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Wells Fargo Dealer Services v. Auto Gallery Group, Inc.

Superior Court of Massachusetts, Worcester

January 24, 2016

Wells Fargo Dealer Services, A Division of Wells Fargo Bank, N.A.
Auto Gallery Group, Inc. dba Revere Auto Gallery No. 132787

          Filed Date February 1, 2016


          DENNIS J. CURRAN, Associate Justice.


         For purposes of the present motion to dismiss, the following facts are relevant.

         Revere Auto bought vehicles, mostly at auction, and sold them at its location in Revere, Massachusetts. Its sole owner, director and officer, Wade Lee entered into a promissory note and guaranty with NextGear Capital. That arrangement permitted car buyers to finance their purchase, and entailed NextGear's holding onto the title until the finance agreement was paid in full. Revere's Auto financial arrangements went awry when Wade Lee decided to sell his business to an Alvin Carter. The plan was to ease Mr. Carter first into the management of the business, and eventually into sole ownership. Mr. Carter, according to the complaint, had other ideas. He changed the account into which Revere's Auto's monies were deposited by its financiers into his own personal account, thereby embezzling Revere Auto's monies and stealing customer deposits.

         The motion before me is a motion to dismiss counts XIV through XIX of Wade Lee's third-party complaint against the third-party defendant NextGear Capital because their contract contained a choice of forum clause and required the application of Indiana law to any interpretation or default of the contract. Wade Lee now claims that the contractually-agreed provision that the case be adjudicated in Indiana should be declared judicially unreasonable because it is inconvenient for some of the parties. This Court, after reviewing the parties' submissions and oral argument, disagrees for several reasons.


         First, this is an arms' length commercial transaction executed between two corporations fully capable of determining the parameters and details of their agreement. The " Demand Promissory Note and Loan Security Agreement, " is 20 single-spaced pages, and includes 29 sections in the primary document, four pages of definitions (see Appendix A), an Advance Schedule, and a two-page Power of Attorney. Section 21 of the Promissory Note controls:

. . . The Borrower submits to the personal jurisdiction and venue of the state and federal courts of Marion and Hamilton County in Indiana, and that any and all claims or disputes pertaining to this note or any other Loan document . . . shall be brought in the state or federal courts of Marion County or Hamilton County, Indiana. Further, Borrower [here, Revere Auto] expressly consents to the jurisdiction and venue of []Indiana . . . and waives any objection based on lack of jurisdiction, improper venue or forum non conveniens with respect to any such claim. (Italics added.)

         These words could not be clearer. Now, in a stab at revisionist history, Revere Auto complains that the forum to which it agreed to be contractually bound is convenient because many of its witnesses reside or do business in Massachusetts. That is a problem of its own making.

         Moreover, Revere Auto's hand-wringing also ignores the realities of modern litigation. While it is true that the forum for the adjudication of the case lies in Indiana, there is no reason why all or nearly all of the Massachusetts witnesses cannot be served with discovery here and depositions conducted here, all by Massachusetts-based attorneys. The reality is that nearly all of civil ligation is resolved without the need for trial, and there is a significant likelihood that Revere Auto's representatives or witnesses may never see inside of an Indiana courtroom. Obviously, there are few guaranties in life; but here, Revere Auto signed a guaranty that spelled out that any dispute was to be governed by Indiana law and that an Indiana court was the locus where an aggrieved party must seek redress.

         Revere Auto concedes that Indiana law controls the issue; and looking at the issue through the lens of Indiana law affords Revere Auto no relief. Such contract provision are enforceable in Mechanics Landry & Supply, Inc. v. Wilder Oil Co., Inc., 596 N.E.2d 248, 252 (Ind.Ct.App. 1992) (although admittedly, that case involved an intrastate transfer of venue involving different Indiana counties), the principle remains the same and a challenging party bears a " heavy burden." Carmeuse Lime & Stone v. Illini State Trucking, Inc., 986 N.E.2d 271, 279-80 (Ind.Ct.App. 2013).

         Second, this case is governed by a doctrine of the first-filed action.[2] NextGear filed its action against Revere Auto, before the latter decided to seek a more " convenient" forum, despite previously agreeing otherwise in writing.[3] This Court thus defers to Indiana.[4]

         The choice of forum was reasonable; it was just; and it will be upheld. The time for complaint by Revere Auto was when it negotiated the terms of a contract to which it expected to be bound. That corporate entity was free to change the deal; it did not mind taking NextGear Capital's money; it follows, logically, ...

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