JUSTIN L. JOHNSON, Plaintiff and Appellant, v. FOREST RIVER RV, INC., et al., Defendants and Respondents.
D085014
COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA
August 22, 2025
NOT TO BE PUBLISHED IN OFFICIAL REPORTS. California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. CVRI2305407). APPEAL from an order of the Superior Court of Riverside County, Carol Greene, Judge. Reversed and remanded.
Phillips, Spallas & Angstadt, Michael R. Halvorsen and Matthew A. Gardner for Defendants and Respondents.
Justin L. Johnson appeals from an order staying his action under the
Since the trial court‘s ruling, several published decisions have reached a contrary result in similar circumstances involving a defendant‘s offer to stipulate to the application of California law in the foreign jurisdiction. (Lathrop v. Thor Motor Coach, Inc. (2024) 105 Cal.App.5th 808, review granted Jan. 15, 2025, S287893 (Lathrop); Hardy v. Forest River, Inc. (2025) 108 Cal.App.5th 450, review granted Apr. 30, 2025, S289309 (Hardy).)1 Following the reasoning of these cases, we conclude that enforcing the Indiana forum selection clause in reliance on the defendants’ proposed
FACTUAL AND PROCEDURAL BACKGROUND
In October 2023, Johnson filed a complaint against Forest Rivеr and Beaumont RV regarding an allegedly defective Forest River trailer he purchased from Beaumont RV in Riverside, California. The complaint alleged that the defendants had violated the Song-Beverly Act and breached Forest River‘s express limited warranty and the implied warranty of merchantability by failing to perform necessary repairs to the trailer and failing to replace the defective trailer. (
In March 2024, Forest River filed a motion to stay the proceedings under
“EXCLUSIVE JURISDICTION FOR DECIDING LEGAL DISPUTES RELATING TO THIS LIMITED WARRANTY, AN ALLEGED BREACH OF WARRANTY, BREACH OF IMPLIED WARRANTIES, OR REPRESENTATIONS OF ANY KIND MUST BE FILED IN THE COURTS WITHIN THE STATE OF INDIANA.
“ANY AND ALL CLAIMS OR CAUSES OF ACTION ARISING OUT OF OR RELATING TO THIS LIMITED WARRANTY OR IMPLIED WARRANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE OF INDIANA, WHETHER SUCH CLAIMS SOUND IN CONTRACT, TORT, OR STATUTE (INCLUDING THE STATUTE OF LIMITATIONS), WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW RULE THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION.”
Beaumont RV joined in Forest River‘s motion and similarly stated in its joinder that it “stipulates that the Song-Beverly Consumer Warranty Act,
Johnson opposed the motion to stay the California action. He argued in relevant part that (1) enforcement of the forum selection clause would violate California public policy under the anti-waiver provision of the Song-Beverly Act (
After a hearing, the trial court adopted its tentative rulings granting Forest River‘s motion to stay the proceedings and granting Beaumont RV‘s joinder. The court concluded that the forum selection clause was enforceable and did not violate Johnson‘s unwaivable rights because Forest River and Beaumont RV had stipulated to the application of California law by the Indiana courts. The court ruled that Johnson could move to lift the stay if the Indiana courts refused to apply California law.
An order granting a motion to stay an action on forum non conveniens grounds is appealable. (
The trial court did not have the benefit of Lathrop and Hardy at the time of its ruling. These recent cases clarify that (1) an invalid choice-of-law provision cannot be severed from a related forum selection clause when the agreement as written violates public policy because it would result in a waiver of unwaivable rights under California law; and (2) a post-dispute offer by the defendant not to enforce the invalid choice-of-law provision does not make the otherwise unenforceable forum selection clause enforceable. We find these cases persuasive and follow their holdings.
Lathrop was the first case to reach this conclusion. In Lathrop, an express warranty designated Indiana as the exclusive forum and also stated that Indiana law would govern all disputes. After purchasing a motorhome in California, the plaintiffs sued the manufacturer in California under the Song-Beverly Act and the
As a matter of first impression, the Lathrop court held that the proposed stipulation did not “render[] an otherwise unenforceable forum selection clause enforceable.” (Lathrop, supra, 105 Cal.App.5th at p. 820, review granted.) The court concluded that requiring the plaintiffs to accept the manufacturer‘s stipulation wоuld violate public policy. (Id. at pp. 820–824.) It treated the manufacturer‘s offer to stipulate as essentially a request to sever the invalid Indiana choice-of-law provision from the rest of the agreement. (Id. at p. 820.) Applying the reasoning of the Supreme Court‘s severance decisions in Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478 (Ramirez) and Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 (Armendariz), the Lathrop court noted that the overarching inquiry was whether the intеrests of justice would be served by severance, which included consideration of any deterrent effect. (Lathrop, at p. 820.)
Lathrop held that severing the invalid choice-of-law provision and enforcing the forum selection clause “would not further the interests of justice.” (Lathrop, supra, 105 Cal.App.5th at p. 820, review granted.) The court reasoned: “Even if [the manufacturer]‘s stipulation protects the rights of the plaintiffs who are savvy enough to obtain experienced legal representation, file in California, and argue the forum selection clause implicates their unwaivable statutory rights, other California consumers, compelled by the forum selection clause, may file suit in Indiana and only later discover . . . that they have given up unwaivable California statutory
Moreover, “[a]ccepting [the manufacturer]‘s proposed stipulation and enforcing its forum selection clause would also create an incentive for [it] to continue to include admittedly unenforceable provisions in its warranties and would deter [it] from revising its warranty to comply with California law.” (Lathrop, supra, 105 Cal.App.5th at pp. 821–822, review granted, citing Ramirez, supra, 16 Cal.5th at p. 517 [“severing multiple unconscionable provisions from an agreement and enforcing the remainder could ‘create an incentive for an employer to draft a one-sided arbitration agreement in the hope employees would not challenge the unlawful provisions, but if they do, the court would simply modify the agreement to include the bilateral terms the employer should have included in the first place’ “]; Armendariz, supra, 24 Cal.4th at p. 124, fn. 13 [“An employer will not be deterred from routinely inserting [an unlawful] clause into the arbitration agreements it mandates for its employees if it knows that the worst penalty for such illegality is the severance of the clause after the employee has litigated the matter“].) Thus, the Lathrop court concluded that the manufacturer‘s offer to stipulate that California law would apply in the Indiana court did not make the forum selection clause enforceable. (Lathrop, at pp. 820–824.)
The court reached a similar result in The Comedy Store v. Moss Adams LLP (2024) 106 Cal.App.5th 784, review granted February 11, 2025, S288469 (The Comedy Store). There, the defendant seeking to enforce a Washington forum selection clause agreed not to invoke a pre-dispute jury waiver that was unenforceable in California. (Id. at pp. 787–788.) The Court of Appeal found “no authority to show the trial court could disregard a contract term that violates public policy because a party has made a post-contractual offer
Most recently, the Hardy court followed Lathrop in circumstances virtually identical to ours. (Hardy, supra, 108 Cal.App.5th 450, review granted.) As in this case, the plaintiff in Hardy sued Forest River under the Song-Beverly Act for breach оf express and implied warranties for failure to repair or replace a Forest River motorhome; Forest River filed a motion to stay or dismiss the action on forum non conveniens grounds invoking the Indiana forum selection clause of the Forest River limited warranty; Forest River acknowledged that enforcing the Indiana choice-of-law рrovision of the warranty would result in a waiver of unwaivable rights under the Song-Beverly Act; Forest River therefore offered to stipulate that the Song-Beverly Act would apply in the Indiana court; the trial court granted the motion and stayed the California action; and the trial court ruled that the plaintiff could move to lift the stay if the Indiana court declined to apply the Song-Beverly Act. (Hardy, at pp. 453–456.)
The Court of Appeal reversed. It held that the Song-Beverly Act “created unwaivable rights” and the burden was therefore on the party seeking to enforce the forum selection clause to prove that it would not result in a significant diminution of rights to California consumers. (Hardy, supra, 108 Cal.App.5th at pp. 456–457, review granted.) The court noted: “Whether Forеst River is willing now to abide by the Song-Beverly Act, does not change the fact that the warranty as written, choosing Indiana law, is void and
As in Lathrop, the Hardy court concluded that Forest River‘s post-dispute stipulation was “effectively a request to sever the choice of law provision from the agreement . . . and enforce the forum selection clause.” (Hardy, supra, 108 Cal.App.5th at p. 458, review granted.) The court therefore turned to “case law on the severancе of unconscionable terms in contracts,” including Ramirez and Armendariz. (Hardy, at pp. 458–459.) Quoting Lathrop, the court ruled that enforcing Forest River‘s one-sided offer to stipulate would violate California public policy because the warranty as written could cause some California consumers to file suit in Indiana and give up unwaivable California rights unknowingly; it could deter others from pursuing their claims at all; and enforcing the offer to stipulate would therefore create an incentive for Forest River to continue to include admittedly unenforceable provisions in its warranties. (Id. at p. 460.) For these reasons, the court declined to sever the invalid choice-of-law provision. (Ibid.)
The court in Hardy also concluded that the problem was not solved by allowing the plaintiff to file a motion to lift the stay if the Indiana courts failed to apply California law. (Hardy, supra, 108 Cal.App.5th at pp. 462–463, review granted.) Relying on two prior cases that rejected such a solution (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 161–162 (Verdugo) and America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 20–21), the Hardy court stated “we share the concerns in Verdugo and America Online regarding how, and at what point, the California trial court would or could entertain a motion to lift the stay.” (Hardy, at p. 463.) The court queried: “Would it be proper to do so whenever the Indiаna court made a ruling that the plaintiff believed contrary to the requirements of the Song-Beverly Act, even though the Indiana court stated that it was following California law?” (Ibid.) The court ultimately concluded that this “seemingly neat solution . . . neither follows California law . . . nor aligns with basic principles of comity.” (Ibid.) Accordingly, it reversed the order and directed the trial court to enter a new order denying Forest River‘s motion to dismiss or stay the action. (Id. at p. 464.)
The Hardy court summarized the proper form of analysis in these circumstances as follows: “[W]hen reviewing a forum selection clause in the context of unwaivable rights, a court must first look to whether the forum selection clause was unconscionable, void, or violated public policy as of the time the agreement was made. If it was, then the court must consider whether to sever the unconscionable or void clauses from the agreement, taking into consideration the factors spelled out in Ramirez and Armendariz. However, in choosing whether to sever, unless there is a bilateral stipulation to which all parties agree, the court may not augment or reform the contract by issuing an order contrary to the agreement actually entered into by the parties.” (Hardy, supra, 108 Cal.App.5th at p. 463, review granted.)
Hardy is directly on point. Under its holding, the trial court here applied improper criteria or incorrect legal assumptions by relying on Forest
In arguing to the contrary, Forest River relies heavily on language in Verdugo, supra, 237 Cal.App.4th at pp. 145, 158, which suggested the possibility a defendant might be able to stipulate to apply California law. As other courts have since recognized, however, Verdugo‘s discussion of this issue is dicta. (Hardy, supra, 108 Cal.App.5th at pp. 461–462, review granted; The Comedy Store, supra, 106 Cal.App.5th at pp. 792–793, review granted; Lathrop, supra, 105 Cal.App.5th at p. 824, review granted.) We follow the holdings of these recent cases, rather than the dicta of Verdugo. We therefore reach the same result as Hardy and reverse the order granting Forest River‘s motion to stay the action on forum non conveniens grounds.
The order is reversed and the matter remanded to the trial court. The trial court is directed to enter a new order denying the motion to stay. Johnson is entitled to recover his сosts on appeal.
BUCHANAN, J.
WE CONCUR:
McCONNELL, P. J.
CASTILLO, J.