Vallejo Enter. v. Boulder Image

950 So. 2d 832, 2006 WL 3113543
CourtLouisiana Court of Appeal
DecidedNovember 3, 2006
Docket2005 CA 2649
StatusPublished
Cited by14 cases

This text of 950 So. 2d 832 (Vallejo Enter. v. Boulder Image) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vallejo Enter. v. Boulder Image, 950 So. 2d 832, 2006 WL 3113543 (La. Ct. App. 2006).

Opinion

950 So.2d 832 (2006)

VALLEJO ENTERPRISE, L.L.C.
v.
BOULDER IMAGE, INC.

No. 2005 CA 2649.

Court of Appeal of Louisiana, First Circuit.

November 3, 2006.

*834 Joseph R. Ward, Jr., Covington, Counsel for Plaintiff/Appellant Vallejo Enterprise, L.L.C.

Stephen L. Williamson, Jeffrey W. Peters, New Orleans, Counsel for Defendant/Appellee Boulder Image, Inc.

Before: KUHN, GAIDRY, and WELCH, JJ.

GAIDRY, J.

This is an appeal of a judgment sustaining a declinatory exception of improper venue, based upon a forum-selection clause in the contract between the parties. For the following reasons, we amend the judgment and affirm the judgment as amended.

FACTS AND PROCEDURAL HISTORY

On January 1, 2004, the plaintiff-appellant, Vallejo Enterprise, L.L.C. (Vallejo), a domestic business enterprise, entered into a distributorship agreement with the defendant-appellee, Boulder Image, Inc. (Boulder), an Arizona manufacturer of synthetic stone and other masonry products. The agreement provided exclusive distribution *835 rights to Vallejo for a term of two years, extendable for additional one-year terms at its option. The agreement also contained the following provision, incorporating a choice-of-law clause and a forum-selection clause:

9. GOVERNING LAW
This agreement shall be construed and interpreted in accordance with Arizona law and any suits with respect to this transaction contemplated herein shall be instituted in courts having their forum with [sic] the state of Arizona.

On February 23, 2005, Vallejo filed a petition in the 22nd Judicial District Court for the Parish of St. Tammany, seeking rescission of the distributorship agreement on the grounds of fraud, together with damages and attorney fees as authorized by La. C.C. art. 1958. In its petition, Vallejo alleged that prior to the execution of the agreement, Boulder made material misrepresentations as to the number of established jobbers or purchasers of its products in the distributorship territory. Vallejo further alleged that based upon these alleged misrepresentations, it was fraudulently induced into entering the agreement. Thus, it contends that the contract is void ab initio under La. C.C. art. 1948, as its consent was obtained through fraud.

Boulder responded to Vallejo's petition with a declinatory exception of improper venue, objecting to the jurisdiction and venue of the trial court by reason of the forum-selection clause quoted above.[1]

The hearing on Boulder's exception was held on July 27, 2005. At the conclusion of the hearing, the trial court ruled in favor of Boulder. Its judgment sustaining the declinatory exception was signed on August 3, 2005, and provided that Vallejo's claims were dismissed with prejudice. Vallejo now appeals, assigning as error the trial court's sustaining the exception and dismissing its action.

DISCUSSION

Forum-selection clauses, or choice-of-exclusive-forum clauses,[2] are prima facie valid, legal, and binding in Louisiana, and a party seeking to set aside such a provision bears a heavy burden of proof. See Pitts, Inc. v. Ark-La Resources, L.P., 30,836, p. 2 (La.App. 2nd Cir.8/19/98), 717 So.2d 268, 270. Such a clause should be enforced unless the resisting party clearly proves that enforcement would be unreasonable and unjust, or that the clause arises from fraud or overreaching, or that enforcement would contravene a strong public policy of the forum where the suit is brought. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15-16, 92 S.Ct. 1907, 1916, 32 L.Ed.2d 513 (1972). For the forum-selection clause to be unenforceable on the grounds of fraud or overreaching, it must be shown that the inclusion of the clause in the contract was the product of fraud or coercion. Scherk v. Alberto-Culver *836 Co., 417 U.S. 506, 519 n. 14, 94 S.Ct. 2449, 2457 n. 14, 41 L.Ed.2d 270 (1974).

Fraud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction. La. C.C. art. 1953. Error induced by fraud need not concern the cause of the obligation to vitiate consent, but it must concern a circumstance that has substantially influenced that consent. La. C.C. art. 1955.[3]

On the trial of the declinatory exception, evidence may be introduced to support or controvert any of the objections pleaded, when the grounds thereof do not appear from the petition, the citation, or return thereon. La. C.C.P. art. 930. In pleading fraud or mistake (error), the circumstances constituting fraud or mistake must be alleged with particularity. See La. C.C.P. art. 856. However, fraud need only be proved by a preponderance of the evidence and may be established by circumstantial evidence. La. C.C. art. 1957.

The terms of the agreement at issue were not disputed; in fact, Vallejo's counsel unequivocally advised the trial court that his client "[was] not contesting any provision in the contract" and that there was "no misinterpretation or misunderstanding or any ambiguity whatsoever." At the hearing of Boulder's exception, Vallejo offered no evidence in support of its petition's allegations, and opted to rely upon the bare allegations of its petition in lieu of presenting testimony from its potential witnesses on the issue of fraud.[4]

The agreement at issue contained no express warranty or other representation by Boulder as to the number of established jobbers or product purchasers, the subject of the alleged fraudulent misrepresentation. In fact, the agreement required Vallejo as distributor to "actively solicit business and promote the sale of [Boulder's] Products to potential customers. . . ." It also contained an integration clause which provided that all of the agreement's terms were set forth therein and that "there [were] no other warranties, obligations, covenants or understandings between the parties." This integration clause would not necessarily preclude the use of parol evidence to show error or fraud, however. See La. C.C. art. 1848. It was therefore incumbent upon Vallejo to overcome the presumption in favor of the forum-selection clause's validity by proof of fraud or a showing that its enforcement would be unreasonable or unjust, or contrary to the established public policy of this state.

In determining whether enforcement of a forum-selection clause would be unreasonable or unjust, the party seeking *837 to avoid its enforcement must show that the chosen forum is seriously inconvenient for the trial of the action. M/S Bremen, 407 U.S. at 16, 92 S.Ct at 1916. Since the claimed inconvenience would generally be foreseeable at the time the freely negotiated agreement was made, the party seeking to escape the clause must demonstrate that trial in the contractual forum will be so gravely difficult and inconvenient that it will for all practical purposes be deprived of its day in court. M/S Bremen, 407 U.S. at 17-18, 92 S.Ct. at 1917. Mere inconvenience or additional expense should not suffice as proof of hardship since these are burdens that were allocated by the parties' private bargain. See Anastasi Bros. Corp. v. St. Paul Fire & Marine Ins. Co., 519 F.Supp.

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Cite This Page — Counsel Stack

Bluebook (online)
950 So. 2d 832, 2006 WL 3113543, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vallejo-enter-v-boulder-image-lactapp-2006.