Forrest Financial v. Gamboa

Dec 01, 1998

OUTCOME: Won at Trial Court & Affirmed on Appeal

(See DISCLAIMER, below) Successful Enforcement of Creditor's "Floating/Traveling Jurisdiction Clause" in Commercial Financing Contract. Successfully defeated Debtor's motion to dismiss for lack of ... jurisdiction at Trial Court level (Circuit Court of Cook County, Illinois) and also successfully represented Creditor on appeal which resulted in the Trial Court decision being affirmed by the Appellate Court of Illinois, First District. In the Forrest v. Gamboa case, according to the terms of the agreement, the governing law is that of the state of the equipment lessor's principal office, Illinois. The jurisdiction clause in question simply states that exclusive jurisdiction shall be in the state where the equipment lessor's principal office is located. Other courts have found similar language specific enough to be treated as a forum selection clause. In light of the determination regarding enforceability of the forum selection clause, accordingly, the order of the circuit court was affirmed. The result in Forrest v. Gamboa was also followed in other cases with similar forum selction clauses, in particular, the Illinois State and Federal appeals in the commercial financing contract cases of IFC Credit Corporation v. Rieker Shoe and IFC Credit Corporation v. Aliano. In IFC v. Rieker Shoe, the Illinois Appellate Court stated "there are legitimate business reasons for this type of forum selection clause, which facilitates the marketability of commercial paper because financial institutions can depend on selling it freely" and "the agreement provides in pertinent part, that it "shall be governed by, construed and enforced in accordance with the law of the State in which the assignee's principal offices are located, without regard to such State's choice of law considerations." The agreement clearly and unambiguously calls for the application of Illinois law. Under Illinois law, we have found the forum selection clause enforceable." DISCLAIMER: The information contained in this website is not intended to create, and receipt of it does not constitute, an attorney-client relationship. It is also not intended to seek engagement in any state where the attorney is not admitted to practice. Examples provided are not intended to create the expectation that the same results could be obtained for other clients in similar matters without reference to the specific factual and legal circumstances of each client’s case.