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Hill v. White Jacobs & Associates, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

April 15, 2015

DARYL HILL, Plaintiff,
v.
WHITE JACOBS & ASSOCIATES, INC., LEXON INSURANCE CO., Defendants.

ORDER ON MOTION TO DISMISS

MARK J. DINSMORE, Magistrate Judge.

This matter comes before the Court on Defendant Lexon Insurance Co.'s ("Lexon") and Defendant White Jacobs & Associates Inc.'s ("WJA") (collectively "Defendants") respective Motions to Dismiss for Improper Venue or, in the alternative, for Transfer of Venue to the Eastern District of Texas. [Dkts. 9 & 15.] For the following reasons, the Court DENIES the Defendants' motions.

I. Background

On January 5, 2015, Daryl Hill ("Plaintiff") filed his Complaint with this Court, alleging that the Defendants violated the federal Credit Repair Organizations Act (CROA) and the Credit Services Organization Acts (CSOA) of both Indiana and Texas. [Dkt. 1.] In response, on January 30, 2015, Lexon promptly filed its motion to dismiss Plaintiff's Complaint for improper venue, pursuant to Federal Rule of Civil Procedure 12(b)(3), along with its Answer. [Dkts. 9 & 10.] One week later, WJA likewise responded to Plaintiff's Complaint by filing a motion to dismiss for improper venue, substantially similar to the one filed by Lexon, along with its Answer. [Dkts. 15 & 17.] On April 13, 2015, all three parties filed a Joint Consent and Reference of a Motion to the Magistrate Judge, which consent to the Magistrate Judge's ruling on Defendants' pending motions to dismiss was approved by the District Judge the same day. [Dkts. 27 & 28.] Accordingly, the Defendants' motions to dismiss and, in the alternative, for transfer are now before the Court. [Dkts. 9 & 15.]

II. Discussion

Defendants make several arguments in their present motions that can be distilled into three issues: (1) whether Plaintiff's agreement with WJA prevents Plaintiff from filing his Complaint in this Court, (2) whether venue is proper pursuant to 28 U.S.C. § 1391, and (3) whether dismissal or transfer is appropriate pursuant to 28 U.S.C. § 1406 (if venue is improper) or, in the alternative, whether transfer is appropriate pursuant to 28 U.S.C. § 1404 (if venue is proper).

A. Venue by Contract

The Court will first address whether the contract between Plaintiff and WJA contains a mandatory forum-selection clause that prevents Plaintiff from filing his Complaint in this Court. In response to Defendants' argument in the affirmative, Plaintiff asserts that the so-called forum selection clause serves no such purpose and only governs the choice-of-law, not the forum. [Dkt. 22 at 4.]

In the Seventh Circuit, "a forum-selection clause will be enforced unless enforcement would be unreasonable or unjust or the provision was procured by fraud or overreaching." Paper Exp., Ltd. v. Pfankuch Maschinen GmbH, 972 F.2d 753, 757 (7th Cir. 1992). However, in order to be enforced as such, the court must first determine whether the clause is even a forumselection clause. Id. at 755. When so interpreting a contract, "every provision should be given effect and the words should be read with their ordinary meaning." Id. Only when the ordinary meaning of the clause in question presents an actual forum-selection clause can the court then determine whether the forum-selection clause can be enforced. Id. In this analysis, a significant distinction is drawn: "where venue is specified with mandatory or obligatory language, the clause will be enforced; where only jurisdiction is specified, the clause will generally not be enforced unless there is some further language indicating the parties' intent to make venue exclusive." Id. at 757.

Here, the relevant clause reads as follows: "This agreement is made and entered into in the State of Texas, shall be performed within the State of Texas, and shall be interpreted, enforced, and governed by the laws of said state without regard to any conflict of law provisions." [Dkt. 9 at 2; Dkt. 15 at 3 (emphasis added).] According to the plain language of this clause, the agreement between Plaintiff and WJA was made, entered into, and performed in or within Texas. However, equally plainly, the agreement must be interpreted, enforced, and governed by the laws of Texas-not within Texas. Thus, with regard to the interpretation and enforcement of the agreement, the language is clear and unambiguous that the law applied to such interpretation and enforcement must be that of the State of Texas. However, there is no "mandatory or obligatory language" specifying the forum in which such interpretation or enforcement is to take place, so the Seventh Circuit standard iterated in Paper Express for an enforceable forum-selection clause is not met. Therefore, while this clause does bind the Court to employ Texas law when interpreting or enforcing the agreement, the clause does not bar the Plaintiff from filing his case in this Court. Accordingly, the terms of Plaintiff's agreement with Defendant WJA does not render this Court an improper venue for his suit against the Defendants.

B. Venue by Statute

While the Court has found that Plaintiff's choice of venue is not improper pursuant to the plain language of his agreement with WJA, Plaintiff must still satisfy the venue requirements of 28 U.S.C. § 1391 in order to avoid dismissal for improper venue pursuant to Rule 12(b)(3). The relevant portion of section 1391 reads as follows:

A civil action may be brought in -

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in ...

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