- Forum Selection Clauses in Retainer Agreement Not Binding When Client Fails to Appear and Seek Enforcement
- September 21, 2006
- Law Firm: Hinshaw & Culbertson LLP - Chicago Office
Reiner, Reiner & Bennett, P.C. v. The Cadle Co., 278 Conn. 92, 897 A2d 58 (2006)
Notwithstanding a clause in the retainer agreement that required an
forum, the Connecticut Supreme Court upheld a Ohio default judgment in favor of a Connecticut law firm against its Connecticut client. Ohio
Reiner, Reiner and Bennett, P.C. (“Reiner”), a
law firm, provided legal services to The Cadle Company ("Cadle”), an Ohio Corporation. As part of the retainer agreement, general counsel for Cadle had included an Connecticut forum selection clause. When Cadle failed to pay the fees it ostensibly owed the firm, Reiner brought two legal actions against Cadle. Default judgments were obtained, and Reiner subsequently obtained a judgment lien and foreclosure by sale on Ohio property owned by Cadle. This appeal followed Cadle’s unsuccessful motion to reopen the judgments. Connecticut
The court found that service had properly been made on Cadle by certified mail and that Cadle had sufficient minimum contacts with
. Cadle nevertheless asserted that in light of the Connecticut forum clause, Ohio courts lacked personal jurisdiction. The court disagreed. Although forum selection clauses were historically disfavored as an attempt to deprive a court of its proper authority, the court noted a trend to enforce such clauses if they were reasonable. See Connecticut v. Zapata Off-Shore Co., 407 Bremen 1 (1972). The court stated that it had discretion either to accept or decline jurisdiction and that where, as here, Cadle had never made a timely attempt to enforce the clause, jurisdiction would be sustained. U.S.
Significance of the Case
In effect, the court chose to disregard the forum selection clause because the party entitled to enforce it had arguably chosen to sleep on its rights. Whether it is wise for law firms more generally to ignore client-based forum selection clauses is, of course, another matter.