Defendant Total Quality Logistics, LLC (TQL) filed an appeal with the Appellate Division of a judgment for plaintiff Narrow Path Transport, LLC (Narrow Path) entered in the Special Civil Part, Small Claims Division, after the trial court had denied defendant’s motion to dismiss the complaint based upon a contractual forum selection clause. This matter concerned claims under the contract between the parties, which contained a clause requiring the parties to litigate any dispute in state court in Ohio. The issue in Narrow Path Transportation, LLC v. Total Quality Logistics, LLC, 2026 N.J. Super. Unpub. LEXIS 217 (App. Div. Feb. 9, 2026) was whether the trial court had properly considered the defendant’s motion to dismiss the complaint based upon this forum selection clause.
The parties had entered into a “Broker-Carrier” agreement by which Narrow Path would transport vehicle trailers for TQL’s customers on request. That agreement contained a provision requiring Narrow Path to indemnify TQL against certain claims related to its performance under the agreement. The agreement also contained a clause which required it to be governed by the laws of the state of Ohio, as well as the parties’ consent to the jurisdiction of the state court located in Clermont County, Ohio (the forum selection clause). Pursuant to the contract, the parties waived any objection to the jurisdiction of that court and all claims arising under or related to the agreement would need to be brought in that court, which would have exclusive jurisdiction over any such dispute.
Despite this forum selection clause, Narrow Path filed a New Jersey small claims complaint against TQL seeking reimbursement of an amount TQL had deducted from Narrow Path’s earnings on other TQL jobs to pay for a customer’s damages. Narrow Path claimed entitlement based upon the contract’s indemnification and offset provisions. This complaint was filed in the Superior Court of New Jersey, Law Division, Burlington County (Special Civil Part, Small Claims Division).
A few days before the trial, TQL filed a motion to dismiss the complaint based upon the contract’s forum selection clause (which required litigation to proceed in an Ohio state court). Narrow Path’s representatives were present in the courtroom for the New Jersey trial and were later joined by TQL’s representative remotely. The record did not reflect that any of the individuals were sworn in before providing trial testimony.
At the trial, Narrow Path did not argue the forum selection clause was inapplicable in opposition to TQL’s motion. After the judge heard from Narrow Path as to its request for the entry of judgment, the judge denied TQL’s dismissal motion and stated that TQL had subjected itself to the jurisdiction of New Jersey courts based upon the parties’ course of conduct, which included seventy prior transports. The judge then entered a monetary judgment in favor of Narrow Path based upon unsworn trial proofs.
TQL filed this appeal of the trial court’s decision. It argued that the judge made a mistake by denying its dismissal motion, seeking to enforce the contract’s forum selection clause, and by entry of judgment absent subject matter jurisdiction.
After reviewing the record and the applicable law, the Appellate Division stated that it was “constrained to vacate the judgment” and remanded the matter for the court to comply with Rule 1:7-4 as to its denial of TQL’s dismissal motion, because the court’s determination not to enforce the forum selection clause was made without explanation.
The Court noted that under well-established law, contracting parties may agree to resolve any dispute arising from their agreement in a particular forum. Under New Jersey law, forum selection clauses are prima facie valid and enforceable.
The Appellate Division noted that forum selection clauses would be enforced “unless the party objecting thereto demonstrates: (1) the clause is a result of fraud or overweening bargaining power, or (2) the enforcement in a foreign forum would violate strong public policy of the local forum, or (3) enforcement would be seriously inconvenient for the trial.”
The Court further noted that a party may waive their rights to enforce a forum selection clause. However, a waiver would constitute “the voluntary and intentional relinquishment of a known right.” The Appellate Division held that a court’s analysis regarding the waiver of a forum selection clause would be similar to the analysis conducted regarding the waiver of an arbitration clause.
Thus, the Court vacated the judgment and remanded the matter back to the trial judge to issue a statement of reasons, “stating clearly its factual findings and correlating them with relevant legal conclusions.” Further, the Appellate Division held that if the trial court concluded that the contract’s forum selection clause was unenforceable or TQL waived enforcement of that clause and determined that the litigation should proceed in New Jersey, then the matter should be scheduled for a new trial and any trial witnesses must be sworn prior to providing testimony.
