217 N.E.3d 1267
Ind. Ct. App.2023Background
- Perdue (Maryland corporation) contracted with U.S. Security on Sept. 16, 2015; the agreement contained a forum-selection clause requiring suits in the U.S. District Court for the District of Maryland and Maryland law.
- On Aug. 18, 2018 a third-party L&B driver (Richardson) delivered aluminum chloride to Perdue’s Indiana plant, causing a chemical reaction, plant shutdowns, and over $1.2 million in damages.
- Perdue sued multiple parties in Indiana, including L&B/Richardson (no Maryland ties) and U.S. Security plus its employees, alleging negligence and related claims.
- U.S. Security and its employees moved to dismiss under the contract’s forum-selection clause; the trial court granted the motion and dismissed Perdue’s claims against them.
- On interlocutory appeal, the Indiana Court of Appeals found the clause was freely negotiated but concluded enforcement would be unjust and unreasonable because it would force parallel litigation in Maryland (against U.S. Security/employees) and Indiana (against L&B/Richardson).
- The court reversed the dismissal and remanded, holding Perdue met its heavy burden to show enforcement would likely produce multiple suits and inconsistent outcomes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of forum-selection clause | Clause is unenforceable here because enforcing it would force Perdue to pursue separate, duplicative suits in MD and IN, risking inconsistent apportionment of liability. | Clause is valid, freely negotiated, reasonable, and there is no fraud or overreaching; enforcement should be required. | Reversed dismissal: clause unenforceable under the circumstances because it would likely lead to multiple lawsuits involving the same facts and issues. |
| Applicability of clause to U.S. Security employees | Employees cannot invoke the clause because they were not parties or third-party beneficiaries of the agreement. | Employees are in privity with U.S. Security and may rely on the clause. | Not decided on merits: court declined to resolve applicability because it held the clause overall unjust and unreasonable. |
Key Cases Cited
- Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) (sets federal factors for assessing whether a forum-selection clause is reasonable and enforceable)
- Farm Bureau Gen. Ins. Co. of Mich. v. Sloman, 871 N.E.2d 324 (Ind. Ct. App. 2007) (adds consideration whether enforcing a clause will lead to multiple lawsuits; refused enforcement where parallel suits were likely)
- Carmeuse Lime & Stone v. Illini State Trucking, Inc., 986 N.E.2d 271 (Ind. Ct. App. 2013) (upheld forum-selection clause where no realistic risk of multiple suits and clause benefited contracting party)
- O’Bryant v. Adams, 123 N.E.3d 689 (Ind. 2019) (reaffirms Indiana’s presumption favoring freedom of contract and that forum clauses are generally enforceable)