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January 2nd, 2019
construction
ALABAMA SUPREME COURT ENFORCES FORUM SELECTION CLAUSE

In Ex parte Killian Constr. Co., No. 1170696, 2018 WL 5730138, at *1 (Ala. Nov. 2, 2018), the Alabama Supreme Court issued a writ directing the lower court to dismiss the claims against Killian Construction Company (“Killian”) based on improper venue.  The Court found the forum selection clause in the parties contract was enforceable, despite the case having almost no contracts with the contractually selected forum.

The City of Foley, Alabama contracted with Killian to construct the Foley Sports Tourism Complex (“the sports complex”). Killian is a Missouri corporation, whose principal place of business is in Springfield, Missouri.

On December 17, 2015, Killian entered into a subcontract for part of the work on the sports complex with Edward E. Woerner, who owns Southern Turf Nurseries, Inc. (“the subcontract”). Woerner is a resident of Baldwin County, Alabama. According to Woerner, Killian failed to pay him the full amount due for the work performed under the subcontract and failed to pay him for additional work performed at the sports complex that was not included in the subcontract. On April 25, 2017, Woerner filed a complaint against Killian in the Circuit Court of Baldwin County, Alabama.

Killian moved to dismiss the action without prejudice pursuant to a mandatory forum selection clause in the subcontract. Killian argued that the forum selection clause made Missouri the exclusive agreed upon forum for this litigation. Woerner countered that the forum-selection clause should not be enforced because it would be “seriously inconvenient” based on the location of the witnesses and the possible need to have the trial judge attend a site visit.

The Alabama Supreme Court has previously held that a forum selection clause should be enforced so long as enforcing it is neither unfair nor unreasonable under the circumstances, and that distance alone is not sufficient to deny a transfer. Rather, inconvenience sufficient to void a forum-selection clause requires a showing that a trial in the other forum would be so gravely difficult and inconvenient that the challenging party would effectively be deprived of its day in court.

The Alabama Supreme Court held that despite Woerner’s claim that all witnesses were located in Alabama and there was a need for a site visit, it was clear that the case was nothing more than a simple breach of contract claim involving an alleged non-payment by Killian. The Court found the request for a site visit not plausible based on the facts alleged and that making witnesses travel to Missouri for the trial alone was not a sufficient burden to defeat the clause. The Court held that Woerner had failed to show why enforcement would be unreasonable under the circumstances and ordered the case be dismissed.  

This case is a good reminder of the high burden a party must establish in order to defeat an otherwise valid forum selection clause. It is incumbent upon the party attempting to defeat the clause to provide the Court with more than a list of witnesses who need to travel to attend the trial in the foreign jurisdiction.
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