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Trinity v. Apex Directional Drilling LLC

Supreme Court of Oregon, En Banc

July 5, 2018

TRINITY, a division of Bank of the West, a foreign corporation, Plaintiff-Adverse Party,
v.
APEX DIRECTIONAL DRILLING LLC, an Oregon limited liability company, Defendant, and Michael LACHNER, Defendant-Relator.

          Argued and Submitted April 11, 2018

          Original proceeding in mandamus. (CC 16CV00770) [*]

          David Shannon, Troutdale, argued the cause and fled the petition for alternative writ of mandamus for the defendant-relator.

          Aaron J. Bell, Bell Law Firm PC, Wilsonville, argued the cause and fled the brief for the plaintiff-adverse party.

         [363 Or. 258] Case Summary:

         Plaintiff-adverse party Trinity brought an action in Clackamas County Circuit Court to enforce a personal guaranty contract on a loan. Defendant-Relator Lachner, who signed the personal guaranty, responded with a motion to dismiss the action because the personal guaranty contained a forum-selection clause stating that "any litigation" relating to the guaranty "shall be brought only in the City and County of San Francisco." The trial court refused to enforce the clause and denied the motion to dismiss, and defendant-relator fled a petition for alternative writ of mandamus, which this court issued. The trial court made findings but did not change its ruling, and the parties proceeded to argument in this court. Held: (1) A trial court must enforce a forum-selection clause unless doing so would result in "serious inconvenience" or be in some other way "unfair or unreasonable," and (2) those circumstances were not present here, so the trial court erred in denying the motion to dismiss.

         A peremptory writ of mandamus shall issue.

         [363 Or. 259] BALMER, J.

         This mandamus proceeding arises from a dispute about a contract's forum-selection clause. Trinity Bank- here, the adverse party-loaned money to Apex, a drilling company. Lachner, a part owner of Apex and the relator in this case, signed a personal guaranty of the loan. The personal guaranty, which Trinity drafted, contained a forum-selection clause:

"You agree that any litigation, related to or arising from this guaranty shall be brought only in the City and County of San Francisco, California and you consent to personal jurisdiction in either state or federal court."

         Apex defaulted on the loan, and Lachner defaulted on the guaranty. Trinity filed an action in Clackamas County Circuit Court asserting separate breach of contract claims against Apex (on the loan) and Lachner (on the guaranty). Apex made no appearance, and a default judgment was entered against it. Lachner filed a motion to dismiss the action against him under ORCP 21 A(1), because the action was not filed in San Francisco as required by the forum-selection clause. See Roberts v. TriQuint Semiconductor, Inc., 358 Or. 413, 417, 364 P.3d 328 (2015) (party may move to dismiss action under ORCP 21 A(1) based on forum-selection agreement). Neither party disputed the meaning of the forum-selection clause, only whether it should be enforced. The trial court denied the motion, without making any findings or conclusions of law, stating that it "ha[d] discretion in [the] matter." We conclude that the clause should be enforced.

         On Lachner's petition, this court issued an alternative writ of mandamus directing the trial court to vacate its order denying Lachner's motion to dismiss and grant that motion, or to show cause why it should not do so. The trial court declined to grant the motion to dismiss, but held another hearing on the motion, considered materials submitted by the parties, and issued written factual findings supporting its denial of the motion. Those findings generally concluded that Oregon was the more reasonable forum. Because the trial court declined to vacate its order and grant [363 Or. 260] the motion to dismiss, the parties proceeded to argument in this court.

         As a preliminary matter, Trinity argues that mandamus is not appropriate in this case, because the case can be litigated through trial to a final judgment and Lachner can raise his forum-selection clause issue in an appeal from that judgment. In that respect, Trinity argues, Lachner has a "plain" and "adequate" remedy by means of an appeal. See ORS 34.110 (writ of mandamus shall not issue "in any case where there is a plain, speedy and adequate remedy in the ordinary course of the law"). Trinity's objection is not well taken. This court has held that mandamus is an appropriate mechanism for challenging a trial court's decision not to enforce a forum-selection clause. Roberts, 358 Or at 417. When the decision not to enforce a forum-selection clause falls outside the trial court's permissible range of discretion, i.e., when the law compels a single course of action, a party may challenge a trial ...


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