CARROLL et al v. CMH HOMES INC. et al

Filing 89

ENTRY ON DEFENDANTS' MOTION TO DISMISS - 53 Motion to Dismiss is GRANTED. 61 Motion for Evidentiary Hearing is DENIED as moot. The Clerk shall close this cause of action on the Court's docket and transfer the case to the United States District Court for the Eastern District of Tennessee, consistent with the parties' agreement in the APA. See Entry for details. Signed by Judge Sarah Evans Barker on 3/12/2013. (LBT)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
NEW ALBANY DIVISION
KEVIN CARROLL, also known as
ROBERT KEVIN CARROLL,
CARROLL’S MOBILE HOMES, INC.,

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

and
CARROLLS’ PROPERTIES, LLC,
Plaintiffs/Counterclaim-Defendants,
vs.
CMH HOMES, INC.,
21st MORTGAGE CORP.,
and
KEVIN CLAYTON,
Defendants/Counterclaim-Plaintiffs.

No. 4:12-cv-23-SEB-WGH

ENTRY ON DEFENDANTS’ MOTION TO DISMISS
Before the Court is the Motion to Dismiss for Improper Venue filed by Defendants
CMH Homes, Inc. (“CMH”), 21st Mortgage Corporation (“21st Mortgage”) and Kevin
Clayton (“Clayton”) (Collectively, “Defendants”). [Docket No. 53]. This motion is fully
briefed, and the Court, being duly advised, now GRANTS Defendants’ motion.
I. Background
A.

Factual History

Prior to October 2008, Kevin Carroll (“Kevin”) and his brother, Hollis Carroll,
were co-owners of Carroll’s Mobile Homes, Inc. (“Carroll’s”), a CMH dealership located
1

in Georgetown, Indiana. Carroll’s received most of its supply of mobile homes from a
CMH plant in Hodgenville, Kentucky (the “Hodgenville plant”). Pls’ Br. at 2, 4. Kevin
mentioned to Clayton that he planned to buy out his brother to become the sole owner of
Carroll’s. Clayton and CMH arranged for Kevin to obtain the necessary money for the
buyout with a loan from 21st Mortgage. Pls’ Ex. A at 1. To effectuate the buyout,
Carroll’s and James Hurst (“Hurst”), principals of Carrolls’ Properties, LLC (“Carrolls’
Properties”), executed two mortgages on three parcels of real estate (the “Hurst
property”) on October 1, 2008. Id. at 2, 9, 13-14; Pls’ Ex. B; Pls’ Ex. C. Kevin also
executed a personal guaranty agreement in connection with one of the mortgages. Pls’
Ex. D. Plaintiffs claim the mortgages and personal guaranty agreement were fraudulently
induced by CMH and Clayton and that the additional mortgage enabled Defendants to
“double collateralize Plaintiffs’ existing floor plan agreement[,] which was already
secured by the mobile homes.” Pls’ Br. at 4.
On October 7, 2008, Defendants, without previously informing Kevin, Carroll’s,
or Carrolls’ Properties (collectively “Plaintiffs”), announced they were closing their
Hodgenville plant. Pls’ Am. Compl. ¶ 18. When Plaintiffs complained to Clayton, Matt
Webb, CMH’s Vice President of Inventory Financing, allegedly threatened to take
Plaintiffs’ inventory, business, and all mortgaged properties. Pls’ Am. Compl. ¶¶ 31-32.
From that date forward, Plaintiffs had to obtain their inventory from the CMH plant in
Knoxville, Tennessee (the “Knoxville plant”). Id. ¶ 33. According to Plaintiffs, the
mobile homes made at the Knoxville plant were of lower quality causing Plaintiffs to
experience a sharp drop in sales. This injury was compounded by Defendants’
2

progressive reductions in Plaintiffs’ inventory, leaving them with less operating capital
without reducing Plaintiffs’ mortgage liability. Id. ¶ 34.
Plaintiffs fell behind on their mortgages payments and Defendants threatened to
foreclose on the Hurst property. Id. ¶ 39. The parties executed an Asset Purchase
Agreement (“APA”) on March 9, 2010. Defs’ Ex. 1. Pursuant to the APA, Plaintiffs
sold $787,145.00 of inventory and personalty to CMH. Id. at 26. The APA contained a
forum selection clause (“FSC”), which provides:
Any action filed in connection with this Agreement shall be brought in the
United States District Court for the Eastern District of Tennessee and each
of the parties irrevocably submits to the exclusive jurisdiction of such court,
waives any objection, present or future, to venue and convenience of forum
and agrees not to bring any action in any other court.
Id. at 10. Plaintiffs claim the FSC was inserted into the APA without notice or
negotiation. Pls’ Br. at 6, Pls’ Ex. E. Nonetheless, Kevin signed as principal of Carroll’s
Mobile Homes. Defs’ Ex. 1 at 12. On March 12, 2010, the parties signed a Real Estate
Sales Agreement (“RESA”), by which Plaintiffs conveyed the Hurst property to
Defendants. Pls’ Ex. G. The RESA contained a merger clause. Id. § 19. 21st Mortgage
released its mortgage on the Hurst property on April 22, 2010. Pls’ Ex. H. There was no
FSC in either the RESA or the mortgage release.
B.

Procedural History

Plaintiffs filed suit in Floyd Circuit Court on February 14, 2012, accusing
Defendants of fraud and constructive fraud. Defendants removed the case to our court on
March 5, 2012, and on April 10, 2012, filed a motion to transfer the case to the Eastern
District of Tennessee, pursuant to 28 U.S.C. § 1404(a) (“1404(a) motion”). [Docket
3

No.17]. While Defendants’ motion was pending, Plaintiffs moved for leave to file an
amended complaint. [Docket No. 31]. On July 3, 2012, the Court denied Defendants’
1404(a) motion, [Docket No. 40], and granted leave to file an amended complaint.
[Docket No. 41]. Plaintiffs filed an amended complaint on July 27, 2012, [Docket No.
46], and on July 31, 2012, Defendants moved to dismiss the case under Federal Rule of
Civil Procedure 12(b)(3) (“Rule 12(b)(3)”) (“Rule 12(b)(3) motion”), claiming improper
venue. [Docket No. 53].
II. Standard of Review
A motion to dismiss based on a forum selection clause is treated properly as a
Rule 12(b)(3) motion to dismiss for improper venue. Auto. Mechanics Local 701 Welfare
& Pension Funds v. Vanguard Car Rental USA, Inc., 502 F.3d 740, 746 (7th Cir.2007).
In the Seventh Circuit, a plaintiff generally bears the burden of proving that venue is
proper. See Moore v. AT&T Latin Am. Corp., 177 F. Supp .2d 785, 788 (N.D. Ill. 2001)
(citing First Health Grp. Corp. v. Sanderson Farms, Inc., 2000 WL 139474, at *2 (N.D.
Ill. 2000); 5B Wright & Miller, Federal Practice & Procedure § 1352 n.8 (3d ed.2008)).
In evaluating a Rule 12(b)(3) motion, while the Court may consider facts beyond the
complaint, Moore, 177 F. Supp. 2d at 788 (citing First Health Grp., 2000 WL 139474, at
*2)1, it must accept Plaintiffs’ allegations as true, and it must resolve any factual conflicts

1

Plaintiffs have requested an evidentiary hearing. [Docket No. 61]. While district courts may
hold hearings on motions to dismiss for improper venue, Szabo v. Bridgeport Machines, Inc.,
249 F.3d 672, 676-77 (7th Cir. 2001), they are not required to do so. Since the Court finds it
sufficient to address the motion based on the briefings, and all factual conflicts are resolved in
Plaintiffs’ favor, we hereby DENY Plaintiffs’ motion for an evidentiary hearing.

4

in the parties’ submissions in the Plaintiffs’ favor. Id. Accordingly, we accept here the
facts as pled by Plaintiffs.
III.

Analysis

Plaintiffs advance several arguments in opposition to Defendants’ motion all of
which dictate that the case be tried in Indiana: that it is untimely and barred by collateral
estoppel; the terms of the APA do not apply to this dispute and, in any event, not all
Plaintiffs are subject to the APA; the FSC is invalid having been procured by fraud,
oppression, undue influence, and overreaching; and various equitable concerns.
A. Applicable Law
Under both federal and Indiana law, FSCs are prima facie valid and binding. M/S
Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S. Ct. 1907, 32 L. Ed. 2d 515 (1972);
Kimco Leasing, Inc. v. Ransom Jr. High Sch., 556 N.E.2d 1371, 1372 (Ind. Ct. App.
1990). The Seventh Circuit favors giving effect to FSCs and enforcing them if “venue is
specified with mandatory or obligatory language.” Muzumdar v. Wellness Int’l Network,
Ltd., 438 F.3d 759, 762 (7th Cir. 2006); see also Appliance Zone, LLC v. NexTag, Inc.,
2009 WL 5200572, at *2-3 (S.D. Ind. Dec. 22, 2009). Courts have enforced them even
when: (1) not all parties were signatories to the contract containing the FSC, Hugel v.
Corp. of Lloyd’s, 999 F.2d 206, 209-10 (7th Cir. 1993); (2) other contracts signed by the
parties did not contain the FSC, Am. Patriot Ins. Agency, Inc. v. Mut. Risk Mgmt., Ltd.,
364 F.3d 884, 888 (7th Cir. 2004) (“Am. Patriot” or “American Patriot”); and (3) the
claims’ allegations of fraud arise in tort rather than breach of contract. Kochert v.

5

Adagen Med. Int’l, Inc., 491 F.3d 674, 680 (7th Cir. 2007); Abbott Labs. v. Takeda
Pharm Co., Ltd., 476 F.3d 421, 424 (7th Cir. 2007); Am. Patriot, 364 F.3d at 888.
FSCs will not be enforced if to do so would be unreasonable or unjust or when an
FSC is overreaching or procured through fraud. M/S Bremen, 407 U.S. at 15; see also
Kimco Leasing, 556 N.E.2d at 1372. However, the party seeking to invalidate the FSC
confronts a steep climb. To invalidate a clause based on unfairness or unconscionability,
the contract must embrace unreasonable or unknown terms, and those terms must have
been “the product of inequality of bargaining power.” Grott v. Jim Barna Log Sys.Midwest, Inc., 794 N.E.2d 1098, 1102 (Ind. Ct. App. 2003); see also Carnival Cruise
Lines, Inc. v. Shute, 499 U.S. 585,593-94, 111 S. Ct. 1522, 113 L. Ed. 2d 622 (1991)
(“Carnival”). For an FSC to be void due to overreaching, the party objecting to it must
show that she would be effectively deprived of her day in court, if the clause were
enforced. Carnival, 499 U.S. at 589; Dexter Axle Co. v. Baan USA, Inc., 833 N.E.2d 43,
48 (Ind. Ct. App. 2005). To defeat enforceability based on fraud, a Plaintiff must prove
the clause itself was fraudulently obtained. Scherk v. Alberto-Culver Co., 417 U.S. 506,
519 n.14, 94 S. Ct. 2449, 41 L. Ed. 2d 270 (1974); see also Am. Patriot, 364 F.3d at 889;
Dexter Axle Co., 833 N.E.2d at 50.
B. Defendants’ motion is neither waived nor barred by collateral estoppel.
Plaintiffs argue that Defendants’ Rule 12(b)(3) motion seeks the same result as
their previously denied 1404(a) motion in that it simply rehashes arguments that the
Court rejected in the 1404(a) motion. They contend that since improper venue was raised
as an affirmative defense by Defendants in their answers, Defendants were obligated to
6

file their motion at the time they filed the 1404(a) motion. Plaintiffs contend that because
an objection to venue normally must be made at the earliest possible opportunity, FED. R.
CIV. P. 12(h)(1), Defendants’ failure to file the Rule 12(b)(3) motion when they first
became aware of the basis for their objection makes it untimely. Pls’ Resp. at 10 (citing
Cabinetree of Wisconsin, Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388, 391 (7th Cir.
1995); Cont. Bank, N.A. v. Meyer, 10 F.3d 1293, 1296-97 (7th Cir. 1993)). Moreover,
Plaintiffs claim, any of Defendants’ contentions raised in their Rule 12(b)(3) motion and
passed on by the Court in connection with their 1404(a) motion are barred by collateral
estoppel. Id. at 11 (citing Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165,
167-68, 60 S. Ct. 153, 84 L. Ed. 167 (1939)).
Plaintiffs’ arguments are not persuasive for the following reasons: First, while
motions under Federal Rule of Civil Procedure 12(b) are typically waived if not raised
immediately, Defendants here clearly did raise them in a timely fashion as affirmative
defenses. They have filed no prior Rule 12(b) motions and have consistently challenged
venue in this district is improper. The Seventh Circuit held that when a defendant raised
an improper venue defense in its initial answer, its defense was not waived even after
engaging in discovery and failing to make a Rule 12(b)(3) motion until nine months after
the suit was filed. Am. Patriot, 364 F.3d at 887-88. Our case was filed only slightly
more than one year ago, the dispositive motions deadline has not passed, and the parties
have not litigated the merits of either this venue issue or the gravamen of the Complaint.
Relying on American Patriot, we, too, conclude that Defendants’ Rule 12(b)(3) motion is
timely.
7

Assuming arguendo that Defendants’ failure to file its Rule 12(b)(3) motion at the
earliest possible time constituted a waiver of that motion, Plaintiffs would have revived
Defendants’ opportunity to file this motion, when they filed their amended complaint.
Perry v. Sullivan, 207 F.3d 379, 383 (7th Cir. 2000). “Because a plaintiff’s new
complaint wipes away prior pleadings, the amended complaint opens the door for
defendants to raise new and previously unmentioned affirmative defenses.” Massey v.
Helman, 196 F.3d 727, 735 (7th Cir. 1999). It would be patently unfair to allow
Plaintiffs a second pleading without giving Defendants a renewed opportunity to file their
motion to dismiss. Plaintiffs’ insistence that in amending their complaint they merely
added a party and did not alter the substance of the claims, Pls’ Resp. at 10, is unavailing,
and unsupported by any case law or other authority.
The 1404 (b) motion and venue objections Defendants have filed are easily
distinguishable from one another and thus foreclosing claims of collateral estoppel. A
motion to transfer under 1404(a) is a matter entrusted to the Court’s discretion, whereas a
Rule 12(b)(3) motion is based on the specific terms of the FSC at issue in the case. Thus,
we hold that Defendants’ Rule 12(b)(3) motion has not been waived nor is it barred by
collateral estoppel principles.
C. All parties subject to the APA.
Plaintiffs claim that Kevin and Hurst signed the APA only in their official
capacities as Carroll’s principals, Pls’ Resp. at 17, Defs’ Ex. 1 at 12, and that, in fact,
Clayton also did not sign the agreement in his individual capacity. Since the agreement
was between Carroll’s, 21st Mortgage, and CMH, Defs’ Ex. 1 at 1, Plaintiffs assert that
8

Kevin, Carrolls’ Properties, and Clayton are not parties to the APA. Pls’ Resp. at 15, 17.
Thus, they argue, enforcement of the FSC would unjustly bind non-parties to something
to which they did not agree. Enforcement would also cause major inconvenience to the
parties, say Plaintiffs, since Carroll’s would be litigating this claim against CMH and 21st
Mortgage in Tennessee, while Kevin, in his individual capacity, would be required to
pursue the fraud claim against Clayton in Indiana. Id. at 18.
Plaintiffs’ arguments again are unsupported by applicable federal and state law
precedent. Kevin executed the APA both as president of Carroll’s Homes and
individually. Defs’ Ex. 1 at 11. Thus, he is bound by the terms of the APA in both
respects. Moreover, courts typically “enforce forum selection clauses in favor of nonparties ‘closely related’ to a signatory.” Frietsch v. Refco, Inc., 56 F.3d 825, 827 (7th
Cir. 1995). Corporations not expressly listed as parties in a contract containing an FSC
are subject to the clause nonetheless, if their president, owner, or affiliated company is a
signatory. Am. Patriot, 364 F.3d at 889; Frietsch, 56 F.3d at 827-28; Hugel, 999 F.2d at
209-10. In our case, both Carrolls’ Properties and Clayton, as non-parties, have sufficient
connections to make them subject to the APA. As we have noted, Kevin Carroll was a
principal of Carrolls’ Properties. Pls’ Am. Compl. ¶ 4. Clayton, as president of both
companies, is also sued individually for fraud allegedly committed by CMH Homes and
21st Mortgage. Id. ¶ 7. These connections suffice to bring all the parties within the
APA, making each of them subject to its terms in resolving the issues in this litigation.

9

D. The FSC applies and must be enforced.
Plaintiffs contend that the APA applied only to the transfer of personal property on
March 9, 2010, and was not intended by the parties to apply to subsequent agreements
between them. Thus, according to them, the fraudulent real estate transfer, which is the
source of their losses, was governed by the RESA, and the RESA did not include an FSC.
Moreover, the RESA contained a merger clause barring the incorporation of any external
written or oral agreement that contradicted the full terms of their agreement. Pls’ Ex. G §
19. Plaintiffs’ argument proceeds that the APA is inapplicable to this litigation making
its FSC is inapplicable, thereby allowing the case to be litigated where Plaintiffs’
damages were caused and suffered, namely, in Indiana.
We find ourselves once again in disagreement with Plaintiffs’ analysis. Their
complaint addresses a comprehensive fraud scheme, beginning when CMH made “a run
at stealing Plaintiffs’ business” in September 2008, Pls’ Am. Compl. ¶¶ 22-23, and
culminating in Defendants’ acquisition of Plaintiffs’ real estate in March 2010. Id. ¶ 39;
Pls’ Resp. at 7. The APA and RESA were executed a mere three days apart, and both
dealt with Defendants’ acquisition of Plaintiffs’ property. Under Indiana law, documents
executed together which deal with the same subject matter are construed together to
determine the underlying intent. Bruno v. Wells Fargo Bank, N.A., 850 N.E. 2d 940, 94546 (Ind. Ct. App. 2006). In construing the APA and RESA together it becomes clear that
they simply address different parts of the same allegedly “fraudulent” scheme. Thus, it
would be unreasonable to interpret them in a way that suggests that the parties intended
10

to litigate some parts of their dispute in Tennessee and other parts in Indiana. See Am.
Patriot, 364 F.3d at 889.
The FSC provides that “[a]ny action filed in connection with this Agreement shall
be brought in the . . . Eastern District of Tennessee.” Defs’ Ex. 1 ¶ 22. On this basis, we
conclude the APA reflects the parties’ intention at the time they entered into their
contract that any litigation over Plaintiffs’ asset transfers to Defendants was to be
litigated in Tennessee. The RESA did not contain any FSC, so requiring the fraudulent
real estate transfer to be litigated in Tennessee does not contradict the RESA’s merger
clause. Barring any equitable concerns, the FSC by its terms applies to this case and is
enforceable according to those terms.
E. No equitable grounds exist to trump the FCS.
A party may rebut an FSC’s presumed validity by showing its incorporation into
the agreement was the result of “fraud, undue influence, or overweening bargaining
power,” M/S Bremen, 407 U.S. at 12, or that enforcement would be unconscionable.
Plaintiffs claim here that they agreed to the APA only after two years of fraudulent
activity by the Defendants which had left them in such a precarious financial position that
the asset sales agreed to in the APA and RESA were necessary in order simply to keep
their business alive. Pls’ Resp. at 21. When the APA was executed, Plaintiffs report that
they were on the verge of bankruptcy due to Defendants’ efforts to strip them of their
showroom inventory, while CMH Homes remained financially healthy. The FSC
provision was allegedly inserted into the APA less than a week prior to its execution with

11

no prior notice or opportunity to negotiate its terms on the part of the Plaintiffs. Id. at 12,
20.
Plaintiffs contend that all of these circumstances—the lack of negotiation over the
FSC, its belated insertion into the negotiation process, and the parties’ unequal bargaining
power—substantiate their claim that they were fraudulently induced into signing the
contract containing the FSC. Id. at 20. Thus, the FSC should be invalidated, id. at 19-20
(citing Dyersburg Mach. Works, Inc. v. Rentenbach Engineering Co., 650 S.W.2d 378,
380 (Tenn. 1983); Lamb v. MegaFlight, Inc., 26 S.W.3d 627, 631 (Tenn. Ct. App. 2000)),
and Defendant s' motion to dismiss denied. Id. at 12 (citing M.G.J. Indus., Inc. v.
Greyhound Fin. Corp., Inc., 826 F. Supp. 430 (M.D. Fla. 1993)).
Under Indiana law, a contract is presumed to be “the freely bargained agreement
of the parties,” and “one is bound to know the contents of the contract which he signs.”
NationsCredit Commercial Corp. v. Grauel Enters, Inc., 703 N.E.2d 1072, 1079 (Ind. Ct.
App. 1998). To invalidate the FSC, Plaintiffs must prove they “unwillingly signed the
[contract] or . . . [were] unaware of its terms,” Farm Bureau Gen. Ins. Co. of Mich. v.
Sloman, 871 N.E.2d 324, 329 (Ind. Ct. App. 2007), and show that the clause itself was
fraudulently obtained or “interferes with the orderly allocation of judicial business.” Id.
(internal quotation omitted). Otherwise, an FSC must be considered freely negotiated,
even if the parties’ bargaining power is disparate. Id. at 330; Horner v. Tilton, 650
N.E.2d 759, 763 (Ind. Ct. App. 1995).
Plaintiffs have not successfully shouldered this heavy burden to rebut the FSC’s
presumed validity. Plaintiffs assert that their attorney was not certain at the time of the
12

closing that the APA would actually be executed at that meeting, had not been provided a
copy of the APA prior to the closing, and had no knowledge of the contents or terms of
the APA. Pls’ Resp. at 20. Even assuming the truth of these assertions, they do not
render the FSC invalid. Plaintiffs do not claim they were prevented from reading the
APA or the portion of it containing the FSC or from asking questions about the clause at
the closing. The insertion of this provision shortly before the APA was executed, with no
notice to Plaintiffs’ counsel, may have been confusing and frustrating and unfair, but the
facts before us do not establish that at the time the APA was executed the parties
remained in the dark regarding the inclusion of the FSC.
Plaintiffs’ contention that the FSC was fraudulently obtained as a result of duress
is similarly unavailing. They argue that, had they not signed the APA containing the
FSC, “Defendants would have refused to execute subsequent agreements and foreclosed
on Hurst’s farm.” Pls’ Resp. at 20. This theory of relief lacks any support in case law
establishing that having to choose between the Hobson’s choice of signing what they
perceive to be a one-sided agreement or allowing their business to fail amounts to duress
or unconscionability. Cf. Pinnacle Computer Servs., Inc. v. Ameritech Pub., Inc., 642
N.E.2d 1011, 1017 (Ind. Ct. App. 1994) (to be unconscionable under Indiana law, the
agreement must be one that “no sensible person not under delusion, duress, or in distress
would make, and that no honest and fair person would accept”). We do not reach that
conclusion either in the matter before us.
Plaintiffs have been unable to adduce any evidence that they were fraudulently
induced by Defendants into agreeing to the APA through a misrepresentation of the
13

agreement’s terms. Further, it is not established that Defendants had any duty to make
any additional disclosures. See Jackson v. Blanchard, 601 N.E.2d 411, 418-19 (Ind. Ct.
App. 1992). Plaintiffs have simply failed to show that they were fraudulently induced by
the Defendants to enter into an agreement with them. Scherk, 417 U.S. at 519 n.14;
Bonny v. Soc. of Lloyd’s, 3 F.3d 156, 160 (7th Cir. 1993); Isp.com, LLC v. Theising, 805
N.E.2d 767, 773 (Ind. 2004). Rather, the evidence indicates that the FSC was freely
negotiated despite the unpalatable options faced by Plaintiffs. As such, it is not subject to
invalidation by us on the basis of fraud.
In the absence of fraud, the only other basis on which the court is authorized by
law to invalidate the parties’ agreement is unconscionability based on a showing that
Plaintiffs would otherwise be effectively deprived of their day in court. M/S Bremen, 407
U.S. at 18; Farm Bureau, 871 N.E.2d at 329. Plaintiffs have not made such a showing,
having failed to prove that the FSC limits their ability to sue the Defendants in
Tennessee. We note, in this regard, that all Defendants are domiciled in Tennessee,
which circumstance reinforces our decision to uphold and enforce the FSC, since it does
not constitute a bad-faith attempt to litigate in a forum in which no party has sufficient
contacts.
F. The Eastern District of Tennessee is a suitable forum.
Plaintiffs include in their arguments several reasons which they maintain support a
decision not to enforce the FSC and for us to retain this litigation: (1) the fraud was
committed in Indiana, Pls’ Resp. at 13; (2) all the Plaintiffs are Indiana citizens, and
Indiana has an interest in protecting its citizens from fraud by nonresidents, id. at 14; and
14

(3) Southern Indiana is the most convenient forum for non-party witnesses, whereas the
Eastern District of Tennessee is not convenient to any key non-party witnesses. Id. at 1819.
Having held that the FSC is valid and enforceable, we refrain from addressing
these equitable arguments relating to whether Indiana is either a proper or preferred
forum state. See ApplianceZone, 2009 WL 5200572, at *3.

IV. Conclusion
For the foregoing reasons, Defendants’ Motion to Dismiss for Improper Venue is
GRANTED. Plaintiffs’ Motion for Evidentiary Hearing is DENIED as moot. The Clerk
shall close this cause of action on the Court's docket and transfer the case to the United
States District Court for the Eastern District of Tennessee, consistent with the parties’ agreement
in the APA.
IT IS SO ORDERED.

Date: 03/12/2013
_______________________________
SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana

15

Distribution:
Michael Kessell Nisbet
LANDRUM & SHOUSE, LLP
[e-mail]
Elizabeth A. Deener
LANDRUM & SHOUSE, LLP
[e-mail]
Larry C. Deener
LANDRUM & SHOUSE, LLP
[e-mail]
David T. Newton
MAYNARD COOPER & GALE, P.C.
[e-mail]
Edward S. Sledge, IV
MAYNARD, COOPER & GALE, P.C.
[e-mail]
Lee E. Bains, Jr.
MAYNARD, COOPER & GALE, P.C.
[e-mail]
William Edward Skees
THE SKEES LAW OFFICE
[e-mail]

16