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Appeals court tests forum‑selection clause and evidentiary standard on incapacity in PCBI litigation
Summary
In PCBI v. Brown/Premsrit, the Court of Appeals questioned whether the district court should have held an evidentiary hearing under Energy Claims before enforcing a Nevada forum‑selection clause and whether plaintiffs' allegations and Dr. Klein's expert report showing substance‑induced psychosis were sufficiently particularized.
The Utah Court of Appeals heard extended argument in PCBI v. Brown/Premsrit about whether a Nevada forum‑selection clause should be enforced and whether the district court erred by dismissing claims without an evidentiary hearing on alleged incapacity.
Plaintiff counsel Alan Morrison described his client’s contention that Tony Sheay suffered substance‑induced psychosis in mid‑2020 and that several transactions and agency designations executed in June–August 2020 were therefore invalid. Morrison said plaintiffs submitted an expert opinion from Dr. Klein concluding that "he lacked contractual and financial capacity during all five transactions from June 2020 to his death in November 2020," and argued the district court erred by refusing to consider near‑time lay and expert accounts and by not applying Rule 9(c) or holding an evidentiary hearing under Energy Claims.
The panel pressed both sides on procedure and timing. One judge framed the issue as two parts: whether the forum‑selection clause applies and, if so, whether it is enforceable; if the clause is enforceable the case would be dismissed on forum grounds, but if not the court must resolve application to specific entities. Defense counsel (identified in the transcript as Michael) argued closely related or subsequently formed affiliates are covered by the engagement agreement and urged deference to Nevada court developments and the district court’s factual assessment.
A central dispute was process: under Energy Claims, does a plaintiff who pleads incapacity have to meet a particularity threshold at the pleading stage, or must the trial court hold an evidentiary hearing when the record contains competing factual evidence? Plaintiffs urged the court to reverse and remand for an evidentiary hearing (or to find the pleadings particularized under Rule 9(c)); defense counsel pointed to Nevada rulings and argued the record did not require the remedy plaintiffs seek.
The court took the case under advisement and said it would issue a decision later.
