Huntington Copper, LLC v. Conner Sawmill, Inc.

• Court: Indiana Court of Appeals
• Decided: April 18, 2012
• Docket: 09A02-1107-PL-917
• Status: Unpublished

Opinion

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MEMORANDUM DECISION - NOT FOR PUBLICATION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

2 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

3 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,

4 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,

5 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

6 “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.

7 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

8 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.