California Court of Appeals, Fourth District, First Division
from an order of the Superior Court of San Diego County, No.
37-2016-00030867-CU-SL-CTL Gregory W. Pollack, Judge.
Weisslaw, Joel E. Elkins, David C. Katz and Joseph H. Weiss
for Plaintiff and Appellant.
Sonsini Goodrich & Rosati, Boris Feldman, Cynthia A. Dy
and Cheryl W. Foung for Defendants and Respondents Patrick
Soon-Shiong, Barry J. Simon, Steve Gorlin, Michael D.
Blaszyk, Henry Ji, Richard Kusserow, John T. Potts, Jr.,
Robert Rosen, John C. Thomas, Jr., Richard Gromberg and
& Williams, Philip J. Eskenazi, and Andrew J. Peterson
for Defendant and Respondent Mayer Hoffman McCann.
Stephen Bushansky filed a shareholder derivative action in
San Diego Superior Court on behalf of nominal defendant
NantKwest, Inc. Based on a forum selection provision
contained in NantKwest's certificate of incorporation
that generally designates Delaware as the forum for
shareholder derivative actions, the trial court dismissed
appeal, Bushansky argues that the forum selection provision
was never triggered since a condition precedent to its
operation was never met. That condition requires that
Delaware courts have personal jurisdiction over all
indispensable parties named as defendants. Since Delaware
courts lacked jurisdiction over one of the defendants at
the time the action was filed in California, Bushansky
urges that the condition was not met and, thus, the forum
selection provision was not triggered.
provision, however, does not specify that personal
jurisdiction must be determined as of the date an action is
filed and no later. In fact, it is silent as to when personal
jurisdiction in Delaware must exist. Faced with that silence,
we-in accord with a well-established principle of contract
law-presume that the parties intended a reasonable timeframe
for the condition to be fulfilled. As we shall explain, here
the condition was satisfied within a reasonable amount of
time. Accordingly, dismissal based on the forum selection
clause was proper.
AND PROCEDURAL BACKGROUND
filed a shareholder derivative action in San Diego Superior
Court on behalf of nominal defendant NantKwest, a Delaware
corporation headquartered in California. The complaint
alleged causes of action against NantKwest's directors
and officers for breaches of fiduciary duty. It also alleged
a malpractice claim and aiding/abetting claim against Mayer
Hoffman McCann PC (the Auditor), an accounting firm that
served as NantKwest's auditor. The Auditor is a Missouri
professional corporation with offices in California.
moved to dismiss the suit based on forum non conveniens,
arguing that a forum selection provision in its certificate
of incorporation mandated dismissal. (Code Civ. Proc.,
§§ 410.30, 418.10.) The provision states, in
the Corporation consents in writing to the selection of an
alternative forum and to the fullest extent permitted by law,
the Court of Chancery of the State of Delaware (or, if such
court lacks jurisdiction, any other state or federal court
located within the State of Delaware) shall be the sole and
exclusive forum for... any derivative action or proceeding
brought on behalf of the Corporation...; in all cases
subject to the court's having personal jurisdiction
over the indispensable parties named as
defendants." (Italics added.)
Auditor joined NantKwest's motion to dismiss and
demurred. All the other defendants demurred too. The
Auditor's demurrer specified that "for this
derivative action, [it] consents to venue in the Delaware
Court of Chancery."
opposition to NantKwest's motion to dismiss, Bushansky
argued that the final clause of the forum selection
provision-"in all cases subject to the court's
having personal jurisdiction over the indispensable parties
named as defendants"-was not met. It was (and is)
undisputed that there was no personal jurisdiction over the
Auditor in Delaware when the suit was filed in
California. Bushansky asserted that the
Auditor's later consent to personal jurisdiction in the
Delaware Court of Chancery was insufficient to satisfy the
provision's final clause, which Bushansky characterized
as a condition precedent to its operation. Bushansky also
argued that the provision was permissive, not mandatory, and
that the traditional forum non conveniens factors counseled
in favor of hearing the action in California.
trial court rejected Bushansky's arguments and granted
the motion to dismiss. Characterizing the forum selection
clause as mandatory and not permissive, it reasoned that the
Auditor's later consent to jurisdiction in Delaware
satisfied the provision. The court further concluded that
even if the clause was not triggered by the Auditor's
postfiling consent, Bushansky could not take advantage of
that fact since he "deprived [the Auditor] of the
opportunity to consent to jurisdiction at the outset" by
failing to "present a litigation demand on
[NantKwest's] Board." (See 1 Witkin, Summary of Cal.
Law (11th ed.) Contracts § 846, p. 897 ["A person
cannot take advantage of his or her own act or omission to
escape liability; if the person prevents or ...