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Liberty Mutual Insurance Co. v. Milender White Construction

United States District Court, D. South Dakota, Western Division

August 29, 2017

LIBERTY MUTUAL INSURANCE COMPANY, Plaintiff,
v.
MILENDER WHITE CONSTRUCTION; MW REAL ESTATE, LLC; U.S. FACILITIES, LLC; and MW SELFWORK, LLC, Defendants.

          ORDER

          JEFFREY L. VIKEN, CHIEF JUDGE.

         This case began as a lawsuit Double H Masonry, Inc., (“Double H”) brought against Liberty Mutual Insurance Company (“Liberty”) and Lockton Companies, LLC, (“Lockton”). (Docket 1). As the case progressed, Lockton was removed from the dispute and Liberty filed a third-party complaint naming Milender White Construction Company, MW Real Estate LLC, U.S. Facilities Management LLC and MW Selfwork LLC.[1] (Dockets 28, 29 & 112). Double H and Liberty settled their claims, leaving Liberty and MWCC as the lone parties. (Dockets 176 & 177). Pending before the court is Liberty's summary judgment motion and MWCC's summary judgment motion and motion to transfer the case to a different jurisdiction. (Dockets 168, 169 & 174).

         FACTUAL AND PROCEDURAL BACKGROUND

         Double H's complaint revolved around masonry work it completed at the Pine Ridge Justice Center in Pine Ridge, South Dakota. (Docket 1 at pp. 2-3). Milender White solicited subcontractor bids for the masonry work and Double H submitted a bid Milender White accepted. Id. MWCC obtained a payment bond from Liberty for the Pine Ridge Justice Center project. Id. at p. 3; (Docket 1-1). “The general purpose of the payment bond was to guarantee that Milender White would pay its subcontractors all amounts due and owing for labor and materials.” (Docket 132 at p. 2). Based on the payment bond, Double H sought to hold Liberty liable for work it completed without compensation. (Docket 1 at pp. 24-26).

         Later in the case, Double H filed an amended complaint that dropped Lockton as a defendant and added two causes of action. (Docket 29 at pp. 30-35). Double H then filed a second amended complaint pursuing two causes of action.[2] (Docket 61 at pp. 25-30). Liberty moved to dismiss Double H's second claim, and the court denied in part and granted in part Liberty's motion. (Docket 132 at p. 1).

         Liberty filed a third-party complaint against MWCC. (Docket 112). When MWCC obtained the payment bond, it entered into a General Agreement of Indemnity (“GAI”) with Liberty. (Dockets 112 at pp. 4-5 & 112-2). Once Double H filed suit against Liberty, Liberty “made multiple demands on [MWCC] to place Liberty in sufficient funds to indemnify Liberty for its actual and anticipated losses and for cooperation with Liberty's investigation into the claims.” (Docket 112 at p. 6). Liberty filed its third-party complaint because MWCC did not comply with Liberty's demands. Id. The third-party complaint consists of five claims: breach of express contract, common law indemnification, specific performance, quia timet rights and unjust enrichment.[3] Id. at pp. 6-12. MWCC filed a joint answer. (Docket 134).

         Soon after MWCC filed its answer, the United States Magistrate Judge mediated the claims between Double H and Liberty. (Dockets 159 & 167). Double H and Liberty stipulated to the dismissal of Double H from this dispute, and the court granted dismissal. (Dockets 176 & 177). The court realigned the parties so the case caption labels Liberty as plaintiff and each entity of MWCC as defendants. (Docket 185 at p. 2). Following Double H's exit from the dispute, Liberty and MWCC filed motions for summary judgment against each other. (Dockets 168 & 169). MWCC also filed a motion to transfer the case to the United States District Court for the District of Colorado. (Docket 174).

         ANALYSIS

         I. Motion to transfer

         Pursuant to 28 U.S.C. § 1404(a), MWCC moves to transfer its dispute with Liberty to the United States District Court for the District of Colorado. (Docket 174). Section 1404(a) provides: “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought . . . .”

         a. Liberty's forum selection clause argument

         Liberty argues MWCC's motion is not proper because the parties' GAI includes a forum selection clause that bars MWCC's motion to transfer. (Docket 181 at pp. 5-6). Liberty asserts this provision is an enforceable forum selection clause:

As to any legal action or proceeding related to this Agreement, the Indemnitors and Principals consent to the general jurisdiction of any local, state or Federal court of the United States or its territories having proper subject matter jurisdiction or in any court of the United States or its territories in which any claim may be brought against the Surety under any Bonds, and waive any claim or defense in any such action or proceeding based on any alleged lack of personal jurisdiction, improper venue, forum non conveniens or any similar basis. Indemnitors and Principals further waive personal service or any and all process.

(Docket 112-2 at p. 4).

         A forum selection clause is prima facie valid and enforceable unless it is (1) unreasonable and unjust, (2) the result of fraud or overreaching, or (3) enforcing it goes against a strong public policy in the forum state. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). MWCC does not show the forum selection clause is unenforceable for any of these reasons, so the court finds it is enforceable. Id.

         Forum selection clauses are mandatory or permissive. See Dunne v. Libbra, 330 F.3d 1062, 1063 (8th Cir. 2003). The United States District Court for the Northern ...


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