Original Proceeding Pursuant to C.A.R. 21 . El Paso County District Court Case No. 2014CV31374. Honorable Gregory R. Werner, Judge.
Rule Made Absolute.
In this C.A.R. 21 original proceeding, the supreme court holds that the trial court erred in setting aside a default judgment as void for lack of jurisdiction due to a contractual forum selection clause purporting to divest Colorado courts of jurisdiction over the matter. A forum selection clause in a contract does not divest a court of personal or subject matter jurisdiction but instead presents the question of whether it is reasonable for the court to exercise its jurisdiction in the particular circumstances of the case. The supreme court also holds that the trial court erred by failing to conduct an evidentiary hearing on damages prior to entering default judgment. The supreme court makes this rule absolute and remands to the trial court for further proceedings consistent with this opinion.
For Plaintiff: Lewis Kuhn Swan PC, Paul F. Lewis, Michael D. Kuhn, Andrew E. Swan, Colorado Springs, Colorado.
For Defendants: Lewis Roca Rothgerber LLP, William D. Nelson, Ian S. Speir, Colorado Springs, Colorado.
[¶1] This original proceeding addresses whether a default judgment may be set aside as void for lack of jurisdiction due to the existence of a contractual forum selection clause purporting to divest Colorado courts of jurisdiction over the matter. After the trial court set aside its default judgment, the plaintiff, Christopher Nickerson, filed this C.A.R. 21 petition seeking to reinstate the default judgment entered against the defendants, Network Solutions, LLC and Web.com Group, Inc.
[¶2] We hold that the trial court erred in setting aside the default judgment. A forum selection clause in a contract does not divest a court of jurisdiction but instead presents the question of whether it is reasonable for the court to exercise its jurisdiction in the particular circumstances of the case. Therefore, the default judgment was not void on this basis. Accordingly, we direct the trial court to reinstate the default judgment in favor of Nickerson.
[¶3] Nickerson filed suit against Network Solutions, LLC and its parent company, Web.com Group, Inc. (collectively, " Network Solutions" ), on April 30, 2014. He had contracted with Network Solutions for web hosting services in connection with his disc jockey business and sued for negligence after the deletion of his data from the company's server. Nickerson properly served Network Solutions on May 19, 2014. He then requested entry of a default judgment under C.R.C.P. 55(a) after Network Solutions failed to respond to the complaint by the deadline. The clerk entered default judgment in the amount Nickerson asked for--$65,000 plus costs.
[¶4] Network Solutions filed a Motion to Set Aside Default Judgment pursuant to C.R.C.P. 55(c) and 60(b). In its motion, Network Solutions argued that it had failed to respond by the deadline due to " mistake, inadvertence, and/or excusable neglect" because its paralegal entered the wrong date into the litigation calendaring system. In its reply brief, Network Solutions argued for the first time that the default judgment was void because the court lacked jurisdiction over the matter due to a forum selection clause granting " exclusive jurisdiction" to certain courts in Virginia.
[¶5] The trial court granted Network Solutions' motion to set aside the default judgment. While the court found the company's excusable neglect claim to be " without merit," it vacated the judgment under C.R.C.P. 60(b)(3) for lack of jurisdiction. The court found that because forum selection clauses are presumptively enforceable in Colorado, a clause purporting to vest exclusive jurisdiction in Virginia courts deprived Colorado courts of jurisdiction over the claim. ...