MILL TOP LLC v. KOKOMO COUNTRY CLUB INC (2025)

MEMORANDUM DECISION

Case Summary

[1] Kokomo Country Club. Inc. (KCC) executed a Master Agreement (the Agreement) with Mill Top, LLC (Mill Top), in which KCC, in exchange for financial commitments from Mill Top, would convey real property located in Howard County to a company jointly owned by KCC and Mill Top. After KCC failed to complete the transaction, Mill Top brought suit against KCC for breach of contract and other claims, filing its complaint in Tippecanoe County pursuant to a forum selection provision in the Agreement.

[2] The trial court granted KCC's motion to dismiss under Ind. Trial Rule 12(B)(3) for improper venue and ordered the case transferred to Howard County.¹ In this interlocutory appeal, Mill Top contends that the trial court erred in determining that the forum selection clause was unenforceable.

[3] We reverse and remand.

Facts & Procedural History

[4] KCC owns and operates a golf course and clubhouse in Howard County, and, in 2023, KCC contacted Mill Top, an event planning business in Noblesville, about handling event operations at KCC. The proposed arrangement involved Mill Top purchasing KCC's building and forming a jointly-owned event management company with KCC to share profits. Negotiations continued between June and mid-October 2023.

[5] On October 14, 2023, Mill Top circulated the Agreement to the parties. The Agreement provided that “[c]losing ² shall occur ․ no later than October 23, 2023” but permitted a party to postpone closing for up to thirty days with notice to the other parties. Exhibits Vol. at 20. The Agreement also included a forum selection provision stating that “[t]he venue of any action arising from this Agreement shall be the state courts of general jurisdiction of Tippecanoe County, Indiana.” Id. at 23.

[6] Steven Oakley, the president of KCC's board of directors, signed the Agreement on October 21, 2023, as did the principal of a third party to the Agreement. The principal of Mill Top, Rocky Shanehsaz, signed it on October 24 and forwarded it to the title company. Days later, KCC notified Mill Top it was postponing the closing and, ultimately, KCC advised Mill Top that it was not proceeding with the transaction.

[7] In November 2023, Mill Top filed a complaint in Tippecanoe County against KCC, later amended in January 2024, asserting claims for, among other things, breach of contract and alleging that the Agreement provided for venue in Tippecanoe County. KCC denied that Tippecanoe County was a proper venue for the action and asserted affirmative defenses, including that Oakley was not authorized to execute the Agreement and, thus, no contract was ever formed. KCC also asserted a counterclaim for a declaratory judgment as to the parties’ respective rights under the Agreement.

[8] KCC contemporaneously filed a T.R. 12(B)(3) Motion to Dismiss (Transfer) for Incorrect Venue under Trial Rule 75, seeking transfer to Howard County. KCC argued that Mill Top “cannot establish the valid formation of the purported contract in which that forum-selection clause appears” and that Howard County was the preferred venue under T.R. 75 because the real property and KCC's principal place of business were located in Howard County. Appellant's Appendix at 134. KCC summarized its position:

[O]n the issue of [ ] proper venue, the contract-formation question is the whole ball of wax. If a contract was validly formed as [Mill Top] alleges, the forum-selection clause would not just authorize, but direct that the claim be litigated in Tippecanoe County. But, if no contract was validly formed, Howard County is a preferred venue for this action and Tippecanoe County is not[.]

Id. at 137.

[9] In May 2024, the trial court held a hearing on KCC's motion. At the start of the hearing, KCC advised that, while it had separate arguments concerning whether Oakley had authority to sign the Agreement, its “only argument” for purposes of the current hearing was that the Agreement was void as of October 23 due to the failure of all parties to sign by that date as required by the Agreement. Transcript at 7. Mill Top maintained that the parties’ conduct waived and modified the stated October 23 closing date, presenting the testimony of the three individuals who had signed the Agreement.

[10] On June 26, 2024, the trial court issued an order, granting KCC's motion to dismiss and transfer venue. The court found that “the Agreement is clear and unambiguous” and contained clauses that closing was to occur no later than October 23; time was of the essence; no change of modification could be made except in writing; and no custom or practice at variance with the terms of the Agreement shall constitute a waiver of any party's right to demand exact compliance. Appellant's Appendix at 15. The court determined that “under [those] circumstances”

it is not reasonable or just to hold [ ] the forum-selection clause to be binding upon the parties since the Agreement was signed after the stated closing date. Therefore, [KCC] has met its burden in demonstrating that the clause is unfair and unenforceable. It should be noted that this ruling is limited to the enforceability of the forum-selection clause only. (The Severance Clause of the Agreement provides that the invalidity or unenforceability of any provision or clause of the Agreement does not impair or affect the validity, legality or enforceability of other provisions of the Agreement.) Thus, the issue of the enforceability of the remaining provisions of the Agreement is left for another day.

Id. at 15. The trial court ordered the matter transferred to Howard County. Mill Top filed this interlocutory appeal as a matter of right under Ind. Trial Rule 14(A).

Discussion & Decision

[11] We will review a trial court's grant or denial of a T.R. 12(B)(3) motion for improper venue only for an abuse of discretion. Comm'r of Labor v. An Island, LLC, 948 N.E.2d 1189, 1190 (Ind. Ct. App. 2011), trans. denied; Shelton v. Wick, 715 N.E.2d 890, 893 (Ind. Ct. App. 1999), trans. denied. An abuse of discretion occurs when a trial court's decision is clearly against the logic and effect of the facts and circumstances before the court, or when the trial court has misinterpreted the law. An Island, LLC, 948 N.E.2d at 1190-91.

[12] Parties to a contract are generally free to bargain for the terms that will govern their relationship. O'Bryant v. Adams, 123 N.E.3d 689, 692 (Ind. 2019). Among other things, they can decide where any disputes will be resolved. Id. at 692-93. We have recognized that, “to determine the validity of a forum selection clause, we are to examine whether the clause is freely negotiated and just and reasonable under the circumstances.” Farm Bureau Gen. Ins. Co. of Michigan v. Sloman, 871 N.E.2d 324, 329 (Ind. Ct. App. 2007), trans. denied. Indiana puts a premium on parties’ freedom of contract, and we presume that contracts represent the parties’ freely bargained agreements. O'Bryant, 123 N.E.3d at 694. And “[w]e seldom relieve contracting parties from their agreed forum.” Perdue Farms, Inc. v. L&B Transp., LLC, 239 N.E.3d 842, 846 (Ind. 2024). Further, “where the contracting parties are commercial entities, the party resisting a forum-selection clause bears an especially onerous burden of showing it was neither ‘freely negotiated’ nor ‘reasonable and just.’ ” Id.

[13] In determining whether a forum selection clause was freely negotiated, we apply a fact sensitive test comparing the bargaining positions of the parties in privity of the contract. Farm Bureau, 871 N.E.2d at 329. In this case, all three parties to the Agreement were commercial entities. Oakley was the president of KCC's board of directors and the other two signatories were principals of their respective organizations. Their testimonies revealed that the Agreement resulted from months-long negotiations that included changes and modifications along the way to accommodate interests, that is, arms-length negotiations between local businesses. We discern no evidence indicating a disparity in bargaining power nor has any party identified such. Nor is there indication in the record that any party unwillingly signed the Agreement or was unaware of its terms.³ In sum, we have no evidence or even argument that the forum selection cause was not freely negotiated.

[14] Turning to whether the forum selection provision is just and reasonable, KCC – to avoid the forum selection clause – must show that enforcing it will be so gravely difficult and inconvenient that it will, for all practical purposes, be deprived of its day in court. Perdue, 239 N.E.3d at 847. We have recognized that “even where the forum-selection clause establishes a remote forum for resolution of conflicts,” the party claiming unfairness should bear a heavy burden of proof. Carmeuse Lime & Stone v. Illini State Trucking, Inc., 986 N.E.2d 271, 278 (Ind. Ct. App. 2013) (some quotations omitted). Here, KCC and its property are located in Howard County, which is just two counties east of Tippecanoe County.⁴ And there has been no showing that having the claims remain in Tippecanoe County would result in multiple actions or “burden [KCC] enough to warrant ignoring the clause.” Id. (finding that enforcement of the parties’ choice of a Maryland forum while some claims remain in Indiana “will not burden Perdue enough to warrant ignoring the clause” since Perdue has presence in both states). Nor does the record show any indication of fraud or overreaching that would render the forum selection clause invalid. See Farm Bureau, 871 N.E.2d at 329 (contractual provisions that seek to limit the litigation of future actions to particular courts are enforceable “if they are reasonable and just under the circumstances and there is no evidence of fraud or overreaching”). In sum, KCC has not established that litigating in Tippecanoe County would be so gravely difficult and inconvenient that KCC would be deprived of its day in court.

[15] We observe that the trial court's analysis – finding that it would be “not reasonable or just” to bind the parties to the forum selection clause because the Contract “is clear and unambiguous” and was signed “after the stated closing date” – misapplies the law. Appellant's Appendix at 15. The court's decision that the forum selection clause was unenforceable was based on a determination that certain other provisions, i.e., the closing date, integration clause, and non-waiver provisions, should and must be enforced. However, at this very early stage, it is premature to determine whether the Agreement, or select provisions of it, are enforceable or not, for whatever reason – including whether the parties waived and/or modified the stated closing date by their conduct (as Mill Top claims) or whether Oakley lacked the capacity to bind KCC such that no contract was formed (as KCC claims). By their very nature, those are disputes “arising from” the Agreement and, pursuant to the forum selection clause, are to be heard and determined in Tippecanoe County. Exhibits Vol. at 23.

[16] For these reasons, we find that the trial court's grant of KCC's motion to dismiss and transfer the cause to Howard Count was an abuse of discretion, and we remand for proceedings in Tippecanoe County consistent with this opinion.

[17] Judgment reversed and remanded.

FOOTNOTES

1.   The trial court thereafter granted Mill Top's motion to stay transfer of the cause to Howard County pending resolution of this appeal.

2.   The Agreement defined “Closing” as the meeting of the parties, whether in person or virtual, “at which this Agreement and the other documents ․ shall be executed[.]” Exhibits Vol. at 5.

3.   No party has claimed, nor did the trial court find, that the forum selection clause was ambiguous.

4.   Tippecanoe and Howard Counties are separated by one county, Carroll County to the north or Clinton County to the south.

Altice, Chief Judge.

Vaidik, J. and Scheele, J., concur.