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Arkla Industries, Inc. v. Columbia Street Partners, Inc.

Court of Appeals of Indiana

March 8, 2018

Arkla Industries, Inc., Arkla Inc. by and through its successor by mergers CenterPoint Energy, Inc., Appellants-Defendants,
v.
Columbia Street Partners, Inc. and Columbia Street Partners Remediation Trust, Appellees-Plaintiffs. Bendix-Westinghouse Automotive Air Brake Company, by and through its successor by mergers Honeywell International, Inc. Defendant below,

         Appeal from the Warrick Circuit Court The Honorable Greg A. Granger, Judge Trial Court Cause No. 87C01-1608-CC-905

          Attorneys for Appellants Daniel J. Deeb Schiff Hardin LLP Chicago, Illinois William R. Peterson Craig Stanfield Morgan, Lewis & Bockius LLP Houston, Texas.

          Attorneys for Defendant below John W. Woodard, Jr. Jordan M. White Wyatt, Tarrant & Combs, LLP Louisville, Kentucky.

          Attorneys for Appellees G. Daniel Kelley Samuel B. Gardner Ice Miller LLP Indianapolis, Indiana David Miller Newburgh, Indiana.

          Robb, Judge.

         Case Summary and Issue

         [¶1] The trial court denied the motion of Arkla Industries, Inc., and Arkla, Inc. by and through its successor by mergers CenterPoint Energy, Inc. (collectively, "Centerpoint"), to transfer this case to a preferred venue pursuant to the provisions of Indiana Trial Rules 12 and 75. Centerpoint appeals, raising the sole issue of whether the trial court clearly erred in concluding it waived its right to seek a preferred venue. Concluding the trial court's order denying Centerpoint's motion was clear error because Centerpoint made a proper motion raising the defense of improper venue, we reverse and remand to the trial court to grant the motion and transfer this case to a preferred venue.

         Facts and Procedural History

         [¶2] On August 4, 2016, Columbia Street Partners, Inc., and Columbia Street Partners Remediation Trust (collectively, "Columbia"), filed in Warrick Circuit Court a complaint for damages for environmental contamination on real property it owns in Evansville. Columbia named the following as defendants who allegedly caused or contributed to the contamination: Centerpoint and Bendix-Westinghouse Automotive Air Brake Company, by and through its successor by mergers Honeywell International, Inc. ("Honeywell"). The trial court granted two unopposed motions for extension of time for the defendants to respond to the complaint, giving them until October 21, 2016, to do so. In seeking Columbia's agreement to an extension, Centerpoint informed Columbia it might be filing a motion to transfer venue. On October 20, 2016, however, before Centerpoint had filed any responsive pleading or other motion in the trial court, Honeywell removed the case to the United States District Court for the Southern District of Indiana. Honeywell alleged as grounds for removal the complete diversity of the parties and the amount in controversy. Honeywell also alleged that it had "met and conferred with" Centerpoint, which consented to removal. Appellants' Appendix, Volume II at 62. The only document Centerpoint filed in federal court was its answer to the complaint as required.

         [¶3] Columbia filed a motion to remand the case to Warrick County challenging the complete diversity of the parties. Centerpoint did not oppose the motion. On May 23, 2017, the district court issued an order finding it did not have diversity jurisdiction over the case and granting the motion to remand to state court. The district court also ordered Honeywell to pay Columbia's attorney fees, which is allowed "only where the removing party lacked an objectively reasonable basis for seeking removal." Id. at 131.

         [¶4] On May 25, 2017, Centerpoint filed a motion in Warrick Circuit Court to transfer the case to Vanderburgh County, a preferred venue pursuant to Indiana Trial Rule 75(A). Columbia objected to the transfer of venue because Centerpoint "agreed to and did engage in baseless litigation . . . and other tactics to delay this case . . . and by such conduct have waived and are estopped to now 9 months later seek to transfer venue." Id. at 133.

         [¶5] Following a hearing on the motion to transfer venue and the submission of proposed findings and conclusions by the parties, the trial court largely adopted Columbia's proposed order and denied the motion to transfer venue:

4. Centerpoint, like Honeywell, chose to pursue venue in federal court. Centerpoint could have refused to consent to the removal (which removal could not have been filed without such consent . . .) and then back in September-October 2016 they could have filed their Motion to Transfer to Vanderburgh County. Instead Centerpoint chose to acquiesce in the pursuit of venue in federal court, not in Vanderburgh County.
6. Despite the fact Centerpoint knew or should have known that the removal was baseless, Centerpoint did not reconsider its decision nor did it withdraw its consent over the next seven months. The day after remand . . ., Centerpoint filed its eight page Motion to Transfer.
13. The facts demonstrate that Centerpoint Defendants and Honeywell Defendants sought venue in federal court, and did not intend to return to state court. Centerpoint waived its right to seek a new venue by not filing a Rule 75 Motion to Transfer Venue to Vanderburgh [County] before the removal, by consenting to the removal rather than filing to transfer venue and by not withdrawing its consent. Centerpoint demonstrated that it did not intend to seek venue in state ...

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