The court granted leave to appeal to consider the enforceability of a forum selection clause contained in commercial loan agreements executed by sophisticated parties. The court concluded such provisions are enforceable despite allegations that the contracts in which they are embedded are unenforceable due to fraud, unless the alleged fraud improperly induced assent to the forum selection clause specifically. In doing so, the court relied upon the United States Supreme Court ruling in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04 (1967), and the New Jersey Supreme Court ruling in Goffe v. Foulke Mgmt. Corp., 238 N.J. 191, 216-17 (2019), both of which applied this principle to enforce arbitration provisions. The court also acknowledged authority from other jurisdictions that have applied this rule to uphold forum selection clauses and explained that its holding aligns with the majority approach.
In addition, distinguishing McNeil v. Zoref, 297 N.J. Super. 213, 219 (App. Div. 1997), the court held the entire controversy doctrine does not vitiate an otherwise-enforceable forum selection clause when the enforcing party is severable from the litigation. Following Wilfred v. MacDonald Inc. v. Cushman Inc., 256 N.J. Super. 58, 65 (App. Div. 1992), the court also concluded no appreciable inconvenience would result from enforcing the forum selection clause, thereby requiring the parties to litigate their claims in Utah.
Finally, the court held that the seven-factor analysis detailed by the New Jersey Supreme Court in Cole v. Jersey City Med. Ctr., 215 N.J. 265, 280-81 (2013) to determine whether a party waived the right to enforce an arbitration provision applies equally to the question of whether a party waived the right to enforce a forum selection clause. The court further explained that the analysis required under Cole is necessarily fact-intensive and therefore declined to exercise original jurisdiction under Rule 2:10-5.
