Crispell v Next Dimension Prod., et al, (04-1015) 06/07/2005

Appeal by defendants from an order entered 18 May 2004 by Judge Stafford G. Bullock in Wake County Superior Court. Heard in the Court of Appeals 9 March 2005.

No brief for plaintiff-appellee.

Parker, Poe, Adams & Bernstein, L.L.P., by Melanie Black Dubis and Sarah L. Ford, for defendant-appellants.

    HUNTER, Judge.

    Next Dimension Productions, LLC (“defendant”) appeals from an order dated 18 May 2004 denying a motion to dismiss or compel arbitration. As we agree that the trial court erred in denying the motion to dismiss, we reverse the trial court's order.
    Defendant is a Nevada limited liability company run by Patricia and Leonard Purcell, which distributes and licenses equipment and marketing materials for oxygen bars. Todd Crispell (“plaintiff”) is a North Carolina resident who contacted defendant via its website regarding its products and marketing materials. Plaintiff visited defendant's office in Las Vegas, Nevada, todiscuss purchase of defendant's products. Following this visit, plaintiff and defendant completed agreements in May and June of 2003 for the sale of oxygen bar equipment and for licensing of defendant's name and operating system. Plaintiff signed the sales and licensing agreements in North Carolina and faxed the documents to defendant's Nevada offices. Patricia Purcell signed the licensing agreement on behalf of defendant.
    Equipment was delivered to plaintiff on 18 July 2003 and 4 September 2003. Plaintiff brought suit against defendant for breach of contract, misrepresentation, breach of fiduciary duty, unfair and deceptive practices, and a Racketeer Influenced Corrupt Organization Act violation. Plaintiff alleged damage to some equipment on delivery and failure to deliver some ordered items.
    On 12 November 2003, defendant moved to dismiss the action for lack of subject matter jurisdiction and improper venue, as the contract governing the transaction contained a forum selection clause designating exclusive jurisdiction in the courts of Nevada. Defendant further moved to dismiss the individual claims made by plaintiff against Leonard and Patricia Purcell for insufficient service of process, and to dismiss all claims against defendant for failure to state a claim upon which relief may be granted. In the alternative, defendant moved for the trial court to compel arbitration, as the parties' contract contained a mandatory arbitration clause.
    After a hearing on 21 April 2004, defendant submitted a motion for reconsideration, providing additional affidavits as evidencethat plaintiff had seen the entire licensing agreement prior to its execution. The trial court denied the motion on 18 May 2004. Defendant appeals.
    We initially note that defendant's appeal is properly before this Court. Although denial of a motion to dismiss is ordinarily not immediately appealable, our courts have recognized that a denial of a “'motion to dismiss for improper venue based upon a jurisdiction or venue selection clause dispute deprives the appellant of a substantial right that would be lost.'” Cable Tel Servs., Inc. v. Overland Contr'g., Inc., 154 N.C. App. 639, 641, 574 S.E.2d 31, 33 (2002) (citations omitted).
    Defendant first contends the trial court erred in failing to dismiss plaintiff's action, as venue is not proper in North Carolina based on the forum selection clause contained in the parties' agreement. We agree.
    “We employ the abuse-of-discretion standard to review a trial court's decision concerning clauses on venue selection.” Mark Grp. Int'l, Inc. v. Still, 151 N.C. App. 565, 566, 566 S.E.2d 160, 161 (2002). “In reviewing the trial court's decision in a forum selection case, this Court has held that because the disposition of such cases is highly fact-specific, the abuse-of-discretion standard is the appropriate standard of review.” Cox v. Dine-A-Mate, Inc., 129 N.C. App. 773, 776, 501 S.E.2d 353, 355 (1998). “Under the abuse-of-discretion standard, we review to determine whether a decision is manifestly unsupported by reason, or so arbitrary that it could not have been the result of areasoned decision.” Mark Grp. Int'l, Inc., 151 N.C. App. at 566, 566 S.E.2d at 161.
    We first examine the parties' agreement for evidence of a forum selection clause. Our courts have held that:
        “[W]here the parties have deliberately put their engagements in writing in such terms as import a legal obligation free of uncertainty, it is presumed the writing was intended by the parties to represent all their engagements as to the elements dealt with in the writing. Accordingly, all prior and contemporaneous negotiations in respect to those elements are deemed merged in the written agreement.”

Town of West Jefferson v. Edwards, 74 N.C. App. 377, 379, 329 S.E.2d 407, 409 (1985) (citation omitted). “Moreover, the parties' intentions which are controlling in contract construction . . . may be construed from the terms of the writings and the parties' conduct.” Zinn v. Walker, 87 N.C. App. 325, 332, 361 S.E.2d 314, 318 (1987).
    Affidavits submitted in support of the motion to dismiss state that plaintiff reviewed the sales and licence agreements while visiting defendant's corporate office in Nevada in March 2003. Upon returning to North Carolina, plaintiff entered into a sales agreement with defendant for certain equipment, signing the agreement on 28 May 2003. The sales agreement contained no forum selection or arbitration clause. On 16 June 2003, plaintiff was emailed a complete copy of defendant's license agreement, and on 18 June 2003, plaintiff faxed a signed copy of the license agreement to defendant. The license agreement specifically incorporated the sales agreement within the terms of the license agreement, stating:        1.01 Purchase and Sale of the Oxygen Bar Equipment. Pursuant to the Agreement of Purchase and Sale dated of even date herewith by and between Licensor and Licensee (the “Agreement”), Licensor has agreed, among other things, to sell to Licensee, and Licensee has agreed to purchase from Licensor, the Oxygen Bar Equipment (as that term is defined in the Agreement).

The license agreement specifically integrated the sales agreement and all other prior writings, stating:
        This License Agreement: (a) integrates all the terms and conditions mentioned in or incidental to this License Agreement; (b) supercedes all oral negotiations and prior writings with respect to its subject matter . . . and (c) is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth herein as the complete and exclusive statement of the terms agreed to by the parties.

Further, the license agreement stated that “[t]he parties hereto consent to the exclusive jurisdiction and venue of the federal and state courts in Clark County, Nevada, with respect to any controversy arising out of this License Agreement or the transactions contemplated hereby.”
    Our Supreme Court has held that “where parties to a contract have agreed that a given jurisdiction's substantive law shall govern the interpretation of the contract, such a contractual provision will be given effect.” Land Co. v. Byrd, 299 N.C. 260, 262, 261 S.E.2d 655, 656 (1980). Although N.C. Gen. Stat. § 22B-3 (2003) prohibits, for public policy reasons, enforcement of forum selection clauses which designate another state as the exclusive forum for contracts entered into in North Carolina, the statute does not apply to contracts entered into in other states. SeeSzymczyk v. Signs Now Corp., ___ N.C. App. ___, ___, 606 S.E.2d 728, 732-33 (2005). Thus, forum selection clauses in a contract entered into in another state will be given effect if enforceable under that state's laws. Id.
    “Under North Carolina law, a contract is made in the place where the last act necessary to make it binding occurred.” Tom Togs, Inc. v. Ben Elias Industries Corp., 318 N.C. 361, 365, 348 S.E.2d 782, 785 (1986). Here, the record shows that the last act necessary to make the contract binding occurred in Nevada, where defendant's representative signed both the sales and licensing agreements after plaintiff signed and faxed the agreement from North Carolina.
    Nevada courts have held that forum selection clauses which are not “'unreasonable and unjust'” are enforceable if obtained through “'freely negotiated'” agreements. Tandy Computer Leasing v. Terina's Pizza, 784 P.2d 7, 8 (Nev. 1989) (citations omitted). Here, the forum selection clause is part of a freely negotiated contract between plaintiff and defendant, appearing in the text under a provision entitled “Application of Nevada Law,” and preceding the signatures of the parties. Further, application of the clause would not be unreasonable and unjust, as defendant's business concerns are located in Nevada, and plaintiff has previously visited Nevada to engage in initial negotiations for the contract agreement.
    As the parties consented to an enforceable exclusive forum selection clause, the trial court's denial of defendant's motion todismiss for lack of jurisdiction and improper venue is unsupported by reason and is an abuse of discretion. The trial court thus erred in denying defendant's motion to dismiss. We, therefore, do not reach defendant's additional assignments of error.
    Reversed.
    Judges McCULLOUGH and LEVINSON concur.
    Report per Rule 30(e).

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