214 N.C. App. 125
N.C. Ct. App.2011Background
- Plaintiff Jermaine Parson filed a class action in Guilford County, NC against Oasis Legal Finance, Baloun, and Chodes asserting multiple claims related to cash advances linked to his personal injury case.
- Parson signed an unsigned Oasis draft on 15 January 2008 and received a $2,972 check; a second advance of $750 occurred on 18 February 2008.
- Both Purchase Agreements contain governing law language favoring North Carolina and forum selection clauses designating Cook County, Illinois, for disputes.
- Oasis is Delaware-formed with Illinois offices; Baloun and Chodes are Illinois-based officers; the last act essential to formation occurred when an Oasis representative signed in Illinois.
- Parson settled his underlying personal injury action for $30,000 in June 2009; Oasis claimed $4,575.48 due under the agreements.
- The trial court denied defendants’ Rule 12(b)(3) motion to dismiss for improper venue; defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Where was the Purchase Agreement formed? | Parson contends NC formation since funds were delivered in NC. | Oasis argues formation occurred in Illinois where the last signing occurred. | Contract formed in Illinois. |
| Should the forum selection clause be enforced despite NC governing law? | Enforcement would be unreasonable/unfair for NC plaintiff over a small NC-law dispute. | Forum clause should be enforced; heavy burden to show unreasonableness or fraud. | Forum clause enforceable; not shown to be unreasonable or unfair. |
| What standard governs review of forum selection clauses? | Court should find enforcement unfair based on public policy and plaintiff's burden. | Abuse-of-discretion review; clause generally enforceable absent fraud or unequal bargaining power. | Abuse-of-discretion standard applied; clause enforceable absent fraud/unfairness. |
Key Cases Cited
- Bundy v. Commercial Credit Co., 200 N.C. 511 (1931) (last act essential to meeting of minds places contract formation location)
- Szymczyk v. Signs Now Corp., 168 N.C.App. 182 (2005) (forum clauses and choice-of-law considerations; formation vs. enforceability)
- Perkins v. CCH Computax, Inc., 333 N.C. 140 (1992) (heavy burden to avoid forum clause; enforceability standard)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum selection clauses prima facie valid and enforceable absent unreasonableness)
- Dine-A-Mate, Inc., 129 N.C.App. 773 (2007) (enforcement may be unfair where bargaining power is unequal)
- Appliance Sales & Serv. v. Command Elecs. Corp., 115 N.C.App. 14 (1994) (abuse-of-discretion standard for forum-selection issues)
- Bell Atl. Tricon Leasing Corp. v. Johnnie's Garbage Serv., 113 N.C.App. 476 (1994) (enforcement generally favored when contract terms consent to forum)