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Ridgelawn Cemetery Association, Inc. v. Granite Resources Corp.

United States District Court, N.D. Indiana, Hammond Division

August 31, 2017

RIDGELAWN CEMETERY ASSOCIATION, INC., Plaintiff,
v.
GRANITE RESOURCES CORPORATION, Defendant.

          OPINION AND ORDER

          JOSEPH S. VAN BOKKELEN UNITED STATES DISTRICT COURT

         Plaintiff claims the monument it bought from Defendant cracked too soon.

         Defendant moved for dismissal on the grounds that a forum-selection clause requires the parties to litigate this matter (if at all) in the State Courts of Wisconsin. Alternatively, Defendant moved for dismissal of the fraud claim for lack of the requisite level of pleading particularity.

         A. Background

         Plaintiff Ridgelawn Cemetery Association (an Indiana corporation) ordered a 54, 000-pound granite monument from Defendant Granite Resources Corporation (“GRC, ” a Wisconsin corporation) on August 27, 2010. GRC responded by faxing an order acknowledgment to Ridgelawn, and by sending an invoice to Ridgelawn. (GRC does not specify the manner by which it sent the invoice.)

         GRC claims this order acknowledgment and invoice contained terms and conditions on their backs, including a forum-selection clause compelling the parties to bring any litigation regarding this matter exclusively in the State Courts of Wisconsin:

Any unresolved legal disputes shall be submitted solely to courts of the State of Wisconsin, and each party accepts Wisconsin jurisdiction.

(DE 9-1 at 3.)

         Neither the front of the order acknowledgment nor the front of the invoice mentions the existence of terms and conditions on the backs.

         Ridgelawn admits it received the order acknowledgement via fax, and also admits it received the invoice. (Ridgelawn does not specify the method of the invoice's transmission either.) But Ridgelawn denies ever receiving the alleged terms and conditions on the backs of the documents.

         GRC claims it also mailed the order acknowledgment-with the terms and conditions on the back-to Ridgelawn via regular United States mail. But Ridgelawn denies ever receiving such mail.

         GRC delivered the monument in April 2011. Ridgelawn paid in full.

         But, according to Ridgelawn, numerous cracks in the granite monument began to appear only three years after installation. Ridgelawn complained to GRC, which sent a representative to investigate the monument. The representative concluded that the cracks were natural fissures, and refused to replace the monument.

         So Ridgelawn sued GRC here.

         Ridgelawn claims that on December 16, 2015, after demanding satisfaction from GRC, Ridgelawn was provided with a copy of the terms and conditions for the first time. (The affidavit of Robert Williams, Jr., cited in support of this point, is actually a bit narrower, and only claims Ridgelawn first became aware of the terms and conditions on December 16, 2015, when GRC sent a copy to Ridgelawn's attorneys.)

         B. Forum-selection clause

         (1) Law

         American law favors forum-selection clauses. The Supreme Court held “such clauses are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable' under the circumstances.” M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972).

         A contract requires three basic elements: offer, acceptance, and consideration. C.G. Schmidt, Inc. v. Permasteelisa N. Am., 825 F.3d 801, 805 (7th Cir. 2016) (applying Wisconsin law); Houston v. Hyatt Regency Indianapolis, 997 F.Supp.2d 914, 922 (S.D. Ind. 2014) (applying Indiana law).

         Forum-selection clauses are valid contractual terms. See Muzumdar v. Wellness Int'l Network, Ltd., 438 F.3d 759, 761 (7th Cir. 2006); see also Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) (enforcing forum-selection clause on a passenger cruise ticket not subjected to negotiation). But a court will not enforce a forum-selection clause, or any other contractual term, if “enforcement would be unreasonable or unjust or the provision was procured by fraud or overreaching.” Paper Express, Ltd. v. Pfankuch Maschinen GmbH, 972 F.2d 753, 757 (7th Cir. 1992).

         The proper method for seeking enforcement of a forum-selection clause pointing to a state forum is through the doctrine of forum non conveniens. Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. Tex., 134 S.Ct. 568, 580 (2013). In ruling on such a motion, a court may consider facts outside the pleadings. See Extra Equipamentos E Exportacao v. Case Corp., No. 01-C- 8591, 2005 WL 843297 (N.D. Ill. Jan. 20, 2005). Generally, a defendant seeking dismissal under the doctrine of forum non conveniens bears a heavy burden. See Dordieski v. Austrian Airlines, 2:15-CV-180, 2016 WL 4437958, at *2 (N.D. Ind. Aug. 23, 2016) (Defendants “who invoke forum non conveniens bear a heavy burden, particularly when the plaintiff's choice is his home forum.”).

         But a forum-selection clause shifts the balance. The party seeking to resist the forum-selection clause bears the burden of establishing that transfer to the bargained forum is unwarranted. Atl. Marine, 134 S.Ct. at 581-82.

         But that presumes the existence of a forum-selection clause in the first place.

         The party seeking to enforce the forum-selection clause bears the burden of proving the existence of that clause, if that is in doubt. See Latino Food Mkt'rs v. Ole Mexican Foods, 407 F.3d 876, 880-81 (7th Cir. 2005). Then, in a battle-of-the-forms, the party opposing inclusion in the contract of the proposed forum-selection clause bears the burden to show the clause would materially alter the contract. See Conmark Merch. v. Highland Grp., 932 F.2d 1196, 1202-03 (7th Cir. 1991).

         Indiana and Wisconsin both adopted the relevant battle-of-the-forms section of the Uniform Commercial Code, governing the issue of whether an additional term included in an acceptance becomes part of the contract:

(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.

Ind. Code § 26-1-2-207; W.S. 402.207 (Wisconsin's statute capitalizes the first words of subsections (a), (b), and (c), and refers to its own statutes at the end of the quoted text).

         Only if a court concludes plaintiff entered a contract with a forum-selection clause will the court turn to the broader issue of the enforceability of that clause.

         (2) Analysis

         (a) Transmission of the ...


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