Lab. Specialists Int'l, Inc. v. Shimadzu Scientific Instruments, Inc.
Lab. Specialists Int'l, Inc. v. Shimadzu Scientific Instruments, Inc.
Opinion of the Court
*757Laboratory Specialists International, Inc. (LSI) appeals from the trial court's order dismissing its lawsuit against Shimadzu Scientific Instruments, Inc. (Shimadzu) under the forum selection clause in the parties' contract. An order granting a motion to stay or dismiss on improper forum grounds is immediately appealable. ( Code Civ. Proc., § 904.1, subd. (a)(3) ; all *496further statutory references are to this code.) LSI contends Shimadzu committed a fatal procedural misstep by requesting a dismissal in its demurrer based *758on the forum selection clause, rather than by a separate motion, and that the trial court erred by granting Shimadzu leave to recast its request for dismissal in a separate motion. In the alternative, LSI contends the court erred by: (1) dismissing LSI's tort claims, which LSI argues did not arise out of or "pertain[ ]" to the parties' contract; (2) finding the forum selection clause mandated Maryland as the proper forum, rather than conducting an analysis under discretionary forum non conveniens factors; and (3) dismissing rather than staying LSI's lawsuit. As we explain, these contentions are without merit, and we therefore affirm the court's dismissal order.
I
FACTUAL AND PROCEDURAL BACKGROUND
LSI filed a complaint in Orange County Superior Court alleging causes of action against Shimadzu for breach of contract, conversion, breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, and intentional and negligent interference with prospective economic relations. LSI also named UB Laboratories (UBL) as a defendant in breach of contract and conversion causes of action. The complaint explained that Shimadzu "manufactures devices for measuring highly sensitive biological and chemical materials, toxicology analyzers, and other medical equipment," LSI is "in the business of distributing and re-selling" such equipment, and UBL "is a full service reference laboratory offering toxicology and other testing services to its customers."
According to the complaint, LSI entered a Sales Agreement with Shimadzu to purchase a device known as the LCMS 8040, and LSI then entered a separate contract in which UBL agreed to lease the LCMS 8040 device from LSI. LSI alleged Shimadzu later caused or induced UBL to breach the rental agreement by disclosing to UBL information that was confidential under the terms of the LSI-Shimadzu purchase agreement, including "confidential pricing information ... related to the purchase of the LCMS 8040 as well as other items LSI sold to UBL." As a result of Shimadzu's disclosure and UBL's breach of the rental agreement, LSI alleged it had "lost the value of the Rental Agreement" and "lost the value of renting a second LCMS 8040 or other similar equipment to UBL."
Specifically, LSI asserted "[t]his unauthorized and contractually prohibited disclosure induced Defendant UBL ... to stop making the rental payments due to LSI under the Rental Agreement," while still retaining the LCMS 8040 device. LSI also alleged the disclosure induced UBL "to not enter a second rental agreement with LSI" and generally that Shimadzu's "disclosure of confidential information was in direct contravention of the confidentiality *759clause contained in the sales agreement between LSI and Shimadzu." The complaint alleged the LSI-Shimadzu purchase agreement "requires both parties to keep information received from the other confidential, and states that '[e]xcept as required by law, neither party shall use (except for purposes connected with the performance of its obligations hereunder), divulge or communicate to any third party any information of the other it reasonably knows to be confidential."
Shimadzu demurred to the complaint, asserting LSI's claims "must be dismissed because only the courts of Howard County, *497Maryland have jurisdiction over this case pursuant to a forum selection clause agreed to by LSI. In addition, Maryland law applies to all of LSI's claims against Shimadzu." Shimadzu also demurred on grounds LSI failed to state causes of action for breach of contract, conversion, negligent interference with prospective economic relations, and that neither the negligent interference nor breach of the implied covenant of good faith and fair dealing were recognized under Maryland law.
After LSI filed an opposition to the demurrer and Shimadzu a reply, the trial court continued the hearing on the demurrer for about six weeks. The court explained in a minute order that Shimadzu "cannot challenge forum by demurrer," citing Miller-Leigh LLC v. Henson (2007)
Shimadzu filed its motion seeking dismissal of the action for improper forum, LSI opposed the motion and, after an unreported hearing, the trial court granted Shimadzu's motion. The court explained in a minute order that "[t]he forum selection clause at issue is mandatory, and it encompasses all the claims asserted against [Shimadzu]. ... [¶] When a forum selection clause is mandatory, the traditional forum non conveniens analysis does not apply. Rather, the only inquiry is whether enforcement of the clause would be unreasonable. [Citations.] [¶] Plaintiff has not met this burden. It argues that factors ... such as the location of evidence or witness[es] ... favor California over Maryland. However, the inquiry here is whether enforcement of the clause would be unreasonable; the traditional forum non conveniens analysis does not apply. Plaintiff has not shown that the Maryland courts would be unavailable or unable to accomplish substantial justice." In granting the motion, the court ruled that Shimadzu's demurrer was moot.
Shimadzu sought attorney fees as the prevailing party, filed a Proposed Judgment on Order of Dismissal of Plaintiff's Complaint, to which LSI offered no objection, and LSI now appeals.
*760II
DISCUSSION
A. Shimadzu Did Not Forfeit Its Forum Challenge
LSI contends that by including a request for dismissal on forum selection grounds in its demurrer, rather than by a separate motion, Shimadzu forfeited its forum selection argument. LSI relies on section 418.10, subdivision (e)(3) (hereafter, § 418.10(e)(3)), which states: "Failure to make a motion under this section at the time of filing a demurrer or motion to strike constitutes a waiver of the issues of lack of personal jurisdiction, inadequacy of process, inadequacy of service of process, inconvenient forum , and delay in prosecution." (Italics added.) LSI argues this language plainly contemplates a separate motion rather than a request incorporated in a demurrer.
More generally, section 418.10 authorizes a special appearance to quash a summons for lack of jurisdiction or to stay or dismiss an action based on inconvenient forum or other grounds. As pertinent here, the statute provides that a defendant, "on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes: [¶] ... [¶] (2) To *498stay or dismiss the action on the ground of inconvenient forum." (§ 418.10, subd. (a).)
LSI correctly suggests a separate motion aids the trial court in addressing a potentially dispositive forum issue before reaching the merits of a demurrer, thereby conserving scarce judicial resources. As LSI puts it, "Filing a demurrer before filing a forum non conveniens motion consumes California judicial resources in a facial challenge to the validity of the complaint-and gives the defendant two bites at the judicial apple. If it does not prevail ... by challenging the complaint itself [by demurrer], the unhappy defendant can thereafter forum shop and seek to take the action somewhere else."
For its part, Shimadzu invokes a different statute aimed at determining the proper forum. Section 410.30 provides: "When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just." ( § 410.30, subd. (a).) In particular, Shimadzu relies on section 410.30, subdivision (b), which states: "The provisions of Section 418.10 do not apply to a motion to stay or dismiss the action by a defendant who has made a general appearance." Shimadzu interprets this language and the existence of two separate forum statutes to mean that a defendant who does not raise the *761issue at the outset in a special appearance under section 418.10 nevertheless may do so anytime under section 410.30, even after filing a demurrer. Because Shimadzu raised its forum challenge at the time of filing its demurrer, we need not consider whether a party may do so subsequent to a demurrer as Shimadzu asserts.
The trial court reasonably could conclude Shimadzu did not run afoul of section 418.10(e)(3)'s forfeiture provision. Although the statute phrases the "[f]ailure to make a motion under this section at the time of filing a demurrer" as a "waiver of the issue[ ] of ... inconvenient forum" (§ 418.10(e)(3), italics added), a true "waiver" requires more than a mere failure to act, but rather an express relinquishment of a known right. Accordingly, "the correct term is 'forfeiture' rather than 'waiver,' because the former term refers to a failure to object or to invoke a right, whereas the latter term conveys an express relinquishment of a right or privilege. [Citations.]" ( In re Sheena K. (2007)
True, Shimadzu did not initially file a separate motion as LSI insists is necessary. Shimadzu instead incorporated its forum challenge in a demurrer, but that is not fatal as LSI asserts. As the appellate court in Miller-Leigh, supra,
In Miller-Leigh , the trial court sustained the defendants' demurrer premised on a forum selection clause, requiring reversal. ( Miller-Leigh , supra , 152 Cal.App.4th at p. 1150,
That is what the trial court did here, and we discern no error. Relying on section 418.10(e)(3), LSI claims a separate motion challenging the forum was necessary "at the time" Shimadzu filed its demurrer, on pain of forfeiture. But the trial court reasonably could conclude Shimadzu substantially complied with section 418.10(e)(3)'s motion requirement. A "motion" is nothing more than "[a]n application for an order" (§ 1003), and section 418.10(e)(3) does not state a separate motion is required in raising a forum issue. The trial court reasonably could view Shimadzu's invocation of the forum selection clause as an "application for an order" enforcing the clause, while Shimadzu simultaneously demurred to the complaint on grounds including failure to state facts constituting a cause of action under Maryland or California law (§ 430.10, subd. (e)). Indeed, section 418.10, subdivision (e), provides: "A defendant or cross-defendant may make a motion under this section and simultaneously answer, demur, or move to strike the complaint or cross-complaint." (Italics added.) While separate documents comprising a party's motion and demurrer may be convenient, trial courts are fully capable-and expressly authorized by statute-to discern and reach forum issues sua sponte.
Thus, section 410.30, subdivision (a), expressly authorizes the trial court to raise and address forum issues on its own motion. Although section 418.10 provides a basis for parties to file preanswer forum challenges, that does not mean the court may not also consider such challenges under section 410.30, which invests the court with independent discretion to consider the proper forum and does not limit that discretion to the postanswer period. Timely alerted to the forum issue in Shimadzu's demurrer, the trial court acted within its authority under section 410.30, subdivision (a), in providing Shimadzu the opportunity to file a separate motion so both parties could brief the forum issue. In essence, the court simply had Shimadzu recast a portion of its demurrer explicitly in the form of a motion rather than captioned as a demurrer. Nothing prevented the court from doing so. ( Miller-Leigh , supra , 152 Cal.App.4th at p. 1150,
The trial court's broad authority over the timing of a forum motion in the preanswer period bolsters our conclusion. Section 418.10, subdivision (a), *763expressly provides *500that the motion may be filed "on or before the last day of [the defendant's] time to plead or within any further time that the court may for good cause allow ." (Italics added.) Whether "good cause" exists to allow a party "further time" to file a motion challenging the forum under section 418.10, subdivision (a), is necessarily committed to the trial court's sound discretion. While no cases address good cause in the context of the timing of a forum challenge, the deferential good cause standard commits the applicable decision " 'almost entirely in the discretion of the court below, and appellate tribunals will rarely interfere, and never unless it clearly appears that there has been a plain abuse of discretion.' " ( City of Ontario v. Superior Court (1970)
Britton v. Dallas Airmotive, Inc. (2007)
In concluding the trial court could entertain the renewed motion, Britton expressly cautioned: "[W]e do not read section 410.30, subdivision (b) to mean that a defendant who has waived the forum non conveniens issue under section 418.10, subdivision (e)(3) may later bring a motion under section 410.30, subdivision (a). If the issue has been waived under the express language of section 418.10, subdivision (e)(3), then the defendant may not raise it at any point in the litigation. Section 410.30, subdivision (b) does not purport to allow a party to raise issues waived at the outset of the litigation, and its general language does not contradict the subsequently enacted and specific waiver provision in section 418.10. [Citations.]" ( Britton , supra , 153 Cal.App.4th at pp. 133-134,
B.-C.
D. The Trial Court Did Not Err in Dismissing Rather than Staying the Lawsuit
Finally, LSI argues for the first time on appeal that the trial court erred by *501dismissing the action rather than staying it. "[N]ot even a 'mandatory' forum selection clause can completely eliminate a court's discretion to make appropriate rulings regarding choice of forum ...." ( Berg , supra , 61 Cal.App.4th at p. 358,
DISPOSITION
The trial court's dismissal order is affirmed. Shimadzu is entitled to its costs on appeal.
WE CONCUR:
O'LEARY, P. J.
IKOLA, J.
See footnote *, ante.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.