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Akinlemibola v. Dohardmoney.Com

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

September 19, 2018




         This matter is before the Court on a Motion to Dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(3) by Defendant, doing business as Do Hard Money (“DHM”) (Filing No. 12). Plaintiff Grace Akinlemibola (“Akinlemibola”) filed this lawsuit to bring various tort claims as well as a breach of contract claim after her business relationship with DHM fell apart. DHM moved to dismiss the action based on improper venue because of an arbitration provision in the parties' contract. For the following reasons, the Court grants the Motion to Dismiss.

         I. BACKGROUND

         Akinlemibola is an individual who lives in Brownsburg, Indiana. DHM is a Utah corporation that is based out of West Jordan, Utah. DHM is in the business of lending money for real estate ventures. Akinlemibola began a real estate business through her company, Grakin Corporation, and she wanted to use DHM as the lender for her properties (Filing No. 1 at 2).

         Before signing a written agreement with DHM, Akinlemibola received assurances from DHM that she would be able to receive $1.25 million to help her with the cost of rehabilitating up to five properties. DHM would provide up to $250, 000.00 for each property. Id. A representative from DHM assured Akinlemibola that after she paid the $3, 000.00 initial start-up fee she would have immediate access to a number of benefits offered by DHM. This included advice from senior advisors, products and services on DHM's website, and a tool (“Advanced Deal Analyzer”) that allowed Akinlemibola to upload data about a property during or before negotiations to determine whether DHM could finance the prospective deal without Akinlemibola having to provide additional funds at closing. Id. at 2-3. Akinlemibola thought about the opportunity to obtain funding and services from DHM and decided to pursue the opportunity. She paid the $3, 000.00 initial start-up fee and, in August 2017, signed DHM's written contract. However, she did not receive the amount of customer support that she would have liked. Id. at 3; Filing No. 12-1 at 6.

         After paying the start-up fee and signing the contract, Akinlemibola began the negotiation process to purchase a property in Avon, Indiana, and asked to start the evaluation process with DHM to ensure that the property would be funded by DHM. She was told that the property needed to be under contract before an evaluation could be undertaken. By the time Akinlemibola was able to again contact the seller, the property already had sold (Filing No. 1 at 3).

         Akinlemibola began negotiations on a different property in Crawfordsville, Indiana. She was able to negotiate the purchase price down to $200, 000.00, but the property needed repairs that would cost $150, 000.00, which is more than DHM normally would lend for a single property. Akinlemibola contacted DHM twice to seek funding approval, but DHM never responded. The property seller was wary of DHM's proof of funds letter and backed out of negotiations with Akinlemibola. Id. at 3-4.

         DHM had informed Akinlemibola that she could use the Advanced Deal Analyzer tool to make sure specific properties could be funded through DHM. Akinlemibola began researching other properties and pursued a property in Indianapolis. She ran the property through DHM's Advanced Deal Analyzer tool and used various figures to determine what offer she could make on the property without having to pay any of her own funds. Using DHM's tool, she determined that she could offer $77, 000.00 as the purchase price for the property. Akinlemibola made an offer of $77, 000.00 to purchase the property, and the next day, she learned that the seller would not reject the offer. Id. at 4-5.

         Akinlemibola then tried to submit a loan application to DHM with the figures she had uploaded into the Advanced Deal Analyzer tool. However, the tool changed the amount of funding that Akinlemibola would be able to receive, reducing the amount available on a loan from $250, 000.00 to $140, 000.00, with Akinlemibola paying $11, 000.00 out of her own pocket. She immediately contacted DHM to ask why the figures had changed from the day before. She provided the property address to DHM, and she was told that only one Advanced Deal Analyzer scenario was found in DHM's system, which gave the lower loan amount. Without being able to obtain funding on the property from DHM, Akinlemibola was unable to move forward with purchasing the property. Id. at 5-6.

         Roughly two months after signing the contract with DHM, on October 31, 2017, Akinlemibola filed her Complaint against DHM, asserting claims for breach of contract, fraud, negligence, promissory estoppel, and tortious interference with economic advantage. Id. at 7-8. DHM then filed its Motion to Dismiss, arguing improper venue based on an arbitration clause in the parties' contract.


         When a party moves for dismissal on the basis of improper venue because of an arbitration clause, courts have determined that Federal Rule of Civil Procedure 12(b)(3) is the appropriate rule to apply. See Auto. Mechs. Local 701 Welfare & Pension Funds v. Vanguard Car Rental USA, Inc., 502 F.3d 740, 746 (7th Cir. 2007).

         “When considering a motion to dismiss, the district court ordinarily assumes the truth of all well-pleaded allegations in the plaintiff's complaint. But this rule is less absolute when considering a motion to dismiss under Federal Rule 12(b)(3) than under Rule 12(b)(6).” Deb v. Sirva, Inc., 832 F.3d 800, 808-09 (7th Cir. 2016) (citation omitted). “Under Rule 12(b)(3), which allows for dismissal for improper venue, the district court assumes the truth of the allegations in the plaintiff's complaint, unless contradicted by the defendant's affidavits.” Id. at 809. “Rule 12(b)(3) is a somewhat unique context of dismissal in that a court may look beyond the mere allegations of a complaint, and need not view the allegations of the complaint as the exclusive basis for its decision.” Id. “It is appropriate, then, for [the court] to consider the evidence submitted with the motion.” Faulkenberg v. CB Tax Franchise Sys., LP, 637 F.3d 801, 810 (7th Cir. 2011). Furthermore, “we have held that a motion to dismiss based on a contractual arbitration clause is appropriately conceptualized as an objection to venue, and hence properly raised under Rule 12(b)(3).” Id. at 807 (citations and quotation marks omitted).

         “A document filed pro se is to be liberally construed, and a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.” Erickson v. ...

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