California Code of Civil Procedure section 410.42 prohibits the enforcement of any subcontract clause which forces a subcontractor with its principal offices in California to litigate in another state any dispute with the contractor, if arising out of a construction project performed in California. As a matter of state public policy, section 410.42 is intended to provide California subcontractors with the protection of California courts and laws, including California prompt payment laws. In Vita Planning And Landscape Architecture, Inc. v. HKS Architects, Inc., the California Court of Appeal extended this protection to architects and design professionals.
In Vita Planning, an owner hired HKS, a Texas architectural firm, to perform architectural work for a hotel to be built in Mammoth, California. The owner/HKS contract required disputes to be resolved in Texas courts under Texas law. Vita is a landscape architect with its principal place of business in California, and it entered into a contract with HKS to do a portion of HKS’s design work under HKS’s contract with the owner. That contract incorporated the Texas venue and law provisions of the owner’s contract with HKS and contained a pay-when-paid clause, which is enforceable in Texas but not California. The owner did not pay HKS, and HKS did not pay Vita. Vita sued, and the trial court ruled that the forum selection clause in the sub-contract was applicable to Vita as a landscape architect, as only subcontractors are specifically named in section 410.42. The trial court dismissed the case so that it could be tried in Texas per the Vita-HKS contract terms.
The California Court of Appeal overruled the trial court’s decision. It held that section 410.42 applies to contracts involving architects and design professionals as well as construction subcontracts, and ruled that HKS could not enforce the clause of Vita’s subcontract requiring Vita to go to the Texas courts. The Court of Appeal explained that the public policy arguments underlying CCP 410.42 were just as applicable to architects and design professionals as to construction subcontractors, and that nothing in the statute indicated any intention to restrict its scope to construction subcontractors. Vita can therefore litigate its disputes with HKS in California, and California architects and design professionals have gained an important protection under California law.
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