Unpublished Disposition, 930 F.2d 26 (9th Cir. 1991)

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U.S. Court of Appeals for the Ninth Circuit - 930 F.2d 26 (9th Cir. 1991)

AMERICAN BUSINESS CREDIT, INC., an Oregon corporation, andC.J. Trumpower, Plaintiffs-Appellants,v.TANDY ELECTRONICS, INC., dba Tandy Computer Leasing, a Texascorporation, and Tandy Corporation, dba RadioShack, a Delaware corporation,Defendants-Appellees.

No. 90-35524.

United States Court of Appeals, Ninth Circuit.

Submitted March 8, 1991.* Decided April 5, 1991.



American Business Credit and C.J. Trumpower appeal the summary judgment dismissal of their action against Tandy Electronics, Inc., and Tandy Corporation for fraud and breach of express and implied warranties. We affirm.

Tandy Electronics sued ABC and Trumpower in Texas state court for breach of contract. ABC and Trumpower failed to appear or answer, and the Texas court entered a default judgment in favor of Tandy Electronics. ABC and Trumpower brought this action against Tandy Corporation and Tandy Electronics in Oregon state court, alleging fraud and breach of express and implied warranties. The defendants removed to federal district court on August 3, 1989. On May 31, 1990, the district court entered summary judgment in favor of the defendants.

ABC and Trumpower recognize that if the Texas court had personal jurisdiction over them, their claims are res judicata and summary judgment for defendants was appropriate. They argue that: (a) the forum selection clause in the computer leases was unenforceable, (b) even if the clause was enforceable it did not apply to Trumpower, and (c) in the absence of valid consent the exercise of personal jurisdiction over them by the Texas court violated due process.

We review for abuse of discretion the district court's finding that the forum selection clause was enforceable. Spradlin v. Lear Siegler Management Services, No. 89-16413, slip op. at 1878 (9th Cir. Feb. 15, 1991). Federal common law controls the enforcement and interpretation of forum selection clauses in diversity actions. Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 513 (9th Cir. 1988). In the context of commercial contracts, forum selection clauses are prima facie valid and should not be set aside unless the party challenging the clause can " 'clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.' " Spradlin, No. 89-16413, slip op. at 1878-79 (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)).

ABC and Trumpower argue that Shute v. Carnival Cruise Lines, 897 F.2d 377 (9th Cir.), cert. denied, 111 S. Ct. 39 (1990) (forum selection clause in cruise ship passenger ticket not enforced because clause was not bargained for and did not represent expressed intent of the parties) controls. We reject the argument. Nothing in the record suggests that (1) ABC was unaware that the leases contained the forum selection clause; (2) ABC was unsophisticated regarding bargaining techniques; (3) ABC was powerless to alter the contract terms, see Shute, 897 F.2d at 388 (quoting The Bremen, 407 U.S. at 12-13 (complex commercial contract between two sophisticated parties distinguishable from form contract with boilerplate language that party had no power to alter); (4) the clause was included as the result of fraud, undue influence, or overweening bargaining power such that it is not the expressed intent of the parties, see Shute, 897 F.2d at 388 (quoting Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 280 (9th Cir. 1984)); see also Spradlin, No. 89-16413, slip op. at 1881 (no evidence of unreasonableness or fraud beyond conclusory allegations of fraud and inconvenience); or (5) ABC was incapable of litigating in Texas. See Shute, 897 F.2d at 389 (record contained evidence that Shutes were physically and financially incapable of litigating in Florida); see also Spradlin, No. 89-16413, slip op. at 1882 (plaintiff failed to produce evidence of inconvenience he would suffer by being forced to litigate in Saudi Arabia, such as allegations of travel costs, availability of counsel in Saudi Arabia, location of witnesses, or financial ability to bear costs). When a plain and unambiguous disclaimer clause is a part of the contract, he who would disavow it must offer evidence of its unenforceability.

We reject ABC's and Trumpower's argument that the case is analogous to Colonial Leasing Co. v. Pugh Bros. Garage, 735 F.2d 380, 382 (9th Cir. 1984) (affirming district court's invalidation of forum selection clause where defendants contracted to lease pipe-bending machine from New York corporation, which subsequently sold the equipment to an Oregon firm). The defendants in Pugh Bros. thought they were dealing only with the New York firm, and had no idea that the Oregon corporation was involved. Id. Here, the district court did not abuse its discretion in finding that the forum selection clause was enforceable.

The argument that the forum selection clause did not confer jurisdiction over Trumpower because he signed the personal guaranty in his individual capacity is meritless. Where there is a substantive identity of interests between the guarantor and the corporation whose obligation he or she guarantees, and evidence that the beneficiary of the guaranty would not have entered into the transaction without the guaranty, jurisdiction may be asserted. See Forsythe v. Overmyer, 576 F.2d 779, 783-84 (9th Cir.), cert. denied, 439 U.S. 864 (1978) (chairman of board and sole shareholder in corporation injected self into transaction by assuming personal liability in event of default). See also National Can Corp. v. K Beverage Co., 674 F.2d 1134, 1137-38 (6th Cir. 1982) (guaranty signed by sole shareholders of corporation and their wives); Marathon Metallic Building Co. v. Mountain Empire Construction Co., 653 F.2d 921, 923 (5th Cir. 1981) (guaranty signed by officer-director-shareholder of Colorado corporation); Lemme v. Wine of Japan Import, Inc., 631 F. Supp. 456, 460-461 (E.D.N.Y. 1986) (guarantor who guaranteed performance of each and every term and condition of agreement consented to personal jurisdiction in New York by agreeing to personally guarantee contracts, although the guaranty agreements did not contain a consent-to-jurisdiction provision).

Since the forum selection clause was enforceable and conferred personal jurisdiction in Texas over ABC and Trumpower, we need not decide whether in the absence of the clause, the exercise of jurisdiction would comport with due process.



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Circuit Rule 36-3


The panel unanimously finds this case suitable for submission without oral argument. See Fed. R. App. P. 34(a); 9th Cir.R. 34-4