NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

PERLUSS, P. J.

Gould Paper Corporation and Gould International Holdings (collectively the Gould plaintiffs) appeal from the order dismissing their complaint against Paperlinx North America, Inc. (Paperlinx NA), its principals, Christopher Creighton and Anthony J. Kennedy, and its agent, John Barry Ronan (collectively the Paperlinx defendants), on the ground the parties were bound by a contractual forum selection clause requiring this case to be tried in British Columbia, Canada. The trial court also ruled the action was properly dismissed under the doctrine of forum non conveniens. We reverse the order dismissing the action.

The forum selection clause does not apply to this case: None of the litigants was a party to the contract containing the clause, an intended third party beneficiary of that contract or so closely related to the contractual relationship as to justify enforcement of the clause by and against nonparties to the contract. Moreover, it remains unclear whether the case can proceed in a Canadian court on its merits. Accordingly, although the trial court's findings that British Columbia is a more suitable forum under the doctrine of forum non conveniens were well within its discretion, the proper remedy in this case is to stay, rather than dismiss, the action. On remand the trial court is directed to enter a new order granting the motion to dismiss for forum non conveniens in part and staying the proceedings pending resolution of the case in the foreign forum.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Parties

Gould Paper Corporation, a New York Corporation, and its wholly owned subsidiary, Gould International Holdings, a Delaware corporation, both of which have their principal places of business in New York, acquire and manage entities that market and distribute business and printing papers throughout the world. Paperlinx, NA, a Nevada corporation with its principal place of business in Santa Fe Springs, California, sells business and printing paper in the United States and Canada. Creighton is the president of Paperlinx, NA and a resident of Seattle, Washington. Kennedy is the vice president of finance for Paperlinx, NA and a resident of California.1 Both Kennedy and Creighton work, at least part of the time, out of Paperlinx, NA's Santa Fe Springs's office. Ronan is a California resident and the purportedly independent manager of certain assets that were purchased by the Gould plaintiffs' subsidiary from Paperlinx NA's subsidiary in an asset-purchase transaction that lies at the heart of the parties' dispute.

2. The Asset Purchase Transaction Between the Gould Plaintiffs' Canadian Subsidiary and Paperlinx, NA's Canadian Subsidiary

In November 2005 Paperlinx Canada, Ltd., a Canadian subsidiary of Paperlinx, NA, entered into an agreement with Cascades Fine Papers Group, Inc. (Cascades), a Canadian fine paper merchant, to purchase the assets of Cascades's fine paper business division known as the Cascades Resources Division. The Canadian Competition Commission, an agency of the Canadian government, investigated the proposed asset purchase and found the transaction would "likely result in substantial lessening and/or prevention of competition in the fine paper merchant industry in British Columbia, Alberta and Saskatchewan."

To receive approval from the Canadian government and effect its purchase of the Cascades Resources Division, in March 2006 Paperlinx Canada entered into a consent decree with the Canadian Competition Commission in which Paperlinx Canada agreed to divest itself of assets of the western Canadian operations of Cascades ("the Cascades West" assets). According to the terms of the consent decree, the Cascades West assets acquired from its purchase of the Cascades Resources Division were to be sold by Paperlinx Canada in an arm's length transaction to a third party in accordance with procedures detailed in the consent decree. Paperlinx Canada was to retain no "remaining title, right, control, liability or interest in" the Cascades West assets. As required under the consent decree, Paperlinx Canada appointed an independent manager—Ronan—to oversee the sale. Ronan was prohibited from communicating any confidential information acquired in the performance of his duties to Paperlinx Canada or other third parties, except to the extent permitted by the consent decree.

In May 2006 the Gould plaintiffs communicated to the Paperlinx defendants their interest in purchasing the Cascades West assets. Following several months of due diligence, on October 1, 2006 their purchase proposal was accepted. On October 5, 2006 the Gould plaintiffs formed a new Canadian entity, Gould Paper Canada, Ltd., to effect the purchase of the Cascades West assets from Paperlinx Canada.

On October 6, 2006 Gould Paper Canada and Paperlinx Canada entered into an agreement in which Gould Paper Canada acquired the Cascades West assets from Paperlinx Canada. The asset purchase agreement contained a provision requiring the agreement to be construed and enforced in accordance with "the laws of the Province of British Columbia and the federal laws of Canada applicable therein (excluding any conflict of law rule or principle of such laws that might refer such interpretation or enforcement to the laws of another jurisdiction)." In addition, the agreement contained a forum selection clause providing, "Each [p]arty irrevocably submits to the exclusive jurisdiction of the courts of the Province of British Columbia with respect to any matter arising hereunder or relating hereto."

3. The Gould Plaintiffs' Complaint

In December 2009 the Gould plaintiffs sued the Paperlinx defendants in Los Angeles Superior Court asserting claims for fraud, breach of fiduciary duty and unfair competition. According to the allegations of the first amended complaint, the Paperlinx defendants intentionally misrepresented or concealed the following facts: The Paperlinx defendants intended to reacquire ownership and or control of the Cascades West assets at the time they sold them to Gould Paper Canada in violation of the consent decree; at the time of the transaction the Paperlinx defendants were negotiating with paper mills and suppliers of Cascades West to discontinue certain exclusive or favorable franchise agreements those mills or suppliers had with Cascades West and to grant the rights or agreements to Paperlinx Canada; and Ronan was not an "independent" manager but a former agent of Paperlinx, NA. The Gould plaintiffs further alleged, as a result of the wrongful conduct of the Paperlinx defendants, the Cascades West business suffered substantial losses in its operations and market share, ultimately requiring the Gould plaintiffs to sell their stock and/or equity interest in Gould Canada and the Cascades West assets, resulting in losses of more than 4.6 million Canadian dollars.

4. The Paperlinx Defendants' Motion To Dismiss Based on the Forum Selection Clause and Forum Non Conveniens

In January 2010 the Paperlinx defendants moved pursuant to Code of Civil Procedure section 410.30 (section 410.30) to dismiss the first amended complaint. They argued the parties were bound by the forum selection clause in the October 2006 asset purchase agreement and, alternatively, the action should be dismissed under the equitable doctrine of forum non conveniens because California was a seriously inconvenient forum and the action for fraud and unfair competition could be litigated more fairly, efficiently and economically in Canada. The motion included declarations of Kennedy, Creighton and Ronan. Kennedy testified most of the evidence concerning the underlying transactions, including documents and witnesses, was located in Canada. In addition, Kennedy and Creighton stated each was "prepared to appear in the court of British Columbia, Canada to defend against Plaintiffs' claims." Ronan's declaration was even more specific on this point, stating he was "willing to submit to jurisdiction in the court of British Columbia, Canada" to defend the action.

The Gould plaintiffs opposed the motion, emphasizing that none of the plaintiffs or defendants to the litigation had been a party to the asset purchase agreement and thus none had agreed to be bound by the forum selection clause contained in that agreement. In addition, the opposition papers included the declaration of Harry E. Gould, Jr., the chief executive officer of both of the Gould plaintiffs, disputing assertions the witnesses to the wrongful acts resided in Canada. Gould insisted the "major individual witnesses" to the misrepresentations made by the Paperlink defendants, apart from Gould himself, are Creighton, Kennedy and Ronan, each of whom works for Paperlink, NA in its California office.

The trial court granted the motion to dismiss on two separate grounds. First, citing Lu v. Dryclean-USA of California (1992) 11 Cal.App.4th 1490, 1494 (Lu), the court found that, even though the contract was entered into by the subsidiaries of the corporate parties in this case, the parent corporations and their managing agents were "closely related" to the contract and, therefore, the forum selection clause applied. Alternatively, the court ruled the action was properly dismissed under the doctrine of forum non conveniens, finding Vancouver, British Columbia "a suitable location" for the litigation in this case. The court explained, "The witnesses are mostly located there. Any parties to be named to the litigation most likely are located in Canada, not Los Angeles. It will cost less to conduct discovery or obtain the attendance of witnesses at a trial in Vancouver. It will be inconvenient and substantially more costly for the witnesses to travel to Los Angeles for the proceedings." In addition, because all parties agree Canadian law will likely apply in this case, the court found California has a lesser interest in the resolution of this case. Based on the foregoing, and at the Paperlinx defendants' request, the court dismissed the action.

DISCUSSION

1. Governing Law on Enforcement of a Forum Selection Clause

"Both the United States Supreme Court and the California Supreme Court have recognized that `[f]orum selection clauses play an important role in both national and interstate commerce.'" (Net2Phone, Inc. v. Superior Court (2003) 109 Cal.App.4th 583, 587-588 (Net2Phone), citing M/S Bremen v. Zapata Off-Shore Co. (1972) 407 U.S. 1, 10 [92 S.Ct. 1907, 32 L.Ed.2d 513]; Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 496.) "Such clauses provide a degree of certainty, both for businesses and their customers, that contractual disputes will be resolved in a particular forum. [Citation.] California courts routinely enforce forum selection clauses even where the chosen forum is far from the plaintiff's residence. (See, e.g., Intershop Communications AG v. Superior Court (2002) 104 Cal.App.4th 191, 196-202 [Hamburg, Germany, forum]; CQL Original Products, Inc. v. National Hockey League Players' Assn. (1995) 39 Cal.App.4th 1347, 1355-1356 [Ontario, Canada, forum].)" (Net2Phone, at pp. 587-588; see Schlessinger v. Holland America (2004) 120 Cal.App.4th 552, 558 ["[b]oth California and federal law presume a contractual forum selection clause is valid and place the burden on the party seeking to overturn the forum selection clause"].)

When a forum selection clause has been "entered into freely and voluntarily by parties who have negotiated at arm's length," the clause will be enforced "in the absence of a showing that enforcement of such a clause would be unreasonable." (Smith, Valentino & Smith, Inc. v. Superior Court, supra, 17 Cal.3d at p. 496.) In those circumstances, the party seeking to avoid application of the forum selection clause bears a "substantial burden" to prove unreasonableness. (CQL Original Products, Inc. v. National Hockey League Players' Assn., supra, 39 Cal.App.4th at p. 1354; Net2Phone, supra, 109 Cal.App.4th at p. 588.)

The trial court's determination whether enforcement of a forum selection clause is reasonable is generally reviewed for abuse of discretion. (Net2Phone, supra, 109 Cal.App.4th at p. 588; America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 7-9; but see Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1680 [applying substantial evidence standard of review].) However, when, as here, the question is not whether enforcement of a clearly applicable forum selection clause is reasonable, but whether the clause governs a dispute at all, the trial court's determination on the applicability of a forum selection clause, absent conflicting extrinsic evidence, is a legal question subject to de novo review. (Intershop Communications AG v. Superior Court, supra, 104 Cal.App.4th at p. 199; cf. Hunt v. Superior Court (2000) 81 Cal.App.4th 901, 905 [applying de novo review to question whether forum selection clause in adhesion contract provided adequate notice that defendant was agreeing to jurisdiction cited in contract]; see generally California National Bank v. Woodbridge Plaza LLC (2008) 164 Cal.App.4th 137, 142 [interpretation of contract absent conflicting extrinsic evidence subject to de novo review].)

2. The Forum Selection Clause Does Not Apply in This Case

One who is not a party to or an intended third party beneficiary of a contract ordinarily lacks standing to enforce the contract's terms. (Berclain America Latina, S.A. de C.V. v. Baan Company N.V. (1999) 74 Cal.App.4th 401, 405 (Berclain); Eastern Aviation Group, Inc. v. Airborne Express, Inc. (1992) 6 Cal.App.4th 1448, 1452; see Civ. Code, § 1559 [intended third party beneficiary has standing to enforce contract].) This oft cited principle of black-letter contract law, however, is not entirely without exception. In particular, several California courts have permitted enforcement of a contractual forum selection clause in litigation between a nonsignatory to the contract and a signatory if the nonsignatory was "closely related" to the contractual relationship, that is, the nonsignatory shared a "defined and intertwining business relationship with a contracting party" that was sufficient to justify conferring standing notwithstanding its nonparty status. (Lu, supra, 11 Cal.App.4th at p. 1494; accord, Bancomer, S.A. v. Superior Court (1996) 44 Cal.App.4th 1450, 1458-1462; Bugna v. Fike (2000) 80 Cal.App.4th 229, 233 (Bugna); Berclain, at p. 407.)

This "closely related" or "defined and intertwining business relationship" exception was first recognized in the forum selection context in Lu, supra, 11 Cal.App.4th 1490. There, a franchisee (a contracting party) brought an action against the franchisor (another contracting party), as well as the franchisor's corporate parents (both nonsignatories to the franchise agreement), alleging each of the defendants had misrepresented the advantages of operating the franchise established by the franchise agreement. The defendants successfully moved to dismiss the action under section 410.30 on the ground the forum selection clause in the franchise agreement required the action be litigated in Florida. The appellate court affirmed, rejecting the plaintiffs' argument the corporate parents, as nonsignatories to the contract, lacked standing to enforce the forum selection clause. Citing language in Manetti-Farrow, Inc. v. Gucci America, Inc. (9th Cir. 1988) 858 F.2d 509, 514, footnote 5 ("`a range of transaction participants, parties and non-parties should benefit from and be subject to forum selection clauses'") and emphasizing allegations in the complaint that the corporate parents were the alter ego of the franchisor, the court held the corporate parents were so "closely related to" the contractual relationship that it was appropriate to allow them to enforce the forum selection clause. (See Lu, at p. 1494 ["Here, the alleged conduct of Dryclean Franchise and Dryclean U.S.A. [(the corporate parents of the contracting defendant)] is closely related to the contractual relationship. They are alleged to have participated in the fraudulent representations which induced plaintiffs to enter into the Agreement. Indeed, plaintiffs go so far as to allege Dryclean Franchise and Dryclean U.S.A. are the `alter ego[s]' of Dryclean California, which did sign the Agreement containing the forum selection clause. Under these circumstances, the fact that [the corporate parents] did not sign the Agreement does not render the forum selection clause unenforceable. [Citations.] To hold otherwise would be to permit a [signatory] plaintiff to sidestep a valid forum selection clause simply by naming a closely related party who did not sign the clause as a defendant."].)

A similar result was reached in Bugna, supra, 80 Cal.App.4th 229, in which a group of physicians sued their business partner, a physician management company and several other defendants, alleging each of the defendants conspired to commit fraud by encouraging the plaintiffs to enter into two unsuccessful management agreements with the management company. The defendants jointly moved to stay or dismiss the action under section 410.30, asserting the action was related to and governed by the physician's management agreement, which contained a provision requiring the plaintiffs' lawsuit be brought in Colorado. As in Lu, supra, 11 Cal.App.4th 1490, many of the defendants (all but the business partner and the physician management company) were not parties to the agreement containing the forum selection clause. Nonetheless, relying on Lu and highlighting allegations that each of the nonsignatory defendants had conspired with the signatory defendants, the court held the forum selection clause could be enforced by both the signatory and the nonsignatory defendants because the nonsignatories had a "defined and intertwining relationship" with the contracting parties. (Bugna, at p. 235.)

The "closely related" or "intertwining relationship" doctrine was narrowly extended in Net2Phone to allow a signatory defendant to enforce a forum selection clause against a nonsignatory, representative plaintiff. (See, e.g., Net2Phone, supra, 109 Cal.App.4th 583.) In Net2Phone a public interest consumers group, Consumer Cause, Inc., sued Net2Phone, an internet telecommunications provider, on behalf of Net2Phone's customers, alleging Net2Phone's "false, misleading and fraudulent" failure to disclose in its advertising materials its billing practices of rounding up to the nearest minute regardless of actual use time violated California's unfair competition statute (Bus. & Prof. Code, § 17200). Net2Phone moved to stay or dismiss the action under section 410.30, asserting the forum selection clause in the user agreement between Net2Phone and its customers required all actions relating to the user agreement to be tried in New Jersey. Consumer Cause opposed the motion, arguing successfully in the trial court it should not be bound by the forum selection clause because it was neither a party to the contract nor "closely related" to those who were. The appellate court reversed. The court observed the clause would have been enforceable had Net2Phone's customers filed the action themselves. Because Consumer Cause had brought the lawsuit under the unfair competition law as a private attorney general, asserting in a representative capacity "the rights of those who are parties to the contract," it effectively stood "in the shoes" of the contracting parties and was thus equally bound by the forum selection clause. (Net2Phone, at p. 589.) "Were we to hold otherwise," the court explained, "a plaintiff could avoid a valid forum selection clause simply by having a representative nonparty file the action." (Ibid.)

The Paperlink defendants acknowledge they are not parties to the asset purchase agreement or intended third party beneficiaries of the agreement. Nonetheless, emphasizing their roles as the parent corporation (and the individual managing agents of the parent corporation) of Paperlinx Canada, a signatory to the asset purchase agreement, they contend, like the nonsignatory defendants in Lu, supra, 11 Cal.App.4th 1490 and Bugna, supra, 80 Cal.App.4th 229, they enjoy a defined and intertwining relationship with the contracting party and thus have standing to enforce the agreement's forum selection clause.2 After all, they assert, Creighton and Kennedy were directors of Paperlinx Canada at the time of the asset purchase agreement. In fact, Kennedy executed the asset purchase agreement on behalf of Paperlinx Canada. Moreover, they observe, the Gould plaintiffs' own complaint alleges Paperlinx NA "directly and indirectly controlled" Paperlinx Canada at the time of the transaction. They also argue the Gould plaintiffs are properly bound by the clause because, like the plaintiffs in Net2Phone, they are "closely related" to their contracting subsidiary, Gould Canada, a party to the asset purchase agreement.

At the threshold, Paperlinx NA's status as the corporate parent of the contracting party is insufficient, by itself, to confer standing on a nonsignatory to the agreement. (See Laird v. Capital Cities/ABC, Inc. (1998) 68 Cal.App.4th 727, 737 ["[c]orporate entities are presumed to have separate existences, and the corporate form will be disregarded only when the ends of justice require this result"]; Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1285 [same]; Mid-Century Ins. Co. v. Gardner (1992) 9 Cal.App.4th 1205, 1212 [plaintiff's burden to overcome presumption of the separate existence of corporate entity].) In contrast to the circumstances in Lu and Bugna, there are no allegations in the instant matter that any of the nonsignatory defendants was the alter ego of Paperlinx Canada (see Lu, supra, 11 Cal.App.4th at p. 1494) or had conspired with any of the signatories to the contract (see Bugna, supra, 80 Cal.App.4th at pp. 235-236), nor is any nonparty to the asset purchase agreement suing in a representative capacity (see Net2Phone, supra, 109 Cal.App.4th at p. 589). General allegations that Paperlinx NA owned or controlled Paperlinx Canada are not the equivalent of alter ego allegations (Wenban Estate, Inc. v. Hewlett (1924) 193 Cal. 675, 697) and, by themselves, provide an insufficient basis to disregard the separate corporate identities of the parties to the agreement, even for purposes of enforcing a forum selection clause (Berclain, supra, 74 Cal.App.4th at pp. 408-409; cf. Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 [ownership and a certain amount of control is expected in parent/subsidiary relationships; "neither ownership nor control of a subsidiary corporation by a foreign parent corporation, without more, subjects the parent to the jurisdiction of the state where the subsidiary does business"].)

More fundamentally, in each of the cases cited by the Paperlink defendants, at least one of the contracting parties was a named litigant in the case (see Lu, supra, 11 Cal.App.4th at p. 1492; Bugna, supra, 80 Cal.App.4th at pp. 231, 233; Net2Phone, supra, 109 Cal.App.4th at pp. 587-589); and the nonsignatory parties were alleged to have participated in the same conduct as the signatory parties, making application of the forum selection clause to both signatories and nonsignatories a logical result that is not inherently incompatible with established principles of contract law. (See, e.g., Bugna, at p. 235 ["[g]iving standing to all closely related entities honors general principles of judicial economy by making all parties closely allied to the contractual relationship accountable in the same forum, thereby abating a proliferation of actions and inconsistent rulings"].) In Lu, Bugna or even Net2Phone, failure to enforce the forum selection clause would have allowed an aggrieved party to avoid a contractual obligation simply by adding, or in the case of Net2Phone, substituting, closely related persons or entities not subject to the clause. Here, in contrast, none of the litigants was a party to the agreement containing the forum selection clause.

The decision in Berclain, supra, 74 Cal.App.4th 401, although cited by the Paperlink defendants, reinforces our conclusion. The Berclain court held a corporation (Baan) lacked standing to enforce a forum selection clause contained in a distribution contract entered into by Berclain, a corporation whose assets Baan had purchased, on the one hand, and Berclain's distributor, on the other hand. Baan was not a party to the distribution agreement, which had been signed four years prior to Baan's purchase of Berclain's assets; and there was no evidence Baan had any role or was involved in any way in that contract. Accordingly, Baan was not sufficiently connected to the contractual relationship to have standing to enforce the clause on behalf of its now wholly owned subsidiary. "Generally, a corporate entity does not assume the rights, duties and benefits of another entity which it acquires in a stock purchase. The two entities are assumed to remain separate absent circumstances justifying their treatment as a single entity . . . ." (Berclain, at p. 407.)

In reaching its conclusion, the court observed, "[I]f Baan had owned Berclain at the time it entered into the agreement with [the distributor] and if Baan had been involved in the transaction, then under Lu and Manetti it would likely be appropriate to require [the distributor] to litigate its action against Baan in Quebec. But the actual story is quite different. Berclain and [the distributor] entered into an agreement in 1992; in 1996 Baan purchased Berclain's stock. Baan had no role in the contractual transaction between Berclain and [distributor], with which it is alleged to have tortuously interfered." (Berclain, supra, 74 Cal.App.4th at p. 408.) Seizing on this language, the Paperlink defendants insist that, unlike the circumstances in Berclain, here the parties' respective parent corporations and managing agents were directly involved in negotiating the contract containing the forum selection clause at issue.

The Paperlinx defendants' emphasis on dicta in Berclain, supra, 74 Cal.App.4th 401 is misplaced. Even in that court's hypothetical scenario, one of the litigants was a party to the contract containing the forum selection clause. Whatever merit the "closely related" or "intertwined business relationship" doctrine may have in those limited situations in which it has been applied, we decline to extend it to a case in which none of the litigants was a party to the contract and there are no allegations or evidence suggesting the separate corporate identities of the contracting parties should be disregarded.

In sum, neither the terms of the asset purchase agreement nor principles of contract law justify applying it to nonparties under the circumstances of this case. Indeed, the agreement itself expressly provides, "[e]xcept as specifically set forth or referred to herein, nothing herein is intended or shall be construed to confer upon or give to any persons, other than the Parties and their respective successors . . . any rights or remedies under or by reason of this Agreement." Had the Paperlinx defendants intended any dispute regarding their role in the transaction to be governed by the forum selection clause, it would have been a simple matter to have so provided. Finally, any residual considerations of convenience or efficiency are properly addressed in the alternative motion to dismiss on forum non conveniens grounds. Dismissal of the action based on the forum selection clause was error.

3. The Trial Court's Ruling on Forum Non Conveniens Was Within Its Discretion; the Proper Remedy Was To Stay, Rather Than Dismiss, the Action

a. Governing law on forum non conveniens

Unlike enforcement of forum selection clauses, which rests on principles of contract law, "[f]orum non conveniens is an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere." (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751 (Stangvik).) The doctrine is codified in section 410.30, subdivision (a), which provides, "When a court upon a motion of a party . . . finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just."

In determining whether to grant a motion based on forum non conveniens, a court must first determine whether the alternative forum is a "`suitable place for trial.'" (Stangvik, supra, 54 Cal.3d at p. 751.) If a suitable alternative forum exists, "the next step is to consider the private interests of the litigants and the interests of the public" to determine whether the balance lies in favor of retaining the action in California or requiring that it be prosecuted in the alternative forum. (Ibid.)

The first question—whether a suitable alternative forum exists—involves a "nondiscretionary determination" whether the defendant is subject to jurisdiction in the alternative forum and, if so, whether the plaintiff's cause of action would be barred in the alternate forum by a statute of limitations that would not operate to bar the suit in California. (Chong v. Superior Court (1997) 58 Cal.App.4th 1032, 1036; accord, Shiley Inc. v. Superior Court (1992) 4 Cal.App.4th 126, 131-132.) If either of those factors would preclude a hearing on the merits, the alternative forum is not suitable; and the motion to dismiss or stay is properly denied no matter how inappropriate the forum may be. (Chong, at p. 1037 [forum is suitable only "if there is jurisdiction and no statute of limitations bar to hearing the case on the merits"]; see Stangvik, supra, 54 Cal.3d at p. 752, fn. 3 ["question of suitable alternative forum depends not on the factors relevant to the convenience of the parties and the interests of the public, but on whether an action may be commenced in the alternative jurisdiction and a valid judgment obtained there against the defendant"]; American Cemwood Corp. v. American Home Assurance Co. (2001) 87 Cal.App.4th 431, 435.) A forum is suitable if the action can be brought there, even if it cannot necessarily be won there. (Chong, at pp. 1036-1037.)

Only if a suitable forum exists does the court proceed to the next step—balancing "the private interests of the litigants and the interests of the public in retaining the action for trial in California"—to determine whether the action should be retained in California or prosecuted in the alternative forum. (Stangvik, supra, 54 Cal.3d at p. 751.) "The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses and the availability of compulsory process for attendance of unwilling witnesses. The public interest factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternate jurisdiction in the litigation." (Ibid.) The analysis requires a balancing. No one factor is dispositive. (Id. at p. 753 ["the private and public interest factors must be applied flexibly, without giving undue emphasis to any one element"]; Rinauro v. Honda Motor Co. (1995) 31 Cal.App.4th 506, 510 [same].)

The trial court's determination on the existence of a suitable alternate forum, when based on undisputed facts, is a legal question subject to de novo review. (Roulier v. Cannondale (2002) 101 Cal.App.4th 1180, 1186; Guimei v. General Electric Co. (2009) 172 Cal.App.4th 689, 696.) The trial court's balancing of the public and private interests, in contrast, is a highly discretionary evaluation that is accorded "substantial deference" on appeal and is subject to reversal only for abuse of discretion. (Chong v. Superior Court, supra, 58 Cal.App.4th at p. 1037; Morris v. AGFA Corp. (2006) 144 Cal.App.4th 1452, 1464.)

b. The suitability of the Canadian forum

The Paperlinx defendants, none of whom is a Canadian resident, contend they met their burden of showing Vancouver, British Columbia is a suitable forum. (See Stangvik, supra, 54 Cal.3d at p. 751 [defendants, as the moving parties in a forum non conveniens motion, bear the burden of proof on forum non conveniens motion].) In particular, they assert, Paperlinx NA, Kennedy (on behalf of himself and Paperlinx NA), Creighton and Ronan each "stipulated" in declarations to allowing itself or himself to be subject to personal jurisdiction in Canada. While that may have been the defendants' intent, the Paperlinx's alleged "stipulations" are not as clear as they suggest. Although Ronan declared a willingness to submit to the Canadian court's jurisdiction, Kennedy's and Creighton's testimony that they were "prepared to appear in the court of British Columbia, Canada to defend against Plaintiffs' claims" is more ambiguous.

Even if we were to construe the declarations, or counsel's assertions to the same effect at oral argument,3 as the functional equivalent of a stipulation to jurisdiction in the foreign forum (see, e.g., Roman v. Liberty University, Inc. (2008) 162 Cal.App.4th 670, 683 [counsel's representation that limitations period would be tolled during time plaintiff's action was pending in California was tantamount to stipulation that defendant would not raise any limitations defense if action were tried in Virginia; accordingly, trial court justified in finding no limitations bar to allowing suit to proceed in Virginia]), there is still the problem of a potential limitations bar. The Gould plaintiffs contend that, in light of Canada's more restrictive statute of limitations for unfair competition claims (two years rather than the four-year limitation period allowed in California), a significant portion of the action could be barred in a Canadian forum, and the Paperlinx defendants have not eliminated the potential for such a bar by waiving any limitations defense. (See Stangvik, supra, 54 Cal.3d at p. 752 [forum not suitable if cause of action would elsewhere be barred by the statute of limitations, unless "`the court is willing to accept the defendant's stipulation that he will not raise this defense in the second [forum]'"].)4

It is possible, of course, that the chosen forum will have no impact on that question. For instance, it may be that, even if the action were tried in California, Canadian law, including its statutes of limitations, would apply. (See generally McCann v. Foster Wheeler LLC (2010) 48 Cal.4th 68, 87 [detailing methodology for resolving choice-of-law questions involving potential application of another jurisdiction's statute of limitations].)5 In that case, the Gould plaintiffs lose nothing by an order requiring the action to be tried in Canada. None of the parties has discussed this point, and resolution of that question at this stage of the proceedings would be premature.

Whatever limitations period is to be applied, however, the Paperlinx defendants have not stipulated to toll the statute for the period the action has been pending in California, a factor that may be dispositive in allowing the case to be heard on the merits in the alternative forum. (See Roman v. Liberty University, Inc., supra, 162 Cal.App.4th at p. 683 [defendant's stipulation to waive limitations bar rendered alternative forum suitable].)6

In light of the Paperlinx defendants' ambiguous statements they are "prepared" to defend the action in Canada and the uncertainty about whether there is a limitations bar to suit in British Columbia that may not otherwise exist in California, dismissal is not an appropriate remedy in this case. Rather, given our affirmance below of the trial court's determination that California is a seriously inconvenient forum, the trial court on remand should grant the motion, but stay the action pending resolution of the matter in the Canadian forum. (See Henderson v. Superior Court (1978) 77 Cal.App.3d 583, 597-598 ["[o]rdinarily, dismissal is the exceptional remedy and stay the usual remedy, so that if obstacles develop to litigation in the convenient forum the litigant may resume litigation in the California forum"]; Archibald v. Cinerama Hotels (1976) 15 Cal.3d 853, 857 [in forum non conveniens context, dismissal rather than stay justified only in "exceptional case"]; Century Indemnity Co. v. Bank of America (1997) 58 Cal.App.4th 408, 411.)

c. The trial court's balancing of public and private interests was within its discretion

The Gould plaintiffs contend the trial court abused its discretion in concluding California is a seriously inconvenient forum because several of the defendants are California residents and are the most significant witnesses, apart from the plaintiffs, concerning the alleged misrepresentations. The trial court, balancing the public and private factors, reached a different conclusion. The court properly evaluated the private interest factors, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses and the availability of compulsory process for the attendance of unwilling witnesses (see Stangvik, supra, 54 Cal.3d at p. 751) and, based on the testimony provided in Kennedy's declaration, concluded Canada was the proper forum. The court observed the consent decree and the subsequent asset purchase, both of which form a large part of the Gould plaintiffs' fraud claims, were negotiated in Canada with some input (at least in connection with the consent decree) from the Canadian government; many documents regarding the consent decree and the asset purchase transaction are located at an accounting firm in Canada, which assisted Paperlinx Canada in effecting the sale; and critical nonparty witnesses, such as employees of Cascades West, reside in Canada.

The trial court also weighed the public interest in having the action remain in California and found California had far less interest than Canada in deciding the case. The consent decree and the asset purchase were all decidedly Canadian transactions with at least some involvement by the Canadian government, and it is likely the substantive law of Canada will control. Moreover, the Gould plaintiffs themselves are not California residents. (Guimei v. General Electric Co., supra, 172 Cal.App.4th at p. 702 ["while a resident plaintiff's choice of California as the forum state is afforded substantial weight, a nonresident plaintiff's choice is given less deference"]; Chong v. Superior Court, supra, 58 Cal.App.4th at p. 1038 [same]; see also Guimei, at p. 703 ["[t]o the extent the trial court gave little deference to [foreign] plaintiffs' choice of California as the forum state, it did not abuse its discretion"].) To be sure, at least some of the defendants are California residents; and California has some interest in keeping the litigation in the state to deter future wrongful conduct; but that factor alone is not sufficient to compel denial of the motion. (See, e.g., Stangvik, supra, 54 Cal.3d at p. 753, fn. 4 ["An undue emphasis on a single factor is especially threatening to a balanced analysis because some of the matters to be weighed will by their nature point to a grant or denial of the motion. For example, the jurisdiction's interest in deterring future wrongful conduct of the defendant will usually favor retention of the action if the defendant is a resident of the forum, whereas the court congestion factor will usually weigh in favor of trial in the alternate jurisdiction."].)

Balancing the public and private interests, the trial court found that California had substantially less interest in deciding the dispute than Canada. Nothing in this record suggests that determination was an abuse of the court's broad discretion in such matters.

DISPOSITION

The order dismissing the action is reversed. On remand the court is directed to enter a new order denying the motion to dismiss based on the forum selection clause, granting the motion in part on the ground of forum non conveniens and staying the action pending resolution of the case in the Canadian forum. The Gould plaintiffs are to recover their costs on appeal.

I concur:

JACKSON, J. WOODS, J., Concurring and Dissenting:

I concur with the conclusion of the majority that application of the doctrine of forum non conveniens dictates that the action is one that should be tried in Vancouver, British Columbia.

I respectfully dissent, however, from the conclusion of the majority that the forum selection clause has no application to this case. In my opinion, the judgment of the trial court should in all respects be affirmed.

The operative complaint in these proceedings is the first amended complaint and contains allegations, among others, as follows: Paperlinx NA and the individual defendants fraudulently induced plaintiffs to invest in Gould Paper (Canada) Ltd. by falsely representing that the business of Cascades West (to be acquired by Gould Paper (Canada) Ltd.) was maintained independent of Paperlinx Canada's operations, and the manager —Ronan — was also independent; Cascades West's confidential, trade secret or proprietary information (including supplier agreements) was not available to or disclosed to Paperlinx NA or its subsidiary or related companies; Paperlinx NA had not obstructed or interfered with the supplies to Cascades West, and would not obstruct or interfere after Gould Paper (Canada) Ltd.'s acquisition of Cascades West assets in favor of its related entities which were competitors in the fine paper business in western Canada.

These allegations give an initial and open window look at what is at stake in this lawsuit. It is quite apparent that the involvement of Canada is of prime importance if the pleaded allegations of the complaint are proven. In selecting Vancouver, British Columbia as the forum of choice the parties were sensitive to this state of affairs. I find the principles contained in Lu v. Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490 to be probative and instructive. In Lu the plaintiffs entered into a franchise agreement with Dryclean U.S.A. of California. The agreement contained a forum selection clause designating Florida as the forum for litigation. The Lus filed suit in California against Dryclean U.S.A. alleging that defendants had misrepresented the advantages of owning a dry cleaning business. The Lus also named the corporate parent (Dryclean Franchise) and grandparent (Dryclean U.S.A.) of Dryclean U.S.A. of California, neither of which was a signatory to the agreement. The trial court granted the defendants' motion to dismiss on the ground that the forum selection clause required litigation in Florida. The Court of Appeal affirmed, holding the forum selection clause applied to the non-signatory corporate parent and grandparent entities, because they were closely related to the contractual relationship and were alleged to have participated in the fraudulent representations which induced plaintiffs to enter into the agreement. The court concluded that there was a failure of the Lus to carry their burden of proof that the forum selection clause was unreasonable.

Secondarily, I am of the opinion that the majority decision in Net2Phone, Inc. v. Superior Court (2003) 109 Cal.App.4th 583, is further authority for affirming the decision of the trial court in its entirety. As the majority says, the "closely related" or "intertwining relationship" doctrine was extended in Net2Phone to allow a signatory defendant to enforce a forum selection clause against a nonsignatory, representative plaintiff. (See, e.g., Net2Phone, supra, 109 Cal.App.4th 583.) In Net2Phone a public interest consumers group, Consumer Cause, Inc., sued Net2Phone, an intent telecommunications provider, on behalf of Net2Phone's customers, alleging Net2Phone's "false, misleading and fraudulent" failure to disclose in its advertising materials its billing practices of rounding up to the nearest minute regardless of actual use time violated California's unfair competition statute (Bus. & Prof. Code, § 17200). Net2Phone moved to stay or dismiss the action under section 410.30, asserting the forum selection clause in the user agreement between Net2Phone and its customers required all actions relating to the user agreement to be tried in New Jersey. Consumer Cause opposed the motion, arguing successfully in the trial court it should not be bound by the forum selection clause because it was neither a party to the contract nor "closely related" to those who were. The appellate court reversed. The court observed the clause would have been enforceable had Net2Phone's customers filed the action themselves. Because Consumer Cause had brought the lawsuit under the unfair competition law as a private attorney general, asserting in a representative capacity "the rights of those who are parties to the contract," it effectively stood "in the shoes" of the contracting parties and was thus equally bound by the forum selection clause. (Id. at p. 589.) "Were we to hold otherwise," the court explained, "a plaintiff could avoid a valid forum selection clause simply by having a representative nonparty file the action." (Ibid.)

I further respectfully dissent from the conclusion of the majority that the California action should be stayed pending further proceedings in Canada.

Respondents claim that an outright dismissal was warranted in this instance. Respondents, in reliance on section 410.30 of the Code of Civil Procedure, assert that substantial justice requires a dismissal in this case, as opposed to a stay, arguing as follows: "Section 410.30 of the California Code of Civil Procedure provides that the Court `shall stay or dismiss an action' where it finds that `in the interest of substantial justice an action should be heard in a forum outside this state.' The trial court is therefore empowered to dismiss an action `in the interest of substantial justice.' (See Credit Lyonnais Bank Nederland v. Manatt (1988) 202 Cal.App.3d 1424, 1437 [dismissing action outright under Section 410.30 where substantial justice dictated that trial be held in England where plaintiff would suffer no inconvenience or injustice].)"

As argued by respondents, "Here, Appellants engineered the structure of their complaint to evade the APA's forum selection clause. Canada is the obvious forum for this action. It would not be in the interest of substantial justice to permit Appellants to maintain their Complaint in the California court system where they `offer no colorable objection to the application of Canadian law to their controversy.' . . . Appellants can and should pursue their claims in British Columbia, not California."

I would affirm the judgment in its entirety.