Electronic Payment Systems, LLC v. Adam T. Carralejo

Case Number

24CV00713

Case Type

Hearing Date / Time

Wed, 08/21/2024 - 10:00

Nature of Proceedings

Motion of Specially Appearing Defendant Adam T. Carralejo to Dismiss Action Based on Forum Non Conveniens

Tentative Ruling

For Plaintiff Electronic Payment Systems, LLC: Gary A. Bemis, John Scott Carter, Law Offices of Gary A. Bemis, APC                         

For Defendant Adam T. Carralejo: James C. Huber, Bryce M. Van De Moere, Global Legal Law Firm

                      

RULING

For the reasons set forth herein, the motion of Adam T. Carralejo to dismiss the action based on forum non conveniens is granted in part and denied in part as follows:

1. The parties are ordered to comply with the mandatory forum selection clause.

2. This action is stayed pending disposition by the Colorado Court.

3. A Status Conference re: dismissal is scheduled for August 20, 2025, at 10:00 a.m. in this department.

4. Carralejo’s request for attorneys’ fees is denied.

Note: This case is also on the CMC Calendar for 8:30 but both the CMC and the L&M matters will be called at 10am; no appearance necessary at 8:30am.

Background:

This action commenced on February 8, 2024, by the filing of the complaint by plaintiff Electronic Payment Systems, LLC (“EPS”) against defendant Adam T. Carralejo aka Adam Thomas Carralejo dba Carralejo Legal Group (“Carralejo”), setting forth causes of action for: (1) breach of contract; (2) open book account; (3) account stated; and (4) breach of personal guarantee.

As alleged in the complaint:

 On September 19, 2022, EPS and Carralejo entered into an agreement whereby Carralejo promised to pay EPS for all purchases and cash advances procured by the use of a card bearing Carralejo’s name and account number, including chargebacks. (Comp., ¶ 5.) On January 25, 2023, Carralejo breached the agreement by failing to make the agreed upon monthly payments. (Comp., ¶ 6) Demand was made for the outstanding balance owed of $72,838.00, but Carralejo has failed and refused to pay all or any part of the balance due. (Ibid.)

A copy of the written agreement is attached to the complaint and contains a mandatory choice of forum clause which reads:

“Governing Law. THIS AGREEEMNT AND ALL QUESTIONS ARISING IN CONNECTION HEREWITH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, AND ALL SUITS HERERUNDER OR IN RESPECT HERETO BY EITHER PARTY SHALL BE INSTITUTED IN THE COLORADO COURTS. FUTHERMORE, Merchant HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE COUNTY COURT OF ARAPAHOE COUNTY, COLORADO, THE DISTRICT COURT OF ARAPAHOE COUNTY, COLORADO, OR IN THE UNITED STATES DISTRICT COURT OR THE DISTRICT OF COLORADO, AND HEREBY CONSENTS TO SERVICE OF PROCESS AT MERCHANT’S ADDRESS SET FORTH ABOVE.” (Comp., Exh. A, ¶ 39.)

Carralejo now moves to dismiss this action based on the choice of forum clause and seeks attorneys’ fees. EPS does not dispute that the choice of forum clause should be enforced. However, EPS asks the court to stay this action, subject to Carralejo’s stipulation to not challenge jurisdiction and venue in Colorado, and that the statute of limitations be stayed for the time that this case was pending in California. EPS also requests 30 days to refile the action in Colorado to give EPS time to hire counsel that is licensed in Colorado. (Opp., p. 2, ll. 18-24.) EPS opposes the awarding of fees and costs to Carralejo.

Analysis

“When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” (Code Civ. Proc., § 410.30, subd. (a).)

“[A] party which has contracted away its right to choose its home forum (as well as all the concomitant conveniences of a home forum) has presumably done so because the value it receives from the negotiated deal is worth the chance the party may be required to litigate disputes elsewhere. To apply the general factors in this context would in essence be rewriting the bargain struck between the parties, which might not have been consummated in the absence of the forum-selection clause.” (Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1683.)

“If there is no mandatory forum selection clause, a forum non conveniens motion “ ‘requires the weighing of a gamut of factors of public and private convenience. . ..’ ” [Citation.] However, if there is a mandatory forum selection clause, the test is simply whether application of the clause is unfair or unreasonable, and the clause is usually given effect. Claims that the previously chosen forum is unfair or inconvenient are generally rejected. [Citation.] A court will usually honor a mandatory forum selection clause without extensive analysis of factors relating to convenience.” (Berg v. MTC Electronics Technologies (1998) 61 Cal.App.4th 349, 358-359.)

Here, the parties agree that a valid mandatory forum selection clause exists regarding this action. EPS admits that the clause is neither unfair, unreasonable, or that enforcing the clause would result in an unfair outcome. As such, the parties will be ordered to comply with the forum selection clause.

The remaining dispute is whether this action should be dismissed, as Carralejo requests, or stayed, as EPS requests.

“[T]he exceptional case which justifies the dismissal of a suit under the doctrine of Forum non conveniens is one in which California cannot provide an adequate forum or has no interest in doing so. Examples would include cases in which no party is a California resident [citation] or in which the nominal California resident sues on behalf of foreign beneficiaries or creditors.” (Archibald v. Cinerama Hotels (1976) 15 Cal.3d 853, 859.)

Here, California can provide an adequate forum and does have an interest in doing so. It would be inappropriate to dismiss this matter, and potentially deprive EPS of its ability to maintain its action against Carralejo, should the Colorado courts be unable or unwilling to provide a forum. For this reason, the action will be stayed pending disposition by the Colorado court.

            Attorney Fees

Carralejo seeks reimbursement of attorneys’ fees in the amount of $3,880.00.

First, the notice is defective. A notice of a motion must “must state … the grounds upon which it will be made” and in the opening paragraph, “the nature of the order being sought….” (Code Civ. Proc., § 1010; Cal. Rules of Court, rule 3.1110(a).) “The purpose of the notice requirements ‘is to cause the moving party to “sufficiently define the issues for the information and attention of the adverse party and the court.” ’ [Citations.]” (Kinda v. Carpenter (2016) 247 Cal.App.4th 1268, 1277.)

The notice makes no mention of attorneys’ fees or the grounds on which they are sought.

Second, Carralejo is not the “prevailing party” as used in Civil Code section 1717. Carralejo partially prevailed on a motion, not on the contract claims.

Thirdly, the declaration is deficient. It only states: “This firm’s fees in brining this motion total $3,880.00.” (Van De Moere Dec., ¶ 6.) There is no breakdown of fees, no hourly rate stated, no invoices, etc. Even if Carralejo filed a proper notice and was the prevailing party, the court would have no way of determining the reasonableness of the requested fees. None will be ordered.

Thomas P. Anderle, Judge