West Consultants, Inc., App/resp. v. Deltek, Inc., Et Ano, Resp/cross-apps. ( 2013 )

p- 160 Wn.2d 826, 833, 161 P.3d 1016 (2007).
3 Dix, 160 Wn.2d at 833 (citing Wash. State Physicians Ins. Exch. &Ass'n
v. Fisons Corp., 122 Wn.2d 299, 339, 858 P.2d 1054 (1993)).
4 Dix, 160Wn.2dat833.
5 Dix, 160 Wn.2d at 833-34.
6 Hulbert v. Port of Everett, 159 Wn. App. 389, 407, 245 P.3d 779, review
denied. 171 Wn.2d 1024 (2011) (citing Scott Fetzer Co. v. Weeks, 122 Wn.2d
141, 147, 859 P.2d 1210 (1993)).
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the following analysis. A&E and Deltek are partners. The A&E purchase
agreement provision establishing venue in King County binds its partner, Deltek.
The forum selection clause in Deltek's license agreement modifies the purchase
agreement provision without consideration. This lack of consideration makes the
modification unenforceable. We reject West's analysis because it fails to
recognize the "layered contract" nature of this transaction. We also reject West's
policy arguments and its challenge to a fee award in Deltek's favor.
In M.A. Mortenson Co., Inc. v. Timberline Software Corp..7 our Supreme
Court approved the formation of "layered contracts" between a merchant and an
end user.8 Mortenson, a contractor, issued a purchase order to Timberline for
the purchase of software.9 Timberline shipped the software with a shrink-wrap
license, which included a limitation of remedies provision.10 When Mortenson
experienced problems with the software, Timberline invoked the limitation
provisions. Mortenson contended that the parties' contract consisted only of its
purchase order because it never saw or agreed to the provisions of the license
7140 Wn.2d 568, 998 P.2d 305 (2000).
8The court stated that Article 2 of the Uniform Commercial Code, chapter
62A RCW, which applies to transactions in goods, applies to software licensing.
Based upon facts similar to this case, the court concluded in Mortenson that
RCW 62A.2-207 did not apply because the case concerned contract formation,
not contract alteration. Additionally, RCW 62A.2-207 applies only to contracts
between merchants. 140 Wn.2d at 582 & n.9.
9 Mortenson. 140 Wn.2d at 571.
10 Mortenson. 140 Wn.2d at 574-75.
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NO. 68309-8-1 / 7
agreement at the time the parties made their contract.11 It also argued that
delivery of the license was a request to add terms to the contract, to which the
parties never agreed.12 Our Supreme Court disagreed, holding that the license
provisions were part of the parties' contract and use of the software constituted
assent to the license terms.13 The court concluded, "[B]ecause RCW 62.A2-204
allows a contract to be formed 'in any manner sufficient to show agreement . . .
even though the moment of its making is undetermined,' it allows the formation of
layered contracts.'"14
West's complaint asserts that Deltek breached implied warranties of
merchantability and fitness for a particular purpose. It also alleges that Deltek
violated the CPA "by selling a poor quality product to Plaintiff WEST and failed to
provide adequate installation, training and maintenance services to render the
product useful for any purposes, let alone the special and particular purposes of
the Plaintiff." West does not dispute that its claims relate in whole or in part to
the license agreement, particularly the agreement's warranties and disclaimers,
and it does not seek to rescind the license agreement. West does not allege any
breach of the purchase agreement's provisions.
11 Mortenson, 140 Wn.2d at 577.
12 Mortenson. 140 Wn.2d at 578.
13
Mortenson. 140 Wn.2d at 584.
14 Mortenson, 140 Wn.2d at 584 (alteration in original).
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As West appropriately acknowledged at oral argument, here, as in
Mortenson, the purchase order is not an integrated contract. West's claims
cannot arise under the purchase agreement, which provides no express
warranties regarding the software and disclaims any implied warranties. West
had previously purchased software from A&E, although it had not previously
used Deltek's products. West does not dispute that the license and purchase
contract terms were clear. When West purchased Deltek's software, it had
notice that it would be subject to a license. The purchase agreement between
West and A&E recited that West was purchasing a license to use the software
and noted that Deltek would provide any warranties for the software. The record
indicates that a scroll box would have appeared on the computer screen during
the software installation process, setting forth the terms of the license agreement,
and that the installer would have been required to affirmatively select the option "I
accept the terms of the license agreement" to proceed. The work order that
Hadley signed stated explicitly that those same terms governed the work order.
West contends that it agreed to this contract without reading it. We follow
the court's reasoning in Mortenson that "it was not necessary ... to actually read
the agreement in order to be bound by it" and that West assented to the license
agreement's terms by using the software.15 West could have declined the terms
15 Mortenson, 140 Wn.2d at 584.
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NO. 68309-8-1 / 9
of the license agreement, chosen not to install the software, and returned the
software for a full refund. Because the purchase order and license agreement
constituted a layered contract and West's claims "relate in whole or in part" to the
license agreement, the license agreement's terms govern this dispute.
Therefore, the license agreement's forum selection clause applies if it is valid.
"A forum selection clause is presumptively valid unless it violates
fundamental public policy of the State of Washington and Washington's interest
in the determination of the issue materially outweighs the chosen state's
interest."16 We generally enforce a forum selection clause "even if it is in a
standard form consumer contract not subject to negotiation."17 The party
resisting the forum selection clause has the burden of demonstrating that it is
unreasonable, even where the clause establishes a remote forum for resolving
disputes.18 Absent evidence of fraud, undue influence, or unfair bargaining
power, courts in Washington are reluctant to invalidate forum selection clauses
because they increase contractual predictability and may reduce costs of doing
business.19
16 Saleemi v. Doctor's Assocs.. Inc.. 176 Wn.2d 368, 384, 292 P.3d 108(2013) (citing McKee v. AT&T Corp., 164 Wn.2d 372, 384, 191 P.3d 845 (2008)).
17 Dix, 160Wn.2dat834.
18 Dix, 160 Wn.2d at 834-35; Voicelink Data Servs., Inc. v. Datapulse, Inc.,
86 Wn. App. 613, 617, 937 P.2d 1158 (1997).
19 Dix. 160 Wn.2d at 834-35.
NO. 68309-8-1/10
West asserts that the license agreement's forum selection clause is invalid
because "Deltek cannot force a new agreement upon Plaintiff WEST without new
consideration." But, under Mortenson, the purchase order and license
agreement constituted a single "layered contract," not separate agreements.
West also contends that enforcing the license agreement's forum selection
clause would violate the CPA's public policy goals and "deny Plaintiff WEST and
any other injured Washington 'persons' a forum for its claims against Deltek." In
support of this argument, West cites Dix v. ICT Group, Inc.20 But, in Dix, a class
action, the plaintiffs claimed that the forum selection clause requiring venue in
Virginia violated the CPA's public policy goals because class action suits were
not available in Virginia.21 The court held that "a forum selection clause that
seriously impairs the plaintiff's ability to go forward on a claim of small value by
eliminating class suits in circumstances where there is no feasible alternative for
seeking relief violates public policy and is unenforceable."22 Here, West seeks
$119,544 in damages, it does not seek to bring a class action, and it presented
no evidence to the trial court that it has no feasible alternative for seeking relief.
Therefore, we reject its argument.
20 160 Wn.2d 826, 161 P.3d 1016 (2007).
21 Dix, 160Wn.2dat835.
22 Djx, 160Wn.2dat837.
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NO. 68309-8-1/11
On appeal, West argues that its claims against Deltek are time barred in
Virginia and "that pursuing such claims in either state or federal court in Virginia
would be cost prohibitive." It first presented a similar argument to the trial court
in response to Deltek's notice of presentation. But the trial court did not consider
this contention timely and entered a final judgment "as set forth in the Court's
May 25, 2010 Order Granting Certain Defendants' Motion to Dismiss for
Improper Venue," and "as set forth in the Court's June 14, 2010 Order Granting
Attorneys' Fees and Costs." Therefore, we also decline to address it.23 Because
West's claims arise under the license agreement and it fails to demonstrate that
the license agreement's forum selection clause is unreasonable, we hold that the
trial court properly required West to litigate its claims against Deltek in Virginia.
West also claims that the trial court's order awarding attorney fees and
costs to Deltek "was only authorized by [RCW 4.28.185(5)] if the error had not
occurred on the ruling granting Deltek's motion to dismiss." RCW 4.28.185(5)
allows a prevailing defendant to recover reasonable attorney fees and costs "[i]n
the event the defendant is personally served outside the state on causes of
action enumerated in this section." West does not dispute that it caused Deltek
to be served personally in Delaware under Washington's long-arm statute.
23 See RAP 2.5(a) ("The appellate court may refuse to review any claim of
error which was not raised in the trial court.").
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NO. 68309-8-1 /12
Because the trial court properly granted Deltek's motion under RCW 4.28.185(5),
we affirm the fee award.
Deltek requests attorney fees and costs on appeal under RAP 18.1 and
RCW 4.28.185(5). "Such an award is discretionary and is limited to the amount
necessary to compensate a foreign defendant for the added costs of litigating in
Washington."24 Because Deltek prevails in this action, we award attorney fees
and costs to Deltek, limited to the amount necessary to compensate it for any
additional costs of defending in Washington.25
In a cross appeal, Deltek asserts that the trial court erred in denying its
motion to strike Seward's declaration, which West offered in response to Deltek's
notice of presentation. Because West does not prevail, we need not consider
this issue.
CONCLUSION
Because West's claims against Deltek arise under the license agreement,
we affirm the trial court's order dismissing its claims for improper venue and
awarding attorney fees and costs to Deltek. Because Deltek prevails in this
appeal, we also award costs and reasonable attorney fees to Deltek incurred on
24 Pavne v. Saberhaqen Holdings, Inc.. 147 Wn. App. 17, 36, 190 P.3d
102 (2008) (citing Scott Fetzer Co.. Kirbv Co. Div. v. Weeks, 114 Wn.2d 109,
120-21, 786 P.2d 265 (1990)).
25 See Pavne. 147 Wn. App. at 36.
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NO. 68309-8-1/13
this appeal, limited to the amount necessary to compensate it for any additional
costs of defending in Washington, upon its compliance with RAP 18.1.
/-£^c^A_ (T .
WE CONCUR:
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