{"id":884554,"date":"2015-10-28T12:05:51","date_gmt":"2015-10-28T18:05:51","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=884554"},"modified":"2015-10-28T12:05:51","modified_gmt":"2015-10-28T18:05:51","slug":"bar-against-forum-selection-clauses-in-construction-contracts-extended-to-design-professionals","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/bar-against-forum-selection-clauses-in-construction-contracts-extended-to-design-professionals\/","title":{"rendered":"Bar Against Forum Selection Clauses in Construction Contracts Extended to Design Professionals"},"content":{"rendered":"

Garret Murai | California Construction Law Blog | October 26, 2015<\/p>\n

It\u2019s a tactic as old as war itself.<\/p>\n

You can often gain a strategic advantage by selecting\u00a0the location of battle.<\/p>\n

The same is true in litigation.<\/p>\n

But as the next case illustrates,\u00a0when it comes to disputes between contractors (and design professionals<\/a>), it isn\u2019t always the combatants who dictate where the battle will be fought.<\/p>\n

Vita Planning and Landscape Architecture, Inc. v. HKS Architects, Inc.<\/em><\/h2>\n

In Vita Planning\u00a0and Landscape Architecture, Inc. v. HKS Architects, Inc., Case No. A141010, <\/em>California\u00a0Court of Appeals for the First District (September 25, 2015), Texas architecture firm HKS Architects, Inc. (\u201cHKS\u201d) was hired to provide architectural services.\u00a0HKS\u2019 design service agreement included a Texas forum selection<\/a> clause which provided:<\/p>\n

As a condition precedent to the institution of any action [or] lawsuit all disputes shall be submitted to mediation\u201d and \u201c[a]ll claim , disputes, and other matters in question between the parties arising out of or related to the Agreement . . . be resolved by the . . . courts in . . . Texas.\u201d<\/p><\/blockquote>\n

Later, Vita Planning and Landscape Architecture, Inc. (\u201cVita\u201d), a landscape design firm in California, entered into negotiations with HKS to provide sub-consultant landscape design services. HKS sent Vita a sub-consultant landscape design contract. The landscape design contract incorporated the terms of the prime contract. However, it was never signed by HKS or Vita.<\/p>\n

During the design phase of the project, the project owner began having financial problems and stopped paying for work. HKS later sued and obtained a judgment against the owner in 2010 for $1,617,073.70 but was unable to recover anything on the judgement.<\/p>\n

In 2013, Vita filed a complaint in California against HKS seeking $370,650.53. In its complaint, Vita alleged that \u201c[o]n or about September 11, 2007, [Vita] and [HKS] entered into [a] contractual agreement, evidenced, in writing, . . . whereby [HKS] agreed to pay for services rendered by [Vita].<\/p>\n

Seven months into the litigation, HKS filed a motion to dismiss the action on the ground that the landscape design contract, while not signed by Vita and HKS, was adopted by performance by the parties, and that the landscape design contract incorporated the prime contract which included a Texas forum selection clause. The trial court granted HKS\u2019 motion and Vita appealed.<\/p>\n

The Court of Appeals Decision<\/h2>\n

On appeal, Vita argued that the Texas forum selection clause contained in the prime contract was inapplicable because Vita and HKS did not sign the\u00a0landscape design contract which incorporated the prime contract.<\/p>\n

However, the Court of Appeals for the Fifth District disagreed, citing Vita\u2019s complaint and its reference to the landscape design contract, and holding that Vita\u2019s complaint constituted a judicial admission:<\/p>\n

The admission of fact in a pleading is a \u201cjudicial admission.\u201d . . . it is a waiver of proof<\/em> of a fact by conceding its truth, and it has the effect of removing the matter from the issues. Under the doctrine of \u201cconclusiveness of pleadings,\u201d a pleader is bound by well pleaded material allegations.<\/p><\/blockquote>\n

Moreover, the\u00a0Court of Appeals disregarded Vita\u2019s argument that the absence of a signed\u00a0<\/em> contract rendered\u00a0the landscape design contract unenforceable:<\/p>\n

A \u201cvoluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it, so far as the facts are known, or ought to be known, to them person accepting.\u201d (Civ. Code,\u00a0\u00a7 1589; see also Civ. Code\u00a0\u00a7 1584 [\u201cacceptance of the consideration offered with a proposal, is an acceptance of the proposal.\u201d] Grant v. Long (1939) 33 Cal.App.2d 725, 736 [\u201c[w]hile an express contract is one, the terms of which are stated in words . . . , one party may use the words and the other may accept, either in words or by his actions or conduct\u201d].). Here, substantial evidence supports the court\u2019s conclusion regarding the existence of a contract memorialized by a writing.<\/p><\/blockquote>\n

And just when it was looking bad for Vita, the Court of Appeals held that Code of Civil Procedure section 410.42 barred enforcement of the Texas forum selection clause. Section 410.42 provides:<\/p>\n

(a) The following provisions of a contract between the contractor and a subcontractor with principal offices in this state, for the construction of a public or private work of improvement in this state, shall be void and unenforceable:<\/p>\n

(1) A provision which purports to require any dispute between the parties to be litigated, arbitrated, or otherwise determined outside this state.<\/p>\n

(2) A provision which purports to preclude a party from commencing such a proceeding or obtaining a judgment or other resolution in this state or the courts of this state.<\/p>\n

(b) For purposes of this section, \u201cconstruction\u201d means any work or services performed on, or materials provided for, a work of improvement, as defined in Section 8050 of the Civil Code, and for which a lien may be claimed pursuant to Section 8400 of the Civil Code (whether or not a lien is in fact claimed) or for which such a lien could be claimed but for Section 8160 of the Civil Code.<\/p><\/blockquote>\n

While Code of Civil Procedure section 410.42 is limited to \u201ccontract[s] between \u201ccontractor[s]\u201d and \u201csubcontractor[s],\u201d explained the Court of Appeals, those terms are not defined, and are thus not limited to contracts between construction\u00a0<\/em>contractors and\u00a0construction<\/em> subcontractors but to…<\/p>\n

To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Garret Murai | California Construction Law Blog | October 26, 2015 It\u2019s a tactic as old as war itself. You can often gain a strategic advantage by selecting\u00a0the location of battle. The same is true in litigation. But as the next case illustrates,\u00a0when it comes to disputes between contractors (and design professionals), it isn\u2019t always… Continue reading Bar Against Forum Selection Clauses in Construction Contracts Extended to Design Professionals<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,172],"tags":[224,27,8795,494],"class_list":["post-884554","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-construction-law-2","tag-construction-contract","tag-construction-law","tag-design-professinals","tag-forum-selection","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nBar Against Forum Selection Clauses in Construction Contracts Extended to Design Professionals - 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