392 P.3d 981
Utah Ct. App.2017Background
- RMBS, a Utah corporation, contracted with Montana resident Steve Marks to replace roofs on two gazebos and a shed at Marks’s Montana home for $14,000; the written form contract included a Utah forum-selection clause and a Utah choice-of-law provision.
- After completion, Marks refused to pay the $11,200 balance; RMBS sued Marks in Utah Fourth District Court.
- Marks moved to dismiss; the district court held the forum-selection clause unenforceable as unfair (given Marks’s status as an individual, the residential nature of the work, and the small amount) and dismissed for lack of personal jurisdiction.
- RMBS appealed, arguing Utah law governed enforceability and that the clause was valid and created a rational nexus for Utah jurisdiction.
- The Court of Appeals reviewed the documentary record de novo, assumed Utah law applied (per the contract), and evaluated enforceability under Utah precedent adopting the Restatement test.
- The Court of Appeals reversed: it held the forum-selection clause enforceable, found a sufficient rational nexus to Utah (RMBS’s residence and principal place of business), and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument (RMBS) | Defendant's Argument (Marks) | Held |
|---|---|---|---|
| Enforceability of forum‑selection clause | Clause is valid under Utah law and not unfair or unreasonable | Clause is unfair given Marks is an individual, dispute concerns his residence, and amount is small | Enforceable — no evidence clause was unfair or negotiated coercively |
| Personal jurisdiction in Utah given clause | Clause creates rational nexus; RMBS is Utah resident/business so Utah has interest | Without clause, Utah lacks jurisdiction; dismissal required | Personal jurisdiction may be exercised because clause is valid and a rational nexus exists |
| Public‑policy/statutory bar for construction clauses | Utah law governs; Jacobsen permits enforcing forum clauses despite construction locus | District court relied on Utah Code §13‑8‑3 and policy favoring situs adjudication | Enforcement not barred here; Jacobsen rejects a blanket rule that construction disputes must be litigated at project site |
| Forum non conveniens / burden on individual defendant | Forum non conveniens is discretionary, not jurisdictional; burdens alone don’t invalidate clause | Requiring defense in Utah imposes heavy practical/financial burden on Marks | Burden alone (individual status, small claim, residential nature) insufficient to render clause unreasonable; forum non conveniens remains a separate discretionary doctrine |
Key Cases Cited
- Prows v. Pinpoint Retail Systems, Inc., 868 P.2d 809 (Utah 1993) (adopts Restatement standard for enforceability of forum‑selection clauses)
- John Call Eng’g, Inc. v. Manti City Corp., 743 P.2d 1205 (Utah 1987) (contracting parties are responsible for reading and understanding contract terms)
- Jacobsen Constr. Co. v. Teton Builders, 106 P.3d 719 (Utah 2005) (valid forum clauses may be enforced where a rational nexus to Utah exists; Utah has policy interest in providing forum for its residents)
- Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (U.S. 1991) (upholding reasonable forum clause in form contract)
- Polzin v. Appleway Equip. Leasing, Inc., 191 P.3d 476 (Mont. 2008) (upholding forum clause in standard contract between corporate seller and individual buyer)