On September 25, 2015, in Vita Planning and Landscape Architecture, Inc. v. HKS Architects, Inc., a California appellate court held that a statute that protects California contractors and subcontractors from being forced to litigate disputes in other states also applies to design professionals ().

A project owner sought to develop a luxury hotel in California. It hired HKS, a Texas corporation, to provide architectural services to the project. The contract between the owner and HKS for design services (prime contract) contained Texas forum selection and choice of law provisions.

HKS subcontracted the landscape architectural design services pursuant to a proposal submitted by a company that was later acquired by Vita, a California corporation. HKS submitted to Vita a subcontract incorporating by reference the terms of the prime agreement between the owner and HKS, but it was not signed by either HKS or Vita.

Vita performed the work in 2008 during the project's design phase and invoiced HKS. The owner later become financially distressed, abandoned the project, and failed to pay HKS or its subcontractors. HKS obtained a judgment against the owner but was unable to recover any monies.

In 2013, Vita sued HKS in California for breach of the subcontract. HKS moved to dismiss based on the forum selection clause in the prime contract.

Vita argued that the forum selection clause was unenforceable under section 410.42 of California Civil Procedure Code, which prohibits enforcement of forum selection clauses requiring disputes between out-of-state contractors and California subcontractors to be litigated outside California. Vita also argued that the forum selection clause was unenforceable because the contract was never signed.

The trial court granted HKS's motion to dismiss because it considered Vita to be a design professional not entitled to protection as a subcontractor under Section 410.42. Vita appealed.

Even though the contract was not signed, the court held that there was a valid contract because the parties conducted themselves as if they had an agreement. The court also pointed to Vita's judicial admission in its complaint regarding the existence of the contract.

Section 410.42 precludes out-of-state contractors from requiring California subcontractors to litigate contract disputes in the contractor's home state when the project is located in California.

The court noted the legislative intent of the statute is to protect California subcontractors because:

Section 410.42 does not define contractor or subcontractor, which allowed the court to construe those terms broadly in accordance with the statute's legislative intent. The court held that Vita, as a design subconsultant, was entitled to statutory protection because it did not have a direct contractual relationship with the project owner and it performed a portion of the design services awarded to HKS in the prime contract.

The court held that the forum selection clause in the subcontract was unenforceable because Vita was a subcontractor protected under Section 410.42.

This decision increases the protections afforded by section 410.42 to expressly include design professionals and their subconsultants. California architects and landscape architects can comfortably challenge being forced to litigate in an out-of-state court under a forum selection clause. This opinion's expansive view of what constitutes a subcontractor will likely also protect other types of design professionals involved in construction projects.

Out-of-state general contractors should be aware that their forum selection clauses may not be enforceable in California or in any of the 24 other states that have similar types of forum selection statutes.