Cupo et al v. Aliomanu Sand Castles, LLC

Filing 27

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS WITH PREJUDICE (ECF NO. 12 ) - Signed by JUDGE HELEN GILLMOR on 12/15/2017. "Defendant Aliomanu Sand Castles, LLC's Motion to Dismiss (ECF No. 12) is GRANTED. Plaintiffs' Amended Complaint (ECF No. 9) is DISMISSED WITH PREJUDICE. The Clerk of Court is DIRECTED TO CLOSE THE CASE." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Antonio Cupo and Dorothy Wang shall be served by first class mail at the address of record on December 18, 2017. Modified on 12/15/2017 (emt, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
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)
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Plaintiffs,
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vs.
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ALIOMANU SAND CASTLES, LLC,
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Defendant.
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)
___________________________________
ANTONIO CUPO and DOROTHY
WANG,

CIVIL NO. 17-00253 HG-KSC

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
(ECF No. 12)
Plaintiffs Antonio Cupo and Dorothy Wang allege they leased
a vacation rental property owned by Defendant Aliomanu Sand
Castles, LLC.

Plaintiffs claim that Cupo was injured when a

chair he was sitting in collapsed.
Defendant moves to dismiss Plaintiffs’ Complaint for
improper venue, failure to state a claim, and failure to join a
necessary and indispensable party.
Defendant argues that Plaintiffs’ Amended Complaint is
subject to a binding forum selection clause designating the Fifth
Circuit Court of the State of Hawaii as the proper venue.
Defendant’s Motion to Dismiss (ECF No. 12) is GRANTED.
Plaintiffs’ Amended Complaint (ECF No. 9) is DISMISSED WITH
PREJUDICE.

PROCEDURAL HISTORY

On May 30, 2017, Plaintiffs filed a COMPLAINT.
1

(ECF No. 1).

On June 1, 2017, Chief Judge J. Michael Seabright issued an
ORDER TO SHOW CAUSE WHY ACTION SHOULD NOT BE DISMISSED WITHOUT
PREJUDICE.

(ECF No. 5).

On July 7, 2017, Plaintiffs filed PLAINTTFS’ [sic] RESPONSE
TO ORDER TO SHOW CAUSE.

(ECF No. 6).

On July 7, 2017, Plaintiffs filed an AMENDED COMPLAINT. (ECF
No. 9).
On July 10, 2017, Chief Judge Seabright issued an ORDER
finding that Plaintiffs’ Response, Affidavits, and Amended
Complaint sufficiently alleged diversity jurisdiction and
therefore the Order to Show Cause was vacated.

(ECF No. 10).

On August 3, 2017, Defendant filed a MOTION TO DISMISS FOR
IMPROPER VENUE, FAILURE TO STATE A CLAIM AND FAILURE TO JOIN A
NECESSARY AND INDISPENSABLE PARTY.

(ECF No. 12).

On September 12, 2017, this case was reassigned to Judge
Helen Gillmor.

(ECF No. 17).

On September 25, 2017, Plaintiffs filed a pleading entitled
PLAINTIFFS’ OPPOSITION RESPONSE TO MOTION TO DISMISS.

(ECF No.

19).
On October 20, 2017, Defendant filed a REPLY.

(ECF No. 20).

The court elected to decide the motion without a hearing
pursuant to Local Rule 7.2(d).

(ECF No. 26).

BACKGROUND

Plaintiffs Cupo and Wang state they are a married couple.
(Amended Compl. at ¶ 21, ECF No. 9). Plaintiffs allege they are
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citizens and residents of Canada.

(Id. at ¶ 1).

The Amended Complaint alleges Defendant Aliomanu Sand
Castles, LLC, has its principal place of business in California
and is a limited liability company formed in Hawaii.

(Id.)

The

Amended Complaint alleges no member, manager, or any person or
entity affiliated with Defendant is a resident or citizen of
Canada.

(Id.)

Defendant owns a vacation rental property on the island of
Kauai located at 5000 Aliomanu Road, Anahola, Hawaii.
3-4).

(Id. at ¶¶

Defendant employs Coldwell Banker Bali Hai Realty as its

professional property manager.

(Motion to Dismiss at p. 2, ECF

No. 12).
Plaintiff Wang entered into a lease for a vacation rental
unit on the property for the period from May 28, 2015, to May 31,
2015.

(Id. at p. 4; Amended Complaint at ¶ 4, ECF No. 9).

Plaintiff Cupo claims that on May 30, 2015, while sitting on
a plastic chair on the deck of the vacation rental property, it
collapsed, causing him injuries.

(Amended Compl. at ¶ 7, ECF No.

9).
Plaintiffs filed an identical lawsuit in the State of Hawaii
Circuit Court of the Fifth Circuit on May 30, 2017, civil case
number 17-1-0084.1

(Complaint and Summons, ECF No. 20-2).

1

See United States ex rel. Robinson Rancheria Citizens
Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992)
(approving taking judicial notice of proceedings in other courts
“if those proceedings have a direct relation to matters at
issue”); see also Fed. R. Evid. 201(c)(1).
3

STANDARD OF REVIEW
A motion to dismiss based on a forum-selection clause is
treated as a Rule 12(b)(3) motion to dismiss for improper venue.
Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir.
1996).

The pleadings need not be accepted as true and the court

may consider facts outside of the pleadings.

Murphy v. Schneider

Nat'l, Inc., 362 F.3d 1133, 1137 (9th Cir. 2004) (citing Richards
v. Lloyd's of London, 135 F.3d 1289, 1292 (9th Cir. 1998) and
Argueta, 87 F.3d at 324).
Generally, “a valid forum-selection clause [should be] given
controlling weight in all but the most exceptional cases.”

Atl.

Marine Const. Co., Inc., v. U.S. Dist. Court for W. Dist. of
Texas, 134 S.Ct. 568, 581 (2013) (internal quotation marks and
quoting citation omitted).
A federal district court may enforce a forum selection
clause in one of two ways.

First, a federal district court may

enforce a forum selection clause by dismissing the action
pursuant to the doctrine of forum non-conveniens.

Id. at 580.

Dismissal is appropriate if the forum selection clause provides
for a state or foreign tribunal as the selected forum.

Id.;

Cycle City, Ltd. v. Harley-Davidson Motor Co., Inc., 81 F.Supp.3d
993, 1000 (D. Haw. 2014).
Second, a federal district court may enforce a forum
selection clause by transferring the action pursuant to 18 U.S.C.
§ 1404(a).

Transfer of the case is appropriate pursuant to

4

Section 1404(a) when the selected forum is another court within
the federal court system.

Atl. Marine Const. Co., Inc., 134

S.Ct. at 580-81.
ANALYSIS
I.

PRO SE
It is unclear if Plaintiffs appear pro se.

represented by Canadian counsel Mr. Scott Parks.

Plaintiff may be
(Scheduling

Conference Minutes at p. 1, ECF No. 24; Declaration of Steven
Goto at ¶ 3, ECF No. 12-1).

Parks has not been admitted pro hac

vice and Plaintiffs do not appear to have retained local counsel.
The Court will therefore liberally construes Plaintiffs’
filings.

See Erickson v. Pardus, 551 U.S. 89, 94 (2007);

Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir. 1987) (“The
Supreme Court has instructed the federal courts to liberally
construe the ‘inartful pleading’ of pro se litigants.”) (citing
Boag v. MacDougall, 454 U.S. 364, 365 (1982) (per curiam)).
II.

THE VACATION RENTAL AGREEMENT

Plaintiffs bring this suit in diversity for personal
injuries sustained while Plaintiffs stayed at Defendant’s
vacation rental property.

Plaintiffs allege they are both

citizens and residents of Canada.
No. 9).

(Amended Complaint at ¶ 1, ECF

The Amended Complaint alleges that Defendant has its

principal place of business in California and is a limited

5

liability company formed in Hawaii.

(Id.)

The Amended Complaint

states that no member, manager or any person or entity affiliated
with Defendant is a resident or citizen of Canada.

(Id.)

Defendant moves to dismiss this action for improper venue
under Federal Rule of Civil Procedure 12(b)(3).

Defendant

asserts that the venue in this action is governed by a binding
forum selection clause.
In reviewing a Fed. R. Civ. P. 12(b)(3) motion, the district
court does not accept the pleadings as true, as would be required
under a Fed. R. Civ. P. 12(b)(6) analysis.

Argueta v. Banco

Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996); Richards v.
Lloyd's of London, 135 F.3d 1289, 1292 (9th Cir. 1998).

The

district court is permitted to consider facts outside of the
pleadings.

Argueta, 87 F.3d at 324.

Defendant alleges that on July 16, 2014, Plaintiff Wang
entered into a written contract titled "Vacation Rental
Agreement" (hereinafter “Rental Agreement”) with the property
manager, Coldwell Banker Bali Hai Realty (hereinafter the
“Property Manager”).

(Motion to Dismiss at p. 4, ECF No. 12).

The agreement to lease the property from May 28, 2015, to May 31,
2015 was attached to the Motion to Dismiss.

(ECF No. 12-4).

The Rental Agreement contains a forum selection clause
stating any claims arising out of the agreement are to be brought
in the Fifth Circuit Court of the State of Hawaii.

(Motion to

Dismiss at p. 5, ECF No. 12; Rental Agreement at p. 6, ECF No.
12-4).

The agreement also contains an indemnification clause
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that states both Defendant and Property Manager are to be held
harmless from any "injury, accident or death arising from or
related to the Guest's use of the Property."

(Motion to Dismiss

at p. 5, ECF No. 12; Rental Agreement at p. 5, ECF No. 12-4).
III. THE FORUM SELECTION CLAUSE
The Rental Agreement signed by Plaintiff Wang is a seven
page form contract.

(Rental Agreement, ECF No. 12-4).

It

contains sections relating to payment, Property Manager
responsibilities, guest responsibilities, waivers and releases.
(Id.)

The forum selection clause is printed in the same font

size as the rest of the terms of the agreement.

(Id.)

The forum selection clause reads as follows:
Any Claim or cause of action arising out of this
Agreement shall be brought in the Fifth Circuit of the
Circuit Courts of the State of Hawaii, and Guest hereby
consents to the jurisdiction thereof and waives any
right to contest the venue of any proceeding.
(Rental Agreement at p. 6, ECF No. 12-4)
In diversity suits, such as this case, federal courts apply
state law to substantive issues and federal law to procedural
issues.

Erie Railroad v. Tompkins, 304 U.S. 64 (1938).

Federal

procedural issues raised by forum selection clauses significantly
outweigh state interests.

Manetti–Farrow, Inc. v. Gucci America,

Inc., 858 F.2d 509, 513 (9th Cir. 1988).

The federal law

announced in M/S Bremen v. Zapata Off–Shore Co. controls
enforcement of forum selection clauses in diversity cases.
(citing 407 U.S. 1, 15 (1972)).

Id.

In federal court, federal law,
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not state law, controls the enforcement and interpretation of
forum selection clauses in diversity cases.
A.

Id.

Plaintiffs Are Closely Related

The Rental Agreement was entered into by Plaintiff Wang.
Wang’s husband, Plaintiff Cupo, did not sign the agreement.

The

Ninth Circuit Court of Appeals has held that a court may enforce
a forum selection clause against a nonsignatory to a contract who
is closely related to the dispute such that it is foreseeable
that the party would be bound.

Manetti-Farrow, 858 F.2d at 514

n. 5; see also Holland Am. Line Inc. v. Wartsila N. Am., Inc.,
485 F.3d 450, 456 (9th Cir. 2007).

The Eleventh Circuit Court of

Appeals has held that spouses are so “closely related” that they
bind each other to forum selection clauses.

See Lipcon v.

Underwriters at Lloyd's, London, 148 F.3d 1285, 1299 (11th Cir.
1998).

The Hawaii District Court has held similarly.

Madoff v.

Bold Earth Teen Adventures, No. CIV. 12-00470 SOM, 2013 WL
1337337, at *4 (D. Haw. Mar. 28, 2013).
Both Plaintiffs are bound by the forum selection clause if
it is valid.
B.

The Scope of the Forum Selection Clause

Plaintiffs do not contend that the forum selection clause is
completely unenforceable.

Rather, Plaintiffs argue that the

scope of the forum selection clause does not apply to tort
claims.

(Plaintiffs’ Opposition at pp.2-3, ECF No. 19).
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The Ninth Circuit Court of Appeals has held that whether a
forum selection clause applies to tort claims depends on whether
resolution of the claims relates to interpretation of the
contract.

Manetti-Farrow, 858 F.2d at 509.

In Manetti–Farrow, the plaintiff had entered into an
exclusive dealership contract with Gucci, which contained a forum
selection clause establishing Florence, Italy as the forum for
any litigation “regarding interpretation or fulfillment” of the
contract.

Id. at 510.

When Gucci terminated the dealership,

plaintiff filed suit in the Northern District of California
against Gucci, alleging conspiracy to interfere with contractual
relations, conspiracy to interfere with prospective economic
advantage, tortious interference with contract, tortious
interference with prospective economic advantage, violation of
the covenant of good faith and fair dealing, and unfair trade
practices.

Id. at 511.

The Ninth Circuit Court of Appeals found

that because the conflict between the parties centered on
interpretation of the contract, the controversy was governed by
the forum selection clause.

Id. at 514 (internal citation

omitted).
The Rental Agreement at issue in this case contains a clause
indemnifying and holding harmless Defendant and its Property
Manager.

It states, in relevant part:

Guest agrees to indemnify and hold harmless Owner and
Coldwell Banker Bali Hai Realty from and against any
loss, liability, damage or expense (including legal
fees and costs) that Guest may suffer, sustain or
become subject to as a result of, or in connection with
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any injury, accident or death arising from or related
to Guest’s use of the Property.
(Rental Agreement at p. 5, ECF No. 12-4).
Defendant argues that this clause precludes Plaintiffs from
stating a claim for which relief may be granted.
Dismiss at pp. 13-17, ECF No. 12).

(Motion to

Determining whether the

indemnification clause applies to Plaintiffs’ tort claim requires
interpretation of the indemnification clause.2

As in

Manetti–Farrow, the Court cannot resolve Plaintiffs’ tort claim
without interpreting the contract.

858 F.2d at 514.

Plaintiffs’ tort claim relates to the interpretation of the
contract and is subject to the Rental Agreement’s forum selection
clause.

Kelso Enterprises, Ltd. v. M/V Wisida Frost, 8 F.Supp.2d

1197, 1206-07 (C.D. Cal. 1998).
C.

The Enforceability of the Forum Selection Clause

The enforceability of the Rental Agreement’s forum selection
clause is controlled by M/S Bremen v. Zapata Off–Shore Co., 407
U.S. 1, 15 (1972).

In Bremen, the United States Supreme Court

held that forum selection clauses are presumptively valid and
should be enforced absent some compelling and countervailing
reason.

Id.

The party challenging the forum selection clause

bears a “heavy burden of proof” and must “clearly show that
enforcement would be unreasonable and unjust, or that the clause

2

The Court will not inquire into the validity of the
indemnification clause. The resolution of the venue question
must first be resolved and may preclude reaching the question.
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was invalid for such reasons as fraud or over-reaching.”

Id. at

15, 17.
The Ninth Circuit Court of Appeals, in Murphy v. Schneider
National, Inc., held that even though Bremen created a
presumption in favor of enforcing forum selection clauses, Bremen
recognized three reasons that would make enforcement of a forum
selection clause unreasonable: (1) the clause was included as a
result of fraud or overreaching; (2) the party seeking to avoid
the clause would “effectively be deprived of his day in court” if
the clause were enforced; or (3) if enforcement would contravene
a strong public policy in the forum in which the suit is brought.
362 F.3d 1133, 1140 (9th Cir. 2004) (citing Bremen, 407 U.S. at
12–13, 15, 18) (internal quotation marks and citation omitted).
No evidence has been offered suggesting that enforcement of
the forum selection clause would be unreasonable.
1.

Id.

Fraud or Overreaching

First, the circumstances surrounding inclusion of the forum
selection clause in the Rental Agreement do not give rise to
either fraud or overreaching.

In Carnival Cruise Lines, Inc. v.

Shute, 499 U.S. 585 (1991), the United States Supreme Court
enforced a forum selection clause contained in a cruise line's
passenger contract ticket, despite the non-negotiable nature of
the clause and the parties' difference in bargaining power.
Carnival Cruise, 499 U.S. at 587, 595.

The Ninth Circuit Court

of Appeals has held that Carnival Cruise stands for the
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proposition that “a differential in power or education on a
non-negotiated contract will not vitiate a forum selection
clause.”

Murphy, 362 F.3d at 1141 (concluding that allegations

of power differential and non-negotiability are insufficient to
overcome the “strong presumption in favor of enforcing forum
selection clauses”).
Faced with this precedent, to the extent that Plaintiffs
could attempt to allege fraud or overreaching because the Rental
Agreement was a form contract and because Plaintiffs had less
experience than Defendant in these matters, those arguments must
necessarily fail.
2.

Deprived of Their Day in Court

Second, Plaintiffs would also not be effectively deprived of
their day in court.

They have filed a parallel action in the

Fifth Circuit Court of the State of Hawaii.

(Complaint and

Summons, ECF No. 20-2).
3.

Public Policy

Third, courts in this District have not identified a strong
public policy in Hawaii law that would be contravened by
enforcing a forum selection clause such as the one in the Rental
Agreement.

See e.g., Chey v. Orbitz Worldwide, Inc., 983 F.Supp.

2d 1219, 1233 (D. Haw. 2013); Madoff, 2013 WL 1337337, at *12;
Marsh USA, Inc. v. Karasaki, No. CIV. 08-00149 SOM, 2008 WL
1805662, at *7-8 (D. Haw. Apr. 22, 2008).
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The Court finds that

the forum selection clause is valid and enforceable.
Plaintiffs’ tort claims are within the scope of a valid
forum selection clause so venue is not proper in the Federal
District Court.

The Court will not consider Defendant’s

additional arguments that Plaintiff has failed to state a claim
or join an indispensable party.

The Court GRANTS Defendant’s

Motion to Dismiss to the extent that it asserts that venue is
improper.

Plaintiffs’ case is DISMISSED WITH PREJUDICE.

CONCLUSION
Defendant Aliomanu Sand Castles, LLC’s Motion to Dismiss
(ECF No. 12) is GRANTED.
Plaintiffs’ Amended Complaint (ECF No. 9) is DISMISSED WITH
PREJUDICE.
The Clerk of Court is DIRECTED TO CLOSE THE CASE.
IT IS SO ORDERED.
DATED:

Honolulu, Hawaii, December 15, 2017.

Antonio Cupo and Dorothy Wang v. Aliomanu Sand Castles, LLC; Civ
No. 17-00253 HG-KSC; ORDER GRANTING DEFENDANT’S MOTION TO DISMISS
WITH PREJUDICE (ECF No. 12)
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