Utah courts may have jurisdiction over a matter even though a given court is not the most convenient location to litigate the matter. This may occur, for example, if two California residents (or businesses) enter into a contract for work to be performed in California but agree that litigation over that contract will occur in Utah. In such a situation, a Utah court may well have jurisdiction over the parties and their dispute, even though a California court would be a more fitting. When a Utah court faces this issue, it may elect to decline its jurisdiction under a doctrine know as “forum non conveniens.”
The Utah Court of Appeals in Rocky Mountain Builders Supply Inc. v. Marks, 2017 UT App 41, 2017 WL 836856, recently discussed the forum non conveniens doctrine. In that case, a Utah roofing contractor entered into a contract with a Montana resident for work to be performed in Montana. The contract had a forum selection clause designating Utah as the forum for resolving any disputes between the parties arising from the contract. After a dispute arose, the contractor sued the Montana resident in Utah.
The Montana resident quickly asked the trial court to find the contract’s forum selection clause was unenforceable and dismiss the action. After reviewing the contractual nature of the case and the relatively small amount at issue, the trial court found that enforcing the forum selection clause would be unjust due to the “heavy financial and practical burden” that litigating in Utah would place on the Montana resident. Therefore, the court concluded it did not have jurisdiction over the dispute because the forum selection clause was unenforceable, requiring dismissal of the case. The contractor appealed this dismissal to the Utah Court of Appeals.
The Utah Court of Appeals began its analysis by noting that a contract’s forum selection clause is to be given effect unless it is unfair or unreasonable. Ultimately, the court of appeals disagreed with the trial court’s determination that enforcing the forum selection clause was unjust. The court of appeals explained that a forum selection clause must effectively deprive a party of their day in court to be unenforceable, and the acknowledged inconvenience to the Montana resident did not rise to that level. Additionally, the court of appeals explained that Utah courts may exercise jurisdiction over a dispute if at least one party to the contract is a Utah resident, which the contractor was in this case. Consequently, the court of appeals held that the trial court, in fact, did have jurisdiction over the dispute. Thus, the trial court had erred by entering a dismissal based on lack of jurisdiction, and the case was remanded to the trial court for further proceedings.
The court of appeals’ analysis did not end there. The court of appeals also noted that forum non conveniens is a well-established doctrine that allows a court with jurisdiction over a lawsuit to decline to exercise that jurisdiction, as a matter of discretion, when the cause could better be tried in a more convenient court. Therefore, the trial court was free to decline to exercise its jurisdiction once it resumed control over the case upon remand.