Russo v. Barger, 731 Ariz. Adv. Rep. 31 (App. I, January 26, 2016) (J. Downey)

RIGHT TO ASSERT FORUM SELECTION CLAUSE WAIVED BY SUBSTANTIAL PARTICIPATION IN STATE COURT ACTION

In this lawsuit involving a real estate dispute in Mexico the trial court granted defendant's motion to dismiss ruling that the forum selection clause in the parties' contract required the matter be litigated in Mexico. The Arizona Court of Appeals vacated the trial court's dismissal and remanded the case.

Here the defendant willingly participated in the instant Arizona state court action brought by plaintiffs for over three years, filed pleadings, attended status conferences, moved for summary judgment and had their statute of limitations defense rejected before asserting the forum  selection clause defense.

While the existence of waiver is normally a  jury question, when, as here, the evidence to support it is uncontroverted “[w]e hold that, as with arbitration clauses and notice-of-claim defenses, a party may waive reliance on an otherwise-enforceable forum selection clause by participating substantially in litigation without promptly seeking to enforce the clause. . . . Had Appellees timely sought dismissal based on the forum selection clause, years of litigation and expense could have been avoided, as well as the expenditure of significant judicial resources.”