Klarfeld v. Vestige Group, L.L.C.

2025 Ohio 2678

• Court: Ohio Court of Appeals
• Decided: July 31, 2025
• Docket: 114486
• Status: Published

Opinion

[Cite as Klarfeld v. Vestige Group, L.L.C., 2025-Ohio-2678.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

ARI B. KLARFELD, ET AL., :

Plaintiffs-Appellants, : No. 114486 v. :

THE VESTIGE GROUP LLC, :

Defendant-Appellee. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: July 31, 2025

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-24-993033

Appearances:

Dworken & Bernstein Co., L.P.A., and Erik L. Walter, for appellants.

Davis & Young, Thomas W. Wright, and Matthew P. Baringer, for appellee.

LISA B. FORBES, J.:

Ari B. Klarfeld (“Klarfeld”) and New Direction Driving School, LLC

(“New Direction”) (collectively, “Appellants”) appeal the judgment granting The

Vestige Group, LLC’s (“Vestige”) motion to dismiss. For the following reasons, we

affirm the trial court’s decision. I. Facts and Procedural History

New Direction is a driving school in Ohio that Klarfeld owns and

operates. Vestige is a limited-liability company that operates in North Carolina,

providing camera and GPS services. This appeal concerns whether New Direction

and Klarfeld can sue Vestige in the Cuyahoga County Court of Common Pleas for

damaging its cars.

On February 19, 2024, Appellants filed a complaint, alleging breach

of contract, unjust enrichment, negligence, tortious interference with business

expectancies, and tortious interference with business contracts.

Appellants alleged that New Direction and Vestige contracted for

Vestige to install cameras in New Direction’s cars for a monthly fee. Per Appellants,

“all of the cameras were installed incorrectly and . . . caused severe damage to every

car they were installed in,” leaving them inoperable. New Direction replaced the

damaged cars with new cars, in which Vestige again tried to install cameras. The

complaint states that this installation was done incorrectly, too, damaging the new

cars. Appellants allege that an unspecified number of the damaged cars were

Klarfeld’s “personal vehicles,” although New Direction used them to train student

drivers.

Attached to the complaint were contracts titled “GPS Vendor Services

Agreement” that New Direction and Vestige signed in 2021, 2022, and twice in 2023

(“the Service Agreements”). The Service Agreements each include a forum-selection

clause, which states that “[t]his agreement will be governed by, enforced in and interpreted according to the laws of the state of South Dakota. You consent to

exclusive jurisdiction in the state or Federal courts of North Carolina.”

On April 19, 2024, Vestige moved to dismiss the complaint for lack of

subject-matter jurisdiction under Civ.R. 12(B)(1), lack of personal jurisdiction under

Civ.R. 12(B)(2), improper venue under Civ.R. 12(B)(3), and failure to state a claim

upon which relief can be granted under Civ.R. 12(B)(6). Appellants filed a brief in

opposition to the motion to dismiss on June 7, 2024.

On September 24, 2024, the court issued a journal entry granting the

motion to dismiss, enforcing the forum-selection clause in the Service Agreements.

Klarfeld and New Direction appealed, raising the following assignment of error:

“The Trial Court’s decision to grant Appellee’s Motion to Dismiss was in error.”

II. Law and Analysis

Appellants assert that the trial court improperly dismissed their

claims because the forum-selection clause requiring them to sue Vestige in North

Carolina was unenforceable. We disagree.

We review de novo the enforceability of a forum-selection clause.

Original Pizza Pan v. CWC Sports Group, Inc., 2011-Ohio-1684, ¶ 10 (8th Dist.).

“In a de novo review, we afford no deference to the trial court’s decision and

independently review the record to determine whether the trial court’s judgment is

appropriate.” Choice Hotels Internatl., Inc. v. C&O Developers, L.L.C., 2022-Ohio-

3234, ¶ 20 (8th Dist.). “The party challenging the forum selection clause bears a heavy

burden of establishing that it should not be enforced.” Original Pizza Pan at ¶ 10.

The party challenging the clause may “present evidentiary materials supporting the

invalidity of the clause.” Id. at ¶ 16, citing Discount Bridal Servs. v. Kovacs, 127

Ohio App.3d 373, 376-377 (8th Dist. 1998).

“‘[A] forum selection clause in a commercial contract should control,

absent a strong showing that it should be set aside.’” Pizza Pan at ¶ 12, quoting

Kennecorp Mtge. Brokers v. Country Club Convalescent Hosp., 66 Ohio St.3d 173,

175 (1993). Courts set aside forum-selection clauses in a commercial contract if

there is “evidence of fraud and overreaching” or if it can be clearly shown that

enforcement of the clause would be “unreasonable and unjust.” Id., citing id.

Reviewing the record de novo, we find the trial court properly

dismissed this action for violating the forum-selection clause in the Service

Agreements.

A. Commercial Contracts

We first find that the forum-selection clause was part of a commercial

contract between business entities, which are ordinarily valid and enforceable. The

identifying information in the Service Agreements demonstrates that they are

commercial in nature. Each Service Agreement lists “New Direction Driving School,

LLC” under “Company Information.” In addition, Klarfeld signed each contract as

“Owner.” The way Appellants used and financed the damaged vehicles also

demonstrates that the Service Agreements are commercial contracts. Though

Klarfeld allegedly used some of the damaged cars as his “personal vehicles,” the

complaint states that “[a]ll vehicles are driver-education vehicles . . . .” The

complaint also alleges that Appellants “paid off all of the vehicles that had the

original installations done in them with proceeds from an SBA [Small Business

Administration] loan . . . .”

For the above reasons, we find the forum-selection clauses were part

of commercial contracts between business entities, which — with limited exceptions

— are valid and enforceable. As we find below, these exceptions do not apply.

B. Fraud or Overreaching

First, we address “evidence of fraud or overreaching.” When deciding

whether to enforce a forum-selection clause, fraud “‘must relate directly to the

negotiation or acceptance of the forum selection clause itself, and not just to the

contract generally.’” Original Pizza Pan, 2011-Ohio-1684, at ¶ 13, quoting Four

Seasons Ents. v. Tommel Fin. Servs., Inc., 2000 Ohio App. LEXIS 5223, *6 (8th

Dist. Nov. 9, 2000). Appellants made no allegations and submitted no evidence

regarding negotiation for or acceptance of the forum-selection clause. We find no

evidence of fraud or overreaching in the formation of the provision that would justify

not enforcing it. C. Unreasonable and Unjust

We also find Appellants have not clearly shown that it would be

“unreasonable and unjust” to require them to litigate in North Carolina. Honoring

a forum-selection clause is unreasonable and unjust where “enforcement under the

particular circumstances of the case would result in litigation in a jurisdiction so . . .

difficult and inconvenient that plaintiff would for all ‘practical purposes be deprived

of his day in court.’” Original Pizza Pan at ¶ 14, quoting Barrett v. Picker Internatl.,

Inc., 68 Ohio App.3d 820, 824 (8th Dist. 1990), quoting Breman v. Zapata Off-

Shore Co., 407 U.S. 1, 9-12 (1972). In Barrett, this court established factors that

guide this determination. They include “(1) which law controls the contractual

dispute; (2) what residency do the parties maintain; (3) where will the contract be

executed; (4) where are the witnesses and parties to the litigation located; and (5)

whether the forum’s designated location is inconvenient to the parties.” Barrett at

825, citing Clinton v. Janger, 583 F.Supp. 284 (N.D.Ill. 1984).

Regarding which law controls the contractual dispute, the Service

Agreements require this case to proceed under South Dakota law. This factor

therefore does not support Appellants’ request to set aside their agreement with

Vestige to litigate in North Carolina.

As for the parties’ residency, this case offers us a choice between

making a North Carolina company defend itself in Ohio or making an Ohio company

advance its claims in North Carolina. Regardless of our decision, one side will have

to litigate “on the road.” By entering into the Service Agreements, the parties agreed that it would be the Appellants. This factor, too, provides no basis for not enforcing

the forum-selection clause.

On the third factor, where the contract was executed, the complaint

does not state where the contracts were signed. Klarfeld’s affidavit, attached to his

brief in opposition to Vestige’s motion to dismiss, states that “[a]ll of the contracts

signed by me were signed in . . . Ohio.” However, we have no information regarding

where Vestige signed the contract. This factor does not weigh in favor of litigating

this case in Ohio.

Regarding the location of the witnesses and parties, at least one —

Klarfeld — lives in Ohio. However, Appellants’ brief states that Vestige “hired and

sent installers to Ohio,” indicating that not all the witnesses to the installation are in

this state. Further, Vestige is located in North Carolina. We have no information

regarding whether its representatives are in Ohio. This factor does not demonstrate

that litigating this case in North Carolina is unreasonable and unjust.

We turn now to Appellants’ arguments about the final Barrett factor,

convenience of the parties. First, we are not persuaded that the location of the

damaged cars — Ohio — makes litigating in North Carolina so inconvenient that

enforcing the forum-selection clause is unreasonable and unjust, as Appellants

argue. Appellants posit that enforcing the clause would require them to “somehow

have all of the vehicles taken to North Carolina . . . .” Appellants do not explain why

this would be necessary. Appellants attached to their complaint images that they claim show damage to their cars. Among other possible ways to present evidence,

Appellants could provide these photos to a North Carolina court.

Further, Appellants argue that requiring Klarfeld to bring this case in

North Carolina is unreasonable and unjust because he suffers from a medical

condition. In an affidavit, Klarfeld attests that he has “severe medical issues and

conditions which prohibit [him] from traveling long distances and causes [him]

multiple hospital visits and stays.” However, Klarfeld’s affidavit does not specify

from what medical condition he suffers, how it affects him physically, or what

treatment is required. Appellants have not provided any medical records.

Appellants have not shown that Klarfeld’s medical condition makes litigating in

North Carolina so inconvenient as to deprive him of his day in court.

Appellants argue the Health Insurance Portability and Accountability

Act (“HIPAA”) protects Klarfeld from having to disclose information about his

condition. However, HIPAA governs health-care providers; it does not prevent an

individual from choosing to disclose his own medical information. See 45 C.F.R.

160.103 (defining “covered entity” for purposes of HIPAA). Klarfeld put his own

medical status at issue by contesting the forum-selection provision on that basis.

Having considered the Barrett factors, we find that Appellants have

not demonstrated that, under the circumstances of this litigation, proceeding in

North Carolina will deprive them of their day in court. We therefore find that

enforcing the forum-selection clause is not unreasonable and unjust. For the reasons above, dismissal was appropriate. Accordingly, the

sole assignment of error is overruled.

Judgment affirmed.

It is ordered that appellee recover from appellants costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said court to carry this judgment

into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

______________________________ LISA B. FORBES, JUDGE

MICHELLE J. SHEEHAN, P.J., and KATHLEEN ANN KEOUGH, J., CONCUR