DEFENDANT’S MOTION TO ENFORCE MANDATORY FORUM SELECTION CLAUSE AND DISMISS OR STAY FOR FORUM NON CONVENIENS
August 4, 2026 Law and Motion Calendar PAGE 26 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________
2:00 PM LINE 16 25-CIV-09351 ALEXANDER ROWLAND, ET AL. VS. ACE FUNDING SOURCE LLC
ALEXANDER ROWLAND STEVEN J. MIRSKY ACE FUNDING SOURCE LLC BARUCH C. COHEN
DEFENDANT’S MOTION TO ENFORCE MANDATORY FORUM SELECTION CLAUSE AND DISMISS OR STAY FOR FORUM NON CONVENIENS
TENTATIVE RULING:
Defendant Ace Funding Source, LLC’s (“Defendant”) Renewed Motion to Enforce Mandatory Forum Selection Clause and Dismiss or Stay for Forum Non Conveniens is DENIED. The court finds that the forum selection clause contained in the Sale of Future Receipts Agreement between Plaintiff LernaLabs, Inc. (“LLI”) and Defendant (“agreement”) is not mandatory because it does not provide for exclusive jurisdiction in the New York courts.
Forum non conveniens is an equitable doctrine involving the discretionary power of a court to decline to exercise jurisdiction when it believes the action is more appropriately and justly tried elsewhere. (Stangvik v. Shiley, Inc. (1991) 54 Cal.3d 744, 751 (Stangvik).) A mandatory forum selection clause in an agreement is ordinarily given effect without any analysis of convenience, and the only question is whether enforcement of the clause would be unreasonable. (Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 471.) If the clause merely provides for submission to jurisdiction and does not expressly mandate litigation exclusive in a particular forum, then the traditional forum non conveniens analysis applies. (Ibid.)
Defendant relies on Korman v. Princess Cruise Lines, Ltd. (2019) 32 Cal.App.5th 206, to argue that the forum selection clause is mandatory. The forum selection clause in the agreement in Korman stated that “All claims or disputes involving Emotional Harm, bodily injury, illness to or death of any Guest whatsoever, including without limitation those arising out of or relating to this Passage Contract or Your Cruise, shall be litigated before the United States District Courts for the Central District of California in Los Angeles, or as to those lawsuits over which the Federal Courts of the United States lack subject matter jurisdiction, before a court located in Los Angeles County, California, U.S.A., to the exclusion of the courts of any other country, state, city, municipality, county or locale.” (Id., at p. 210.)
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In contrast, paragraph 20 of the agreement states:
Binding Effect, Governing Law, Venue and Jurisdiction. This Agreement shall be binding upon and inure to the benefit of Seller, Buyer, Guarantor and their respective successors and assigns, except that neither Seller nor Guarantor shall have the right to assign its respective rights hereunder or any interest herein without the prior written consent of Buyer which consent may be withheld in Buyer's sole discretion. Except as set
August 4, 2026 Law and Motion Calendar PAGE 27 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ forth in the Arbitration section, this Agreement shall be governed by and construed in accordance with the laws of the state of New York, without regard to any applicable principles of conflicts of law. Each Seller and Guarantor understands and agrees that (i) Buyer is located in New York, (ii) Buyer makes all decisions from Buyer's office in New York, (iii) the Agreement is made in New York (that is, no binding contract will be formed until Buyer receives and accepts Seller's signed Agreement in New York, and (iv) Seller's payments are not accepted until received by Buyer in New York.
Any suit, action or proceeding arising hereunder, or the interpretation, performance or breach of this Agreement, shall, if Buyer so elects, be instituted in any court sitting in New York, (the "Acceptable Forums"). Each Seller and Guarantor agrees that the Acceptable Forums are convenient to it, and submit to the jurisdiction of the Acceptable Forums and waives any and all objections to jurisdiction or venue. Should such proceeding be initiated in any other forum, each Seller and Guarantor waives any right to oppose any motion or application made by Buyer to transfer such proceeding to an Acceptable Forum.
Unless prohibited by law, Buyer, Seller and Guarantor further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court will constitute valid and lawful service of process against them, without the necessity for service by any other means provided by statute or rule of court, but without invalidating service performed in accordance with such other provisions.
(Complaint, Exh. B, Agreement, ¶ 20 (emphasis added).)
Contrary to Defendant’s argument, the forum selection does not mandate exclusive jurisdiction in a New York court. Although the forum selection clause uses the word “shall” in referring to instituting an action in New York courts, it is qualified by the phrase “if Buyer so elects.” Defendant’s CEO acknowledges that under the agreement, the action may be brought in New York if Defendant so elects. (Guttman Decl., ¶ 4.) As CEO, he has authority to elect New York as the exclusive forum. (Id., ¶ 5.)
Defendant’s own evidence supports that the action may only be brought in a New York court if Defendant elected. The implication is that the action could have been brought elsewhere if Defendant did not elect to bring it in a New York court. The language in the agreement does not limit where the Seller, in this case Plaintiff, may bring suit. As such, the parties did not agree that jurisdiction is exclusive to New York courts. Thus, the court finds the forum selection clause is not mandatory.
As such, the traditional forum non conveniens analysis applies instead. (Animal Film, LLC, supra, 193 Cal.App.4th at p. 471.) Under the traditional forum non conveniens analysis, the defendant bears the burden of proof. (Stangvik, supra, 54 Cal.3d at p. 751.) The defendant must provide the trial court with evidence sufficient to carry out its weighing and balancing analysis. (National Football League v. Fireman’s Fund Ins. Co. (2013) 216 Cal.App.4th 902, 933, fn. 15.) The court first determines whether the alternate forum is a suitable place for trial. (Stangvik, supra, 54 Cal.3d at p. 751.)
If the court finds a suitable alternate forum, then the court next considers the private interests of the litigants and the public interests in retaining the action for trial in California. (Ibid.) “The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of
August 4, 2026 Law and Motion Calendar PAGE 28 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses.” (Ibid.) The public interest factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternate jurisdiction in the litigation. (Ibid.) Defendant fails to provide any analysis or evidence addressing this traditional forum non conveniens analysis, and therefore it has not met its burden.
If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for Plaintiffs shall prepare a written order consistent with the Court's ruling for the Court's signature, pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.