Trinity v. Apex Directional Drilling LLC

434 P.3d 20, 363 Or. 257
CourtOregon Supreme Court
DecidedJuly 5, 2018
DocketCC 16CV00770 (SC S065147)
StatusPublished
Cited by2 cases

This text of 434 P.3d 20 (Trinity v. Apex Directional Drilling LLC) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trinity v. Apex Directional Drilling LLC, 434 P.3d 20, 363 Or. 257 (Or. 2018).

Opinion

BALMER, J.

**259This mandamus proceeding arises from a dispute about a contract's forum-selection clause. Trinity Bank-here, the adverse party-loaned money to Apex, a drilling company. Lachner, a part owner of Apex and the relator in this case, signed a personal guaranty of the loan. The personal guaranty, which Trinity drafted, contained a forum-selection clause:

"You agree that any litigation, related to or arising from this guaranty shall be brought only in the City and County of San Francisco, California and you consent to personal jurisdiction in either state or federal court."

Apex defaulted on the loan, and Lachner defaulted on the guaranty. Trinity filed an action in Clackamas County Circuit Court asserting separate breach of contract claims against Apex (on the loan) and Lachner (on the guaranty). Apex made no appearance, and a default judgment was entered against it. Lachner filed a motion to dismiss the action against him under ORCP 21 A(1), because the action was not filed in San Francisco as required by the forum-selection clause. See Roberts v. TriQuint Semiconductor, Inc., 358 Or. 413, 417, 364 P.3d 328 (2015) (party may move to dismiss action under ORCP 21 A(1) based on forum-selection agreement). Neither party disputed the meaning of the forum-selection clause, only whether it should be enforced. The trial court denied the motion, without making any findings or conclusions of law, stating that it "ha[d] discretion in [the] matter." We conclude that the clause should be enforced.

On Lachner's petition, this court issued an alternative writ of mandamus directing the trial court to vacate its order denying Lachner's motion to dismiss and grant that motion, or to show cause why it should not do so. The trial court declined to grant the motion to dismiss, but held another hearing on the motion, considered materials submitted by the parties, and issued written factual findings supporting its denial of the motion. Those findings generally concluded that Oregon was the more reasonable forum. Because the trial court declined to vacate its order and grant **260the motion to dismiss, the parties proceeded to argument in this court.

As a preliminary matter, Trinity argues that mandamus is not appropriate in this case, because the case can be litigated through trial to a final judgment and Lachner can raise his forum-selection clause issue in an appeal from that judgment. In that respect, Trinity argues, Lachner has a "plain" and "adequate" remedy by means of an appeal. See ORS 34.110 (writ of mandamus shall not issue "in any case where there is a plain, speedy and adequate remedy in *22the ordinary course of the law"). Trinity's objection is not well taken. This court has held that mandamus is an appropriate mechanism for challenging a trial court's decision not to enforce a forum-selection clause. Roberts , 358 Or. at 417, 364 P.3d 328. When the decision not to enforce a forum-selection clause falls outside the trial court's permissible range of discretion, i.e. , when the law compels a single course of action, a party may challenge a trial court's contrary decision through a petition for writ of mandamus. Id. If the trial court committed legal error, this court, in its discretion, may issue a writ and effectively reverse the trial court decision.

Turning to the merits, this court has held that the law of the forum in which the action was filed governs the decision whether to enforce the forum-selection clause. Id. As to enforceability, we have stated that "forum-selection clauses are presumptively valid unless 'unfair or unreasonable.' " Id. at 426-27, 364 P.3d 328 (quoting Reeves v. Chem Industrial Co. , 262 Or. 95, 100-01, 495 P.2d 729 (1972) ). A party filing an action outside the selected forum bears the burden of persuading the court not to enforce the clause. Reeves, 262 Or. at 98, 495 P.2d 729.

This court most recently applied the "unfair or unreasonable" standard in Roberts , where we held that a forum-selection clause in a Delaware corporation's bylaws was enforceable and required the dismissal of shareholder derivative actions filed in Multnomah County. 358 Or. at 415, 364 P.3d 328. Although the forum provision was included in the corporate bylaws, rather than a separate contract, we applied the unfair or unreasonable standard set out in Reeves . We discussed, as examples, three circumstances where that **261standard may be met, only one of which is even arguably applicable here.

First, if the forum-selection clause is contained in a " 'contract[ ] of adhesion' that [was] 'the product of unequal bargaining power between the parties,' " the clause should be disregarded. Roberts , 358 Or. at 427,

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Cite This Page — Counsel Stack

Bluebook (online)
434 P.3d 20, 363 Or. 257, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trinity-v-apex-directional-drilling-llc-or-2018.