He Who Hesitates, May be Too Late!
In Trident Labs, Inc. v. Merrill Lynch Commercial Finance Corp., the Court of Appeal held that a party, who has the option to litigate in more than one forum and litigates extensively in one forum, cannot then decide to enforce its rights to litigate in another forum. Pursuant to a forum selection clause, Trident Labs agreed to waive any rights to commence an action anywhere but Illinois. Trident nevertheless sued Merrill Lynch in California. Merrill Lynch actively litigated the case for 19 months in California by filing a cross-complaint, conducting substantial discovery and filing motions seeking relief. Merrill Lynch then filed a motion pursuant to Code of Civil Procedure section 410.30 to stay or dismiss the lawsuit based on the forum selection clause. Merrill Lynch contended that it had the right to make the motion "at any time," and the trial court agreed. The Court of Appeal noted that section 410.30 does not say such motions may be made at any time. "Where no limits are stated, a reasonableness standard is inferred." The Court of Appeal concluded that 19 months of delay, without any justification, is unreasonable as a matter of law and reversed the trial court. Moral of the story: Don't delay!
Jeffrey Huron is the founder of Huron law group, a litigation firm that handles business, real estate and entertainment disputes.