Case Name: Seth Rogers v. iTy Labs Corp., et al.
Case No.: 17-CV-306546

Plaintiff Seth Rogers brings this action for business torts, breaches of fiduciary duties, and related claims against his former business partner Jose Cong; the company he and Cong created, iTy Labs Corp.; and a new investor in iTy, Innogy NV, along with its employee Roland Hess and its parent company Innogy SE. Before the Court are motions by (1) iTy, Cong, and Hess and (2) the Innogy entities to dismiss and/or stay the action pursuant to a forum selection clause. Plaintiff opposes these motions.

The Innogy entities’ motion to join in the motion by iTy, Cong, and Hess is GRANTED.

I. Allegations of the Operative Complaint

According to the First Amended and Supplemental Complaint (“FAC”), Rogers and his business partner Michael Mintz formed iTy in September of 2014 in San Francisco, with the plan to provide workforce management software to companies of all sizes. (FAC, ¶ 12.) Rogers developed the intellectual property that was used in iTy’s software “Plause.” (Ibid.) In May of 2015, Rogers partnered with Cong to restructure iTy, and they incorporated the company in Delaware with the understanding that Rogers would provide the intellectual property and Cong would act as the face of the company by securing additional business and financing. (Id., ¶ 15.) On May 7, 2015, Rogers purchased 2,000,000 shares of common stock in iTy through a Common Stock Purchase Agreement (“SPA”), in exchange for the transfer of his intellectual property and $20. (Id., ¶ 16.)

iTy raised a first round of financing in July and August of 2015, with angel investors, including Cong, joining a single initial investor in the company. (FAC, ¶ 17.) In August and September of 2016, iTy obtained additional funding, including through two Convertible Promissory Notes executed by Rogers. (Id. at ¶ 18.) Under Paragraph 2 of the Promissory Notes, Roger’s principal investment may be converted to stock, including preferred stock, upon the satisfaction of certain conditions. (Id. at ¶ 19.) Under Paragraph 5, iTy may not prepay the Promissory Notes without penalty absent the written consent of a majority in interest of holders of convertible promissory notes issued by iTy. (Ibid.)

Shortly after Rogers executed the last of the two Promissory Notes on September 14, 2016, iTy again ran out of money. (FAC, ¶ 21.) Rogers could not afford to invest in any more bridge loans, and Cong had no business near closing. (Ibid.) Facing these issues, Rogers and Cong aggressively pursued acquisitions by any and all suitors. (Ibid.) By October 11, 2016, with no money, no imminent business, and no one to acquire the company, Rogers and Cong agreed to dissolve and wind up iTy. (Id., ¶ 22.) However, at no time did Rogers resign from his position with the company. (Ibid.)

Following his agreement with Cong, Rogers understood that iTy was being wound up with the assistance of its corporate counsel Wilson Sonsini Goodrich & Rosati (“WSGR”). (FAC, ¶ 23.) He communicated this understanding by email to iTy’s counsel at WSGR and specifically requested to be included on any discussions of company business while he remained a director. (Ibid.) He received no communications from Cong, iTy, or WSGR for several weeks; however, at a social gathering in November of 2016, he learned that Cong was continuing to secretly operate iTy without his consent, excluding him from all company dealings, communications, and decisions. (Id., ¶ 23.)

Cong ultimately (a) hired a sales manager, (b) solicited bids for a new round of investors, (c) entered into term sheets with investors, (d) failed to lay off all iTy employees, (e) closed the company’s physical office, (f) restructured salary, and (g) added features to Plause. (FAC, ¶ 24.) He revoked Rogers’s access to the company email and Google apps and refused to restore it despite multiple requests by Rogers. (Id., ¶ 25.) He orchestrated the removal of Rogers from the board of directors in January of 2017, using stockholder written consent, and on March 19, 2017, he caused all of Rogers’s unvested shares to be repurchased. (Id., ¶¶ 26-27.)

On March 20, 2017, Cong passed a resolution reducing the board to one directorship, making himself the only remaining director of iTy; removed Rogers from all officer positions, appointing himself secretary and treasurer; and increased the total number of shares in iTy to 11 million in common stock and 4,792,788 shares of “Series A Preferred Stock.” (FAC, ¶ 32.) Cong authorized a “management rights letter” with Innogy NV in connection with the sale and issuance of the shares, and expanded the Board to three directors: Cong, a director “designated by Innogy,” and an additional director. (Id., ¶¶ 33-34.) Following two purchases of Series A Preferred Stock, Innogy owns over 1 million shares: as of September 2017, Innogy and Cong were the majority shareholders of the Series A Preferred Stock. (Id., ¶¶ 36-38.) Innogy’s employee Roland Hess was designated as a director, and he and Cong have served as the only board members and have steered iTy to act in Innogy’s interests since March 20, 2017. (Id., ¶ 35.)

Rogers has made multiple requests for access to iTy’s financial books and records, minutes, and other documentation, but Cong and WSGR have refused these requests. (FAC, ¶¶ 41-42.) On November 30, 2018, Rogers sent a letter informing Cong he would notice a shareholder meeting for January 30, 2019 and requesting shareholder information and financial documents. (Id., ¶¶ 43-45.) Unbeknownst to Rogers, Cong and Hess held a board meeting at WSGR in which they discussed dissolving the company, and on January 19, 2019, WSGR sent Rogers limited financial information, told him that iTy would cease operations and dissolve by the end of January, and requested that Rogers drop his request for a stockholder meeting. (Id., ¶¶ 46-47.) Rogers responded that he intended to proceed with the meeting and requested additional information. (Id. ¶¶ 48-51.) The meeting was delayed by Cong until February 20, at which point Cong told shareholders that iTy’s commercial contract with Innogy was its only viable contract and Innogy was the only user of its software, but indicated that iTy was still trying to close other deals because there were no prospects for a sale. (Id., ¶¶ 54-56.) Cong confirmed that iTy owed hundreds of thousands of dollars to Innogy even though Innogy was also its main customer. (Id., ¶¶ 57-58.) He refused to state whether Innogy, as iTy’s largest creditor, would receive all of its assets upon dissolution. (Id., ¶ 62.)

Rogers alleges upon information and belief that Innogy is currently developing a project called “Cultim8” using iTy’s core intellectual property, which was developed by Rogers. (FAC, ¶ 65.) Cong, Hess, and Innogy’s actions have all been fueled by Innogy’s desire to obtain iTy’s assets, including the intellectual property created by Rogers. (Id., ¶ 66.)

Based on these allegations, Rogers asserts claims for (1) fraud/intentional misrepresentation (against Cong), (2) concealment (against Cong), (3) negligent misrepresentation (against Cong), (4) breach of fiduciary duty (against Cong), (5) breach of oral contract (against Cong), (6) unjust enrichment (against Cong), (7) declaratory relief (against all defendants), (8) compliance with Corporations Code sections 1601 and 1602 (against Cong); (9) injunctive relief (against all defendants), (10) breach of fiduciary duty to minority shareholders (against Cong and the Innogy entities), (11) violation of Business & Professions Code section 17200 (against Cong and the Innogy entities), (12) breach of fiduciary duty (against Cong and Hess as directors of iTy), and (13) violation of Business & Professions Code section 17200 (against Cong and Hess as directors of iTy).

II. Procedural Background

Rogers filed his original complaint in this action on February 17, 2017, naming iTy and Cong as defendants. iTy and Cong moved to stay the action pursuant to Code of Civil Procedure sections 410.30 and 418.10, urging that the mandatory forum selection clause in iTy’s certificate of incorporation required all of plaintiff’s claims to be heard in Delaware. Plaintiff responded that the SPA’s mandatory forum selection clause required that all of his claims be heard in California. In an order filed on July 7, 2017, the Court (Hon. Kuhnle) found that two claims in the original complaint, the seventh cause of action for declaratory relief and the eighth cause of action to enforce inspection rights under the Corporations Code, were covered by the forum selection clause in the SPA and should remain in California, while the other claims must proceed in Delaware. The court stayed the present action to allow litigation in Delaware to proceed first.

Rogers appealed, and on February 14, 2019, the Court of Appeal reversed the order granting the stay. It concluded that, “in addition to the two causes of action that the trial court determined were within the scope of the forum selection clause in the stock purchase agreement, … an additional cause of action—the fourth cause of action for breach of fiduciary duty against defendant Cong—was also within the scope of that clause.” (Rogers v. iTy Labs Corp. (Cal. Ct. App., Feb. 14, 2019, No. H045347) 2019 WL 625389, at *1.) It remanded the matter, directing the Court “to exercise its discretion and determine in the first instance (1) whether the forum selection clause in the certificate of incorporation, which requires litigation in Delaware, should be enforced as to the remaining causes of action, and (2) if so, whether the litigation in California should be stayed.” (Ibid.)

After the action was remanded, it was reassigned to Department 1 and Rogers filed the FAC pursuant to a stipulated order. On September 9, 2019, Cong and iTy—now joined by Hesse—again moved to stay the action pursuant to the forum selection clause in iTy’s certificate of incorporation. The Innogy entities also moved for a stay and for dismissal of certain claims on the same ground. Those motions have now come on for hearing by the Court.

III. Legal Standard

“[T]he procedure for enforcing a forum selection clause is a motion to stay or dismiss for forum non conveniens pursuant to Code of Civil Procedure sections 410.30 and 418.10.” (Berg v. MTC Electronics Technologies (1998) 61 Cal.App.4th 349, 358.) However, “a motion based on a forum selection clause is a special type of forum non conveniens motion” and “[t]he factors that apply generally to a forum non conveniens motion do not control” the analysis where a mandatory forum selection clause is present. (Ibid.) “Instead, the test is simply whether application of the clause is unfair or unreasonable; if not, the clause is usually given effect.” (Drulias v. 1st Century Bancshares, Inc. (2018) 30 Cal.App.5th 696, 703, quoting Berg v. MTC Electronics Technologies, supra, 61 Cal.App.4th at p. 358, internal quotations omitted.) The party seeking to avoid enforcement of a forum selection clause bears the burden to show that its enforcement would be unreasonable, unless the claims at issue are based on unwaivable rights created by California statute. (Id. at p. 703.) The burden is a “heavy” one (Wimsatt v. Beverly Hills Weight etc. Internat., Inc. (1995) 32 Cal.App.4th 1511, 1523): “Claims that the previously chosen forum is unfair or inconvenient are generally rejected.” (Drulias v. 1st Century Bancshares, Inc., supra, 30 Cal.App.5th at p. 703, quoting quoting Berg v. MTC Electronics Technologies, supra, 61 Cal.App.4th at p. 358.)

Courts have found enforcement of a mandatory forum selection clause to be unreasonable where the opposing party demonstrates “that the contractually selected forum would be unavailable or unable to accomplish substantial justice or that no rational basis exists for the choice of forum.” (Intershop Communications v. Superior Court (Martinez) (2002) 104 Cal.App.4th 191, 199-200.) “[N]either inconvenience nor additional expense in litigating in the selected forum are part of the test of unreasonability.” (Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1679.) “However, a forum selection clause will not be enforced if to do so would bring about a result contrary to the public policy of this state.” (Intershop Communications v. Superior Court, supra, 104 Cal.App.4th at pp. 199-200.)

IV. Analysis

Defendants contend that all the claims in this action—with the exception of the fourth, eighth, and, as to Cong and iTy, the seventh causes of action—are governed by the Delaware forum selection provision in iTy’s certificate of incorporation. In particular, they argue that all of the claims against the newly added defendants (Hess and the Innogy entities) are governed by the Delaware provision, as those defendants are not subject to the California forum selection provision set forth in the SPA. Defendants urge that because the majority of the action must be heard in Delaware, the Court should stay or dismiss the California claims.

Plaintiff argues that only the first through third, fifth, and sixth causes of action are subject to the Delaware forum selection provision, while the remaining claims must be heard in California, and it would be unreasonable to enforce the Delaware provision under those circumstances. In any event, plaintiff contends that the claims that are subject to the California provision should not be held hostage to the claims that must be heard in Delaware, and, at a minimum, defendants’ motion should be denied as to the California claims.

A. The Court of Appeal’s Ruling

In resolving the motions before it, the Court must apply the Court of Appeal’s ruling as law of the case. (See Stock v. Meek (1952) 114 Cal.App.2d 584, 586 [“Where questions presented on a subsequent appeal were necessarily involved in a former appeal, and the conclusion arrived at on the former appeal could not have been reached without expressly or impliedly deciding the question subsequently presented, the decision on the former appeal is the law of the case ….”].) It will thus begin its analysis by addressing that ruling in some detail.

As explained by the Court of Appeal, iTy’s certificate of incorporation generally provides that “ ‘Delaware shall be the sole and exclusive forum for … any action or proceeding asserting a claim for breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, … or … any action or proceeding asserting a claim governed by the internal affairs doctrine.’ ” (Rogers v. iTy Labs Corp. (Cal. Ct. App., Feb. 14, 2019, No. H045347) 2019 WL 625389, at *4.) However, the certificate of incorporation “also provides that iTy may ‘consent[ ] in writing to the selection of an alternative forum.’ ” (Rogers v. iTy Labs Corp., supra, 2019 WL 625389, at *8.) Meanwhile, “[t]he forum selection clause in the stock purchase agreement between plaintiff and iTy states: ‘For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the state of California and agree that any such litigation shall be conducted only in the courts of California or the federal courts of the United States located in California and no other courts.’ (Italics added.)” (Ibid.)

“Whether one or more of plaintiff’s causes of action is covered by the forum selection clause in the stock purchase agreement [thus] depends on whether the cause of action ‘arise[s] directly or indirectly from’ that agreement.” (Rogers v. iTy Labs Corp., supra, 2019 WL 625389, at *8.) The Court of Appeal held that the inclusion of the word “indirectly” means the clause should “be construed to encompasses claims that have their roots in the relationship between the parties which was created by the contract,” namely, plaintiff’s relationship to iTy as a stockholder. (Id. at *10, internal citation and quotations omitted.) Based on this construction, the Court of Appeal held that plaintiff’s previously alleged claim for breach of oral contract, his three fraud-related claims, and his claims for unjust enrichment and injunctive relief were not subject to the forum selection clause in the SPA. It reasoned that “Plaintiff’s alleged oral contract with Cong … involve[s] new and different contractual obligations to wind up the corporation—obligations that are completely unrelated to any contractual obligations in the stock purchase agreement that plaintiff entered into with iTy.” (Ibid., italics original.) “Likewise, plaintiff’s fraud-related claims (first, second, and third causes of action) and unjust enrichment claim (sixth cause of action) against defendant Cong all appear to arise out of factual allegations similar to the allegations underlying the breach of oral contract claim against Cong, that is, the two agreed to wind up the business but Cong instead continued to operate the business on his own. The claim for injunctive relief (ninth cause of action) also appears to be based on these same allegations.” (Ibid.) The Court of Appeal noted that Rogers himself characterized these claims as being based on Cong’s individual conduct, outside his capacity as an officer, director, or stockholder of iTy. (Id. at *11.) It reasoned that

to the extent plaintiff alleged a cause of action addressing specific rights provided by the stock purchase agreement that Cong directly or indirectly interfered with, the trial court [correctly] found that the cause of action is covered by the forum selection clause in the stock purchase agreement. For example, in the seventh cause of action for declaratory relief, plaintiff alleged that Cong improperly attempted to remove plaintiff as a board member, which affects the vesting of plaintiff’s stock under the stock purchase agreement. The trial court correctly determined that this cause of action “contains allegations regarding [plaintiff’s] stock rights that arise out of the Stock Agreement” and “[t]herefore, it is subject to the forum selection clause in the Stock Agreement.”

However, we reach a different conclusion than the trial court regarding plaintiff’s fourth cause of action for breach of fiduciary duty against Cong. … In the fourth cause of action, plaintiff alleges that Cong, “[a]s a director and stockholder of iTy,” owes fiduciary duties to plaintiff, a “co-board member, officer, and stockholder of iTy.” Plaintiff alleges that Cong breached those fiduciary duties to plaintiff by committing various acts.

We determine that, because the fiduciary duties that Cong allegedly owes to plaintiff arise, at least in part, from plaintiff’s stockholder relationship with the corporation, and because that stockholder relationship arises from the stock purchase agreement, plaintiff’s fourth cause of action for breach of fiduciary duty against Cong “arise[s] directly or indirectly from” the stock purchase agreement and is thus within the scope of the forum selection clause of that agreement.

(Rogers v. iTy Labs Corp., supra, 2019 WL 625389 at *11.)

The Court of Appeal further determined that, “although Cong was not a party to the stock purchase agreement, the forum selection clause in that agreement may be applied to him with respect to the fourth cause of action for breach of fiduciary duty” because “he “was ‘closely related to the contractual relationship’ ” between plaintiff and iTy,” having “ ‘a defined and intertwining business relationship with a contracting party.’ ” (Rogers v. iTy Labs Corp., supra, 2019 WL 625389 at *12, quoting Bancomer v. Superior Court (Reilly) (1996) 44 Cal.App.4th 1450, 1459, 1461.)

Cong was an officer, director, and shareholder of iTy, which was a party to the stock purchase agreement, and he allegedly breached fiduciary duties to plaintiff that arose from the stock purchase agreement. Cong’s breaches of fiduciary duty allegedly included conduct that he and iTy participated in, such as allegedly refusing to allow plaintiff access to corporate books and records pursuant to the Corporations Code. Under the circumstances, the forum selection clause in the stock purchase agreement may properly apply to Cong with respect to plaintiff’s breach of fiduciary duty claim (fourth cause of action).

(Rogers v. iTy Labs Corp., supra, 2019 WL 625389 at *12.)

B. Claims Subject to Each Forum Selection Provision

There appears to be no dispute that, pursuant to the Court of Appeal’s ruling, plaintiff’s fraud-related claims against Cong (the first through third causes of action) and his related claims against Cong for breach of oral contract and unjust enrichment (the fifth and sixth causes of action) are subject to the Delaware forum selection provision in iTy’s certificate of incorporation, and not to the California forum selection provision in the SPA. As reasoned by the Court of Appeal, these claims arise from Cong’s oral promise to wind up iTy and are unrelated to the parties’ obligations arising from the SPA. Similarly, there is no dispute that the Court of Appeal found the fourth cause of action against Cong for breach of fiduciary duty is subject to the California forum selection provision in the SPA “because the fiduciary duties that Cong allegedly owes to plaintiff arise, at least in part, from plaintiff’s stockholder relationship with the corporation, and because that stockholder relationship arises from the stock purchase agreement….” (Rogers v. iTy Labs Corp., supra, 2019 WL 625389 at *11.) The Court of Appeal also confirmed that the eighth cause of action to enforce compliance with the Corporations Code is subject to the California forum selection provision. However, due to plaintiff’s amendment of the operative complaint and addition of new defendants on remand, the Court must newly evaluate which of the remaining claims are governed by each forum selection provision, applying the Court of Appeal’s reasoning.

The Court begins its analysis with the entirely new claims set forth in the tenth through thirteenth causes of action. The tenth cause of action for breach of fiduciary duty to minority shareholders and the eleventh cause of action under the UCL, which is also based on unfair conduct toward minority shareholders, fall squarely under the California forum selection provision following the Court of Appeal’s reasoning: the duties that give rise to these claims “arise, at least in part, from plaintiff’s stockholder relationship with the corporation,” which arises from the SPA.

Defendants contend that the SPA’s forum selection provision should not be enforced against the newly added defendants because they are not parties to the SPA and lack a “defined and intertwining business relationship” with iTy. However, the Court of Appeal previously rejected this argument as to defendant Cong due to his status as an officer, director, and shareholder as iTy and his direct involvement in the conduct giving rise to plaintiff’s claims. (See Rogers v. iTy Labs Corp., supra, 2019 WL 625389 at *12 [citing Marano Enterprises of Kansas v. Z-Teca Restaurants, L.P. (8th Cir. 2001) 254 F.3d 753, 757 for the proposition that an officer, director, and shareholder of a signatory was “ ‘closely related’ to the disputes arising out of” franchise and development agreements and thus was “bound by the forum-selection provisions” in those agreements].) Now, plaintiff alleges that, in their capacities as majority shareholder and director, the Innogy entities and Hess have dominated iTy and steered it to act in Innogy’s interests since March of 2017, violating plaintiff’s rights as a shareholder. (FAC, ¶¶ 32-35.) Unlike in Bancomer, S. A. v. Superior Court, supra, 44 Cal.App.4th at p. 1460, Rogers does not allege that the new defendants “acted alone” in violating duties independent of the agreement containing a forum selection provision, but that, along with another defendant (Cong) who is subject to the SPA’s forum selection provision, they violated duties to Rogers arising from the SPA. Defendants also cite Berclain America Latina v. Baan Co. (1999) 74 Cal.App.4th 401, 408 for the proposition that plaintiff must show the new defendants “had been corporate participants with the signing defendant at the time the agreement containing the [forum selection] clause was signed.” In Berclain, however, it was held that an unrelated company that had purchased a signatory had no standing to enforce a forum selection provision in the signatory’s exclusive distribution agreement with other companies, with which the purchaser was alleged to have interfered. Again, the duties alleged to have been violated were independent of the agreement containing the forum selection provision. The Court of Appeal reasoned that “a corporate entity does not assume the rights, duties and benefits of another entity which it acquires in a stock purchase,” in the absence of “circumstances justifying their treatment as a single entity, such as an alter ego showing or an asset purchase.” (Id. at p. 407.) Here, Rogers seeks to hold the new defendants liable for their own breaches of fiduciary duty to him arising from the SPA, as well as on an alter ego theory. The new defendants did not acquire iTy but became its majority shareholder and director, directly assuming duties to shareholders like Rogers. In the Court’s view, the statements in Berclain that focus on the relationship between defendants at the time the agreement containing the forum selection clause was signed should not be extended to these circumstances, and doing so would conflict with the Court of Appeal’s reasoning in this case. The Court thus finds that the tenth and eleventh causes of action are subject to the California forum selection provision as to all defendants.

On the other hand, the twelfth and thirteenth causes of action are based on Cong and Hess’s alleged breaches of fiduciary duties owed to iTy rather than to Rogers directly. Accordingly, these appear to be derivative claims asserted by Rogers “on behalf of iTy.” (FAC, ¶¶ 138, 142.) While plaintiff may allege standing to assert these claims by virtue of his status as an iTy shareholder, defendants’ fiduciary duties to iTy do not “arise … from plaintiff’s stockholder relationship with the corporation” in the same manner as plaintiff’s direct claims for breach of fiduciary duty. Accordingly, the Court finds that these claims are subject to the Delaware forum selection clause in iTy’s certificate of incorporation, which specifically encompasses “any derivative action or proceeding brought on behalf of the Corporation.”

The seventh cause of action for declaratory relief and the ninth cause of action for injunctive relief are asserted against all of the defendants, and have been amended since the Court of Appeal’s ruling. While Rogers initially sought declaratory relief that (1) he remains a board member, (2) his stock continues to vest, and (3) iTy is prohibited from pre-paying the Promissory Notes, he now additionally seeks a declaration (4) that California Corporations Code section 2115 applies to iTy and (5) scheduling an annual meeting of the shareholders under California Corporations Code section 600. As urged by Rogers, the Court of Appeal previously found the seventh cause of action to be subject to the California forum selection provision, and the new allegations also pertain to his stockholder rights under the California Corporations Code. This claim is accordingly subject to the California forum selection provision.

Finally, the ninth cause of action for injunctive relief has been amended only to the extent that new defendants were added to the FAC. It continues to allege an entitlement to relief based on “Rogers’s rights and managerial input as a director, the forfeiture and loss of the value of Rogers’s stock, and the forfeiture and loss of monies owing and payable to Rogers as and for salaries, expense reimbursements, distributions, dividends, and note repayments.” (FAC, ¶ 120.) Based on Rogers’s briefing to this Court in connection with Cong and iTy’s original motion to stay, which stated that this claim was asserted against Cong in his individual capacity only, the Court of Appeal found that it “appears to be based on the[] same allegations” as the fraud-based claims against Cong. (Rogers v. iTy Labs Corp., supra, 2019 WL 625389, at *10.) However, Rogers now brings this claim against the other defendants in their capacities as shareholder and director. Thus, it is now clear that this claim, like the fourth cause of action, arises from both the allegations against Cong in his individual capacity and “at least in part” from allegations that defendants breached fiduciary duties arising from plaintiff’s stockholder relationship to iTy. (Id. at *11.) Consequently, like the fourth cause of action, this claim is subject to the California forum selection provision. Notably, however, “[i]njunctive relief is a remedy, not a cause of action”: a court may only grant a request for injunctive relief that is supported by a valid cause of action. (Allen v. City of Sacramento (2015) 234 Cal.App.4th 41, 65.) Accordingly, plaintiff’s request for injunctive relief is subject to the California forum selection provision only insofar as it is supported by causes of action subject to the California forum selection provision.

In sum, the first through third, fifth, sixth, twelfth, and thirteenth causes of action are subject to the Delaware forum selection provision, while the fourth and seventh through eleventh causes of action are subject to the California forum selection provision. The Court must evaluate defendants’ motions for a stay in light of these circumstances.

C. Reasonableness and Propriety of a Stay

As an initial matter, plaintiff argues that the Court should not enforce the Delaware forum selection provision because his claims implicate unwaivable statutory rights and/or fundamental California public policies. However, he fails to specify what unwaivable rights or fundamental policies he believes are at issue in this case. It does not appear to the Court that any such rights or policies are implicated. To the contrary, courts routinely enforce forum selection and choice of law provisions against shareholders in foreign corporations. (See, e.g., Drulias v. 1st Century Bancshares, Inc., supra, 30 Cal.App.5th at p. 705 [rejecting the argument that California shareholder in foreign corporation has a right to a California forum or that enforcing a forum selection bylaw would violate fundamental California public policy].)

Plaintiff also contends that it would be unreasonable to enforce the Delaware forum selection provision in this case, given that a substantial portion of his claims must be litigated in California. While not raised by plaintiff in support of this argument, Bancomer, S. A. v. Superior Court, supra, 44 Cal.App.4th 1450 held that it would be unreasonable to enforce a forum selection provision contained in purchase agreements governing leaseholds in one area of a resort property when leaseholds in another area of the same property were subject to a different forum selection provision. The Court of Appeal found that enforcing the former provision would be “arbitrary and inconsistent”:

Some of the purchasers bought interests on both the “north” and “south” side of the resort. It would be unreasonable and illogical to have an individual involved in simultaneous litigation in two separate forums, over the same issue, because of nothing more than the location of the leasehold interest within the same resort area. This simultaneous litigation could result in conflicting rulings. Furthermore, Bancomer could also find itself litigating in two separate forums because owners of the “south” side leasehold interests could choose to resolve [their] disputes in California. This outcome violates principles of judicial economy. Additionally, we agree with the superior court’s conclusion that “[b]ecause Bancomer’s role and relationship to all the plaintiffs’ purchases of the condominiums and the sellers of the condominiums is the same, namely, that of a trustee, it should reasonably litigate all the claims against it in the same forum.”

(Bancomer, S. A. v. Superior Court, supra, 44 Cal.App.4th at p. 1462.)

The circumstances here are distinct from those present in Bancomer. Specifically, the split between the claims subject to the Delaware forum selection provision and those subject to the California provision is not based on an arbitrary criterion such as the location of a leasehold interest within a single resort; rather, it is based on the nature of the claims at issue, with those arising from plaintiff’s stockholder relationship to iTy subject to the California provision in the SPA and other claims subject to the Delaware provision in iTy’s certificate of incorporation. In light of these circumstances, the risk of conflicting rulings and wasted judicial resources is much lower than in Bancomer. Moreover, the Court does not find it “irrational” for the parties to have selected Delaware as the default forum for litigation involving iTy, while providing that those claims arising from the SPA be litigated in California. Although this may be inconvenient and expensive, the Court is prohibited from disregarding the parties’ agreements based on such considerations. (See Cal-State Business Products & Services, Inc. v. Ricoh, supra, 12 Cal.App.4th at p. 1679.) Moreover, contrary to plaintiff’s argument, the Court also does not consider “the factors relevant to a forum non conveniens motion which is not contractually based.” (Id. at p. 1682, italics original.) Consequently, the Court will enforce the Delaware forum selection provision and stay the first through third, fifth, sixth, twelfth, and thirteenth causes of action.

Still, the Court finds no reason to stay the claims subject to the California provision, which it deems equally if not more significant relative to the claims subject to the Delaware provision. As defendants acknowledge, the Court has broad discretion to “stay or dismiss the action in whole or in part on any conditions that may be just.” (Code Civ. Proc., § 410.30, subd. (a).) Here, it would not be just to further delay the resolution of plaintiff’s claims as a shareholder of iTy, which are properly adjudicated in California, pending the resolution of different claims that must be litigated in Delaware.

For these reasons, the Court will grant defendants’ motions to stay with respect to the first through third, fifth, sixth, twelfth, and thirteenth causes of action only. The Innogy entities’ request for dismissal of certain claims is denied. (See Archibald v. Cinerama Hotels (1976) 15 Cal.3d 853, 857-858 [the California Supreme Court has “consistently held that except in extraordinary cases a trial court has no discretion to dismiss an action brought by a California resident on grounds of forum non conveniens,” and should instead stay the action].)

V. Conclusion and Order

The motions to stay are GRANTED IN PART with respect to the first through third, fifth, sixth, twelfth, and thirteenth causes of action only, and are otherwise DENIED.

The Court will prepare the order.