Richard Goettle, Inc. v. Kevitt Excavating, LLC

Background

Richard Goettle, Inc. sued Kevitt Excavating, LLC, doing business as Kevitt Companies, and Granite Re, Inc. The dispute arose from a Minneapolis construction project. The City of Minneapolis hired Kevitt to perform excavation work, and Kevitt subcontracted with Richard Goettle for drilling work.

The subcontract stated that Minnesota law governed the contract documents and that disputes or claims between Richard Goettle and Kevitt under the subcontract had to be filed and litigated in an appropriate Minnesota district court. Richard Goettle’s complaint alleged that it completed the required work but that Kevitt and Granite Re did not pay the full amounts due. It asserted claims for breach of contract, unjust enrichment, payment on a bond, and negligence.

Granite Re removed the case from Ohio state court to federal court based on diversity jurisdiction. Kevitt then moved under 28 U.S.C. § 1404(a), a statute allowing a federal court to transfer a civil case for convenience and in the interest of justice, relying on the subcontract’s forum-selection clause. Granite Re joined the motion.

Arguments and Analysis

Richard Goettle did not dispute that it signed the subcontract or that the forum-selection clause covered its claims against the defendants. It argued, however, that the clause was unenforceable because Kevitt had allegedly failed to follow the subcontract’s payment provisions. Richard Goettle also argued that public-interest considerations favored keeping the case in Ohio.

The court held that Richard Goettle had not shown that the clause was obtained through fraud, duress, or other improper means. It also did not show that Minnesota courts would handle the case unfairly or ineffectively. The court explained that the relevant inconvenience question was whether litigating in Minnesota would effectively deprive Richard Goettle of its opportunity to obtain a remedy. Richard Goettle had not argued that litigating in Minnesota would be inconvenient or prevent it from pursuing the case.

Because the clause was enforceable, the court treated the private-interest factors as favoring Minnesota and required Richard Goettle to show that public-interest factors overwhelmingly opposed transfer. The court found that both Ohio and Minnesota had interests in the dispute, but Minnesota had particularly strong interests because the project was located in Minneapolis and the subcontract was governed by Minnesota law. The court also found that court congestion did not strongly favor either venue.

Ruling

Judge Timothy S. Black GRANTED the motion to transfer, transferred the case to the United States District Court for the District of Minnesota for reassignment, and TERMINATED the case on the Southern District of Ohio’s docket. The court also TERMINATED AS MOOT Granite Re’s filing joining the transfer motion. The order decided where the case would proceed; it did not decide the parties’ underlying payment or liability claims.