Arntz Builders v. Superior Court

In this writ proceeding we consider the validity of a contractual venue selection clause that purports to waive a party’s right to transfer to a neutral county an action brought by a county against a resident of another county. A construction contract between petitioner Arntz Builders (Arntz) and real party in interest County of Contra Costa (County) provides that any action arising out of the contract would be brought in Contra Costa County, and expressly waives Arntz’s right to remove the action to a neutral venue under section 394 of the Code of Civil Procedure. 1 Despite authority holding contractual venue selection provisions to be void, County contends, and the superior court held, that the clause is valid because the contractually selected venue is one of several statutorily permissible counties for the filing of such an action. We conclude that the contractual provision purporting to *1199 waive Arntz’s right to transfer the action to a neutral county is nonetheless invalid. Accordingly, we shall issue a writ of mandate directing the trial court to transfer the action to a neutral county.

Factual and Procedural Background

Arntz entered into a $26.8 million…

I concur. I write separately only to briefly note that the trial court’s attempt to uphold the parties’ freedom of contract was not unreasonable. Ordinarily, voluntary contractual waivers should be enforced by the courts. However, in this case the public policy underlying Code of Civil Procedure section 394—to avoid even the appearance of prejudice in the venue for litigation initiated by a local government—must take precedence over the parties’ right to negotiate a convenient and efficient venue for litigating their contract disputes. Setting trial in a county which is itself a plaintiff, and from which the jury and the trial judge will be selected, is a scenario that might “bring the administration of justice into disrepute.” This was the concern that led our Supreme Court to hold contractual venue selection clauses void. (General Acceptance Corp. v. Robinson (1929) 207 Cal. 285, 289 [ 277 P. 1039 ].) Thus, even though the venue specified in the parties’ contract was proper under section 395 of the Code of Civil Procedure, the right of removal conferred by section 394 of the Code of Civil Procedure must be honored by the courts.

Farella Braun & Martel LLP, B. Scott Douglass, Anthony D. Giles, and Bridget K. Kaman, San Francisco; Silvano B. Marchesi and David F. Schmidt, County Counsel, Martinez, for Real Party in Interest.

In this writ proceeding we consider the validity of a contractual venue selection clause that purports to waive a party's right to transfer to a neutral county an action brought by a county against a resident of another county. A construction contract between petitioner Arntz Builders (Arntz) and real party in interest County of Contra Costa (County) provides that any action arising out of the contract would be brought in Contra Costa County, and expressly waives Arntz's right to remove the action to a neutral venue under section 394 of the Code of Civil Procedure. [1] Despite authority holding contractual venue selection provisions to be void, County contends, and the superior court held, that the clause is valid because the contractually selected venue is one of several statutorily permissible counties for the filing of such an action. We conclude that the contractual provision purporting to waive Arntz's right to transfer the action to a neutral county is nonetheless…