Huntington Copper, LLC v. Conner Sawmill, Inc. ( 2012 )

Pursuant to Ind.Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
CHRISTOPHER L. CASSIDY BRIAN M. HOUSE
Indianapolis, Indiana Norris Choplin Schroeder, LLP
Indianapolis, Indiana
FILED
Apr 18 2012, 9:34 am
IN THE
COURT OF APPEALS OF INDIANA CLERK
of the supreme court,
court of appeals and
tax court
HUNTINGTON COPPER, LLC, )
)
Appellant-Defendant, )
)
vs. ) No. 09A02-1110-PL-917
)
CONNER SAWMILL, INC., )
)
Appellee-Plaintiff. )
)
INTERLOCUTORY APPEAL FROM THE CASS SUPERIOR COURT
The Honorable Richard A. Maughmer, Judge
Cause No. 09D02-1107-PL-13
April 18, 2012
MEMORANDUM DECISION - NOT FOR PUBLICATION
VAIDIK, Judge
Case Summary
Huntington Copper, LLC, appeals the trial court’s denial of its motion to dismiss
for lack of personal jurisdiction. Huntington Copper contends that the forum-selection
clause contained in the contract at issue is valid and enforceable, and that the proper
venue for any litigation is the Common Pleas Court of Hamilton County in Cincinnati,
Ohio. Finding that the forum-selection clause is valid and enforceable, we reverse the
trial court’s denial of Huntington Copper’s motion to dismiss.
Facts and Procedural History
Conner Sawmill, Inc., is an Indiana corporation that has been in operation for
thirteen years. It is run by Tim and Beverly Middlekauf, both of whom have Bachelor’s
degrees in Business from Indiana University. Huntington Copper, LLC, is a North
Carolina Limited Liability Company that provides business-consulting services. Its
principal place of business is in Greensboro, North Carolina, but it has several regional
offices, including one in Mason, Ohio.
A representative from Huntington Copper contacted Conner Sawmill to set up a
meeting between the two companies so that Huntington Copper could present the services
that it could offer to Conner Sawmill. Conner Sawmill checked the Better Business
Bureau website to investigate Huntington Copper. The meeting between the two
businesses took place on December 21, 2010, and lasted for three hours. They discussed
a potential agreement for Huntington Copper to provide business-consulting services, and
on that same day, a formal Consulting Services Agreement was negotiated and entered
into by both parties. The contract was two pages long and included a forum-selection
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clause, indicating that “in the event of litigation, exclusive jurisdiction shall vest in the
Common Pleas Court of Hamilton County, Cincinnati, Ohio; Ohio law applying.”
Appellant’s App. p. 22.
On December 27, 2010, a representative of Huntington Copper traveled to Indiana
and began providing services to Conner Sawmill. This arrangement continued until
approximately February 3, 2011, and Conner Sawmill made payments of approximately
$20,000 to Huntington Copper during that time. On February 1, 2011, Bev Middlekauff
wrote a letter to Huntington Copper, praising the work of their representative, noting that
he had “taken a very disorganized, untimely and inaccurate set of books and has put
systems in place to offer meaningful data and financial tools that can be used daily to
guide our business.” Id. at 23.
However, Conner Sawmill later became dissatisfied with Huntington Copper’s
work and discontinued payment. Conner Sawmill filed suit in Cass Superior Court, Cass
County, Indiana, seeking to rescind the contract and order the return of all money paid to
Huntington Copper. Huntington Copper filed a 12(b)(2) motion to dismiss based on lack
of personal jurisdiction due to the forum-selection clause. The trial court held a hearing
on the matter and issued a order denying the motion to dismiss. Id. at 15.
This interlocutory appeal now ensues.
Discussion and Decision
Huntington Copper contends that the trial court erred in denying its motion to
dismiss for lack of personal jurisdiction and allowing Conner Sawmill’s suit to continue
in Indiana despite the forum-selection clause indicating exclusive jurisdiction in the
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Common Pleas Court of Hamilton County in Cincinnati, Ohio, because: (1) there was
mutual assent with respect to the contract at issue in this case and (2) the forum-selection
clause itself was valid and enforceable.
Conner Sawmill argues that the proper remedy in this case is the rescission of the
contract. Therefore, its argument continues, the forum-selection clause does not apply
because there will be no contract. Appellee’s Br. p. 9. However, a contract is not
rescinded until it is addressed by a trial court and declared as such. Van Bibber Homes
Sales v. Marlow, 778 N.E.2d 852 (Ind. Ct. App. 2002), trans. denied. Therefore, the
forum-selection clause is still valid because it will determine which trial court will hear
the rescission issue. As a result, we are not persuaded by Conner Sawmill’s argument
and turn to the arguments surrounding the denial of Huntington Copper’s motion to
dismiss for lack of personal jurisdiction.
Personal jurisdiction is a question of law. Grott v. Jim Barna Log Sys.-Midwest,
Inc., 794 N.E.2d 1098, 1102 (Ind. Ct. App. 2003), trans. denied. When reviewing a
motion to dismiss for lack of personal jurisdiction under Indiana Trial Rule 12(b)(2), we
apply a de novo standard of review. Id. at 1101-02.
I. Mutual Assent
Huntington Copper contends that there was a meeting of the minds between it and
Conner Sawmill with respect to key contractual terms, rendering the contract as a whole,
including its forum-selection clause, enforceable.
The law concerning contracts is well settled in Indiana. An offer, acceptance, plus
consideration make up the basis for a contract. Homer v. Burman, 743 N.E.2d 1144,
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1146-47 (Ind. Ct. App. 2001), reh’g denied. “‘A mutual assent or a meeting of the minds
on all essential elements or terms must exist in order to form a binding contract.’” Id.(quoting Pinnacle Computer Servs., Inc. v. Ameritech Pub., 642 N.E.2d 1011, 1013 (Ind.
Ct. App. 1994), reh’g denied). However, “[a]ssent to those terms of a contract may be
expressed by acts which manifest acceptance.” Id.In this case, Conner Sawmill was on notice of the clause and manifested assent to
it when it signed the contract. The clause was in plain language in the middle of the
second page of a two-page contract. The terms were straight forward and capable of
understanding; Conner Sawmill could have easily rejected the terms of the clause had it
objected. Failing to read the entire contract absent an excuse such as fraud or
misrepresentation will not relieve a party of the terms of the contract. See Moore v.
Bowyer, 180 Ind. App. 429, 431, 388 N.E.2d 611, 612 (1979). “Under Indiana law, a
person is presumed to understand and assent to the terms of the contract he signs.”
Buschman v. ADS Corp., 782 N.E.2d 423, 428 (Ind. Ct. App. 2003).
Further, Conner Sawmill and Huntington Copper indicated their intent to be bound
by the terms of the contract by their performance. Huntington Copper provided
consulting services to Conner Sawmill, and in return, Conner Sawmill paid Huntington
Copper approximately $20,000. Appellant’s App. p. 76. This clearly manifested
acceptance of the terms of the contract, indicating the mutual assent necessary for
contract formation.
We therefore find that there was mutual assent, rendering the contract as a whole,
including its forum-selection clause, enforceable.
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II. Valid and Enforceable Forum-Selection Clause
Huntington Copper also contends that the forum-selection clause itself is valid and
enforceable. Contractual provisions, even those occurring in form contracts, that seek to
limit the litigation of future actions to particular courts are enforceable if they are
reasonable and just under the circumstances and there is no evidence of fraud or
overreaching such that the agreeing party would be deprived of a day in court. Mechs.
Laundry & Supply, Inc. v. Wilder Oil Co., 596 N.E.2d 248, 252 (Ind. Ct. App. 1992),
reh’g denied, trans. denied. Additionally, the provision must have been freely
negotiated. Dexter Axle Co. v. Baan USA, Inc., 833 N.E.2d 43, 48 (Ind. Ct. App. 2005).
Thus, it is well settled that to determine the validity of a forum-selection clause, we are to
examine whether the clause is freely negotiated and just and reasonable under the
circumstances.
A. Freely Negotiated
Huntington Copper first contends that the forum-selection clause was freely
negotiated. Indiana courts recognize that parties are free to enter into contracts and
presume that contracts represent the freely bargained agreement of the parties. Grott, 794
N.E.2d at 1102. In determining whether a forum-selection clause was freely negotiated,
we apply a fact sensitive test comparing the bargaining positions of the parties in privity
of the contract. Dexter, 833 N.E.2d at 49. This inquiry is akin to whether a contract is
unconscionable due to a disparity in bargaining power. Horner v. Tilton, 650 N.E.2d
759, 763 (Ind. Ct. App. 1995), reh’g denied, trans. denied. A contract is unconscionable
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“if there exists a great disparity between the parties which leads the weaker party to sign
the contract unwillingly or without awareness of its terms.” Id.In this case, Huntington Copper and Conner Sawmill were both sophisticated
commercial actors who had substantially similar bargaining positions during negotiations.
Huntington Copper is a company that provides business-consulting services with its
principal place of business in North Carolina and several other regional offices.
Appellant’s App. p. 44. Conner Sawmill is a company that has been in operation for
thirteen years and is run by Bev and Tim Middlekauf, both of whom received Bachelor’s
Degrees in Business from Indiana University. Id. at 71-72. Both parties clearly possess a
high degree of business acumen.
The bargaining process between the two parties also appears to have been fair.
Huntington Copper contacted Conner Sawmill and set up an appointment to make a
presentation about the services that it could offer. Id. at 73. Conner Sawmill consulted
the Better Business Bureau website to check on Huntington Copper and listened to a
three-hour presentation, and it was not until after all of this that a contract was signed.
The contract was two pages, with the forum-selection clause included in a paragraph on
the second page. While the forum-selection clause was not explicitly discussed before
the parties signed the contract, id. at 75, Conner Sawmill had the opportunity to read the
contract before signing. The clause was not buried in pages of text, and the parties had
equal bargaining positions, so if Conner Sawmill had objected to that clause, the issue
could have been discussed before signing.
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We therefore find that the parties were able to freely negotiate the forum-selection
clause.
B. Just and Reasonable
Generally no public policy reasons exist to prevent parties from establishing venue
through a contractual provision. Mechs. Laundry, 596 N.E.2d at 252. This is because
forum-selection clauses typically serve as a worthy tool to limit the fora in which a
company may be sued, to dispel any confusion about where suits arising from the
contract must be brought, and to pass on economic benefits to consumers in the form of
reduced prices reflecting the savings that a company enjoys by limiting the fora in which
it may be sued. Id. at 251. Nevertheless, a forum-selection clause’s validity may come
into question when it “interfere[s] with the orderly allocation of judicial business . . . .”
Nw. Nat’l Ins. Co. v. Donovan, 916 F.2d 372, 375 (7th Cir. 1990).
However, we find that this forum-selection clause did not interfere with the
orderly allocation of judicial business. On the contrary, it dispels any confusion as to
where disputes arising from this contract shall be litigated, conserving judicial resources
that may otherwise be dedicated to deciding this issue.
Additionally, Ohio is not an inconvenient or unreasonable forum; it is our
neighboring state and the home state of one of Huntington Copper’s regional offices.
The distance that Conner Sawmill would have to travel in order to be present in court is
not so great as to deprive them of a meaningful opportunity to litigate its claim. Further,
we have held that “[a] claim that unnecessary travel expense will result from trial in the
contractual forum is far from sufficient, by itself, for this court to conclude that an
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otherwise reasonable and freely negotiated contractual provision is unenforceable.”
Grott, 794 N.E.2d at 1104. So while Ohio cannot be said to be a remote or inconvenient
forum, any travel that Conner Sawmill would be required to undergo as a result of the
forum-selection clause would not necessarily render the clause unenforceable.
Finally, there is no evidence of fraud or overreaching. The forum-selection clause
was in plain language in the middle of the second page of a two-page contract. The
language was clear, with the clause providing: “it is specifically agreed that, in the event
of litigation, exclusive jurisdiction shall vest in the Common Pleas Court of Hamilton
County, Cincinnati, Ohio; Ohio law applying.” Appellant’s App. p. 22. The contract
itself was not lengthy or convoluted; it was clearly written and easily accessible to the
reader. See id. at 21-22. There was nothing fraudulent or overreaching about the forum-
selection clause, so we find that the forum-selection clause was just and reasonable.
We therefore hold that the trial court erred in denying Huntington Copper’s
motion to dismiss, as the forum-selection clause was valid and enforceable; any litigation
should have taken place in the Common Pleas Court of Hamilton County in Cincinnati,
Ohio, preventing the Cass Superior Court from having personal jurisdiction in this matter.
Reversed.
CRONE, J., and BRADFORD, J., concur.
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