Ameriprint, LLC Versus Canon Solutions America, Inc.; Canon Financial Services, Inc.

AMERIPRINT, LLC NO. 21-C-94

VERSUS FIFTH CIRCUIT

CANON SOLUTIONS AMERICA, INC.; COURT OF APPEAL CANON FINANCIAL SERVICES, INC. STATE OF LOUISIANA

May 24, 2021

Susan Buchholz First Deputy Clerk

IN RE CANON FINANCIAL SERVICES, INC.

APPLYING FOR SUPERVISORY WRIT FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT, PARISH OF JEFFERSON, STATE OF LOUISIANA, DIRECTED TO THE HONORABLE DANYELLE M. TAYLOR, DIVISION "O", NUMBER 804-626

Panel composed of Judges Susan M. Chehardy, Fredericka Homberg Wicker, and Robert A. Chaisson

WRIT GRANTED

Canon Financial Services, Inc. (“CFS”) seeks supervisory review of a February 1, 2021 judgment of the trial court denying its declinatory exception of improper venue. For the following reasons, we grant CFS’s writ application, vacate the judgment of the trial court, and render judgment sustaining CFS’s exception of improper venue.

BACKGROUND

This writ application concerns the validity of a forum selection clause contained in multiple written agreements between Ameriprint, LLC (“Ameriprint”), as well as Ameriprint’s predecessor, H & H Printing Services, Inc. (“H & H Printing”), and CFS concerning the lease of a Canon printer on premises located at 3546 Airline Highway in Metairie, Louisiana. The initial contract for lease of the printer signed by H & H Printing and CFS on July 15, 2014 (the one- page Faxable Lease Agreement), sets forth general terms for the lease of the printer and monthly payment amounts. It also contains the following clause:

10. MISCELLANEOUS: THIS AGREEMENT SHALL BE GOVERNED BY NEW JERSEY LAW, ANY ACTION BETWEEN CUSTOMER AND CFS SHALL BE BROUGHT IN A COURT LOCATED IN THE COUNTY OF BURLINGTON OR CAMDEN, NEW JERSEY, PROVIDED THAT CFS AT ITS SOLE OPTION

21-C-94

MAY BRING SUCH ACTION IN A COURT WHERE THE CUSTOMER OR THE EQUIPMENT IS LOCATED. …

On or about October 15, 2016, Ameriprint assumed this lease and all its obligations from H & H Printing in a two-page “Assumption Agreement” signed by H & H Printing, Ameriprint, and CFS. This agreement states, “2. Assuming Party … hereby assumes all of the existing and future obligations … under the Agreement, being as fully responsible as if Assuming Party were the original Customer with respect thereto.”1

On August 21, 2019, CFS filed suit in the Superior Court of New Jersey, Burlington County against H&H Printing and Ameriprint alleging that the defendants had defaulted under the terms of the lease by failing to make the agreed upon lease payments.

On February 27, 2020, Ameriprint filed suit in the 24th Judicial District Court for the Parish of Jefferson for rescission and dissolution of the lease and for damages against both CFS and CSA. In its petition, Ameriprint acknowledged that H & H Printing entered into the original Lease Agreement with CFS, and that Ameriprint entered into the Assumption Agreement on October 15, 2016. Ameriprint alleged that, since assumption of the lease, it has experienced recurring problems with the printer due to defects such as the spewing of noxious substances which require remediation, that technicians were unable to make repairs, and that it lost profits and revenues. Ameriprint argues that CFS is in breach of the lease agreement, in particular in that the printer contains a redhibitory defect, the printer is not fit for ordinary use, and that the printer is not of the kind specified in the contract. Ameriprint seeks complete rescission and/or dissolution of the Lease Agreement as well as damages for lost profits and costs incurred.

In response to Ameriprint’s petition, CFS filed a declinatory exception of improper venue in which it argued that the forum selection clause contained in the Faxable Lease Agreement requires all claims to be filed in a New Jersey court and that venue in Jefferson Parish is improper.

In response to this exception, Ameriprint argued that venue is proper in Louisiana based on general rules for actions on contracts set forth in La. C.C.P. art. 76.1, as well as for actions on offenses or quasi offenses set forth in La. C.C.P. art. 74. Ameriprint also argued that its petition alleges facts sufficient to state a claim under the Louisiana Unfair Trade Practices Act, which allows for actions to be brought by Louisiana residents regardless of forum selection clauses. Ameriprint further argued that the forum selection clause contained in the Lease Agreement is not contractually binding because it is adhesionary, against public policy, and devoid of the requisite consent.

Following a hearing on the matter at which no evidence was introduced, the trial court, after finding the Lease Agreement and the Maintenance Agreement were contracts of adhesion and against public policy, issued a judgment in favor of Ameriprint denying both exceptions of improper venue. This timely writ application followed.

1 Ameriprint also signed a Maintenance Agreement with Canon Solutions America, Inc. (“CSA”), which also contains a forum selection clause. CSA also seeks supervisory review from this Court in a separate writ application, No. 21-C-110, of the trial court’s denial of its exception of improper venue.

LAW

Venue is a question of law, which is reviewed de novo by the appellate court. Seghers v. LaPlace Equip. Co., Inc., 13-350 (La. App. 5 Cir. 2/12/14), 136 So.3d 64. Evidence may be presented at a hearing on a declinatory exception. La. C.C.P. art. 930. If evidence is admitted at a hearing on a declinatory exception, the exception must be resolved on the evidence presented, rather than on the allegations in the petition. Johnson v. Byrd, 48,411 (La. App. 2 Cir. 9/25/13), 125 So.3d 1220, 1226. For purposes of a venue exception, the allegations of the plaintiff’s petition are taken as true; however, when evidence is offered at a trial on the exception, the court is not bound to accept as true the allegations of the petition. Chumley v. White, 46,479 c/w 46,707 (La. App. 2 Cir. 11/9/11), 80 So.3d 39, 42.

A forum selection clause is a provision in a contract that mandates a particular state, county, parish, or court as the proper venue in which the parties to an action must litigate any future disputes regarding their contractual relationship. Fidelak v. Holmes European Motors, L.L.C., 13-0691 (La. 12/10/13), 130 So.3d 851, 853. Forum selection clauses should be enforced in Louisiana unless the resisting party can clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching or that enforcement would contravene a strong public policy of the forum in which the suit is brought. Shelter Mut. Ins. Co. v. Rimkus Consulting Grp., Inc. of Louisiana, 13-1977 (La. 7/1/14), 148 So.3d 871, 881. Forum selection clauses are generally enforceable and are not per se violative of public policy in Louisiana. Id. at 878. Forum selection clauses are favored because the elimination of uncertainties relative to the location of litigation by agreement in advance on an acceptable forum to both parties is an indispensable element of trade, commerce, and contracting. Id. at 882. In Creekstone Juban I, L.L.C. v. XL Ins. Am., Inc., 18- 0748 (La. 5/8/19), 282 So.3d 1042, 1048, the Louisiana Supreme Court re- emphasized that forum selection clauses are unenforceable and against public policy in “very limited circumstances.”

A contract of adhesion is a standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party. Aguillard v. Auction Mgmt. Corp., 04-2804 (La. 6/29/05), 908 So.2d 1, 10. Often in small print, these contracts sometimes raise a question as to whether or not the weaker party actually consented to the terms. Id. Consent is called into question by the standard form, small print, and most especially the disadvantageous position of the accepting party, which is further emphasized by the potentially unequal bargaining positions of the parties. Id. An unequal bargaining position is evident when the contract unduly burdens one party in comparison to the burdens imposed upon the drafting party and the advantages allowed to that party. Id. Once consent is called into question, the party seeking to invalidate the contract as adhesionary must then demonstrate the non-drafting party either did not consent to the terms in dispute or his consent was vitiated by error, which in turn renders the contract or provision unenforceable. Id.

Upon de novo review, we find that the trial court erred in denying CFS’s exception of improper venue. Ameriprint argues, without providing supporting evidence, that it would not have entered into the lease agreement if it had known of the printer’s defects. This argument concerns the merits of Ameriprint’s claims for breach of contract and action in redhibition, but does not address the validity of the

presumptively valid forum selection clause. In its petition, Ameriprint acknowledges the Lease Agreement, the Assumption Agreement, and the Maintenance Agreement, but alleges no facts concerning the negotiation or signing of these agreements which suggest they were not freely entered into at the time they were signed. Even assuming the allegations set forth in the petition are true, Ameriprint has failed to show, with alleged facts or evidence, that enforcement of the agreement would be unreasonable or unjust, or that enforcement would contravene a public policy of the State of Louisiana. Accordingly, we grant this writ application, vacate the February 1, 2021 judgment of the trial court, and sustain the declinatory exception of improper venue filed by CFS.

Gretna, Louisiana, this 24th day of May, 2021.

RAC SMC FHW

SUSAN M. CHEHARDY CURTIS B. PURSELL CHIEF JUDGE CLERK OF COURT

NANCY F. VEGA FREDERICKA H. WICKER CHIEF DEPUTY CLERK JUDE G. GRAVOIS MARC E. JOHNSON ROBERT A. CHAISSON SUSAN S. BUCHHOLZ STEPHEN J. WINDHORST FIRST DEPUTY CLERK HANS J. LILJEBERG JOHN J. MOLAISON, JR. FIFTH CIRCUIT MELISSA C. LEDET JUDGES 101 DERBIGNY STREET (70053) DIRECTOR OF CENTRAL STAFF POST OFFICE BOX 489 GRETNA, LOUISIANA 70054 (504) 376-1400

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