Inc. v. Mewhinney

Excerpt

Avicanna Inc. is a Canadian corporation with its principal place of business in Ontario. It contracted with St. J Distribution LLC, a Colorado company, and several of its members to purchase certain assets. The asset purchase agreement included a choice of law and forum selection clause in favor of the laws of the Province of Ontario and the federal laws of Canada. Avicanna sued the contractual counterparties and Laughing Dog Group, LLC, which was owned and/or managed by one or more members of St. J Distribution. Two of the defendants, St. J Distribution and Robinson, then filed cross-claims against the remaining defendants, Mewhinney, Garcia, and Laughing Dog Group (collectively, the Mewhinney defendants) for breach of contract. The Mewhinney defendants moved to dismiss both the complaint and cross-claims for failure to state a claim upon which relief may be granted. Neither motion mentioned the forum selection clause. But in their reply to support their motion to dismiss, the Mewhinney defendants argued the forum selection clause deprived the trial court of jurisdiction over the dispute. Because the forum selection argument was raised in a reply, the district court declined to consider it. But the court sua sponte later invited briefing on the issue, and it granted the motion to enforce the forum selection clause and dismissed the case without prejudice. On appeal, Avicanna argued that the forum selection clause was intended for its sole benefit and Avicanna was therefore entitled to unilaterally waive its protections and file suit in Colorado. A forum selection clause in a contract will be enforced unless the party seeking to avoid its effect proves that enforcement of the clause would be unfair or unreasonable. Avicanna did not argue that the clause would be unfair or unreasonable or that the clause was ambiguous. Rather, Avicanna asserted that it was entitled to unilaterally waive enforcement of the clause because it was the only party that was an Ontario resid