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The Court of Appeals of Indiana reversed a trial court’s judgment that granted a motion to dismiss in a case involving extensive damages and cleanup at a southwestern Indiana poultry processing plant.
According to court records, Perdue Farms Inc. is a company based in Maryland, but it has a poultry processing plant in Daviess County.
The plant processes about a million pounds of meat per day. In 2015, Perdue entered into a service agreement with U.S. Security Associates Inc., which included a forum selection clause stating that any lawsuit that would arise from either party would be brought to the U.S. District Court for the District of Maryland.
In August 2018, William Richardson, who was an employee of L&B Transport LLC, made an unannounced delivery to Perdue Farms’ plant outside of its normal business hours.
He informed the gate employees that he was delivering bleach. They directed him to the bleach tank, where he connected his truck to the tank and began filling it. Richardson didn’t watch the transfer, but instead waited in his truck.
However, Richardson was not transporting bleach but rather aluminum chloride.
The transfer caused a chemical reaction, creating fog and foam in multiple rooms of the plant.
The plant had to shut down for multiple days to clean and repair, and Perdue had to replace damaged equipment costing more than $1.2 million.
In May 2021, Perdue filed an amended complaint in Daviess Circuit Court against Richardson, L&B, U.S. Security and several of its employees, as well as other entities, for negligence, strict liability and breach of contract.
U.S. Security and the employees filed a Trial Rule 12(B)(3) motion to dismiss the complaint pursuant to the forum selection clause.
Perdue responded, claiming that the Indiana trial court was the appropriate venue to address the claims and enforcing the forum selection clause would result in multiple concurrent lawsuits.
In October 2022, the trial court granted U.S. Security and the employees’ motion to dismiss. It found that the forum selection clause was “valid and enforceable.”
The Court of Appeals reversed the lower court’s ruling and remanded the case for further proceedings.
The issue Perdue brought to the appellate court was whether the court erred when it granted U.S. Security and the employees’ motion to dismiss the complaint pursuant to a forum selection clause.
“… (T)here is no dispute that the forum selection clause does not apply to Richardson or L&B, and there is no dispute that a Maryland court would not have personal jurisdiction over either Richardson or L&B,” Judge L. Mark Bailey wrote. “As a result, if we were to enforce the forum selection clause, Perdue would be forced to litigate its claims against U.S. Security and the Employees in Maryland while maintaining an action against Richardson and L&B in Indiana.”
Bailey also noted that by enforcing the clause, an Indiana company and its employees would be required to defend themselves in Maryland and all witness would also have to participate, which wouldn’t conserve resources.
The appellate court found that Perdue met its burden to demonstrate that enforcement of the forum selection clause would not be just or reasonable.
While Judge Dana Kenworthy concurred with the judgment, Judge Terry Crone dissented with a separate opinion.
“I believe that Perdue has no valid basis for crying ‘foul’ here and chickening out on the forum selection clause that it undoubtedly insisted on including in its contract with U.S. Security to shield it from being haled into court in Indiana,” Crone wrote.
Crone concluded that Perdue would have to live with the contractual bargain that it made with U.S. Security.
The case is Perdue Farms, Inc. v. L&B Transport, LLC; U.S. Security Associates, Inc.; William Richardson; Jennifer Freeman; Brian Hill; Carl Nelson; ABC Corporation, 22A-PL-2989.
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