Daniel T. O'Bryant, D.B.A. O'Bryant Transport LLC v. Alan P. Adams, Luan Adams, D.B.A., A.L.A. Trucking, Inc. , 108 N.E.3d 933 ( 2018 )

FILED
Aug 09 2018, 8:08 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Scott A. Norrick Andrew F. Marquis
Attorney at Law, P.C. Scopelitis, Garvin, Light, Hanson
Anderson, Indiana & Feary, P.C.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Daniel T. O’Bryant, D.B.A. August 9, 2018
O’Bryant Transport LLC, Court of Appeals Case No.
Appellant-Defendant, 48A02-1711-PL-2709
Appeal from the Madison Circuit
v. Court
Alan P. Adams, Luan Adams, The Honorable Angela Warner
D.B.A., A.L.A. Trucking, Inc., Sims, Judge
Appellee-Plaintiff Trial Court Cause No.
48C01-1703-PL-19
May, Judge.
[1] Daniel T. O’Bryant, doing business as O’Bryant Transport, LLC (collectively
“O’Bryant”), appeals the trial court’s dismissal of its claims against Alan P.
Adams and Luan Adams, doing business as A.L.A. Trucking, Inc. (collectively
“ALA”). The trial court dismissed the case because the contract between
O’Bryant and ALA required any litigation resulting from the parties’ agreement
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to be filed in Texas. Because that forum selection clause is valid and
enforceable, we affirm the trial court’s dismissal of O’Bryant’s claims.
Facts and Procedural History
[2] Both O’Bryant and ALA are located in and do business in Indiana. On
December 15, 2015, O’Bryant and ALA entered into an Independent
Contractor Agreement (“Agreement”) under which O’Bryant was to provide
“transportation related services and the Equipment” in return for certain
compensation by ALA. (App. Vol. II at 98.) O’Bryant agreed to provide
drivers and equipment, and he was also required to ensure compliance with
state laws. ALA agreed to treat O’Bryant as an independent contractor rather
than an employee and to compensate O’Bryant with “80% of gross receipts and
100% of fuel surcharge, per load [after] withhold[ing] 3 cents per mile[.]” (Id. at
108.)
[3] The Agreement included a forum selection clause (“FSC”) that stated:
19. COMPLETE AGREEMENT. This Agreement, including
any Appendices attached, constitutes the sole, entire, and
existing agreement between the parties herein, and supersedes all
prior agreements and undertakings, oral and written, expressed
or implied, or practices, between the parties, and expresses all
obligations and restrictions imposed on each of the respective
parties during its term, except those specifically modified or
changed by mutual written agreement between [ALA] and
[O’Bryant]. This Agreement shall be deemed to have been
drawn in accordance with the statutes and laws of the State of
Texas and in the event of any disagreement or litigation, the laws
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of this state shall apply and suit must be brought in this state,
except that [ALA] may bring suit against [O’Bryant] in any state
where [O’Bryant] resides or is located.
(Id. at 105.)
[4] On March 16, 2017, O’Bryant filed a complaint against ALA in Madison
County, Indiana. On May 5, 2017, O’Bryant amended the complaint.
O’Bryant alleged ALA had breached the Agreement by, instead of reimbursing
O’Bryant as an independent contractor pursuant to Section 7 and Appendix B
of the Agreement, O’Bryant had worked at ALA’s “office, as Operations
Manager, without employee salary or benefits, throughout the majority of the
year 2016[.]” (Id. at 95.) O’Bryant alleged ALA had breached the contract “by
failing and refusing to perform in good faith their promise to insure [sic] return
of equity, payment for work, fees, costs and expenses.” (Id.) O’Bryant also
alleged ALA fraudulently induced O’Bryant to sign the Agreement by making
“material misrepresentations” regarding the work O’Bryant was to do and the
outcome of his investments. (Id. at 96.)
[5] On May 26, 2017, ALA filed a motion to dismiss in which ALA asserted: 1)
pursuant to Trial Rule 12(B)(2), O’Bryant’s claim in Indiana was barred
because the FSC controlled “regarding personal jurisdiction,” (id. at 80)
(formatting altered), and O’Bryant could only file a claim in Texas per the FSC;
and 2) pursuant to Trial Rule 12(B)(6), O’Bryant’s complaint failed to state a
claim for which relief could be granted. While also responding with arguments
about personal jurisdiction doctrines and forum non conveniens, O’Bryant filed an
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answer to ALA’s reply arguing the FSC was ambiguous and therefore
permissive, rather than mandatory. O’Bryant argued that, when signing the
Agreement in Indiana, O’Bryant understood the reference to “this state” in
section 19 to indicate Indiana. (Id. at 42.) O’Bryant argued the phrase “suit
must be brought in this state,” (id. at 105), “neither identifies a venue nor
contains a specific grant of exclusivity.” (Id. at 43.) He contended that because
the FSC is permissive and inadequate, the case is properly brought in Indiana,
where both parties are located and do business. ALA countered that “this
state,” (id. at 105), is in the same sentence as “laws and statutes of Texas,” (id.);
thus, “this state,” (id.), must refer to Texas and not Indiana. The trial court
held a hearing on ALA’s motion on August 15, 2017.
[6] On August 31, 2017, finding the parties were “all either businesses or the
owners thereof,” (id. at 14), the trial court granted ALA’s motion based on its
allegations under Indiana Trial Rule 12(B)(2) pertaining to jurisdiction. The
trial court found and concluded:
[O’Bryant] contends that the forum selection provision should
not be enforced because it is ambiguous and permissive.
However, the Court finds that the provision is unambiguous and
mandatory. The provision specifically states that the agreement
is drawn in accordance with the statutes and laws of the State of
Texas and then refers back to the State of Texas within the same
sentence by using the term “this state.” The only logical
conclusion to the meaning of “this state” is that it refers to the
State of Texas. Furthermore, the provision uses the mandatory
language “must be brought” when requiring the suit to be
litigated in the State of Texas. This language “precludes the
possibility of venue in any other forum.” See Coral Chemical Co.
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v. Chemetall U.S., Inc., Cas No. 16-cv-23, 2016 WL 3521952, *7
(S.D. Ind. June 28, 2016).
The Court also finds that [O’Bryant] has failed to demonstrate
that the forum selection provision is unreasonable and unjust
under the circumstances, and that there is any evidence of fraud
or overreaching. In fact, [O’Bryant] gives little attention to these
elements in his responsive filings other than to make the blanket
statements that the forum selection provision is (1) “based on the
fraudulent conduct of [ALA]”; (2) “enforcement of that clause
would be unreasonable and unjust”; and (3) “[ALA], . . . , have
merely inserted that permissive clause to avoid litigation by
causing inconvenience.” See [O’Bryant]’s Answer to [ALA]s’
Motion to Dismiss Amended Complaint, p. 2; [O’Bryant]’s
Answer to [ALA’s] Reply in support of Motion to Dismiss
Amended Complaint, p. 7, footnote 1. These assertions alone
failed to give the Court any grounds on which to find the forum
selection provision unenforceable.
Moreover, the Court finds that the provision was freely
negotiated.
*****
Plaintiff alleges in its Amended Complaint that the parties are all
either businesses or the owners thereof. Plaintiff’s Amended
Complaint, ¶¶ 2 and 8. Plaintiff further alleges that the parties
“entered into and affixed signatures to an Independent
Contractor Agreement (hereafter ‘The Agreement’), included
herein and attached hereto.” Plaintiff’s Amended Complaint, ¶
9. Nothing in Plaintiff’s Amended Complaint or responses to
Defendants’ Motion to Dismiss demonstrates that the parties
negotiated the Independent Contractor Agreement from unequal
bargaining positions. “‘Because we presume that contracts
represent the freely bargained agreement of the parties, we
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conclude that this agreement represents the freely negotiated
wishes of both parties.“ Grott v. Jim Barna Log Systems-Midwest,
Inc., 794 N.E.2d at 1102.
(Id. at 13-14) (errors and ellipsis in original).
[7] On September 25, 2017, O’Bryant filed a motion to correct error, alleging the
same arguments it had in previous filings, together with a new argument that
Texas would “not entertain a dispute over the Indiana contract in the courts of
that State[.]” (Id. at 21.) In support of the new argument, O’Bryant’s attorney
submitted an affidavit stating he had contacted an unnamed attorney in Texas
and been told “O’Bryant had no remedy in the State of Texas based on the fact
that none of the parties maintained an operational business in that state and
therefore, the State of Texas would not accept personal jurisdiction over the
parties to any law suit.” (Id. at 133.) ALA responded and noted the affidavit
from O’Bryant’s counsel was improper because 1) the only way to introduce
new evidence with a motion to correct error is if the evidence is newly
discovered and could not have been discovered and produced earlier and 2) the
affidavit did not prove any truth but was merely “inadmissible hearsay and
conclusory legal statements.” (Id. at 37.) By chronological case summary
notation, the trial court denied O’Bryant’s motion to correct error.
Discussion and Decision 1
1
We note, at the onset, the lack of civility, in particular on the part of O’Bryant, throughout not only the trial
proceedings but the appellate proceedings. Unnecessarily argumentative and snide comments such as, “This
explanation [of persuasive authority] is made for edification of Defendant, not the Appellate Court. The first
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[8] O’Bryant argues the trial court abused its discretion when it granted ALA’s
motion to dismiss because the FSC was permissive and because the Agreement
is unenforceable as it was signed under fraudulent circumstances and would
deprive O’Bryant of a remedy at law. O’Bryant does not argue the trial court
erred when it denied O’Bryant’s motion to correct error.
[9] In its motion to correct error, for the first time, O’Bryant alleged Texas would
not accept jurisdiction. A new issue may not be raised for the first time in a
motion to correct error or on appeal. Rodgers v. Rodgers, 503 N.E.2d 1255, 1257
(Ind. Ct. App. 1987), reh’g denied, trans. denied. Per Indiana Trial Rule 59, a
party may use a motion to correct error to present “newly discovered material
evidence . . . which, with reasonable diligence, could not have been discovered
and produced at trial[.]” The affidavit provided by O’Bryant’s attorney could
have been produced at any time during these proceedings. Therefore, we
cannot say the court abused its discretion by refusing to reconsider its order (or
find its judgment erroneous) on the basis of the affidavit. See Hawkins v. Cannon,
826 N.E.2d 658, 664 (Ind. Ct. App. 2005) (no error in denial of motion to
correct error when evidence could have been discovered and produced at trial
with due diligence), trans. denied.
is apparently unaware – while Plaintiff is sure the latter is quite aware[,]” (Reply Br. at 11 n.3), degrade the
parties’ arguments by showcasing the incivility between the parties. We remind counsel of sections 1 and 9
of the Preamble of the Indiana Rules of Professional Conduct, which state: “Whether or not engaging in the
practice of law, lawyers should conduct themselves honorably[;]” and “[The principles of the Rules of
Professional Responsibility] include the lawyer’s obligation to protect and pursue a client’s legitimate
interests, within the bounds of the law, while maintaining a professional, courteous and civil attitude toward
all persons involved in the legal system.”
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[10] Although O’Bryant does not argue the trial court erred when it denied the
motion to correct error, our standard of review for appeal of a motion to correct
error nevertheless directs us to consider the underlying order, here the order
granting ALA’s motion to dismiss pursuant to Trial Rule 12(B)(2). See In re
Paternity of H.H., 879 N.E.2d 1175, 1177 (Ind. Ct. App. 2008) (review of motion
to correct error includes review of underlying order). It is proper to challenge
the personal jurisdiction of a trial court with a motion to dismiss pursuant to
Indiana Trial Rule 12(B)(2). Simek v. Nolan, 64 N.E.3d 1237, 1241 (Ind. Ct.
App. 2016). The standard of review of a trial court’s grant or denial of a motion
to dismiss based on whether personal jurisdiction exists is de novo. Sohacki v.
Amateur Hockey Assoc. of Illinois, 739 N.E.2d 185, 188 (Ind. Ct. App. 2000).
When reviewing matters involving personal jurisdiction, the party challenging
jurisdiction has the burden of establishing the lack thereof by a preponderance
of the evidence. Id. Upon appeal from a motion to dismiss on grounds of lack
of jurisdiction, the Court of Appeals is in as good a position as the trial court to
determine whether it has jurisdiction. Zollman v. Gregory, 744 N.E.2d 497, 498
(Ind. Ct. App. 2001), trans. denied.
[11] The jurisdictional issues in this case arise from the forum selection clause found
in the contract between the parties. Forum selection clauses are not per se
invalid. Horner v. Tilton, 650 N.E.2d 759, 763 (Ind. Ct. App. 1995), reh’g denied,
trans. denied. Provisions seeking to “limit the litigation of future actions to
particular courts or places are enforceable if they are reasonable and just under
the circumstances, and there is no evidence of fraud or overreaching such that
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the agreeing party, for all practical purposes, would be deprived of a day in
court.” Grott v. Jim Barna Log. Sys.-Midwest, Inc., 794 N.E.2d 1098, 1102 (Ind.
Ct. App. 2003), trans. denied. The reviewing court must also determine the
provision was freely negotiated. Id. The party claiming unfairness bears the
burden of proof. Id.
Permissive or Mandatory
[12] O’Bryant contends the trial court erred when it dismissed this suit because the
FSC was permissive rather than mandatory. O’Bryant argues the language
referencing “this state,” (App. Vol. II at 105), was ambiguous. Additionally,
O’Bryant argues the FSC “neither identifies a venue nor contains a specific
grant of exclusivity.” (Br. of Appellant at 13.) Due to these alleged deficiencies
and ambiguities, O’Bryant maintains the FSC is permissive and the case need
not be filed in Texas.
[13] The unambiguous language of a contract is conclusive and binding on the
parties and on the court, and if the language is unambiguous, the parties’ intent
is determined from the four corners of the document. Peoples Bank & Trust Co. v.
Price, 714 N.E.2d 712, 716 (Ind. Ct. App. 1999), trans. denied. “The terms of a
contract are not considered ambiguous merely because a controversy exists
between the parties concerning the proper interpretation of terms.” George
Uzelac & Assocs., Inc. v. Guzik, 663 N.E.2d 238, 240 (Ind. Ct. App. 1996), trans.
denied. “Generally, the courts should presume that all provisions included in a
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contract are there for a purpose . . . .” Indianapolis–Marion Cnty. Pub. Library v.
Shook, LLC, 835 N.E.2d 533, 541 (Ind. Ct. App. 2005).
“This State”
[14] The FSC states the Agreement “shall be deemed to have been drawn in
accordance with the statutes and laws of the State of Texas and in the event of
any disagreement or litigation, the law of this state shall apply and suit must be
brought in this state . . . .” (App. Vol. II at 105) (emphasis added). O’Bryant
contends that because the Agreement was signed in Indiana, it understood “this
state” to refer to Indiana. ALA counters that the only state listed in the clause
was Texas, and therefore the only state “this state” could refer to was Texas.
ALA argues O’Bryant’s mistaken interpretation does not render the FSC
ambiguous. The trial court agreed with ALA.
[15] We agree with ALA and the trial court. Under the ejusdem generis rule, “when a
general word or phrase follows a list of specifics, the general word or phrase will
be interpreted to include only items of the same class as those listed.” BLACK’S
LAW DICTIONARY (10th ed. 2014). Here, the specific item is the “statutes and
laws of the State of Texas,” (App. Vol. II at 105), while the general term is “this
state.” (Id.) Therefore, “this state” means Texas and not Indiana, regardless of
where the parties signed the Agreement. See Westfield Companies v. Knapp, 804
N.E.2d 1270, 1275 (Ind. Ct. App. 2004) (a pickup truck is not considered
mobile equipment when “mobile equipment” is listed as including “air
compressor, pumps and generators . . . or [c]herry pickers . . . ”), reh’g denied,
trans. denied. While O’Bryant may have misconstrued the meaning, under
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general contract interpretation rules, it is not reasonable to interpret “this state”
to mean Indiana rather than Texas. See Perryman v. Motorist Mut. Ins. Co., 846
N.E.2d 683, 687 (Ind. Ct. App. 2006) (goal of contract interpretation is to
ascertain and enforce the parties’ intent as manifested in the language of the
contract).
Venue and Exclusivity
[16] O’Bryant contends the FSC does not identify a specific individual county in
Texas and grant exclusive jurisdiction to that venue; therefore, it argues, the
FSC is permissive and not mandatory. ALA counters the language does
identify a venue and grants it exclusivity.
[17] In Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), 2 both parties were
domiciled in the United States. Carnival’s principal place of business was
Florida, but it operated in many other states. The Shutes lived in Washington.
Ms. Shute was injured while on a cruise off the coast of Mexico. The FSC in
that case designated any disputes were to be litigated “before a Court located in
the State of Florida, U.S.A., to the exclusion of the Courts of any other state or
country.” Id. at 587-88. The FSC did not designate a county wherein a suit
was required to be brought; rather, the suit merely had to be brought in Florida.
The Supreme Court held the forum selection clause was valid.
2
Carnival was a case in admiralty and, thus, not binding on Indiana state courts; nevertheless, Indiana has
adopted the Supreme Court’s reasoning as it pertains to the validity of forum selection clauses. Farm Bureau
Gen. Ins. Co. of Michigan v. Sloman, 871 N.E.2d 324, 329 (Ind. Ct. App. 2007), trans. denied.
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[18] In Mechanics Laundry & Supply, Inc. v. Wilder Oil Co., Inc., 596 N.E.2d 248 (Ind.
Ct. App. 1992), reh’g denied, trans. denied, we adopted the holding of Carnival
regarding FSCs wherein parties have consented “by contract to the exercise of
personal jurisdiction by courts that otherwise might not have such jurisdiction.”
596 N.E.2d at 251. Therefore, the lack of designation of a particular county in
Texas does not invalidate the FSC here.
[19] O’Bryant also argues the FSC is permissive because the word “shall” does not
grant exclusive jurisdiction to Texas. In Indiana, we have held the word “shall”
indicates the subsequent language is mandatory. See, e.g., Harris v. Delaware
Cnty. Div. of Family & Child. Servs., 732 N.E.2d 248, 249 (Ind. Ct. App. 2000)
(trial rule employing the word “shall” makes the rule mandatory), reh’g denied;
Indiana Gaming Co., L.P. v. Blevins, 724 N.E.2d 274, 278 (Ind. Ct. App. 2000)
(“shall” language in agreement necessitates certain parties be included as third-
party beneficiaries), trans. denied. Nevertheless, the FSC in this matter states not
only that the Agreement was made “in accordance with the statutes and laws of
the State of Texas and . . . the laws of this state shall apply . . . ” but also that
“suit must be brought in this state[.]” (App. Vol. II at 105) (emphases added).
Therefore, because the FSC states the laws of Texas shall apply and the parties
must bring suit in Texas, Texas has exclusive jurisdiction.
Enforceability
[20] O’Bryant contends the FSC is not enforceable because it deprives O’Bryant of a
remedy at law.
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“[C]ontractual provisions . . . that seek to limit the litigation of
future actions to particular courts or places 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,
for all practical purposes, would be deprived of a day in court.”
Mechanics, 596 N.E.2d at 250. In order to be enforceable, the FSC must be
freely negotiated. Farm Bureau Gen. Ins. Co. of Michigan v. Sloman, 871 N.E.2d
324, 329 (Ind. Ct. App. 2007), trans. denied. Therefore, the FSC is required to
be freely negotiated and also be just and reasonable.
Freely Negotiated
To determine whether a forum selection provision was freely
negotiated, courts apply a fact-sensitive test involving a
comparison of the bargaining position of the parties to the
contract. A contract is unconscionable if there exists a great
disparity in bargaining power between the parties, leading the
weaker party to sign the contract unwillingly or without
awareness of its terms. Indiana courts recognize the principle
that parties are free to enter into contracts and, indeed, presume
that contracts represent the freely bargained agreement of the
parties. A standardized contract is not unenforceable merely
because of the unequal bargaining power of the parties—there
must also be a showing that the contract is unconscionable.
Dexter Axle Co. v. Baan USA, Inc., 833 N.E.2d 43, 49 (Ind. Ct. App. 2005)
(internal citations omitted).
[21] The record reveals O’Bryant and ALA are both businesses that entered into an
arms-length business transaction. The trial court refers to the parties as “all
either businesses or the owners thereof[,]” (App. Vol. II at 14), and that
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“[n]othing in [O’Bryant’s] Amended Complaint or responses to Defendants’
Motion to Dismiss demonstrates that the parties negotiated the [Agreement]
from unequal bargaining positions.” (Id.) O’Bryant does not argue this
assertion is incorrect. When parties are on equal footing, “the law will not
protect one who fails to exercise common sense and judgment.” Plymale v.
Upright, 419 N.E.2d 756, 762 (Ind. Ct. App. 1981).
[22] In its brief, O’Bryant makes some blanket statements that ALA misrepresented
facts as to recompense, but it does not argue it was unable to negotiate the FSC
or that it had to accept the contract as written. The question of recompense is
not before us—only the question regarding the applicability of the FSC is before
us. O’Bryant makes no claim that it objected to the FSC or tried to omit it.
Rather, O’Bryant simply argues it misunderstood the FSC to mean any
litigation would occur in Indiana, rather than Texas, without arguing ALA had
affirmatively stated that to be the case. Therefore, O’Bryant has not
demonstrated it was unable to negotiate the FSC. We have no reason to upset
the bargained-for language of the parties, and we conclude the FSC was freely
negotiated and is enforceable. See Grott, 794 N.E.2d at 1103 (without evidence
from complainant otherwise, reviewing court has no reason to assume the
contract language was not freely negotiated).
Just and Reasonable
[23] O’Bryant asserts the FSC is unjust and unreasonable as it would deprive
O’Bryant of its day in court and be against public policy because neither
O’Bryant nor ALA are located in Texas. O’Bryant appears to be arguing Texas
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is an inconvenient forum or it has insufficient contacts with Texas for Texas to
acquire personal jurisdiction over it. However, those issues are not available to
O’Bryant because O’Bryant signed the contract and consented to jurisdiction in
Texas. As noted above, O’Bryant has not shown it was unable to negotiate the
terms of the agreement.
[24] To avoid litigation in Texas, O’Bryant must prove that holding trial in Texas
will be “so gravely difficult and inconvenient that [it] will, for all practical
purposes, be deprived of [its] day in court.” Horner, 650 N.E.2d at 763-64
(quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 19 (1972)). In Carnival,
although the Shutes were located in Washington and the cruise they took was
along the west coast of the United States, the Supreme Court held that venue in
Florida was not enough of an inconvenience to make the FSC unjust or
unreasonable. Carnival, 499 U.S. at 595. While we recognize neither ALA nor
O’Bryant is located in Texas, the fact remains that two business entities agreed
to litigate any disagreements in Texas. If the Shutes, unsophisticated parties
who agreed by signing a non-negotiable form contract, cannot show litigation
in another State is sufficiently inconvenient to make the FSC unenforceable, we
cannot hold this seemingly knowledgeable business entity, with the power and
ability to negotiate the terms of the contract, can simply assert Texas, an
agreed-upon forum, is too inconvenient to be reasonable and just.
[25] As to O’Bryant’s contention it would be deprived its day in court, we again note
O’Bryant waived that argument by not asserting Texas would not accept
jurisdiction until it filed its motion to correct error. See Rodgers, 503 N.E.2d at
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1257 (a new issue may not be raised for the first time in a motion to correct
error or on appeal).
Conclusion
[26] As the trial court did not err when it dismissed O’Bryant’s claim due to the FSC
in the Agreement, the court did not abuse its discretion when it denied
O’Bryant’s motion to correct error. We therefore affirm.
[27] Affirmed.
Riley, J., and Mathias, J., concur.
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