Smith, Valentino & Smith, Inc. v. Superior Court

Smith, Valentino & Smith, Inc. (Smith) (plaintiff) was a California corporation. Life Assurance Company of Pennsylvania (Life Assurance) (defendant) was a Pennsylvania corporation that did business in California. Smith and Life Assurance made a contract whereby Smith was to represent and act as agent for Life Assurance in soliciting business in California. The contract included a forum-selection clause that required Smith to file any actions arising out of the contract only in Philadelphia and required Life Assurance to file such actions only in Los Angeles. The contract also contained a choice-of-law provision that Pennsylvania law would govern any contractual disputes. Smith sued Life Assurance, alleging that it had breached the contract and committed various torts including unfair competition and tortious interference with business relationships. Smith filed the action in a Los Angeles court rather than in Philadelphia. Life Assurance moved to dismiss the case, relying on the forum-selection clause. Smith opposed the motion, arguing that the case should remain in California because witnesses were all California residents and litigating in Philadelphia would cause Smith financial hardship. Smith also argued that the forum-selection clause should not apply to the tort claims. The trial court determined that Philadelphia was the proper forum, but rather than granting the motion to dismiss, the trial court stayed the action. Smith appealed.