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In re Red Baron Motors, Inc.

United States Court of Appeals, Fifth Circuit

July 20, 2015

In re: RED BARN MOTORS, INCORPORATED; BARBARA A. RICHARDSON; DONALD B. RICHARDSON; LOUISIANA'S FIRST CHOICE AUTO AUCTION, L.L.C., Petitioners

Petitions for Writs of Mandamus to the United States District Court for the Middle District of Louisiana.

For In re: RED BARN MOTORS, INCORPORATED, Barbara A. Richardson, Donald B. Richardson, Petitioners: Joshua Paul Melder, Cassie Felder & Associates, Baton Rouge, LA.

For Louisiana's First Choice Auto Auction, L.L.C., Petitioner: Lisa Brener, Esq., Brener Law Firm, L.L.C., New Orleans, LA.

For NEXTGEAR CAPITAL, INCORPORATED, as successor-in-interest to Dealer Services Corporation, Respondent: Robin Bryan Cheatham, Adams & Reese, L.L.P., New Orleans, LA.

Before SMITH, ELROD, and HIGGINSON, Circuit Judges.

OPINION

Page 482

PER CURIAM:

These petitions for writs of mandamus ask us to order the United States District Court for the Middle District of Louisiana to vacate its transfer to the Southern District of Indiana. The petitions were filed more than three months after the transfer and after proceedings had begun in the transferee court. We deny the petitions.

I.

Red Barn Motors, Incorporated (" Red Barn" ), is a car dealership that, in 2011, entered into an agreement with Dealer Services Corporation (" DSC" ) for DSC to finance Red Barn's purchase of vehicles at auction. According to Red Barn's complaint, when it would buy a vehicle at auction, sometimes six to eight weeks would elapse before the auction house would obtain the title and transfer it to DSC. Red Barn contends that DSC would not pay the auction house until DSC received the title but would charge interest and fees starting from when Red Barn made the purchase, weeks before DSC transferred the funds to the auction house.

In March 2013, Red Barn stopped making payments to DSC on its line of credit, whereupon DSC began seizing some of Red Barn's assets. In April, Red Barn delivered about a dozen vehicles to Louisiana's First Choice Auto Auction, L.L.C. (" First Choice" ), to sell, but First Choice delivered them to DSC. Red Barn declared bankruptcy that month. At some point, DSC was absorbed by NextGear Capital, Inc. (" NextGear" ).

II.

Red Barn sued NextGear and First Choice in the Middle District of Louisiana, claiming breach of contract and unjust enrichment by NextGear and conversion by both defendants. NextGear moved to transfer the case to the Southern District of Indiana under 28 U.S.C. § 1404(a).[1] NextGear attached to its motion a copy of the promissory note that Red Barn had tendered to DSC, which stated that Red Barn consented to personal jurisdiction and venue in the state and federal courts of Marion and Hamilton Counties, Indiana, and that any claims by Red Barn against DSC arising out of the promissory note would be brought in those courts.

First Choice and Red Barn opposed the transfer. Red Barn contended that this was an exceptional case in which a forum-selection clause should not be enforced; it also alleged that NextGear had intended to breach the promissory note when signing it and had therefore procured the contract by fraud. First Choice, meanwhile, contended that venue would be improper in Indiana because First Choice was a Texas company with its principal place of business in Louisiana, and all of the events relating to the lawsuit took place in ...


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