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Justices: Trucking contract jurisdiction dispute may yield new rules

June 5, 2019

The Indiana Supreme Court affirmed the dismissal of a Hoosier trucking company’s amended complaint regarding a clause in a driver’s contract, although it found error with the dismissal’s basis on lack of personal jurisdiction. Justices also said this case will prompt consideration of rules so litigants can move to enforce contractual forum-selection clauses.

In the case of Daniel O'Bryant, d/b/a O'Bryant Transport, LLC v. Alan P. Adams, Luan Adams, d/b/a A.L.A. Trucking, Inc.,18S-PL-584, Daniel O’Bryant sued A.L.A. Trucking in Madison Circuit Court, alleging breach of contract in its independent-contractor agreement with O’Bryant Transport LLC. Under the parties’ agreement, O’Bryant would provide trucking services and equipment to A.L.A. in exchange for certain compensation.

O’Bryant alleged A.L.A. treated him as an A.L.A. employee rather than an independent contractor and did not pay him salary or benefits for most of the year prior to the suit. A.L.A. filed a motion to dismiss the complaint under Trial Rule 12(B)(2) for lack of personal jurisdiction, arguing the complaint was barred because the contract includes a forum-selection clause requiring O’Bryant to sue in Texas, not Indiana.

The Indiana Court of Appeals concluded that the phrase “this state” in the agreement’s forum-selection cause referred to Texas, not Indiana, and that the clause was unambiguous, mandatory and enforceable. O’Byrant was also denied his motion to correct error, which argued newly discovered evidence would show a Texas court would not enforce the clause.  

Indiana Supreme Court justices affirmed the trial court’s dismissal of the amended complaint in a Tuesday order, and agreed that disputed forum-selection clause was mandatory and unambiguous in requiring that suit be brought in Texas. It also concluded that O’Bryant did not satisfy his burden of showing that the clause was invalid and thus unenforceable.

However, the high court noted an error in the lower’s court’s decision to base its dismissal on personal jurisdiction.

“We hold that a valid forum-selection clause does not divest a trial court of personal jurisdiction over parties otherwise subject to the court’s jurisdiction,” Justice Geoffrey Slaughter wrote. “Parties are free to consent to having their disputes litigated in a forum in which they would not otherwise be amenable to suit. And when they elect to do so, as here, they submit to the personal jurisdiction of the distant forum. 

“But by consenting to personal jurisdiction in a different forum, they do not thereby deprive other jurisdictions — such as those where they live and do business — of personal jurisdiction, too,” Slaughter continued. “Personal jurisdiction is not a zero-sum game in which agreeing to personal jurisdiction elsewhere divests jurisdiction at home. Thus, the parties’ consent to suit in Texas did not deprive the court below of personal jurisdiction.”

The Supreme Court added that the parties — all residents of Indiana or companies doing business in the state — remain subject to the jurisdiction of an Indiana tribunal. It therefore concluded that the trial court erred in dismissing O’Bryant’s amended complaint under Rule 12(B)(2).

Regardless, it found dismissal was nevertheless warranted.

Additionally, the high court offered an option of an alternative vehicle for relief in the form of a stand-alone motion to enforce the forum-selection clause. There, the argument could be made that the parties’ written agreement requires their dispute to be litigated elsewhere, the court advised.

“By recognizing this procedural vehicle, we do not foreclose other possible options for enforcing a forum-selection clause against a litigant that sued in an unapproved forum,” the justices concluded. “Once our opinion is certified, we will ask our rules committee to consider various options for amending our rules of trial procedure to formalize a process for enforcing forum-selection clauses.”

Chief Justice Loretta Rush and Justices Mark Massa and Christopher Goff concurred. Justice Steven David concurred in result.

 

 

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