160 N.E.3d 1124
Ind. Ct. App.2020Background
- Sullivan and Rabco entered a written subcontract (Aug 29, 2017) for a storage facility construction project located in Noblesville, Indiana; contract price ≈ $1,143,940.
- The contract contained a choice-of-law and forum-selection clause: Florida law governs and exclusive venue for disputes is state or federal courts in Orange County, Florida (with a carve-out that lien rights are governed by the law of the job-site state).
- Sullivan sued Rabco in Hamilton County, Indiana (Sept 24, 2019) alleging breach of the subcontract; Rabco moved to dismiss based on the forum-selection clause.
- Sullivan responded that Indiana Code § 32-28-3-17 voids contract provisions that (1) make the contract subject to another state's laws or (2) require dispute resolution to occur in another state for contracts to improve Indiana real estate.
- The trial court found no fraud or overreaching and enforced the forum-selection clause, dismissing the suit; Sullivan appealed.
- The Court of Appeals reversed, holding § 32-28-3-17 applies broadly to contracts for improvement of Indiana real estate and renders the out-of-state forum/choice-of-law provisions void.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Indiana Code § 32-28-3-17 voids a contract provision that makes litigation or choice-of-law occur in another state for a contract to improve Indiana real estate | § 32-28-3-17 applies broadly to all contracts for improvement of Indiana real estate and voids the clause | The statute is limited to mechanic's-lien enforcement contexts and does not bar forum-selection clauses generally | The statute applies broadly to all contracts improving Indiana real estate; the Florida choice-of-law/forum clause is void |
| Whether the forum-selection clause is enforceable despite lack of fraud or overreaching | Even absent fraud, the statute overrides ordinary enforceability and voids the out-of-state forum/choice-of-law terms | Forum-selection clauses are generally enforceable if reasonable and no fraud/overreaching exists; here none is alleged | Statutory prohibition controls; absence of fraud does not save the clause from being void under § 32-28-3-17 |
Key Cases Cited
- Adsit Co. v. Gustin, 874 N.E.2d 1018 (Ind. Ct. App. 2007) (forum-selection clauses generally enforceable absent fraud or overreaching)
- Gray v. D & G, Inc., 938 N.E.2d 256 (Ind. Ct. App. 2010) (plain-meaning statutory construction rules; give words ordinary meaning)
- Ind. State Bd. of Health v. Journal–Gazette Co., 608 N.E.2d 989 (Ind. Ct. App. 1993) (clear statutes are given their apparent and obvious meaning)
- U.S. Steel Corp. v. N. Ind. Pub. Serv. Co., 951 N.E.2d 542 (Ind. Ct. App. 2011) (statutory-construction principles reaffirmed)
- Ansert Mech. Contractors, Inc. v. Ansert, 690 N.E.2d 305 (Ind. Ct. App. 1997) (legislative drafting choices inform statutory scope)