State Ex Rel. Polaris Industries, Inc. v. District Court of the Thirteenth Judicial District

No. 84-454

I N THE SUPRELW COURT OF THE STATE OF MONTANA

1985

STATE OF MONTANA, e x r e l . ,
POLARIS INDUSTRIES, I N C . ,

Relator,

THE D I S T R I C T COURT OF THE
THIRTEENTH J U D I C I A L D I S T R I C T ,
I N AND FOR THE COUNTY OF YELLOWSTONE,
THE HONORABLE DIANE G. BARZ, J u d g e
presiding,

Respondents.

O R I G I N A L PROCEEDING :

COUNSEL O F RECORD:

For Relator:

McNamer, Thompson & C a s h m o r e ; C h a r l e s R. C a s h m o r e , Jr.
a r g u e d , B i l l i n g s , Montana

F o r Respondents:

B e r g e r L a w F i r m ; A r n o l d B e r g e r argued, B i l l i n g s ,
Montana
A n d e r s o n , E d w a r d s & Molloy, B i l l i n g s , Montana

Submitted: January 2 5 1 1 9 8 5
~ ~ ~ i d F e b r d a r: y 1 5 , 1 9 8 5
~ u

Filed:: ( -.. . .
:7:j :;
:
Mr. Justice William E. Hunt, Sr., delivered the Opinion of
the Court.

Relator Polaris Tndustries, Inc. filed an application
for e writ of supervisory control asking this Court to
reverse the Yellowstone County District Court's Order which
refused to grant Polaris' motion to dismiss an action filed
against it by Midland Implement Company, Jnc.
Three issues were raised: first, whether the District
Court erre? in denying Polaris1 motion to dismiss; second,
whether a provision in an Agreement providing an exclusive
out-of-state forum for litigation is valid and enforceable in
Montana; and third, whether the District Court erred in
holding that Polaris' refusal to renew the Agreement rendered
it void as a matter of law, thereby precluding Polaris from
availing itself of the out-of-state forum provision of the
Agreement. Because we hold the forum-selection clause is
void, we need not address the remaining issues.
On April 7, 1982, Midland entered into a written
Distributor Agreement with Polaris. The Agreement provj-des
Polaris would manufacture snowmobiles for commercial sale,
and Midland would act as distributor for the products.
The Agreement further provides that no action on claims
arising from the Agreement may be maintained by Midland
against Polaris in any court except in Hennepin County,
Minnesota District Court, or in the United States District
Court in Minneapolis, Minnesota. After one year, the
Agreement expired of its own terms, leaving matters such as
inventory and warranty claims between the parties unresolved.
 Midland. a.sserted that 5 28-2-708, MCA renders the
forum-selection clause void. We agree. That statute
provides :
"Restraints upon 1ega.l proceedings void. Every
stipulation or condition in a contract by which any
parky thereto is restricted from enforcing his
rights under the contract by the usual proceedings
in the ordinary tribunals or which limits the time
within which he may thus enforce his rights - i.s
void."
-- (Emphasis added.)
The complaint of the plaintiff in this case comes within
the provisions of the foregoing code section. The pla.intiff
seeks to enforce its right under its contract with Polaris by
a "usual proceeding" in the "ordinary tribunals" of Montana.
We hold that the forum-selection clause of the Agreement is
void under the statute a.s an improper restraint upon the
pla.intifflsexercise of its rights.
We, therefore, conclude that the District Court
correct)-y denied Polaris' motion to dismiss. We deny the
application for writ of supervisory control.
/?

We Concur: ,/
/

kfq7'&)2-
Chief Justice
Justices
Justice John C. Sheehy, special.1~
eo~curring:

1 concur in the foregoing opinion.

The provisions of Art. I , Section 16, 1972 Montana
Constitution, are further evidence of a strong public policy
in this State that impedances to state courts may not be

contenanced by us. The constitutional statement is that
courts of justice shall be open to every person, and speedy
remedy afforded for every injury of person, property or
character. Forum selection clauses in contracts impede the
right to judicial process and especially discourage a speedy
remedy.
A further reason for refusing validity to a forum
selection clause may be found in the development of long-arm
jurisdiction. Whereas formerly, a state could not make a
Sinding judgment - personam
in against an individual or
corporate defendant with which the state had no contacts,
fv'
ties or relations (PeJdnoyer v. Neff (1877), 95 U.S. 714, 24
L.Ed 565), with the decisions of the U.S. Supreme Court
beginning in 1945 (International. Shoe Co. v. State of
Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 I..Ed. 95),
it became recognized that due process is provided non-state
residents if traditional notions of justice and fair play
made them amenable to state jurisdictions away from home.
See Travelers Health Associat.ion v. Virginia (1950), 339 U.S.
643, 70 S.Ct. 927, 94 L.Ed. 1154; Perkins v. Benguet
Consolidated Mining Co. (1952), 342 U.S. 437, 72 S.Ct. 413,
L/ f5- /+5/
96 L . E d . 4 ; McGee v. International Life Ins. Co. f39-52),

355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; Hanson v. Denckla
(1958), 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283.
Thus under McGee, supra., it was sufficient for due
process that suit was based on a contract which had
substantial connection with that state. 355 U.S., p. 223.
8
CORRECTION. In preparing this opinion for pub-
Hon, John C. Sheehy lication, we noted in our verification o titles and
f
Justice, Supreme Court
citations the matters listed below. Corrections have
Room 414 Justice Building
been made on our copy o the opinion.
f
215 North Sanders
Helena, Montana 59620

March 12, 1985 MAR 18 1985
ETHZ!.. M . &HI?]:i,ON
State ex rel. Polaris Industries, Inc. v. District & W G t s @ L i Z i mc o u r i
e
Thirteenth Judicial District, Yellowstone County, ~o.StM.sQ@dh$anFeb.
15, 1985, specially concurring

---
Page 4, line 15 Pehnoyer v. Neff should read Pennoyer v. Neff.
Page 4, line 6 from bottom --- 97 L.Ed. - should read 97 L.Ed. 485.
469 /
7
$
Page 4, line 6 from bottom
Page 5, line 10 from bottom
--- (1952) should read (1957).
--- S -
27-2-708 should read §
J
-28-2-708.

WEST PUBLISHING COMPANY
Box 43526
St. Paul, MN 55164
Fere Polaris' contact with Midland constituted very
substantial connections with Montana. Under any modern
concept of -
in personam jursidiction over non-state
defendants, Polaris is plainly subject in this case to
Montana's long-arm jurisdiction. It would be patently a step
hack from the cases affording such jurisdiction to hold that
forum selection clauses may set aside the significant growth
of - personam jursidiction law.
in
Montana's rules of civil procedure take notice of the
growth in the law pertaining to non-state defendants in state
courts. Rule 4B provides that jurisdiction of the sta.te
courts stretches to include any claim for relief from the
doing personally or through employees of the transaction of
any business in the state or entering into a contract for
materials to be furnished in this state. Those activities
provide the "minimum con.tactsW by the non-state resident
which makes long-arm iursidiction of the non-state resident
comportable with due process. international -- supra.
Shoe Co.,
/d
I therefore agree that S -2-7-2-708, MCA, states a public
pol-icy that has existed in Montana. historically and has even
more meaning with the d.evelopment of the newer concepts of
1-ong-arm jurisdiction. That policy makes forum-selection
clauses in contracts in our state void. There i.s a measure
of protection even so for non-state residents. If there a.re

not the minimum contacts necessary for long-arm jurisdiction
with the state by the non-state resident, no state
jursidiction exists with or without the forum selection
clause.