Cases & Deals

Yard House prevails on issue of first impression before California Court of Appeal

Client(s) Yard House USA, Inc.

On April 11, 2013, the Fourth District, Division One California Court of Appeal ruled in favor of Jones Day client Yard House USA, Inc. on a novel question of California Civil Procedure that had gone unanswered for more than 80 years concerning venue transfer. The question is whether a superior court can transfer a matter to a different venue on the basis of a contractual venue selection provision that specifies venue in a jurisdiction authorized by statute.

The petitioner and the plaintiff in the underlying action, Battaglia Enterprises, Inc. ("Battaglia"), filed suit against Yard House in the Superior Court of San Diego County for breach of contract, alleging damages in excess of $10 million. On behalf of Yard House, Jones Day moved to transfer the action to Orange County, citing a venue selection clause to which the parties had agreed to in the contract giving rise to the suit. Yard House argued that the contractual venue selection clause required that the trial be venued in Orange County despite the venue statute. Although no case had ever dealt with the factual circumstances presented by the case at bar, the trial court granted the motion.

Battaglia filed a petition for a writ of mandate seeking relief from the trial court's order transferring the underlying action from the Superior Court of San Diego County to the Superior Court of Orange County. In its petition, Battaglia argued that the trial court erroneously gave effect to the parties' agreement concerning the place of venue for any action between them arising from their contract. Battaglia maintained that venue selection clauses are void, per se, under long-standing California Supreme Court precedent as set forth in General Acceptance Corp. v. Robinson, 207 Cal. 285 (1929). Yard House argued that Battaglia misread General Acceptance and further argued that where, as here, the legislature provided for more than one permissible statutory venue, public policy was not furthered by a rule refusing to enforce a contractual selection of one of the permissible venues.

The Fourth District agreed with Yard House and concluded that the trial court properly granted Yard House's motion to transfer venue to Orange County. Despite settlement of the underlying case, the Fourth District thought the issue was so important that it rendered a published opinion on the matter.

Battaglia Enterprises, Inc. v. Yard House USA, Inc. et al., 215 Cal.App.4th 309 (Sup. Ct. of San Diego)