here, the Rawdons failed to provide a specific reason why they should have been granted leave to amend their petition. Rather, the one-line request found in the Rawdons' response to Investors' motion to dismiss appears as an afterthought. Neither do the Rawdons allege what amendment might have remedied their petition such that Investors would not have prevailed on their motion to dismiss. Further, it was certainly not the trial court's duty to explain what amendment of the petition might allow the Rawdons to successfully overcome Investors' motion to dismiss. Because the Rawdons' alleged "request to amend" was so vague as to render it impossible to determine how such an opportunity would have been required in the interests of justice, we hold that it was not an abuse of discretion for the trial court to deny the Rawdons' request.
¶16 The third issue raised on appeal is whether the Rawdons' claims were encompassed by the forum selection clause in the LLC Agreement. The clause states: "[E]ach of the parties [to the LLC Agreement] hereto submits to the exclusive jurisdiction of any state or federal court sitting in New York, New York in any action or proceeding arising out of, or relating to, [the LLC Agreement]." The Rawdons argue this language does not encompass their claims against Investors.
¶17 A party's obligations under a contract are determined by the language contained therein, which the parties to the contract have negotiated and agreed upon. Tucker, 2014 OK 112, ¶ 20, 341 P.3d 673. The parties' intent is the paramount consideration in interpreting a contract. May v. Mid-Century Ins. Co., 2006 OK 100, ¶ 22, 151 P.3d 132. In determining whether the claims fall under the forum selection clause, we must interpret the language of the clause and ascertain the intent of the parties. Here, the important question is whether the words "arising out of, or relating to" are sufficiently broad so that Rawdons' claims against Investors must be litigated according to the forum selection clause.
¶18 The Supreme Court of Oklahoma has not explicitly ruled upon the scope of a particular forum selection clause. However, other Oklahoma courts have interpreted clauses governing litigation of disputes pertaining to a contract with varying results. Some Oklahoma courts have construed particular contractual clauses narrowly. In Hawk Enterprises, Inc. v. Cash America International, Inc., 2012 OK CIV APP 66, ¶ 9, 282 P.3d 786, the Oklahoma Court of Civil Appeals interpreted a choice of law provision in a contract that provided Texas law shall govern "all matters relating to [the contract's] validity, construction, performance, and enforcement." There, the Hawk Enterprises court determined that the choice of law clause was not broad enough to include the appellant's claims for tortious interference against appellee. Id. ¶ 10. Similarly, in CITGO Petroleum Corp., v. Home Service Oil Co., No. 09--CV--0503--CVE--PJC, 2009 WL 4348391, at *4 (N.D. Okla. Nov. 30, 2009), the U.S. District Court for the Northern District of Oklahoma determined a forum selection clause that did not specify which claims it encompassed would not be construed broadly so as to "avoid an unreasonable interpretation of the clause."
¶19 Other Oklahoma courts, however, have construed specific language to include a broader range of claims. In Flanagan v. Access Midstream Partners, L.P., No. 17-CV-315-GKF-JFJ, 2017 WL 4324535, at *2 (N.D. Okla. Sept. 28, 2017), the U.S. District Court for the Northern District of Oklahoma held that a forum selection clause providing that "[v]enue for any dispute arising under [the contract] shall lie in Tarrant County, Texas" was sufficiently broad so as to include the appellant's RICO claim. Similarly, in Cass v. Balboa Capital Group, No. CIV--13--483--SPS, 2015 WL 1428076, at *1-2 (E.D. Okla. March 27, 2015), the U.S. District Court for the Eastern District of Oklahoma construed a forum selection clause providing that "[v]enue for any action related to [the contract] shall be in an appropriate court in Orange County, California," encompassed tort claims relating to the agreement.
¶20 Here, the relevant forum selection clause more closely resembles those provisions construed more broadly by Oklahoma courts. The clause in this case dictates that claims "arising out of, or relating to" the agreement be litigated in New York, New York. The language here is broader than that in Hawk Enterprises, which only encompassed "matters relating to [the contract's] validity, construction, performance, and enforcement." The clause here is also unlike that in CITGO, which did not specify which claims the clause encompassed. Instead, the language in the LLC Agreement between the Rawdons and Investors is most similar to the language in Flanagan and Cass, where those provisions encompassed claims which "arise out of" or "related to" the respective contracts. The Rawdons claim this suit--the allegations of a fraudulent scheme by Investors to wrongfully divest the Rawdons of their "C" units--relates directly to the LLC Agreement, where the allegedly fraudulent conduct originated via the agreement. As such, we hold the Rawdons' claims arise out of or relate to the LLC Agreement and are thus encompassed by the forum selection clause contained therein.
¶21 Lastly, we consider whether public interest factors weigh against enforcement of the forum selection clause. The Rawdons argue the enforcement of the forum selection clause would go against public policy because the LLC Agreement was allegedly procured by fraud. As previously stated, in challenging the enforcement of a forum selection clause, the party seeking to enforce the clause must first establish a prima facie case that the clause is valid. Tucker, 2014 OK 112, ¶ 33, 341 P.3d 673. The burden then shifts to the party challenging the clause to show "that transfer to the forum for which the parties bargained is unwarranted." Id. ¶ 32. In considering whether justice requires the non-enforcement of the clause, a trial court "should not consider arguments about the parties' private interests," as the private interests have already been expressed via the forum selection clause. Id. Instead, a trial court "may consider arguments about public-interest factors only." Id. Of course, the enforcement of a forum selection clause obtained by fraud violates public policy and is voidable. First Nat'l Bank in Durant v. Honey Creek Entm't Corp., 2002 OK 11, ¶ 12, 54 P.3d 100 ("Fraud vitiates everything it touches, and a contract obtained thereby is voidable.") (quoting Am. Asbestos Prods. Co. v. Smith Bros., 1937 OK 604, ¶ 10, 73 P.2d 839).
¶22 In this case, the trial court determined that because the Rawdons had not alleged fraud in the inducement of the forum selection clause specifically, the enforcement of the clause was not against public policy. In so holding, the trial court cited to Tucker, which held that a plaintiff "may raise any cognizable contract-based claim, including a claim based on public policy, when that claim relates to the forum-selection clause itself as opposed to the contract as a whole." Tucker, 2014 OK 112, ¶ 33, 341 P.3d 673 (emphasis in original). The Rawdons challenge the trial court's holding, arguing the trial court misconstrued the Tucker court's holding and failed to recognize Oklahoma precedent.
¶23 The doctrine to which the trial court referred in its order, and which the Rawdons challenge here, is known as the "separability doctrine." Shaffer v. Jeffery, 1996 OK 47, ¶ 18, 915 P.2d 910. The separability doctrine, having its origins in the United States Supreme Court case Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), provides that an arbitration clause is severable from the rest of the contract, such that "where there are no allegations of fraud in the making of the specific agreement to arbitrate, that agreement to arbitrate is separable and stands apart from allegations of infirmities with the other provisions of the agreement." Shaffer, 1995 OK 47, ¶ 18, 915 P.2d 910. In Shaffer, the Oklahoma Supreme Court declined to recognize the Prima Paint separability doctrine under Oklahoma law. Id. ¶ 24. The Oklahoma Supreme Court agreed with the reasoning in other minority states refusing to adopt the separability doctrine, noting that "courts have more expertise in resolving issues that go to the validity of a contract" and are "best suited to determine issues such as fraud." Id. ¶ 22 (citing City of Blaine v. John Coleman Hayes & Assocs., Inc., 818 S.W.2d 33, 37--38 (Tenn. App.1991); George Engine Co., Inc. v. S. Shipbuilding Corp., 350 So.2d 881, 886 (La. 1977)). Adopting the reasoning in Justice Black's dissent in Prima Paint, the Oklahoma Supreme Court held:
[A]llegations of fraud in the inducement of the . . . contract or agreement generally, apart from the clause to arbitrate, must be resolved by the court prior to either compelling arbitration or dismissing the cause. This means that if Plaintiffs allege fraud in the inducement of the arbitration clause itself or the underlying contract of which the arbitration agreement is a part, the District Court must adjudicate that issue prior to granting the Firm any relief based upon the validity of the arbitration clause.Shaffer, 1996 OK 47, ¶ 26, 915 P.2d 910.
¶24 On appeal, the Rawdons argue the trial court went against the Oklahoma Supreme Court's precedent in Shaffer by applying the separability doctrine to the forum selection clause here. Generally, states which have accepted the Prima Paint application of separability to arbitration clauses have applied the same reasoning to forum selection clauses. Tucker, 2014 OK 112, ¶ 27 n. 40, 341 P.3d 673 (citing Intercall Telecomms., Inc. v. Instant Impact, Inc., 376 F.Supp.2d 155 (D.P.R.2005) ("Courts must distinguish between challenges to the validity of the underlying contract . . . and to the validity of the forum selection clause in particular . . . Under the purview of this separability doctrine, a forum selection clause is deemed to be separate from, and independent of, the contract containing it.")). Similarly, in a footnote, the United States Supreme Court upheld the application of the separability doctrine to forum selection clauses:
See also Kelly Amanda Blair, A Judicial Solution to the Forum-Selection Clause Enforcement Circuit Split: Giving Erie a Second Chance, 46 Ga. L. Rev. 799, 801-33 (2012); Symeon C.Symeonides, What Law Governs Forum Selection Clauses, 78 La. L. Rev. 1119, 1120-1161 (2018). --------
In [The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 13 (1972)] we noted that forum-selection clauses 'should be given full effect' when 'a freely negotiated private international agreement (is) unaffected by fraud' . . . This qualification does not mean that any time a dispute arising out of a transaction is based upon an allegation of fraud, as in this case, the clause is unenforceable. Rather, it means that an arbitration or forum-selection clause in a contract is not enforceable if the inclusion of that clause in the contract was the product of fraud or coercion.Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 n. 14 (1974).
¶25 Though Oklahoma has declined to apply the separability doctrine to arbitration clauses, the Oklahoma Supreme Court has not yet ruled upon the issue of whether the doctrine should be applied to forum selection clauses. In Tucker, 2012 OK 112, ¶ 34, 341 P.3d 673, the Court discussed the possibility of applying separability to forum selection clauses, but ultimately declined to decide the issue. Id. ("We decline to decide these issues prior to their litigation in the trial court using a proper procedure.") In its discussion of the issue, however, the Supreme Court cited to other courts upholding the application of the separability doctrine to forum selection clauses. Id. ¶ 27 n. 40 (citing Intercall Telecomms., 376 F.Supp.2d 155 (D.P.R. 2005), and noted that the appellant could bring any contract-based claim when the claim "relates to the forum-selection clause itself as opposed to the contract as a whole." Tucker, 2014 OK 112, ¶ 33, 341 P.3d 673 (emphasis in original). The Court also noted that Oklahoma has historically recognized that a contract is severable, depending upon "particular circumstances in each case." Id. ¶ 27 (citing Greater Okla. City Amusements, Inc. v. Moyer, 1970 OK 213, ¶ 10, 477 P.2d 73, 75).
¶26 A forum selection clause which is established to be prima facie valid shall be enforced absent compelling reasons to the contrary. Adams, 2002 OK CIV APP 117, ¶ 5, 60 P.3d 509. A forum selection clause that is valid on its face is the best indicator of the contractual intent of the parties. Tucker, 2014 OK 112, ¶ 32, 341 P.3d 673. Further, the public policy reasons cited by the Shaffer court in declining to apply the Prima Paint separability doctrine to arbitration clauses under Oklahoma law are not applicable to forum selection clauses. Specifically, the Shaffer court's determination that courts are best suited to rule upon issues pertaining to the validity of contracts does not apply to the enforcement of forum selection clauses that designate only the place and venue--not the method--in which a dispute is to be resolved. This is because the transfer of a matter to another jurisdiction does not deprive the parties of the opportunity to have the issues of validity examined by a judicial body, unlike when a dispute is submitted to arbitration. Accordingly, because we will seek to uphold the terms agreed upon by contractual parties, and because the Shaffer court's concerns regarding the separability doctrine are not present in the context of forum selection clauses, we hold the application of the separability doctrine to forum selection clauses is consistent with Oklahoma law. Therefore, where a party has alleged the invalidity of a contract generally, but has not challenged the validity of the forum selection clause itself, the court need not rule upon the issue of the contract's validity prior to enforcing the forum selection clause.
¶27 Here, the Rawdons did not allege that Investors fraudulently induced them to submit to the jurisdiction of courts in New York, New York, by way of the forum selection clause. Instead, the Rawdons' petition simply alleged a larger, more generalized scheme of fraud by which Investors allegedly sought to wrongfully divest the Rawdons of their shares in VEP. These general allegations of fraud do not speak to the validity of the forum selection clause specifically, and the trial court therefore properly applied the separability doctrine and determined that the forum selection clause should be enforced.
¶28 Because the trial court (1) afforded the Rawdons the proper standard of review on Investors' § 2012(b)(6) motion to dismiss, (2) did not abuse its discretion in disallowing the Rawdons the opportunity to amend their petition, (3) properly determined that the Rawdons' claims are encompassed by the LLC Agreement, and (4) applied the separability doctrine to the forum selection clause and determined that there was no allegation of fraud as to the clause itself, we affirm the holding of the trial court.
¶29 AFFIRMED.
GOREE, C.J., and JOPLIN, J., concur.