Long Beach Auto Auction, Inc. v. United Security Alliance, Inc.


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Docket Number: 2005-CA-00729-SCT
Oral Argument: 05-23-2006
 

 

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Supreme Court: Opinion Link
Opinion Date: 08-17-2006
Opinion Author: RANDOLPH, J.
Holding: REVERSED AND REMANDED

Additional Case Information: Topic: Contract - Forum selection clause - Overweening bargaining power
Judge(s) Concurring: SMITH, C.J., WALLER AND COBB, P.JJ., DIAZ, EASLEY AND CARLSON, JJ.
Non Participating Judge(s): DICKINSON, J.
Concurs in Result Only: GRAVES, J.
Procedural History: Dismissal
Nature of the Case: CIVIL - CONTRACT

Trial Court: Date of Trial Judgment: 01-13-2005
Appealed from: Harrison County Circuit Court
Judge: Stephen Simpson
Disposition: Granted Appellee's Motion to Dismiss & dismissed the case without prejudice
Case Number: A2401-2004-206

  Party Name: Attorney Name:  
Appellant: LONG BEACH AUTO AUCTION, INC.




JOHN PAUL BARBER, WILLIAM E. WHITFIELD, III



 

Appellee: UNITED SECURITY ALLIANCE, INC. MICHAEL ANDREW McDONALD, JAMES WILLIAM WILLIAMS, LAUREN CARSON WILLIAMS  

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Topic: Contract - Forum selection clause - Overweening bargaining power

Summary of the Facts: Long Beach Auto Auction, Inc. and United Security Alliance, Inc. entered into an agreement for United to install and operate a video surveillance system at LBAA’s auction facility. United provided a warranty agreement to LBAA which LBAA signed. The warranty agreement contained a forum selection clause limiting jurisdiction to Florida courts and sole venue to Hillsborough County, Florida. After having trouble with the system, LBAA filed a complaint against United in the Circuit Court of the First Judicial District of Harrison County, Mississippi, alleging that United was guilty of breach of contract, breach of express warranty, breach of implied warranty of merchantability, and breach of implied warranty of fitness for a particular purpose. United filed a motion to dismiss on the basis of jurisdiction. The court granted the motion, and LBAA appeals.

Summary of Opinion Analysis: Forum selection clauses are presumptively enforceable unless the resisting party can show that the incorporation of the clause into the contract was the result of fraud, undue influence or overweening bargaining power, the selected forum is so gravely difficult and inconvenient that the resisting party will for all practical purposes be deprived of its day in court, or the enforcement of the clause would contravene a strong public policy of the forum in which the suit is brought. LBAA argues that United fraudulently inserted the forum selection clause into the warranty document after the parties had finalized their agreement for leasing the system and United had installed the defective system. In fact, the undisputed facts do show that the system had previously been installed, leases were finalized and enforceable, and the deposit and first month’s rent had been paid, all before LBAA was given the warranty. Thus, LBAA had no meaningful opportunity to object to the forum selection clause. Because refusal by LBAA to sign would have left it with no written express warranty, United possessed overweening bargaining power. Therefore, the forum selection clause is unenforceable.


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