Anosike v. Covenant Transport

 

 

 

 

 

 

 

 

 

 

Filed 5/24/13  Anosike v. Covenant Transport CA2/4

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>NOT TO BE
PUBLISHED IN THE OFFICIAL REPORTS

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California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b).  This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

 

 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

 

SECOND APPELLATE DISTRICT

 

DIVISION FOUR

 

 
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JOHN ANOSIKE,             Plaintiff and Appellant,             v.   COVENANT TRANSPORT, INC.,             Defendant and Respondent.

B238684         (Los Angeles County       Super. Ct. No. BC463482)

 

          APPEAL from an
order of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Joanne O’Donnell, Judge.  Affirmed.

          Mancini &
Associates, Marcus A. Mancini, Timothy J. Gonzales; Benedon & Serlin,
Douglas G. Benedon, and Gerald M. Serlin for Plaintiff and Appellant.

          McBreen &
Senior, David A. Senior; Miller & Martin, and Bradford G. Harvey for
Defendant and Respondent.

 

 

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INTRODUCTION

John Anosike filed a complaint for href="http://www.fearnotlaw.com/">damages against respondent Covenant
Transport, Inc. (Covenant), alleging employment discrimination, wrongful
termination, and violation of the medical
leave law.  Respondent moved for a
stay of the proceedings, seeking to enforce a forum selection clause in a
written employment agreement.  The
superior court granted the motion for a stay, finding the forum selection
clause valid.  Appellant appealed from
the superior court’s order granting the motion to stay, contending the forum
selection clause was unconscionable and violated California public policy.  Finding no error, we affirm.

>STATEMENT OF THE FACTS

          Respondent is
a national trucking company incorporated under Tennessee law, with its corporate headquarters
and principal place of business in Chattanooga, Tennessee. 
Appellant is a Black male, and a resident of California. 
In June 2010, he learned that Covenant was hiring truck drivers out of
its Pomona, California terminal.  Appellant completed a one-week orientation in
Pomona. 
During the orientation, he signed a written “Conditional Offer of
Employment.”  The one-page document
consisted of the following:

“I, [name], accept a conditional offer of employment
with COVENANT TRANSPORT pending successful completion of:  [¶] 
DOT Physical and Drug Screen 
[¶]  DOT Written Exam  [¶] 
Road Test  [¶]  Completion of Orientation  [¶] 
Personal Interview  [¶]  MVR Review 
[¶]  Reference Checks  [¶] 
DAC Review  [¶]  I also acknowledge and agree that the venue
of any claims filed for injuries, accidents, or incidents will be handled
through the State of Tennessee.  I also
acknowledge and agree that the venue of litigations that may arise from this
employment shall be in the State of Tennessee.  I also
acknowledge and agree that Tennessee
law shall apply exclusively to any such claims or litigation.  Finally, I acknowledge and agree that
Covenant Transport shall have the right to recover reasonable attorney fees and
expenses it incurs if it prevails in any such dispute, charge, or action. 

“I also acknowledge and agree that Covenant Transport
offers a Transitional Duty Program, and as such, I agree to be subjected to
said program and its conditions/requirements. 
I also acknowledge and agree to medical treatment and light duty in Hamilton County, Chattanooga, TN as part of my employment responsibilities with
Covenant Transport, Inc.” 

         

          Following the
one-week orientation, appellant completed an approximately three-week training
course, during which he drove a truck throughout the United States. 
Upon completion, he was hired by respondent on June
24, 2010. 

          On or about November
12, 2010,
appellant was involved in a rollover accident in the State of Washington. 
Following the accident, appellant received medical treatment and
participated in respondent’s light duty program in Chattanooga, Tennessee. 
After completion of Covenant’s investigation into appellant’s accident,
his employment was terminated December 22, 2010. 


>STATEMENT OF THE CASE

          On June
13, 2011,
appellant filed a complaint for damages. 
He asserted claims for race and disability discrimination, harassment,
retaliation, and violation of the California Family Rights Act under the Fair
Employment and Housing Act (FEHA), Government Code section 12900 et seq., and
for wrongful termination in violation of public policy. 

          On August
23, 2011,
respondent removed the case to federal court, based on diversity
jurisdiction.  On October
6, 2011, the
federal district court granted appellant’s motion to remand the removed
action. 

          On October
24, 2011,
respondent moved for an order staying further proceedings on the ground that “California is an inconvenient and inappropriate
forum for the trial of this action.”  In
the motion, brought under Code of Civil Procedure section 410.30,href="#_ftn1" name="_ftnref1" title="">^[1] respondent contended that appellant had agreed
to litigate all employment-related claims in Tennessee. 
Respondent also asserted that the decision to terminate appellant’s
employment was made in Tennessee, and that the individuals who would testify
concerning respondent’s employment policies and practices were located in Tennessee. 
Thereafter, respondent filed an answer, generally denying the
allegations in appellant’s complaint. 

          Appellant
opposed the motion to stay, arguing that the “forum selection/choice of law
provisions” in the Conditional Offer of Employment were unconscionable.  Appellant contended the provisions were
procedurally unconscionable because they were contained in a contract of adhesion.  He contended the provisions were
substantively unconscionable because they were unduly oppressive, “as [their]
sole purpose [was] to shield Defendant Covenant from liability by making
litigation for a potential claimant, such as Plaintiff, so onerous and
expensive that the claimant will not pursue litigation.”  Appellant also contended, without
elaboration, that he would be “unable to litigate his discrimination claims in Tennessee.” 


          In a
declaration filed in support of the opposition, appellant stated he was given
the Conditional Offer of Employment as a “take it or leave it contract.”  He further stated he was currently a
part-time security guard in Los Angeles, California, earning approximately $700 per
month.  He asserted that “[a]s a result
of my current economic situation, I do not have the money to travel to Tennessee to litigate this lawsuit.  In addition to not being able to afford to
fly cross-country for this case, I may also lose my job if I were required to
take multiple days off work and travel to Tennessee.” 


          In reply, respondent
argued that the forum selection clause was not unconscionable.  Respondent asserted that the forum selection
clause helped provide it with “consistency in employment litigation outcomes,
and therefore, consistency in employment policies and procedures.”  It alleged that “[t]he choice of Tennessee is
directly related to the fact that being headquartered in Tennessee means that
most of the daily business and management occurs in Tennessee.” 

          On December
15, 2011, the superior court granted the motion to stay, pending the outcome of
proceedings in Tennessee.  The court
found some procedural unconscionability in the Conditional Offer of Employment
because the forum selection clause was contained in a contract of adhesion, but
found no substantive unconscionability. 
The court also noted that “[a]t the hearing on defendant’s motion,
plaintiff raised for the first time the argument that plaintiff’s claim will
likely be time-barred under Tennessee law . . . .  Although
the issue has not been briefed by any party (and plaintiff did not request the
opportunity for further briefing), [the] argument is unpersuasive.  Defendant seeks a stay, not dismissal of the
action.  If plaintiff’s action in
Tennessee is found to be time-barred, plaintiff may move this court to lift the
stay.”  Appellant timely appealed. 

>DISCUSSION

          The California
Supreme Court has held that “forum selection clauses are valid and may be given
effect, in the court’s discretion and in the absence of a showing that
enforcement of such a clause would be unreasonable.”  (Smith,
Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 496 (>Smith).) 
“Given the importance of forum selection clauses [to both national and
international commerce], both the United States Supreme Court and the California
Supreme Court have placed a heavy burden on a plaintiff seeking to defeat such
a clause, requiring it to demonstrate that enforcement of the clause would be
unreasonable under the circumstances of the case.”  (Lu v.
Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490, 1493 (>Lu), citing Smith, supra, at
p. 496 & The Bremen v. Zapata
Off-Shore Co. (1972) 407 U.S. 1, 10, 15; accord, Bancomer, S.A. v. Superior Court (1996) 44 Cal.App.4th 1450.)  “The party’s burden is to demonstrate that the
contractually selected forum would be unavailable or unable to accomplish
substantial justice or that no rational basis exists for the choice of
forum.”  (Intershop Communications AG v. Superior Court (2002) 104
Cal.App.4th 191, 199 (Intershop).)  The inconvenience and additional expense of
litigating in another state is insufficient to meet this burden.  (Smith,
supra, 17 Cal.3d at p. 496.)  However, a forum selection clause will not be
enforced if to do so would “bring about a result contrary to the public policy
of the forum.”  (Cal-State Business Products & Services, Inc. v. Ricoh (1993)
12 Cal.App.4th 1666, 1680 (Cal-State).)

          “The
enforceability of a forum selection clause is properly raised by a motion to
stay or dismiss under . . . section 410.30, as it is a
request to the court to decline jurisdiction.” 
(Furda v. Superior Court
(1984) 161 Cal.App.3d 418, 425; see also Smith,
supra, 17 Cal.3d at p. 494 [defendant
moved to dismiss lawsuit and enforce forum selection clause under
§ 410.30].)href="#_ftn2"
name="_ftnref2" title="">^[2] 
The superior court’s decision is customarily reviewed for an abuse of
discretion.  (Trident Labs, Inc. v. Merrill Lynch Commercial Finance Corp. (2011)
200 Cal.App.4th 147, 154; America Online,
Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 9; but see >Cal-State, supra, 12 Cal.App.4th at pp. 1680-1681 [substantial-evidence
test].)  We apply that standard of review
to the instant case.

          Appellant
contends the superior court erred in granting the motion to stay because the
forum selection clause (1) is unconscionable, and (2) violates California’s
public policy. 

          A.      Alleged Unconscionability

          “The doctrine
of unconscionability is a judicially created doctrine which was codified in
1979 when the Legislature enacted Civil Code section 1670.5.  [Citation.] 
That section provides in relevant part, ‘If the court as a matter of law
finds the contract or any clause of the contract to have been unconscionable at
the time it was made the court may refuse to enforce the
contract . . . .’ 
(Civ. Code, § 1670.5, subd. (a).) 
While the statute does not attempt to precisely define ‘unconscionable,’
there is a large body of case law recognizing the term has ‘both a procedural
and a substantive element, both of which must be present to render a contract
unenforceable.  [Citation.]  The procedural element focuses on the unequal
bargaining positions and hidden terms common in the context of adhesion
contracts.  [Citation.]  While courts have defined the substantive
element in various ways, it traditionally involves contract terms that are so
one-sided as to “shock the conscience,” or that impose harsh or oppressive
terms.  [Citation.]’  [Citation.]” 
(Bolter v. Superior Court
(2001) 87 Cal.App.4th 900, 906-907 (Bolter).)


          “[P]rocedural
unconscionability requires oppression or surprise.  ‘“Oppression occurs where a contract involves
lack of negotiation and meaningful choice, surprise where the allegedly
unconscionable provision is hidden within a prolix printed form.”’  [Citation.]” 
(See Pinnacle Museum Tower Assn.
v. Pinnacle Market Development (US),
LLC (2012) 55 Cal.4th 223, 247.)  We
agree with the trial court that some elements of procedural unconscionability
are present in the forum selection clause, as it was contained in a contract of
adhesion presented on a “take-it-or-leave-it” basis.  Not all contracts of adhesion are
procedurally unconscionable, however, and there was no element of surprise, as
the forum selection clause was prominently placed in the single page
Conditional Offer of Employment which appellant had ample time to review.  (See id.
at p. 248 [rejecting claim of procedural unconscionability, although a
condominium project’s CC&Rs “may perhaps be viewed as adhesive”].) 

          More
importantly, appellant has not shown that the forum selection clause is so
one-sided as to “shock the conscience,” or that it imposes harsh or oppressive
terms.  He contends the forum selection
clause is substantively unconscionable because it effectively shields
respondent from liability, as it increases the costs and burdens of employees
such as appellant, by requiring them to litigate in Tennessee.  (See Comb
v. Paypal, Inc. (N.D. Cal. 2002) 218 F.Supp.2d 1165, 1177 [denying motion
to enforce forum selection clause in arbitration agreement because “[l]imiting
venue to [defendant’s] backyard appears to be yet one more means by which the
arbitration clause serves to shield [defendant] from liability”].)  This argument was foreclosed by our Supreme
Court’s holding in Smith, that
“‘[m]ere inconvenience or additional expense is not the test of unreasonableness.’”  (Smith,
supra, 17 Cal.3d at p. 496; accord, >Intershop, supra, 104 Cal.App.4th at pp. 199, 202 [enforcing forum selection
clause requiring parties to settle disputes in Hamburg, Germany]; >CQL Original Products, Inc. v. National
Hockey League Players’ Assn. (1995) 39 Cal App.4th 1347, 1354, 1358-1359
[enforcing forum selection clause requiring parties to settle disputes in
Ontario, Canada].)

          Appellant’s
reliance on Bolter, >supra, 87 Cal.App.4th 900, >Nagrampa v. Mailcoups, Inc. (9th Cir.
2006) 469 F.3d 1257, 1287, and Lucas v.
Gund, Inc. (C.D. Cal. 2006) 450 F.Supp.2d 1125, 1134, is similarly
misplaced.  Those cases involved forum
selection clauses in arbitration agreements and did not address >Smith. 
Bolter is further
distinguishable on the ground that the forum selection clause requiring any
arbitration to be conducted in Utah was imposed upon preexisting California
franchisees.  As the Bolter court noted, “[w]hen petitioners first purchased
their . . . franchises in the early 1980’s, [the franchisor]
was headquartered in California, and the franchise agreement did not contain an
arbitration provision.  Thus, they never
anticipated [the franchisor] would relocate its headquarters to Utah and
mandate that all disputes be litigated there.” 
(Bolter, supra, 87 Cal.App.4th at p. 909.) 
In contrast, appellant was provided notice before he was employed that
all employment-related disputes would be litigated in Tennessee. 

          Moreover, the >Bolter court expressed concern that the
“forum selection provision[] ha[d] no justification other than as a means of
maximizing an advantage over the petitioners.” 
(Bolter, supra, 87 Cal.App.4th at p. 910.) 
Here, the forum selection clause was included to help respondent attain
consistency in its employment practices and procedures.  As a national employer, it was rational and
reasonable for respondent to select the State where its headquarters are
located as the exclusive forum for all employment litigation.  (See Lu,> supra, 11 Cal.App.4th at p. 1493, fn. 2
[reasonable for national companies to limit venue to the State where their
principal place of business is located].) 
In short, appellant has failed to show the forum selection clause in his
conditional employment contract was substantively unconscionable.  Accordingly, the trial court did not err in
declining to find the provision unenforceable on this ground.  (See Intershop,
supra, 104 Cal.App.4th at pp.
201-202 [“A forum selection clause within an adhesion contract will be enforced
‘as long as the clause provided adequate notice to the [party] that he was
agreeing to the jurisdiction cited in the contract.’  [Citations.]”].)href="#_ftn3" name="_ftnref3" title="">^[3]    


          B.      Alleged Violation of California’s Public
Policy    

          A California court will not enforce a
forum selection clause if it would lead to a result contrary to California’s
public policy.  (Cal-State, supra,> 12 Cal.App.4th at p. 1680.)  Appellant contends enforcement of the forum
selection clause would violate California’s public policy against disability
discrimination because the clause would require Tennessee courts to apply
Tennessee law, which provides less protection than California law.  He also contends the conditional employment
contract contains a “unilateral attorney’s fee provision” in favor of
respondent that violates California’s public policy. 

          As an initial
matter, we note that these arguments were not raised in the court below.  As such, they are forfeited.  (See Redevelopment
Agency v. City of Berkeley (1978) 80 Cal.App.3d 158, 167 [failure to raise
point in the trial court constitutes waiver].) 
Even were we to consider the arguments, we would reject them on the
merits. 

          First, the
forum selection clause does not address choice of law, and the conditional
employment contract does not have a separate choice of law provision.  More importantly, appellant has not
demonstrated that Tennessee courts are less likely to enforce
antidiscrimination laws, or that he cannot get adequate redress for disability
discrimination under Tennessee law.  (See
Olinick v. BMG Entertainment (2006)
138 Cal.App.4th 1286, 1304 [enforcing forum selection clause requiring
California resident to litigate age discrimination claim in New York City
because New York City’s Human Rights Law prohibits age discrimination, and
there was “no reason to believe the New York courts ‘are less likely than
California courts to enforce anti-discrimination laws’”].)  Appellant concedes that Tennessee prohibits
disability discrimination, but contends the definition of “disability” is
narrower under Tennessee law than California law.  Appellant has not shown, however, that his
alleged disability would fall outside the scope of Tennessee’s disability
discrimination law.  Moreover, appellant is
entitled only to an adequate remedy in the alternative forum, not the exact
remedy.  (Id. at p. 1303 [“[P]>rovided [appellant] has an adequate
remedy for his . . . discrimination claim in the selected
forum, the forum selection clause does not violate California’s public policy
against . . . discrimination.”].)  In addition, “the FEHA, unlike other
statutory schemes, does not contain an antiwaiver provision.”  (Id.
at p. 1304.)  The FEHA does not expressly
prohibit “parties [from] selecting a forum and/or substantive
antidiscrimination law other than California’s.”  (Ibid.)  In short, the forum selection clause does not
violate California’s public policy against disability discrimination. 

          Nor does the
“unilateral attorney’s fee provision” in the conditional employment contract
change our analysis, as the issue on appeal is the enforcement of the forum
selection clause.href="#_ftn4"
name="_ftnref4" title="">^[4] 
Accordingly, the superior court did not abuse it discretion in granting
respondent’s motion to stay.

DISPOSITION

The order is affirmed.  Costs are awarded to respondent.

         

          NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

 

 

 

                                                                             MANELLA,
J.

 

We concur:

 

 

 

WILLHITE, Acting P. J.                                                

 

 

 

SUZUKAWA, J.