United States District Court, D. Nevada
before the court is plaintiff Old Republic Insurance
Company's (“Old Republic”) brief in response
to this court's October 26, 2016, order to show cause
regarding this case's progression in the United States
District Court, District of Nevada, because a contract
forum-selection clause or choice-of-law clause may
apply. (ECF Nos. 60, 76). Pursuant to that order,
defendants City Plan Development, Inc., Ernesto Savino, and
Cynthia Wilson filed a response to plaintiff's
brief. (ECF Nos. 60, 77). This court also
considers plaintiff's motion for leave to file a second
amended complaint. (ECF No. 50).
2, 2016, plaintiff filed its amended complaint, alleging that
defendants breached the parties' indemnity agreement
because they have not compensated plaintiff for monies paid
to defendants' subcontractors or suppliers made under
labor and material payment bond no. 1238636. (ECF No. 8).
October 26, 2016, this court expressed its concern about this
action's forum and choice of law, in light of the terms
of indemnity agreement paragraph ZC. (ECF No. 60). That
clause of the contract appeared to suggest that the parties
agreed to resolve disputes in a Pennsylvania or Wisconsin
forum, under Pennsylvania or Wisconsin law. (ECF No. 8-1).
December 28, 2016, plaintiff submitted its brief, first
arguing that the list of eight non-exhaustive considerations
mentioned in Jones v. GNC Franchising, Inc., 211
F.3d 495 (9th Cir. 2000), outweighs the presumptive validity
of the forum-selection clause. (ECF No. 76). Next, Old
Republic asserted that the parties have waived the
forum-selection clause and choice-of-law provision.
(Id.). Finally, plaintiff suggested that, if this
court did not find those clauses to be waived, the applicable
forum would be the United States District Court for the
Eastern District of Wisconsin and that Pennsylvania law would
January 1, 2017, defendants submitted a response to
plaintiff's submission, agreeing with plaintiff that
venue is proper in this court and that Nevada law should
apply in the instant case. (ECF No. 77). They assert that:
(1) the relevant clauses are merely permissive-not
obligatory; (2) “nearly all factors used to determine
if venue is proper weigh in favor of maintaining venue in the
district of Nevada”; and (3) the parties have agreed to
conduct suit in this district. (Id. at 2-3).
selection clauses in contracts are “presumptively
valid; the party seeking to avoid a forum selection clause
bears a ‘heavy burden' to establish a ground upon
which [the court] will conclude the clause is
unenforceable.” Doe 1 v. AOL LLC, 552 F.3d
1077, 1083 (9th Cir. 2009) (quoting M/S Bremen v. Zapata
Off-Shore Co., 407 U.S. 1, 17 (1972)). A forum-selection
clause is unenforceable “if enforcement would
contravene a strong public policy of the forum in which suit
is brought, whether declared by statute or by judicial
decision.” M/S Bremen, 407 U.S. at 15.
a valid forum selection clause is bargained for by the
parties and embodies their expectations as to where disputes
will be resolved, it should be ‘given controlling
weight in all but the most exceptional cases.'”
In re Orange, S.A., 818 F.3d 956, 961 (9th Cir.
2016) (quoting Atl. Marine Constr. Co., Inc. v. U.S.
Dist. Court for W. Dist. of Texas, 134 S.Ct. 568, 581
a court should evaluate relevant contract language of an
applicable forum-selection clause to determine whether its
terms are permissive or exclusive. See Hunt Wesson Foods,
Inc. v. Supreme Oil Co., 817 F.2d 75, 77-78 (9th Cir.
1987); see also Docksider, Ltd. v. Sea Tech., Ltd.,
875 F.2d 762, 764 (9th Cir. 1989). “To be mandatory, a
clause must contain language that clearly designates a forum
as the exclusive one.” N. California Dist. Council
of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d
1034, 1037 (9th Cir. 1995).
discussion of the permissive construction of contract
paragraph ZC is persuasive. (ECF No. 77). Both the
forum-selection clause and the choice-of-law provision are
couched in terms indicating that the clauses may be exercised
at plaintiff's option. See (ECF No. 8-1).
the forum selection clause at issue relevantly reads:
“The Surety, at its option, shall be entitled to
enforce this Agreement by an action . . . brought in the said
State of Incorporation or in the State where Surety's
principle office is located . . . .” (Id. at
5). Second, the choice-of-law provision states:
“Interpretation and enforcement of this Agreement, at
the Option of Surety, ...