The court holds that a forum-selection clause can be waived. There is nothing particularly new here unless it be the application of established law to this particular type of clause.
The plaintiff contracted with the defendants to have a condo built in Rocky Point. When it wasn’t done on time he demanded rescission and the return of his deposit; the defendants refused. The contract had a forum-selection clause requiring that litigation be in Mexico but the plaintiff filed suit in Arizona. The defendants appeared in the case and eventually moved, unsuccessfully, for summary judgment on various grounds not including jurisdiction. Then, over two years after litigation had begun, they responded to an amended Complaint by moving to dismiss it on forum-selection grounds. The trial court granted that motion.
The Court of Appeals reverses, holding that the defendants’ conduct waived the clause. “A litigant asserting waiver by conduct must establish acts by the opposing party that are clearly inconsistent with an intention to assert the right in question.” Waiver will be found when the defendant “has taken substantial action to litigate the merits of the claim that would not have been necessary had the entity promptly raised the defense.” The appellate court therefore finds waiver as a fact because, quoting in part from another case, “we have no difficulty concluding here that ‘wavier by conduct is apparent from the extensive litigation record below.’”