Empire Loan of Stoughton, Inc. v. Stanley Convergent Security Solutions, Inc.

NOTICE: All slip opinions and orders are subject to formal
revision and are superseded by the advance sheets and bound
volumes of the Official Reports. If you find a typographical
error or other formal error, please notify the Reporter of
Decisions, Supreme Judicial Court, John Adams Courthouse, 1
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us

17-P-1115 Appeals Court

EMPIRE LOAN OF STOUGHTON, INC. vs. STANLEY CONVERGENT SECURITY
SOLUTIONS, INC.

No. 17-P-1115.

Norfolk. November 8, 2018. - January 24, 2019.

Present: Sullivan, Kinder, & Shin, JJ.

Appeals Court, Jurisdiction. Practice, Civil, Notice of appeal,
Motion to dismiss, Choice of forum. Contract, Choice of
forum clause, Choice of law clause.

Civil action commenced in the Superior Court Department on
July 24, 2015.

A motion to dismiss was heard by Beverly J. Cannone, J.,
and a motion for reconsideration was considered by her.

A motion to dismiss the appeal was heard in the Appeals
Court by Rubin, J.

Dana E. Casher for the plaintiff.
Christopher A. Duggan (Nicole B. Cordeiro also present) for
the defendant.

KINDER, J. Pawn shop operator Empire Loan of Stoughton,

Inc. (Empire), filed a complaint in Superior Court against

Stanley Convergent Security Solutions, Inc. (Stanley), a
2

supplier and servicer of security systems, alleging, among other

things, that Stanley breached a contract with Empire by failing

to properly monitor and maintain a security system it sold to

Empire. A Superior Court judge allowed Stanley's motion to

dismiss because the contract contained a forum selection clause

that provided that any action against Stanley must be brought in

Hartford, Connecticut. On appeal, Empire claims error in the

order of dismissal, arguing that the forum selection clause is

unenforceable. In a consolidated appeal, Stanley argues that

its motion to dismiss Empire's appeal for lack of jurisdiction

should have been allowed by the single justice. We affirm the

order of the single justice and the judgment dismissing Empire's

claims.

Background. Stanley filed its motion to dismiss the

complaint under Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754

(1974), which, in the normal course, "is the correct vehicle to

employ when the ground for dismissal is alleged to be that the

court lacks jurisdiction as a result of an enforceable forum

selection clause." Boland v. George S. May Int'l Co., 81 Mass.

App. Ct. 817, 818 n.2 (2012). However, when "matters outside

the pleading are presented to and not excluded by the court, the

motion shall be treated as one for summary judgment and disposed

of as provided in [Mass. R. Civ. P. 56, 365 Mass. 824 (1974)]."

Mass. R. Civ. P. 12 (b). Because both parties submitted
3

affidavits in connection with the motion to dismiss and the

record does not show that the judge excluded them, we treat the

motion as one for summary judgment.1 See Baby Furniture

Warehouse Store, Inc. v. Meubles D&F Ltée, 75 Mass. App. Ct. 27,

29 n.3 (2009). Our review of the record in the light most

favorable to Empire, the nonmoving party, id., reveals the

following material facts.

Empire is a Massachusetts company that operates five

Massachusetts pawn shops, including one in Stoughton.2 Stanley

is a Delaware corporation doing business in Massachusetts with

an office in Woburn. Beginning in 2011, Empire and Stanley

entered into eight contracts in which Stanley agreed to install

and monitor security systems in Empire's pawn shops in exchange

for monthly payments. As relevant here, the contracts stated

that they were entered into in Connecticut, that they "shall be

interpreted, enforced and governed under the laws of the State

of Connecticut without regard to application of conflicts of

laws principals [sic] that would require the application of any

1 Neither the memorandum of decision on the motion to
dismiss nor the judgment indicates under which rule it entered,
and there is no transcript before us of the hearing on the
motion.

2 We simplify here for convenience, but it does not affect
our analysis. Empire is actually one of five corporations run
by the same principals, with the other companies operating
affiliated pawn shops at four other Massachusetts locations.
4

other law," and that "[a]ny action regarding this agreement or

otherwise brought against [Stanley] by or on behalf of any party

to this agreement . . . shall be maintained in a court in

Hartford, Connecticut."

Stanley's Massachusetts salesperson Robert Corrieri

negotiated the contracts with Empire's general manager, Steven

Duva, and its president, Michael Goldstein. Viewing the

evidence in the light most favorable to Empire, the negotiations

actually occurred in Massachusetts. The parties negotiated

prices, and Duva inserted handwritten terms into the agreement

relating to Empire's pawn shop in Lynn. Each page of every

contract bears the signature or initials of Duva or Goldstein,

neither of whom objected to the forum selection clause. In

executing each contract, Duva and Goldstein agreed that they had

"read th[e] entire [a]greement" and would "be bound by all its

terms and conditions."

Business between Empire and Stanley proceeded without

incident until December 25, 2014, when two unidentified burglars

disabled the telephone wire to the Stoughton pawn shop, tore

wiring from the security system, broke in, and damaged or stole

property. Neither Stanley nor the security system alerted

Empire or the police. As a result of the burglary, Empire

sustained losses that were not covered by insurance.
5

Discussion. 1. Motion to dismiss the appeal. We first

address Stanley's claim that the Appeals Court lacks

jurisdiction over this appeal because Empire did not file "a

valid, timely notice of appeal." More specifically, Stanley

argues that the single justice should have dismissed the appeal

on its motion because Empire did not file a new notice of appeal

after the denial of Empire's motion to reconsider. We disagree.

The procedural history follows, with all dates referring to

the year 2016. On June 28, the Superior Court judge's order

entered allowing the motion to dismiss Empire's complaint. On

July 29, Empire served Stanley with a motion for

reconsideration. Empire filed a notice of appeal from the order

of dismissal on August 2; however, the judgment dismissing the

complaint did not enter until August 5. On August 26, Empire

filed a notice of appeal from the judgment of dismissal.

Empire's motion for reconsideration was denied on August 31, and

Empire did not notice an appeal after that decision.

We begin our analysis by assuming, without deciding, that

if the August 26 notice of appeal is not effective, we would not

have jurisdiction to hear the appeal from the judgment. See

DeLucia v. Kfoury, 93 Mass. App. Ct. 166, 170 (2018) ("A timely

notice of appeal is a jurisdictional prerequisite to our

authority to consider any matter on appeal"). But see Roch v.

Mollica, 481 Mass. 164, 165 n.2 (2019) (deciding merits of
6

appeal where sole notice of appeal was of no effect due to

timely filed motion for reconsideration). To be effective, a

notice of appeal must be filed "within thirty days of the date

of the entry of the judgment appealed from." Mass. R. A. P.

4 (a), as amended, 464 Mass. 1601 (2013). The thirty-day appeal

period may be tolled by the filing of a "timely motion," among

other things, "to alter or amend a judgment under Rule 59 or for

relief from judgment under Rule 60, however titled," Mass.

R. A. P. 4 (a), which may include a motion to reconsider the

judgment. See 2013 Reporter's Notes to Mass. R. A. P. 4, 2

Mass. Ann. Laws Court Rules, Rules of Appellate Procedure, at 11

(LexisNexis 2018). Such motions to alter or amend a judgment or

for relief from the judgment are timely only "if either motion

is served within ten days after entry of judgment" (emphasis

added). Mass. R. A. P. 4 (a). The parties then have thirty

days after entry of the order disposing of the motion to file a

new notice of appeal. "A notice of appeal filed before the

disposition of any of the above motions shall have no effect."

Id.

In denying Stanley's motion to dismiss for lack of

appellate jurisdiction, the single justice concluded that

Empire's motion for reconsideration was not a "timely" one under

rule 4 (a). We discern no error in that conclusion because it

is undisputed that the motion was served before judgment
7

entered. Moreover, Empire's motion for reconsideration, which

only sought reconsideration of the allowance of the motion to

dismiss, was not a motion for reconsideration that tolls the

time period for filing a notice of appeal. Only motions seeking

reconsideration of a judgment have that effect under rule 4 (a).

Accordingly, Empire's motion to reconsider did not toll the

running of the thirty-day appeal period and a new notice of

appeal was not required when the motion was denied. Empire's

August 26 notice of appeal, filed within thirty days of entry of

the judgment of dismissal, conferred jurisdiction on this court,

and we therefore reach the merits.3

2. Enforceability of the forum selection clause. The

Superior Court judge allowed Stanley's motion to dismiss,

reasoning that "the forum selection language is clear and

unambiguous, is presented fairly and conspicuously and . . . the

contract was entered into by sophisticated parties who have

agreed to litigate in Connecticut." She further concluded that

(1) "[t]he forum selection clause is fair and reasonable because

there is no evidence of fraud, duress, or substantial imbalance

3 Our holding is limited to the particular procedural
situation before us. We do not decide whether a premature
motion for reconsideration might toll the time period for filing
a notice of appeal in other circumstances. However, it should
serve as a reminder that a party who relies on a prejudgment
motion for reconsideration in delaying its notice of appeal does
so at its peril.
8

of bargaining power between the two parties," (2) the forum

selection clause is not in contravention of public policy, and

(3) "a trial in Connecticut, as agreed to by the parties, would

not be so gravely difficult that the plaintiff would be deprived

of its day in court." We review the judge's decision de novo to

determine whether Stanley has established that, viewing the

evidence in the light most favorable to Empire, there is no

genuine issue as to any material fact and that Stanley is

entitled to a judgment as a matter of law. See Scarlett v.

Boston, 93 Mass. App. Ct. 593, 596-597 (2018), citing Mass. R.

Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002).

a. Choice of law. We first determine which State's

substantive law should be used to analyze the enforceability of

the contract's forum selection clause. "Where, as here, 'the

parties have expressed a specific intent as to the governing

law, Massachusetts courts will uphold the parties' choice as

long as the result is not contrary to public policy.'" Oxford

Global Resources, LLC v. Hernandez, 480 Mass. 462, 468 (2018),

quoting Hodas v. Morin, 442 Mass. 544, 549-550 (2004). A

choice-of-law provision is not contrary to public policy unless

"'(a) the chosen state has no substantial relationship to the

parties or the transaction and there is no other reasonable

basis for the parties' choice, or (b) [where] application of the

law of the chosen state would be contrary to a fundamental
9

policy of a state which has a materially greater interest than

the chosen state [in the determination of the particular issue]'

and is the State whose law would apply . . . 'in the absence of

an effective choice of law by the parties.'" Id. at 469,

quoting Hodas, supra at 550.

The record in this case shows little connection between the

parties and Connecticut. According to the contract, Stanley is

located in Naperville, Illinois. Although Stanley's memorandum

in support of its motion to dismiss suggests that it has a

national branch office in Trumbull, Connecticut, there is no

record evidence to support that claim. The contract states that

it was entered into in the State of Connecticut, but that fact

is disputed. Marc Gundersheim, an officer and director of

Empire, states in an affidavit that the contract was entered

into in Massachusetts.4 Other than these unsupported or disputed

claims, there is nothing in the record establishing any

relationship between the parties and the State of Connecticut,

4 Gundersheim fails to state the basis for his personal
knowledge of these facts as required by Mass. R. Civ. P. 56 (e)
("affidavits shall be made on personal knowledge, shall set
forth such facts as would be admissible in evidence, and shall
show affirmatively that the affiant is competent to testify to
the matters stated therein"). See Madsen v. Erwin, 395 Mass.
715, 721 (1985). However, because Stanley did not move to
strike the affidavit and the record is open to our independent
consideration, we consider the location of the execution of the
contract to be disputed. See Matthews v. Ocean Spray
Cranberries, Inc., 426 Mass. 122, 123 n.1 (1997).
10

much less a substantial relationship. It is undisputed,

however, that Empire is located in Massachusetts, where (1) both

parties do business, (2) the contract was negotiated, (3) the

conduct at issue occurred, and (4) Empire sustained losses. On

this record, we conclude that Connecticut does not have a

substantial relationship to the parties or the transaction and

there is no other reasonable basis for the parties' choice of

law. See Oxford Global Resources, LLC, supra at 467 (setting

forth factors to be considered in identifying State with most

significant relationship). The choice-of-law provision in the

contract is therefore unenforceable, and we apply the

substantive law of Massachusetts to determine the enforceability

of the forum selection clause.

b. Forum selection. Forum selection clauses are

presumptively enforceable in Massachusetts "so long as they are

fair and reasonable." Melia v. Zenhire, Inc., 462 Mass. 164,

182 (2012). See Jacobson v. Mailboxes Etc. U.S.A., 419 Mass.

572, 575 (1995). The proponent of a forum selection clause

bears the burden of showing that the clause was reasonably

communicated and accepted. Ajemian v. Yahoo!, Inc., 83 Mass.

App. Ct. 565, 574 (2013), S.C., 478 Mass. 169 (2017), cert.

denied sub nom. Oath Holdings, Inc. v. Ajemian, 138 S. Ct. 1327

(2018). By contrast, "[t]he opponent of a forum selection

clause bears the 'substantial burden' of showing that
11

enforcement of a forum selection clause would be unfair and

unreasonable." Melia v. Zenhire, Inc., supra, quoting Cambridge

Biotech Corp. v. Pasteur Sanofi Diagnostics, 433 Mass. 122, 133

(2000).

Stanley has met its burden of showing that the forum

selection clause was reasonably communicated and accepted by

Empire. Stanley negotiated eight separate contracts with

Empire's president and general manager, each of which contained

an identical forum selection clause. Neither the president nor

the general manager objected to the forum selection clause, and

nothing in the record supports an inference that they did not

see or understand that clause. Rather, by executing the

contracts, they agreed that they "read th[e] entire

[a]greement." The president or the general manager signed or

initialed each page of every contract, and in the case of the

contract relating to the Lynn shop, the general manager inserted

additional contract terms directly under the forum selection

clause. In these circumstances, Empire's assertion that it

signed the contracts with little or no knowledge of their terms

rings hollow.

Empire claims the forum selection clause is unfair and

unreasonable because (1) the contract is one of adhesion, (2)

its witnesses would be unavailable for a trial in Connecticut,

and (3) forcing Empire to litigate in Connecticut would deprive
12

Empire of its contract-based G. L. c. 93A claim, in violation of

Massachusetts public policy. We address each argument in turn.

A contract of adhesion is one that is "drafted unilaterally

by the dominant party and then presented on a 'take-it-or-leave-

it' basis to the weaker party who has no real opportunity to

bargain about its terms." Restatement (Second) of Conflict of

Laws § 187 comment b (1971). While there is no dispute that

Stanley drafted the contracts at issue here, they were subject

to negotiation. Empire concedes that the parties negotiated

"what components would be installed, the level of service and

maintenance plans, and the pricing," and it is undisputed that

handwritten terms were inserted into the agreement relating to

Empire's pawn shop in Lynn. Thus, we agree with the motion

judge that this was not a contract of adhesion. Moreover, even

adhesion contracts are enforceable "unless they are

unconscionable, offend public policy, or are shown to be unfair

in the particular circumstances." Chase Commercial Corp. v.

Owen, 32 Mass. App. Ct. 248, 253 (1992). We see nothing

unconscionable or unfair in this case where the principals were

sophisticated business people and there is no claim of fraud in

the contract's execution. See Miller v. Cotter, 448 Mass. 671,

680 (2007). Accordingly, on this point, Empire has failed to

meet its substantial burden of showing that enforcement of the

forum selection clause would be unfair and unreasonable.
13

Second, we find no merit in Empire's claim that it would be

unfair and unreasonable to enforce the forum selection clause

because it cannot present the testimony of Massachusetts

witnesses in a Connecticut proceeding. Even assuming that the

subpoena power of a Hartford forum would not extend to

Massachusetts witnesses, which is not clear from this record,

nothing would prevent depositions taken in Massachusetts from

being presented in the courts of Connecticut. See Connecticut

Practice Book §§ 13-27(f), 13-29(d), 13-31 (2018).

Finally, we are not persuaded by Empire's claim that

enforcing the forum selection clause in this case would deprive

Empire of its contract-based G. L. c. 93A claim in violation of

Massachusetts public policy. Assuming, without deciding, that

Empire has a viable G. L. c. 93A claim against Stanley, Empire

has not shown that a Connecticut forum could not apply

Massachusetts law to its unfair or deceptive business practice

claim. In Connecticut, "[a] principled search for the local law

of the state with the most significant relationship to the

occurrence and the parties will often cause foreign law to be

recognized as the law that should govern the controversy."

O'Connor v. O'Connor, 201 Conn. 632, 648 (1986). Thus, we see

no reason why a Connecticut court could not properly apply our

statute, where (1) the injury and the conduct alleged to have

caused the injury occurred in Massachusetts, (2) Empire is a
14

Massachusetts company, (3) Stanley maintains an office in

Massachusetts, and (4) the parties' relationship is centered in

Massachusetts. See id. at 652, quoting Restatement (Second) of

Conflict of Laws § 145(2) (1971).

For all of these reasons we discern no error in the judge's

conclusion that the forum selection clause is valid and

enforceable. The judgment dismissing Empire's complaint is

affirmed, as is the order of the single justice denying

Stanley's motion to dismiss Empire's appeal.

So ordered.