Pitkin
County District Court No. 17CV30089 Honorable Christopher G.
Seldin, Judge.
Dentons U.S. LLP, Karen Ashley Phillips, Robert A. Hammeke,
Denver, Colorado, for Plaintiff-Appellant
Law
Office of Corry & Associates, Robert J. Corry, Jr., Abbey
G. Moffitt, Denver, Colorado, for Defendants-Appellees
OPINION
GROVE
JUDGE.
¶
1 In this commercial dispute, we consider whether plaintiff,
Avicanna Inc., should have been permitted to sue defendants
in Pitkin County District Court or whether, as the district
court found, Avicanna was bound by a forum selection clause
that designated the courts of Ontario, Canada, as the forum
for the resolution of any disputes between Avicanna and its
contractual counterparties. Because nothing in the
parties' contract showed that the forum selection clause
was included exclusively for Avicanna's benefit, we
conclude that Avicanna could not unilaterally waive that
provision. We therefore affirm the district court's order
enforcing the forum selection clause and dismissing
Avicanna's complaint without prejudice.[1]
I.
Background
¶
2 As the district court described it, this case involves a
"topsyturvy expression of incentives" in which a
Canadian plaintiff filed suit in Colorado against Colorado
defendants, and then unsuccessfully opposed a motion by those
Colorado defendants to move the litigation off of their home
turf and back to Canada.
¶
3 Avicanna is a Canadian corporation with its principal place
of business in Ontario, Canada. It contracted with St. J
Distribution LLC, a Colorado limited liability company, and
several of its members to purchase certain assets from that
business.[2] Among other things, the asset purchase
agreement included the following choice of law and forum
selection provision:
9.10 Governing Law; Attornment
This Agreement will be construed, interpreted and enforced in
accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable therein. Each Party
irrevocably attorns and submits to the exclusive jurisdiction
of the courts of Ontario and irrevocably waives objection to
the venue of any proceeding in those courts or that those
courts provide an inconvenient forum.
¶
4 Alleging breach of contract, Avicanna sued all of the
contractual counterparties, along with Laughing Dog Group,
LLC, [3]in Pitkin County. Two of the defendants,
St. J Distribution LLC and John David Robinson (collectively,
St. J), then filed cross-claims against the remaining
defendants - Timothy Mewhinney, Steven Garcia, and The
Laughing Dog Group, LLC (collectively, the Mewhinney
defendants).
¶
5 The Mewhinney defendants moved to dismiss both the
complaint and St. J's cross-claims for failure to state a
claim on which relief may be granted. Neither motion
mentioned the forum selection clause. Instead, the Mewhinney
defendants kept quiet about the issue until filing their
reply in support of their motion to dismiss Avicanna's
complaint, when they argued that the forum selection clause
deprived the trial court of jurisdiction over the dispute.
¶
6 Because the Mewhinney defendants raised it for the first
time in a reply (and because it did not implicate the
district court's subject matter jurisdiction, see
Nickerson v. Network Sols., LLC, 2014 CO 79, ¶ 13),
the district court declined to consider the Mewhinney
defendants' forum selection argument as part of the
motions to dismiss. In a subsequent sua sponte order,
however, the court stated that "the issue is
significant, and if a party wishes to enforce [the forum
selection clause] . . . it should be afforded an opportunity
to present argument to that effect." The court invited
briefing on the issue and, shortly thereafter, the Mewhinney
defendants moved to enforce the forum selection clause.
¶
7 In a detailed written order, the district court ruled that
the forum selection clause "unambiguously states that
each party submits to the jurisdiction of [the
courts of] Ontario," and that because nothing in the
parties' agreement showed that the clause was included
"solely for Avicanna's benefit," Avicanna could
not unilaterally waive it. The district court also rejected
Avicanna's argument that the Mewhinney defendants
"relinquished any right to enforce the clause by failing
to raise it earlier," thereby waiving their right to
invoke its protections. Although the court stated that the
Mewhinney defendants' tardiness in raising the issue made
it "a close case," the court ultimately concluded
that Avicanna was not prejudiced by the delay. As a result,
the court granted the Mewhinney defendants' motion to
enforce the forum selection clause and dismissed the case
without prejudice.
II.
Avicanna Could Not Unilaterally Waive the Forum Selection
Clause
¶
8 Avicanna argues that the forum selection clause in the
contract was intended for its sole benefit, and that it was
therefore entitled to unilaterally waive its ...