Innerlight v. Matrix

1 Innerlight’s motion to strike portions of Matrix’s reply
brief is also before this court. Because we reverse the district
court’s grant of summary judgment and remand on grounds unrelated
to Innerlight’s motion to strike, we need not consider the
motion.
2009 UT 31
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
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Innerlight, Inc. No. 20070425
Plaintiff and Appellee,
v.
F I L E D
The Matrix Group, LLC,
Defendant and Appellant. June 5, 2009
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Fourth District, Provo Dep’t
The Honorable Fred D. Howard
No. 060400775
Attorneys: David L. Arrington, Matthew G. Grimmer, Thomas J.
Burns, Salt Lake City, for appellee
Stephen Quesenberry, Charles L. Perschon, Salt Lake
City, for appellant
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PARRISH, Justice:
INTRODUCTION
¶1 Appellant, The Matrix Group, LLC (“Matrix”), appeals
the district court’s rule 56(c) grant of summary judgment in
favor of Innerlight, Inc. (“Innerlight”). In ruling for
Innerlight, the district court held that the forum selection and
choice of law provisions within the contract between Matrix and
Innerlight are unenforceable because of Matrix’s failure to
fulfill a material condition precedent to the contract. But
under the plain language of the contract, the forum selection and
choice of law provisions are enforceable apart from the condition
precedent. We therefore reverse.1

No. 20070425 2
BACKGROUND
¶2 Matrix operates a skin care products business with its
principal place of business in Florida. Innerlight is a multi-
level marketing group with its principal place of business in
Utah. In October 2004, Matrix and Innerlight entered into a
written Exclusive Distributor Agreement (the “Contract”) whereby
Innerlight was to become the exclusive distributor of the Beverly
Sassoon line of Matrix’s skin care products. The Contract was
negotiated and signed by both parties.
¶3 Section 12 of the Contract, which includes a forum
selection and choice of law provision, reads as follows:
This Agreement shall be construed and
interpreted under the laws of the State of
Florida and the parties agree that any action
or proceeding brought concerning this
Agreement may be brought only in the courts
of Palm Beach County, Florida, and each party
hereto hereby consents to the jurisdiction of
such courts.
In addition, Section 2 of the Contract entitled “Appointment of
Distributor” contains the following two provisions:
(a) Subject to the terms and provisions set
forth in this Agreement, [Matrix] hereby
appoints [Innerlight] as the exclusive
distributor for the Products (defined below)
within the Territory (defined below) insofar
as, but only insofar as, the Industry
(defined below) is concerned. . . .
(b) The acceptance of this appointment by
[Innerlight] is conditioned upon
[Innerlight’s] written acceptance of
[Matrix’s] Product Price List which shall not
be subject to change until October 17, 2006.
¶4 After the parties executed the Contract in August 2004,
Innerlight purchased more than $250,000 worth of cosmetic
products from Matrix and engaged in various efforts to promote
and sell the products through its distributors.
¶5 On March 13, 2006, almost a year and a half after the
parties entered into the Contract, Innerlight filed suit against
Matrix in Utah seeking a declaration that the Contract was not
enforceable because Matrix failed to fulfill the condition

2 We note the inconsistencies in the district court’s order
denying Matrix’s motion to dismiss, which holds that the forum
selection clause is not binding on the parties because the
Contract is unenforceable, while at the same time enforcing other
(continued...)
3 No. 20070425
precedent in Section 2(b) of the Contract by neglecting to
provide Innerlight with a “Product Price List.” In response,
Matrix moved to dismiss the action claiming that venue was
improper under rule 12(b)(3) of the Utah Rules of Civil
Procedure. Specifically, Matrix argued that the forum selection
clause in Section 12 of the Contract must be enforced before a
court could even entertain Innerlight’s claim under Section 2(b)
of the Contract. The district court denied Matrix’s Motion to
Dismiss holding as follows:
(1) The law is clear where a contract between
two parties is established, and such a
contract provides for a forum and law
selection, then the agreement is to be
construed, interpreted and brought under the
law and venue designated by that contract.
(2) The law-selection and venue terms of an
agreement are ineffective if the agreement
has not first been established. Where there
is no valid contract, such terms are not
enforceable.
(3) [Section] 2(b) of the [Contract] creates
an express condition precedent.
(4) No contract exists because the material
condition precedent of paragraph 2(b) remains
to be satisfied. . . . As such, the law and
the forum-selection provisions, which are
clear in the language of the [Contract], are
--notwithstanding their clarity--
unenforceable.
(5) The express condition precedent is not to
be ignored, weighed or helped with evidence
regarding a course of dealing. First the
record does not reflect a course of dealing.
Second, paragraph 12 [of the Contract] . . .
precludes any amendment or modification
except by a written instrument signed by both
parties.2

2(...continued)
provisions of the contract to prevent admission of evidence of
amendment or modification to the Contract.
3 While a district court’s “decision that venue is proper,
despite a forum-selection clause to the contrary,” is reviewed
under an “abuse of discretion” standard, Prows v. Pinpoint Retail
Sys., Inc., 868 P.2d 809, 810 (Utah 1993), this standard is
inapplicable here because the district court did not determine
that venue was proper. Rather, it entered a legal ruling that
the Contract was unenforceable and therefore the venue terms were
likewise unenforceable.
No. 20070425 4
¶6 After the district court denied Matrix’s Motion to
Dismiss, both Innerlight and Matrix filed motions for summary
judgment. The district court granted Innerlight’s motion,
holding that the Contract, including the forum selection and
choice of law provisions, was unenforceable because Matrix had
failed to fulfill a material condition precedent. Specifically,
the district court held that Matrix neglected to provide a fixed
price list as required by the condition precedent under Section 2
of the Contract.
¶7 Matrix now appeals the district court’s grant of
summary judgment. We have jurisdiction pursuant to Utah Code
section 78A-3-102(3)(j) (2008).
STANDARD OF REVIEW3
¶8 We review a district court’s grant of summary judgment
de novo, considering the record as a whole, with no deference
afforded to the legal conclusions of the district court. See
Pearce v. Utah Athletic Found., 2008 UT 13, ¶ 13, 179 P.3d 760;
Poteet v. White, 2006 UT 63, ¶ 7, 147 P.3d 439. “[S]ummary
judgment is appropriate only when there is no genuine issue as to
any material fact and the moving party is entitled to a judgment
as a matter of law.” Swan Creek Vill. Homeowners Ass’n v. Warne,
2006 UT 22, ¶ 16, 134 P.3d 1122 (internal quotation marks
omitted).
ANALYSIS
¶9 The district court’s denial of Matrix’s motion to
dismiss for improper venue was a necessary predicate to its grant
of summary judgment in favor of Innerlight. In its summary
judgment order, the district court specified that “the venue
terms . . . under the [Contract] are not enforceable because the
[Contract] is an ineffective executory contract.” We disagree

5 No. 20070425
with the district court’s legal conclusion that the forum
selection clause and choice of law provisions in the Contract are
unenforceable. However, before reaching the merits of this
issue, we first address whether the issue was properly preserved
below and raised on appeal.
I. THE ISSUE WAS PROPERLY PRESERVED BELOW AND RAISED ON APPEAL
¶10 “Generally, ‘in order to preserve an issue for appeal
the issue must be presented to the [district] court in such a way
that the [district] court has an opportunity to rule on that
issue.’” Pratt v. Nelson, 2007 UT 41, ¶ 15, 164 P.3d 366
(quoting Brookside Mobile Home Park, Ltd. v. Peebles, 2002 UT 48,
¶ 14, 48 P.3d 968). A district court is deemed to have had an
opportunity to rule on an issue if: (1) it is “raised in a
timely fashion”; (2) it is “specifically raised”; and (3) the
party raising the issue has introduced “supporting evidence or
relevant legal authority.” Brookside Mobile Home Park, 2002 UT
48, ¶ 14 (quoting Badger v. Brooklyn Canal Co., 966 P.2d 844, 847
(Utah 1998)).
¶11 Matrix satisfied each of these requirements with
respect to the issue of whether the forum selection and choice of
law provisions are binding on the parties. Matrix filed a motion
to dismiss for improper venue shortly after Innerlight filed its
complaint. The basis for Matrix’s motion was that the forum
selection clause was binding on the parties and any action
concerning the suit must be brought under Florida law in the
courts of Florida or nowhere at all. And Matrix’s motion was
accompanied with a supporting memorandum that included relevant
legal authority. We therefore conclude that the issue was
properly preserved below.
¶12 We now examine whether Innerlight properly raised the
issue on appeal. “In general, if a defendant has not raised an
issue on appeal, [an appellate court] may not consider the issue
sua sponte.” Allen v. Friel, 2008 UT 56, ¶ 7, 194 P.3d 903
(alteration in original) (internal quotation marks omitted). On
appeal, Matrix argues that the forum selection and choice of law
provisions of the Contract are enforceable. In so arguing,
Matrix does not specifically contend that the forum selection
clause and choice of law provisions are enforceable apart from
the condition precedent in Section 2 of the Contract. Rather, it
argues that the forum selection and choice of law provisions are
enforceable because the condition precedent was fulfilled.
Although the specific reasoning behind Matrix’s conclusion that
the forum selection and choice of law provisions are enforceable
differs from this court’s reasoning in reaching the same
conclusion, the fact remains that the main thrust of Matrix’s

4 The plain language of the Contract indicates that the
Contract was “the result of negotiation by the parties, each of
[which] was represented by counsel.”
No. 20070425 6
argument is that the forum selection and choice of law provisions
are enforceable. We therefore find that the enforceability of
the forum selection and choice of law provisions are properly at
issue on appeal.
¶13 Because the issue was properly preserved in the
district court and raised on appeal, we now address its merits.
II. THE FORUM SELECTION CLAUSE AND CHOICE OF LAW PROVISIONS
ARE ENFORCEABLE
¶14 The district court erred in its denial of Matrix’s
motion to dismiss and in its grant of Innerlight’s motion for
summary judgment when it held that the forum selection and choice
of law provisions are not binding on the parties. When
interpreting a contract, we begin by looking within the four
corners of the contract “to determine the parties’ intentions,
which are controlling.” Bakowski v. Mountain States Steel, Inc.,
2002 UT 62, ¶ 16, 52 P.3d 1179 (citations omitted). “If the
language within the four corners of the contract is unambiguous,
. . . a court determines the parties’ intentions from the plain
meaning of the contractual language as a matter of law.” Id.
Innerlight and Matrix entered into an agreement that was
negotiated4 and signed by both parties. We find that there is no
ambiguity in the relevant provisions of the Contract and
therefore look to the plain meaning of the contractual terms to
determine the parties’ intent.
¶15 Innerlight argues, and the district court agreed, that
the condition precedent in Section 2 of the Contract applies to
the entire Contract. We disagree. Section 2 of the Contract
includes two paragraphs: paragraph (a) and paragraph (b).
Paragraph (a) “appoints [Innerlight] as the exclusive
distributor” of the Beverly Sassoon line of skin care products.
Paragraph (b) then modifies paragraph (a) by conditioning
Innerlight’s “acceptance of this appointment . . . upon
[Innerlight’s] written acceptance of [Matrix’s] Product Price
List.” (Emphasis added.) Nothing in paragraph (b) indicates
that the condition precedent applies to the entire agreement
between the parties. Instead, the plain language states that the
condition precedent in paragraph (b) applies to Innerlight’s
appointment as “exclusive distributor.” If the parties intended
the condition precedent in paragraph (b) to apply to the entire
Contract, they easily could have included language to that

5 While unnecessary to our determination that the forum
selection and choice of law provisions of the Contract are
enforceable, we note that other jurisdictions have made similar
determinations regarding the enforceability of forum selection
and choice of law provisions within contracts. See Yazdani v.
Access ATM, 941 A.2d 429, 432 (D.C. 2008) (enforcing a forum-
selection clause “notwithstanding appellee’s disavowal of the
remainder of the contract”); see also Marra v. Papandreou, 216
F.3d 1119, 1123 (D.C. Cir. 2000) (“A forum-selection clause is
understood not merely as a contract provision, but as a distinct
contract in and of itself--that is, an agreement between the
parties to settle disputes in a particular forum--that is
separate from the obligations the parties owe to each other under
(continued...)
7 No. 20070425
effect. We cannot conclude that the parties intended to
condition the enforceability of the entire agreement on
Innerlight’s appointment as exclusive distributor when the plain
language of the Contract indicates no such intent.
¶16 Our conclusion in this regard is buttressed by the
language of Section 12 of the Contract, which contains no
reference to the condition precedent found in paragraph (b) of
Section 2, or to Innerlight’s appointment as exclusive
distributor. Rather, Section 12 plainly and unambiguously states
as follows:
This Agreement shall be construed and
interpreted under the laws of the State of
Florida and the parties agree that any action
or proceeding brought concerning this
Agreement may be brought only in the courts
of Palm Beach County, Florida, and each party
hereto hereby consents to the jurisdiction of
such courts.
(Emphases added.) Pursuant to Section 12, any action concerning
the Contract, including a declaratory action seeking a
determination that the contract is unenforceable, is governed by
Florida law and may only be brought in Florida courts. Based on
a plain reading of the language of the Contract, the condition
precedent in Section 2(b) does not diminish the enforceability of
the forum selection and choice of law provisions. Therefore, the
district court erred when it denied Matrix’s motion to dismiss
for improper venue, and subsequently erred when it granted
Innerlight’s motion for summary judgment based, in part, on the
erroneous conclusion that the venue terms of the Contract were
unenforceable.5

5(...continued)
the remainder of the contract.” (citing Nw. Nat’l Ins. Co. v.
Donovan, 916 F.2d 372, 376 (7th Cir. 1990)). But see Brownsville
Advanced Med. Imaging, L.P. v. Capitalwerks, LLC, No. 13-04-419-
CV, 2005 Tex. App. LEXIS 6360, at *21 (August 11, 2005) (holding
that parties not bound to forum selection clause within an
unenforceable executory contract).
No. 20070425 8
CONCLUSION
¶17 Innerlight and Matrix entered into a valid and binding
agreement. Matrix’s duty to provide a price list was a condition
precedent only to Innerlight’s appointment as exclusive
distributor of Matrix’s Beverly Sassoon line of skin care
products and not to the enforceability of the forum selection and
choice of law provisions. Because the forum selection and choice
of law provisions are enforceable apart from the condition
precedent in Section 2 of the Contract, the district court erred
by denying Matrix’s motion to dismiss and subsequently erred in
granting Innerlight’s motion for summary judgment. We therefore
vacate the district court’s order and remand to the district
court for further proceedings consistent with this opinion.
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¶18 Chief Justice Durham, Associate Chief Justice Durrant,
Justice Wilkins and Justice Nehring concur in Justice Parrish’s
opinion.