This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C9-01-223

 

AEI Net Lease Income and

Growth Fund XX Limited Partnership,

a Minnesota limited partnership, and

AEI Real Estate Fund XVI Limited Partnership,

a Minnesota limited partnership,

Respondents,

 

vs.

 

Anthony R. Alvarez,

Defendant,

 

and

 

Estella Alvarez,

Appellant.

 

Filed June 26, 2001

Affirmed

Harten, Judge

 

Ramsey County District Court

File No. C2-00-8827

 

Steven K. Champlin, Jonathan A. Strauss, Dorsey & Whitney, LLP, 220 South Sixth Street, Minneapolis, MN 55402 (for respondents)

 

Robert E. Lieske, Wagner, Falconer & Judd, Ltd., 3500 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellant)

 


Considered and decided by Harten, Presiding Judge, Foley, Judge,* and Parker, Judge.*

 

U N P U B L I S H E D   O P I N I O N

 

HARTEN, Judge

 

            Appellant Estella Alvarez challenges the district court's denial of her motion to dismiss for lack of personal jurisdiction.  We affirm. 

FACTS

Respondents AEI Net Lease Income and Growth Fund XX Limited Partnership (AEI Net Lease XX) and AEI Real Estate Fund XVI Limited Partnership (AEI Real Estate XVI) are organized as limited partnerships domiciled in Minnesota.  In both limited partnerships, corporations function as general partners; Robert P. Johnson is president of the corporations.

            During the mid-1990s, both appellant and her then-husband, Anthony R. Alvarez, were officers and shareholders in Renaissant Development Corporation (RDC), a Texas corporation that operated various Texas restaurant chains.  

            Respondents owned several Texas properties.  On November 30, 1994, Anthony Alvarez in his capacity as president of RDC entered into a lease agreement with AEI Net Lease XX, whereby RDC would become lessee of one of AEI's Texas properties.  That same day, both Anthony Alvarez and appellant signed a "guarantee of lease."  The document stated that

the undersigned * * * hereby absolutely and unconditionally guarantees to said Lessor * * * the due and prompt performance and observance of all of the obligations of said Lease to be met by Lessee, including but not limited to the payment of rent and other payments to be made under the Lease.

 

The document also contained the following clause:

This Guarantee is executed under and intended to be construed by the laws of the State of Minnesota.  The undersigned consents to be sued in the jurisdiction and venue of any District Court in the State of Minnesota or in any Court in the State of Texas, such jurisdiction and venue to be determined at the sole option and election of Lessor.

 

The document was signed by Anthony Alvarez in his capacity as president of an entity called The Harvard Associates, Inc.  It was also signed by both Anthony Alvarez and appellant, apparently individually.

            On August 30, 1995, Anthony Alvarez in his capacity as president of RDC leased another Texas property owned by AEI Net Lease XX.  Again, Anthony Alvarez and appellant signed a document containing language nearly identical to that found in the 1994 guarantee. 

            Finally, on March 22, 1996, Anthony Alvarez in his capacity of president of RDC leased a third Texas property, this time from AEI Real Estate XVI.  Anthony Alvarez, in his capacity as president of The Harvard Associates, Inc. and as president of various other corporations, signed a guarantee with terms almost identical to the aforementioned guarantees.  Both Anthony Alvarez and appellant also signed the guarantee in their respective individual capacities. 

In 1997, Anthony Alvarez and appellant reached a divorce agreement whereby Anthony Alvarez was to retain sole control over the RDC restaurant businesses. 

            In August 2000, respondents filed a complaint in Ramsey County District Court against, among others, The Harvard Associates, Inc., Anthony Alvarez, and appellant.  Respondents alleged that RDC had failed to pay rent under all three of the foregoing lease agreements and that the defendants were liable for the resulting damages pursuant to the guarantor agreements.

            Appellant moved to dismiss the complaint on the grounds that the district court lacked personal jurisdiction over her.  In support of this motion, appellant submitted an affidavit in which she alleged that she had little or no involvement with RDC operations.  Rather, according to appellant, she merely signed documents that Anthony Alvarez had placed in front of her from time to time.  Appellant argued that this lack of knowledge concerning the forum-selection clauses contained in the guarantor agreements, coupled with the inconvenience that would result to her in Minnesota litigation, justified dismissal of the complaint.  Appellant acknowledged that she signed all three documents purporting to make her a guarantor of the lease agreements.  Johnson claims that appellant did in fact have some contact with respondents' offices in the mid-1990s concerning the guarantor agreements; appellant denies this claim. 

            The district court denied appellant's motion to dismiss, finding that enforcing the forum-selection clauses contained in the guarantor agreements was neither unfair nor unreasonable.  The district court noted that "[w]hile [appellant] may have been unsophisticated in business matters, it is clear that her husband was not" and that "[w]hen Mr. Alvarez negotiated these [guarantor] agreements he was doing so as agent of the corporations and of his wife."  The district court concluded:

The bottom line is that, on her husband's advice, [appellant] voluntarily signed agreements which she chose of her own free will not to read or familiarize herself with, and she did so for the benefit of her and her husband.  Under these circumstances the court is satisfied that there is nothing unfair about requiring [appellant] to defend this case in Minnesota.

 

This appeal followed.           

D E C I S I O N

 

Enforcement of a forum-selection clause is within the discretion of the district court.  Personalized Mktg. Serv., Inc. v. Stotler & Co., 447 N.W.2d 447, 450 (Minn. App. 1989), review denied (Minn. Jan. 12, 1990).  The district court's decision should not be disturbed unless the forum-selection clause is "so unreasonable that its enforcement would be clearly erroneous and against both logic and the facts on record."  Id. at 451 (citation omitted). 

            When parties contractually agree to a forum-selection clause, that agreement should be given effect unless the party seeking to avoid the agreement can show that to do so would be unfair or unreasonable.  Hauenstein & Bermeister, Inc. v. Met-Fab Indus., 320 N.W.2d 886, 890 (Minn. 1982).  Enforcement of a forum-selection clause is unfair or unreasonable only if:  (1) the chosen forum is a seriously inconvenient place for trial; (2) the choice of forum agreement is one of adhesion; or (3) the agreement is otherwise unreasonable.  Interfund Corp. v. O'Byrne, 462 N.W.2d 86, 88 (Minn. App. 1990).  Appellant contends that the district court abused its discretion in enforcing the forum-selection clauses at issue because the three enumerated situations apply.

1.         Seriously Inconvenient Forum

Appellant claims that Minnesota is a seriously inconvenient forum as applied to her because she and her family reside in Texas and defending a lawsuit in Minnesota would disrupt the lives of her and her children.

In order for a forum to be seriously inconvenient, one party would have to be "effectively deprived of a meaningful day in court."  The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 19, 92 S. Ct. 1907, 1918 (1972), quoted in Hauenstein, 320 N.W.2d at 890.  Factors relating to the location and convenience of witnesses generally do not enter the analysis in determining whether a forum is seriously inconvenient.  Hauenstein, 320 N.W.2d at 890.  Accordingly, appellant's discussion concerning the practical complications that might disrupt her life are irrelevant in determining whether to enforce the forum-selection clauses at issue.  Moreover, appellant has not demonstrated how enforcement of the forum-selection clauses will deprive her of a meaningful day in court and therefore has failed to show that Minnesota is a seriously inconvenient venue for trial.

2.         Adhesion Contracts

Appellant argues that the guarantor agreements at issue constitute contracts of adhesion.

By definition, an adhesion contract is drafted unilaterally by a business enterprise and forced upon an unwilling and often unknowing public for services that cannot readily be obtained elsewhere.  It is a contract generally not bargained for, but which is imposed on the public for necessary service on a "take it or leave it" basis.  Even though a contract is on a printed form and offered on a "take it or leave it" basis, those facts alone do not cause it to be an adhesion contract.  There must be a showing that the parties were greatly disparate in bargaining power, that there was no opportunity for negotiation and that the services could not be obtained elsewhere.

 

Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920, 924-25 (Minn. 1982) (citations omitted) (emphases in original).  Accordingly, the two essential inquiries for determining whether a contract is one of adhesion are:  (1) whether the contract the result of the superior bargaining power of one of the parties; and (2) whether the contractual service involved a public necessity.  Osgood v. Medical, Inc., 415 N.W.2d 896, 899 n.1 (Minn. App. 1987), review denied (Minn. Feb. 12, 1988).

Appellant acknowledges that she signed the guarantor agreements at issue even though she did not know what the agreements bound her to do.  Despite appellant's claims that she had little knowledge concerning her husband's business affairs,[1] she could have been in a fair bargaining position had she taken the time to read what she was signing rather than blindly following her former husband's advice or instructions.  See Cell v. Moore & Schley Sec. Corp., 449 N.W.2d 144, 147 (Minn. 1989) (no adhesion contract where, although party claimed to be unsophisticated, "there is no indication that he was forced to enter into the agreement or was completely unable to negotiate its terms").  Moreover, there is no evidence that appellant signed the guarantor agreements as a result of respondents’ superior bargaining power.  On this ground alone the guarantor agreements cannot be considered to be adhesion contracts.  See id.

Finally, the guarantor agreements involved a guaranty by appellant, her former husband, and others as a means of inducing respondents to lease certain properties to RDC.  Appellant acknowledges she was an officer and shareholder of RDC.  Under the circumstances of the present case, this type of agreement cannot be said to involve a public necessity, as RDC presumably could have leased properties for its restaurants from any number of Texas landowners.  See Schlobohm, 326 N.W.2d at 925 (no adhesion contract where "no showing that [a party's] services were necessary or that the services could not have been obtained elsewhere"). 

In sum, the guarantor agreements at issue do not display the indicia of adhesion contracts.

3.         Otherwise Unreasonable Agreement

Appellant asserts that the terms of the guarantees were otherwise unreasonable. 

A forum selection clause is otherwise unreasonable if enforcement of the clause would contravene a strong public policy of the forum in which the suit is brought.  Judicial economy and the prevention of multiple actions on similar issues are policies which can render a forum selection clause patently unreasonable.

 

Interfund, 462 N.W.2d at 89 (citations omitted).  Here, there is simply no evidence to explain how the enforcement of the forum-selection clauses at issue would contravene a strong public policy.

Because appellant has failed to show that the chosen forum is seriously inconvenient, that the contracts at issue were adhesion contracts, or that they were otherwise unreasonable, we conclude that the district court acted within its discretion in enforcing the forum-selection clauses. 

Affirmed.



* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

 

[1] Appellant claims that the district court erred as a matter of law by imputing the business knowledge of a husband to a wife and by imputing the knowledge of one corporate officer to another.  Based on the district court's order, it is not clear that the district court made any such legal determination.  On the contrary, it appears that the district court was simply discussing Anthony Alvarez's business sophistication as one of many factors weighing against appellant's assertion that the guarantor agreements constitute contracts of adhesion. 

At any rate, the issue in the present case is whether the district court abused its discretion in enforcing the forum-selection clauses, not whether knowledge attribution from Anthony Alvarez to appellant is appropriate.  We will not reverse a district court's decision based on an error—real or perceived—concerning what amounts to a collateral legal question.  See In re Welfare of D.T.N., 508 N.W.2d 790, 797 (Minn. App. 1993) ("A reviewing court will not reverse a trial court for an error that it can see did not change the result." (citation omitted)), review denied (Minn. Jan. 14, 1994).