Court Disregards Forum Selection Clause and Dismisses Case
On November 23, 2012, Judge Todd Shaughnessy of Utah’s Third Judicial District Court issued an order dismissing a Missouri plaintiff’s breach of contract civil lawsuit filed against Missouri defendants represented by Kirton McConkie’s R. Willis Orton and Adam M. Kaas. (See Broadway Properties, LLC v. Macheca Transport Co., Inc., et al., Case No. 120903705, Third District Court) In doing so, the Court disregarded the applicability of a forum selection clause contained in the parties’ contract, which clause plaintiffs argued required the lawsuit be filed in Utah.
At a hearing on the motion, Mr. Orton argued that because neither the plaintiffs nor defendants were from Utah or had any reasonable relationship to Utah sufficient to otherwise satisfy minimum contact requirements of the law or the “rational nexus” test set out in the Utah Supreme Court’s decision in Phone Directories Co. v. Henderson, 2000 UT 64, ¶ 14, the case should be dismissed.
The Court agreed and dismissed the case without prejudice. When learning of the decision, Mr. Orton remarked: “Forum selection clauses are not infallible and parties and their lawyers drafting contracts which contain forum selection clauses should not presume such clauses are impenetrable in Utah. The residence of the current owners and obligors under the contract—if the contract has been assigned-- and the nature of their involvement with the state of Utah are and will be significant factors that the courts will consider in their determination as to whether or not to sustain contractual forum selection clauses.”