This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF APPEALS
Valspar Refinish, Inc.,
Filed June 6, 2006
Hennepin County District Court
File No. CT 05-7744
Considered and decided by Hudson, Presiding Judge, Klaphake, Judge, and Peterson, Judge.
This is a consolidated appeal from orders denying appellant Gaylord’s, Inc.’s motions to dismiss respondent Valspar Refinish, Inc.’s breach of contract action against it for forum non conveniens and lack of personal jurisdiction. Appellant claims that the forum selection clause contained in the parties’ exclusive paint supply contract is unenforceable because the clause is unreasonable and is insufficient to confer personal jurisdiction over appellant. Appellant also argues that it lacks the contacts necessary to confer personal jurisdiction in the selected forum, Minnesota. Because appellant agreed to personal jurisdiction when it selected Minnesota as a forum, and because the district court did not err in concluding that the forum selection clause is enforceable, we affirm.
I. Personal Jurisdiction
To satisfy due process principles, “a plaintiff must show
that a defendant has ‘minimum contacts’ with a forum state such that
maintaining jurisdiction there does not offend ‘traditional notions of fair
play and substantial justice.’” Lorix
v. Crompton Corp., 680 N.W.2d 574, 577 (Minn. App. 2004), review denied (Minn.
Sept. 21, 2004) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310,
316, 66 S. Ct. 154, 158 (1945)). The defendant
must act to “purposefully avail itself of the privilege of conducting
activities with the
“Because personal jurisdiction is a matter of individual
liberty,” a party may submit to the exercise of personal jurisdiction by
“entering into a contract containing a valid forum selection clause.” TRWL Fin. Establishment v. Select Int’l,
Inc., 527 N.W.2d 573, 578 (
II. Forum Selection Clause
The decision whether to enforce a forum selection clause is
within the discretion of the district court, and we will affirm the court’s
ruling unless it clearly abused its discretion.
Personalized Mktg. Serv., Inc. v. Stotler & Co., 447 N.W.2d
447, 450 (Minn. App. 1989), review denied (Minn. Jan. 12, 1990). This court will reverse a decision upholding
a forum selection clause only if the selected forum is “so unreasonable that
its enforcement would be clearly erroneous and against both logic and the facts
Forum selection clauses “should be given effect unless it
is shown by the party seeking to avoid the agreement that to do so would be
unfair or unreasonable.” Hauenstein
& Bermeister, Inc. v. Met-Fab Indus., Inc., 320 N.W.2d 886, 890 (
Appellant contends that Minnesota is an inconvenient forum because (1) its witnesses reside in California; (2) its evidence is located in California; and (3) its litigation costs, which include direct costs and lost profit, make Minnesota seriously inconvenient as a forum.
When the parties freely enter into a contract in which
they agree on a forum, it is presumed that the forum is convenient. See id. In order for a forum to
be considered seriously inconvenient, a party must be “effectively deprived of
a meaningful day in court” by the forum selection.
Contract of Adhesion
Appellant does not specifically argue that the parties’ exclusive supply contract was one of adhesion, nor is there factual support for this argument. Whether a contract is one of adhesion depends on factors such as the bargaining power of the parties, whether they negotiated the contract, the business sophistication of the parties, and the need for the subject of the agreement. Interfund Corp., 462 N.W.2d at 89. Here, while respondent is a large corporation and appellant is a small company, both are commercial entities. Appellant has been in business since 1953, and it has participated in commercial dealings for more than 50 years, including contracting for paints for its products both before and after the contract at issue here. The parties negotiated from “spring of 2003” until they reached an agreement on October 8, 2003, and they discussed the terms of the agreement on a weekly basis until the contract was signed. Further, during negotiations appellant was able to secure a $400,000 prepaid rebate to finance its purchase of equipment to use in applying respondent’s products, as well as other favorable contract terms. Under these circumstances, the exclusive supply contract was not one of adhesion.
Otherwise Reasonableness of the Contract
Appellant contends that public and private interest
factors weigh in favor of finding California the proper forum for this action. Generally, when a forum selection clause is
at issue, the clause is unreasonable if it “contravene[s] a strong public
policy,” such as “[j]udicial economy and the prevention of multiple actions on
similar issues,” which may render a forum selection clause “patently
Because the three factors that determine the enforceability of a forum selection clause support upholding the clause involved here, we observe no abuse of discretion in the district court’s denial of appellant’s motion to dismiss for forum non conveniens.
Appellant relies on Bergquist v.
Medtronic, Inc., 379 N.W.2d 508 (