LeRoy v. MAXmotive, LLC

Background

Richard LeRoy sued MAXmotive, LLC, concerning his February 2023 purchase of a 1971 Oldsmobile model 442 W30. The complaint alleged that MAXmotive represented that the vehicle had 29,218 miles, was in original restored condition, and had one owner. LeRoy paid $140,250.00. He alleged that, after taking delivery, he discovered that the vehicle had 128,218 miles. A consignment agreement later provided by MAXmotive stated that the actual mileage was 129,218. The opinion notes that the complaint used both mileage figures.

LeRoy asserted claims for breach of contract, breach of express warranty, common-law fraud or intentional misrepresentation, negligent misrepresentation, and consumer fraud. The case was filed in Minnesota state court and later removed to the U.S. District Court for the District of Minnesota.

The sales agreement contained a forum-selection clause. It required litigation related to the agreement or the vehicle to be filed in and heard by state or federal courts in Allegheny County, Pennsylvania. The agreement also stated that it was entered into at MAXmotive’s premises in Pittsburgh, Pennsylvania and would be interpreted under Pennsylvania law.

Motion and Arguments

MAXmotive moved to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3), or alternatively to transfer the case under 28 U.S.C. § 1404(a). Section 1404(a) permits transfer of a civil case to another district where it could have been brought when transfer would be more convenient for the parties and witnesses and would serve the interests of justice.

The court did not decide whether venue was proper in Minnesota. Instead, it analyzed the request under Section 1404(a). The court explained that a valid and applicable forum-selection clause is an important factor in deciding whether to transfer a case.

LeRoy argued that the clause was unenforceable because the agreement was a contract of adhesion, meaning a take-it-or-leave-it agreement imposed without a real opportunity to negotiate. He also argued that the parties had unequal bargaining power and that MAXmotive’s alleged fraud justified disregarding the clause.

Court’s Analysis

The court found that the forum-selection clause applied because all of LeRoy’s claims concerned MAXmotive’s sale of the Oldsmobile. The clause appeared separately under the heading “Jurisdiction, Venue and Forum.”

The court rejected the adhesion-contract argument. It noted that LeRoy had negotiated the purchase price, had general legal and business sophistication, and had experience negotiating purchases of other specialty used vehicles. The court also found that the Oldsmobile was not a product of public necessity and that LeRoy had not shown that the car was otherwise unavailable.

The court concluded that the clause resulted from an arm’s-length negotiation rather than coercion or overreaching. It therefore held that LeRoy had a heavy burden to avoid enforcing the clause. The court also rejected the fraud argument because the alleged fraud concerned the vehicle’s sale and mileage representations, not the inclusion of the forum-selection clause. The court found no evidence that LeRoy was unaware of the clause, or that it was hidden or ambiguous.

The court recognized that litigating in Pennsylvania would be less convenient for LeRoy because he resides in Minnesota. But it found that LeRoy had agreed to the Pennsylvania forum, that MAXmotive had shown that more witnesses were located in Pennsylvania, and that the interests of justice favored honoring the agreement.

Disposition

Judge Donovan W. Frank granted in part MAXmotive’s motion, specifically granting the request to transfer venue. The court transferred the action to the Pittsburgh Division of the U.S. District Court for the Western District of Pennsylvania under 28 U.S.C. § 1404(a) and directed the clerk to complete the transfer. The order did not decide the merits of LeRoy’s contract, warranty, misrepresentation, or consumer-fraud claims.