Plaintiff appeals as of right the circuit court order dismissing her complaint without prejudice on the basis of a forum-selection clause in the parties’ contract. We affirm. This appeal is being decided without oral argument. MCR 7.214(E).
I. FACTS
Plaintiff was employed as a branch manager by defendant, a Washington corporation, pursuant to an employment contract. The contract contained both a choice-of-law provision and a forum-selection provision:
This agreement shall be subject to and governed by the laws of Washington, irrespective of the fact that a party is or may become a resident of a different state.
Both parties hereby agree that the Circuit Court of Pierce County, State of Washington, shall have the exclusive jurisdiction to hear and determine any and all disputes, controversies, or claims arising out of, or relating to this Agreement, or concerning the respective rights of the parties hereunder and, for such purposes, do hereby submit themselves to the sole personal jurisdiction of that Court.
Plaintiff brought this action in the Wayne Circuit Court, alleging that defendant failed to pay commissions that she was owed under the contract. Defendant argued that, in light of the forum-selection clause, plaintiff should have brought this action in the state of Washington.
Plaintiff asserted that the forum-selection clause was unenforceable pursuant to MCL 600.745(3), which provides in pertinent part:
If the parties agreed in writing that an action on a controversy shall be brought only in another state and it is brought in a court of this state, the court shall dismiss or stay the action, as appropriate, unless any of the following occur:
(c) The other state would be a substantially less convenient place for the trial of the action than this state.
(d) The agreement as to the place of the action is obtained by misrepresentation,duress, the abuse of economic power, or other unconscionable means.
(e) It would for some other reason be unfair or unreasonable to enforce the agreement.
Defendant suggested that the forum-selection clause was enforceable under MCL 600.745(3), and that, in the alternative, Washington law should apply to determine the enforceability of the contract’s forum-selection clause.
The trial court observed that “[p]eople are free to bargain for the [forum] where any dispute will be litigated and [plaintiff] did so . ...” Having found that plaintiff freely consented to the forum-selection provi sion, and that the provision did not fall within any of the MCL 600.745(3) exceptions, the trial court enforced the forum-selection clause and dismissed the action without prejudice. 1
II. FORUM-SELECTION CLAUSE
Plaintiff argues that the trial court erred in dismissing this action pursuant to the forum-selection clause in the parties’ contract. We disagree.
A. STANDARD OF REVIEW
Michigan courts have not precisely identified the proper standard for reviewing a trial court’s dismissal based on a forum-selection clause. Both parties contend on appeal that a trial court’s dismissal of an action pursuant to a contractual forum-selection clause should be reviewed de novo.
While not identical, dismissal based on a forum-selection clause is similar to a grant of summary disposition for lack of personal jurisdiction. Although a valid forum-selection clause does not
divest
the Michigan courts of personal jurisdiction over the parties, it evinces the parties’ intent to forgo personal jurisdiction in Michigan and consent to
exclusive
jurisdiction in another forum. See
James v Midland Co Agricultural & Horticultural Society,
Moreover, a dismissal based on a forum-selection clause necessarily requires interpretation and application of contractual language. The legal effect of a contractual clause is a question of law that we review de novo.
Quality Products & Concepts Co v Nagel Precision, Inc,
In light of the above authority and the contractual nature of forum-selection provisions, we are convinced that a trial court’s dismissal of an action pursuant to a contractual forum-selection clause is properly reviewed on appeal under a de novo standard.
B. ANALYSIS
We begin with Michigan’s fundamental rules of contract interpretation, set forth by our Supreme Court in Quality Products & Concepts, supra:
In interpreting a contract, our obligation is to determine the intent of the contracting parties. If the language ofthe contract is unambiguous, we construe and enforce the contract as written. Thus, an unambiguous contractual provision is reflective of the parties’ intent as a matter of law. Once discerned, the intent of the parties will be enforced unless it is contrary to public policy. [Id. at 375 (internal citations omitted).]
It is undisputed that Michigan’s public policy favors the enforcement of contractual forum-selection clauses and choice-of-law provisions. See
Offerdahl v Silverstein,
The analysis grows more complicated, however, when a single agreement contains both a forum-selection clause and a choice-of-law provision. When a party to such an agreement sues in a state that is not designated by either the forum-selection clause or the choice-of-law provision, it becomes necessary to determine which state’s law will govern the enforceability of the forum-selection clause itself. In other words, the trial court where the action is filed must decide whether to determine the enforceability of the forum-selection clause by applying its own law, or by applying the law designated in the choice-of-law provision. 2
In the case at bar, the parties designated the state of Washington in the forum-selection clause and Washington state law in the choice-of-law provision. Notwithstanding these provisions, plaintiff filed suit in Michi gan. Therefore, in order to decide whether to exercise or decline jurisdiction, it was essential for the trial court to determine whether the forum-selection clause was valid and enforceable. Accordingly, under ordinary circumstances, the trial court would have been required to first determine whether Michigan or Washington law governed the forum-selection clause’s enforceability. 3
As noted earlier, Michigan courts generally enforce contractual forum-selection clauses. MCL 600.745(3);
Offerdahl, supra
at 419. The exceptions to this rule are stated in MCL 600.745(3)(a)-(e), and unless one of the statutory exceptions applies, Michigan courts will enforce a forum-selection clause as written. The statutory exceptions that are relevant in this case provide that a forum-selection clause should be enforced unless “[t]he other state would be a substantially less convenient place for the trial[,]” “[t]he agreement as to the place of the action is obtained by misrepresentation, duress, the abuse of economic power, or other unconscionable means[,]” or “[i]t would for some other reason be unfair or unreasonable to enforce the agreement.” MCL 600.745(3)(c)-(e). A party seeking to avoid a contractual forum-selection clause bears a heavy burden of showing that the clause should not be enforced.
The Bremen v Zapata Off-Shore Co,
Our research has revealed that the standards for enforcing contractual forum-selection provisions under Washington law are substantially similar. In general, Washington state courts will enforce a forum-selection clause unless it is unreasonable, unjust, or unfair.
Voicelink Data Services, Inc v Datapulse, Inc,
86 Wash
Turning to the case at bar, defendant presented affidavits stating that the witnesses and voluminous employment records needed to defend this action are located in Washington. Moreover, defendant’s affidavits showed that only a minimal amount of relevant evidence is located in Michigan. Plaintiff asserted that most of her witnesses reside in Michigan, that the pertinent transactions took place in Michigan, and that certain factual information concerning the case is located in Michigan. However, plaintiff failed to present admissible documentary evidence supporting any of these assertions. Plaintiff also claimed that the contract was obtained through abuse of economic power, inasmuch as defendant is a large corporation and she is a mere individual who was unable to negotiate the terms of the contract at the time the agreement was executed. Again, however, plaintiff failed to present evidence to support her assertions that defendant wielded unfair bargaining power or that the clause was not subject to negotiation. Under the law of both Michigan and Washington, plaintiffs unsupported allegations were inadequate to meet her burden of showing that enforcement of the forum-selection clause would have been unreasonable, unjust, substantially inconvenient, or unfair. The Bremen, supra at 17-18; Bank of America, supra at 748; see also 1 Restatement Conflict of Laws, 2d (1988 Revisions), § 80, comment c, p 85 (“[t]he burden of persuading the court that stay or dismissal of the action would be unfair or unreasonable is upon the party who brought the action”).
Moreover, the claimed inconvenience of litigating in Washington should have been apparent to plaintiff when she agreed to the forum-selection clause. Like the Washington Court of Appeals and the United States Supreme Court, we conclude that inconvenience, insofar as it is within the contemplation of the parties at the time of contracting, should not render a forum-selection clause unenforceable. The Bremen, supra at 16-17; Bank of America, supra at 748-749. Where the inconvenience of litigating in another forum is apparent at the time of contracting, that inconvenience is part of the bargain negotiated by the parties. Allowing a party who is disadvantaged by a contractual choice of forum to escape the unfavorable forum-selection provision on the basis of concerns that were within the parties’ original contemplations would unduly interfere with the parties’ freedom to contract and should generally be avoided.
III. ATTORNEY FEES
Defendant also asserts that it is entitled to attorney fees incurred in defending this action, including the
appeal. Defendant asserted its claim for attorney fees below, but the trial court denied the request. Although filing a cross-appeal is not necessary to argue an alternative basis for affirming the trial court’s decision, the failure to do so generally precludes an
IV CONCLUSION
Similar to a dismissal for lack of jurisdiction, see MCR 2.504(B)(3), a dismissal based on a contractual forum-selection clause is not an adjudication on the merits. Therefore, such a dismissal is properly characterized as a dismissal without prejudice. See
ABB Paint Finishing, Inc v Nat’l Union Fire Ins Co of Pittsburgh,
Affirmed.
Notes
Contrary to plaintiffs assertion, the trial court did not dismiss this case for improper venue.
Such a decision necessarily requires the court to first determine under its own law whether the contractual choice-of-law provision is itself enforceable. See
Beilfuss v Huffy Corp,
Michigan courts have never squarely addressed whether the enforceability of a contractual forum-selection clause should be governed by the law of the state where the action was filed or, in the alternative, the law selected by the parties in the choice-of-law provision. However, courts in several other jurisdictions have addressed this matter. Many jurisdictions follow the rule that, provided the choice-of-law provision is enforceable under the law of the state where the action was filed, the law selected in the choice-of-law provision will govern the applicability or enforceability of the forum-selection clause. The rationale for this view is that the parties contracted for the law of a specific jurisdiction, and therefore the law of the state where the action was filed should not be applied to displace the contractually chosen law. See
Jacobsen Construction Co v Teton Builders,
See
Morgan Bank (Delaware) v Wilson,
164 Ariz 535, 538;