Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-2_12-cv-00847/USCOURTS-almd-2_12-cv-00847-2/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:2201 Declaratory Judgement

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IN THE UNITED STATES DISTRICT COURT 

FOR THE MIDDLE DISTRICT OF ALABAMA 

NORTHERN DIVISION 

WILDFIRE GROUP, LLC, ) 

 ) 

 Plaintiff, ) 

 ) 

v. ) CASE NO.: 2:12-cv-847-MEF 

 ) (WO—Publish) 

PRIME INSURANCE COMPANY, ) 

 ) 

 Defendant. ) 

MEMORANDUM OPINION AND ORDER 

Before the Court are Defendant Prime Insurance Company’s (“Defendant” or 

“Prime”) Motion to Dismiss for Improper Venue, or in the Alternative, for Forum Non 

Conveniens (Doc. #6) and Motion to Dismiss Amended Complaint (Doc. #12). For the 

reasons set forth below, the Court finds that the motions are due to be DENIED. 

I. JURISDICTION 

 The Court has subject-matter jurisdiction over this lawsuit pursuant to 28 U.S.C. § 

1332 (diversity).1

 The parties do not contest personal jurisdiction and the Court finds 

adequate allegations supporting such. Prime argues, however, that this case should be 

dismissed for improper venue under 28 U.S.C. § 1391(b), because of a forum-selection 

clause that it contends governs the forum and choice of law applicable to this dispute. 

The arguments of the parties are discussed below. 

                                                            

1

 Plaintiff is a limited liability corporation existing under Alabama law with its sole member, 

Whitney Maudsley, being an Alabama citizen. (Doc. #11, ¶ 2.) Defendant is an Illinois 

corporation with its principal place of business in the state of Utah. (Doc. #11, ¶ 3.) The Court 

is satisfied that the amount in controversy in this case exceeds $75,000, exclusive of interest and 

costs. 

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II. FACTUAL AND PROCEDURAL BACKGROUND 

 Wildfire Group, LLC (“Plaintiff” of “Wildfire”) sells Vehicle Service Contract 

Buy Back Agreements on new and used vehicles to automobile dealers in several states. 

(Doc. #11, ¶ 7.) When a service contract provided by a dealer is not used by the 

customer during the term of the contract, Wildfire purchases the contract back from the 

dealer under the Buy Back Agreement. Prime and Wildfire entered into an insurance 

contract, whereby Prime would insure Wildfire for contractual liability arising out of the 

Buy Back Agreements between Wildfire and the various automobile dealers. Under the 

terms of the insurance policy, Prime insured Wildfire’s performance under the Vehicle 

Service Buy Back Agreements. 

 As per the insurance policy, Prime and Wildfire created a Reserve Funds Trust 

Agreement (“Trust Agreement”). Under the Trust Agreement, Wildfire would deposit 

funds into the reserve account on a monthly basis. (Doc. #11, ¶ 15.) The Trust 

Agreement’s purpose was to hold reserve funds to be repaid to dealers in the event that 

no claims have been made under the service contract and to hold the underwriting profits 

until the time when they may be distributed to both Wildfire and Prime. (Doc. #11, ¶ 10.) 

Profit sharing distributions are made to Prime and Wildfire, in accordance with the 

distribution terms of the trust, when all contracts written within a calendar year expire 

and there are no unpaid outstanding losses. (Doc. #11, ¶ 12.) 

 On October 6, 2011, Prime notified Wildfire of its intent to cancel the insurance 

policy as of December 9, 2011. (Doc. #11, ¶ 13.) Prior to the cancellation date, Prime 

expressed to Wildfire a desire to continue insuring Wildfire’s Buy Back Program but 

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under renegotiated terms. For several months during negotiations, Wildfire continued to 

deposit monthly funds into the trust to support new Buy Back Agreements entered into by 

Wildfire under the belief that Prime intended to continue business relationships with 

Wildfire. (Doc. #11, ¶ 18.) Specifically, Wildfire alleges that the reserve funds 

deposited from December 9, 2011, through the date of its Complaint (Doc. #11) exceed 

$278,400.00. The parties were unable to negotiate new terms, resulting in the 

termination of their relationship. 

Wildfire claims that Prime refuses to insure any Buy Back Agreements written by 

Wildfire after December 9, 2011. Additionally, Wildfire claims that Prime refuses to 

release the Trust funds, including those deposited by Wildfire after the termination of the 

insurance policy, even though dealers have submitted claims for reimbursement from the 

trust. (Doc. #11, ¶ 19.)2

 Wildfire claims that the conditions of the Trust Agreement 

require Prime to authorize reimbursement distributions within three business days, or 

notify the Trustor why a distribution is declined, neither of which were done by Prime. 

Accordingly, Wildfire was forced to pay five claims tendered under the Vehicle Service 

Contract Buy Back Agreements out of its own account, and Prime has refused to 

reimburse Wildfire out of the Trust account. 

On August 6, 2012, Prime filed an action for declaratory judgment in Salt Lake 

County, Utah. Prime requested a declaratory judgment that: (1) the Policy cancelled on 

December 9, 2011, and Prime no longer has any obligation to Wildfire under the terms 

                                                            

2

 Under the Trust Agreement, a distribution from the trust requires the signature of both Wildfire 

and Prime. 

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and conditions of the Policy; (2) Prime should refund a balance of $20,000.00 to Wildfire 

because it has no continuing legal obligation under the terms of the Policy; (3) Prime 

should not negotiate the premium payments made by Wildfire because it has no 

continuing obligations under the terms of the Policy; and (4) the Trust assets should be 

administered consistent with the provisions of the Policy and Trust Agreement until all of 

the relevant contracts have expired. 

On October 2, 2012, Wildfire filed its answer and counterclaim in the Utah action. 

(Doc. #11.) The same day, Wildfire commenced an action against Prime in this Court 

claiming: (1) breach of the duty of good faith and fair dealing; (2) tortious interference 

with contractual and business relations; (3) unjust enrichment and breach of fiduciary 

duty; (4) fraudulent inducement; (5) injunctive relief; and (6) declaratory judgment. 

Wildfire contends that this Court is a proper venue because the Trust Agreement, which 

forms the basis of this action, identifies Alabama law as the governing law with respect to 

construction, validity, and performance.3

 Additionally, Wildfire argues that venue is 

proper because the contract with Prime was entered into in Alabama. Wildfire also 

asserts that the forum-selection clause Prime attempts to invoke pertains only to the 

insurance contract, not the Trust Agreement that forms the basis of Wildfire’s claims. On 

the other hand, Prime contends that a forum-selection clause included within the 

insurance contract mandates all disputes arising between the parties be litigated in the 

                                                            

3

  The choice of law provision states: “This Trust Agreement will in all respects be governed by, 

and construed in accordance with, the laws of the State of Alabama, including matters of 

construction, validity and performance, but excluding any rule or principle of conflicts of laws 

that might otherwise refer to the substantive law of another jurisdiction for the construction.” 

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State of Utah. (Doc. #6.) Alternatively, Prime argues this Court should dismiss the 

action under the doctrine of forum non conveniens because Utah provides a more 

convenient forum for the parties to litigate their claims against one another. (Doc. #6.) 

III. LEGAL STANDARD 

In the Eleventh Circuit, a motion to dismiss on the basis of a forum-selection 

clause is brought pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure as a 

motion to dismiss for improper venue. Lipcon v. Underwriters at Lloyd’s, London, 148 

F.3d 1285, 1290 (11th Cir. 1998). “A judge may make factual findings necessary to 

resolve motions to dismiss for ... improper venue,” so long as the resolution of the factual 

disputes is not an adjudication on the merits of a case. Bryant v. Rich, 530 F.3d 1368, 

1376 (11th Cir. 2008). Thus, in the context of a Rule 12(b)(3) motion to dismiss for 

improper venue, “the court may consider matters outside the pleadings such as affidavit 

testimony, particularly when the motion is predicated upon key issues of fact.” BelcherRobinson, L.L.C. v. Linamar Corp., 699 F. Supp. 2d 1329, 1333 (M.D. Ala. 2010). When 

venue is challenged by a Rule 12(b)(3) motion, the plaintiff has the burden of showing 

that venue in the forum is proper. Id.; Interlease Aviation Investors II (Aloha) L.L.C. v. 

Vanguard Airlines, Inc., 262 F. Supp. 2d 898, 913 (N.D. Ill. 2003); Indymac Mortgage 

Holdings, Inc. v. Reyad, 167 F. Supp. 2d 222, 237 (D. Conn. 2001). 

A court “must accept all allegations of the complaint as true, unless contradicted 

by the defendants’ affidavits, and when an allegation is so challenged the court may 

examine facts outside of the complaint to determine whether venue is proper.” BelcherRobinson, 699 F. Supp. 2d at 1333. A court must draw all reasonable inferences and 

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resolve all factual conflicts in favor of the plaintiff. Id.; see Lawrence v. Dunbar, 919 

F.2d 1525, 1530 (11th Cir.1990) (holding that courts should apply the summary judgment 

standard when ruling on a motion to dismiss which asserts a factual attack on subject 

matter jurisdiction or a related type of motion, including ones for improper venue); see 

also Hodgdon Powder Co., Inc. v. Clean Shot Techs., Inc., 92 F. Supp. 2d 1170, 1177–72 

(D. Kan. 2000).    “If the court chooses to rely on pleadings and affidavits, the plaintiff 

need only make a prima facie showing of [venue].” Gulf Ins. Co. v. Glasbrenner, 417 

F.3d 353, 355 (2d Cir. 2005) (quoting CutCo Indus. v. Naughton, 806 F.2d 361, 364–65 

(2d Cir. 1986)). 

IV. DISCUSSION 

Prime’s extensive briefing in support of its motion contains two principal 

arguments. First, Prime argues that the forum-selection clause in the insurance contract 

signed between the parties requires this action to be litigated in the courts of Utah and 

requires dismissal of the claims against Prime. Second, as an alternative argument, Prime 

argues that the doctrine of forum non conveniens suggests dismissal of the claims against 

Prime. Wildfire disagrees on both counts and argues that the forum-selection clause does 

not govern the current action, and that forum non conveniens presents no challenge to the 

case continuing in this district. For the reasons set forth below, the Court finds that, under 

the applicable legal standard, the forum-selection clause in the insurance contract does 

not apply to the claims Wildfire brings under the Trust Agreement and that forum non 

conveniens does not compel dismissal of the claims against Prime. Therefore, the motion 

is due to be DENIED. 

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A. Forum-selection Clause 

The United States Supreme Court has established two separate standards for 

considering the impact of forum-selection clauses on venue. In M/S Bremen v. Zapata 

Off-Shore Company, the Court altered the “traditional view of many American courts” 

that forum-selection clauses removing a case from American courts are against public 

policy and unenforceable. 407 U.S. 1, 6 (1972). The Court determined instead that “such 

clauses are prima facie valid and should be enforced unless enforcement is shown by the 

resisting party to be unreasonable under the circumstances.” Id. at 10 (internal quotations 

omitted). The Court listed “fraud, undue influence, or overweening bargaining power” as 

conditions that might make enforcement of a forum-selection clause unreasonable. Id. at 

12. 

The Supreme Court in Zapata said its given standard “is the correct doctrine to be 

followed by federal district courts sitting in admiralty.” Zapata, 407 U.S. at 10.  However, 

some lower courts applied Zapata to forum-selection clauses generally. See, e.g., In re 

Firemans Fund Ins. Cos., 588 F.2d 93, 95 (5th Cir. 1979) (applying Zapata to a transfer 

under 28 U.S.C. § 1404(a)). 

The Supreme Court made clear in a later case that the Zapata standard did not 

govern all considerations of forum-selection clauses. In Stewart Organization, Inc. v. 

Ricoh Corporation, the Court considered “whether a federal court sitting in diversity

should apply state or federal law in adjudicating a motion to transfer a case to a venue 

provided in a contractual forum-selection clause.” 487 U.S. 22, 24 (1988) (emphasis 

added). After noting that the Eleventh Circuit “applied the standards articulated in the 

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admiralty case of” Zapata, the Supreme Court “affirm[ed] under somewhat different 

reasoning.” Id. at 25 (emphasis added). The Court found that “the first question for 

consideration should have been whether [28 U.S.C.] § 1404(a) itself controls 

respondent’s request to give effect to the parties’ contractual choice of venue.” Id. at 29. 

The Court went on to say that a forum-selection clause “will be a significant factor that 

figures centrally” in a court’s consideration of a motion to transfer under § 1404(a). Id. 

See also 14D Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 

3803.1, at 79 (3d ed. 2007) (“The combined rule of these cases is that a federal court 

sitting in admiralty jurisdiction should apply a forum-selection clause if it is ‘reasonable,’ 

but a federal court sitting in diversity or federal question jurisdiction should take the 

clause into account only as one element in the balancing test required by Section 

1404(a).”). 

The resolution of the motion to dismiss turns largely on the fact-finding standards 

applicable to motions to dismiss for improper venue. Applying these standards to the 

case at bar, the Court finds that Wildfire has produced sufficient facts by which this Court 

could conclude that they are not bound by the forum selection clause included within the 

insurance contract because Wildfire’s claims arise out of the Trust Agreement, which 

does not contain a forum-selection clause. Construing the evidence presented in 

Wildfire’s favor, as the Court must under the standard for ruling on this motion to 

dismiss, the Court finds that the forum-selection clause does not bar Wildfire from 

litigating their claims relating to the Trust Agreement in this Court. Therefore, the 

motion is due to be DENIED on the grounds of the forum-selection clause. 

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B. Forum Non Conveniens

Under the doctrine of forum non conveniens, “when an alternative forum has 

jurisdiction to hear a case, and when trial in the chosen forum would establish 

oppressiveness and vexation to a defendant out of all proportion to plaintiff’s 

convenience, or when the chosen forum is inappropriate because of considerations 

affecting the court’s own administrative and legal problems, the court may, in the 

exercise of its sound discretion, dismiss the case.” Wilson v. Island Seas Invs., Ltd., 590 

F.3d 1264, 1269 (11th Cir. 2009) (quoting Am. Dredging Co. v. Miller, 510 U.S. 443, 

447–48 (1994)). A defendant invoking forum non conveniens “bears a heavy burden in 

opposing the plaintiff’s chosen forum.” Wilson, 590 F.3d at 1269 (quoting Sinochem 

Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430 (2007)). A plaintiff’s 

choice of forum is entitled to deference, and there is a presumption in favor of a 

plaintiff’s choice of forum. SME Racks, Inc. v. Sistemas Mecanicos Para Electronica, 

S.A., 382 F.3d 1097, 1100–02 (11th Cir. 2004). 

A court conducting an analysis of whether to dismiss a case pursuant to forum non 

conveniens must first consider private interest factors. King v. Cessna Aircraft Co., 562 

F.3d 1374, 1382 (11th Cir. 2009). Private factors the district court should consider when 

analyzing a forum non conveniens claim include the relative ease of access to sources of 

proof, access to unwilling and willing witnesses, ability to compel testimony, the 

possibility of view of premises, and the enforceability of a judgment. Liquidation 

Comm’n of Banco Intercontinental, S.A. v. Renta, 530 F.3d 1339, 1356 (11th Cir. 2008). 

These factors are not exhaustive, and the district court should be flexible in applying 

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them. King, 562 F.3d at 1381–82. “A trial court will look at the private interests first and 

then, if the balance of the private interests are found ‘to be in equipoise or near 

equipoise,’ it will ‘determine whether or not factors of public interest tip the balance in 

favor of a trial in a foreign forum.’” Id. at 1382. The Court, therefore, turns first to an 

analysis of the private interest factors. 

Wildfire argues that the private interest factors weigh in favor of resolving the 

dispute in this Court. They point out, with respect to the sources of evidence and 

witnesses, that the Trust,4

 the Trustee, and Wildfire are located within this District. (Doc 

#14.) The two primary witnesses in this action, who handled negotiations with Prime and 

handled all claims to determine whether the contract qualifies for a buy back, reside in 

this District. (Doc. #14.) Additionally, Wildfire submits that public interest factors also 

favor litigation in Alabama. Specifically, Wildfire argues that the choice of law 

provision included within the Trust Agreement require that Alabama law govern disputes 

arising out of the Trust Agreement. (Doc. #14.) Therefore, Wildfire contends that this 

Court could more properly apply Alabama law. 

Wildfire contends that the private and public interest factors, together with the 

strong preference afforded to the plaintiff’s chosen forum, defeat Prime’s motion to 

dismiss for forum non conveniens. Balancing the private and public interest factors 

presented by Wildfire, together with the presumption in favor of the plaintiff’s chosen 

forum, the Court cannot say that trying this case in the Middle District of Alabama would 

                                                            

4

 Plaintiff’s claims stem from Prime’s alleged failure to release funds that are held in a trust 

account in Alabama. (Doc. #14.) 

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be oppressive, vexatious, or necessarily inconvenient for Prime. Moreover, Wildfire has 

chosen this forum because it is a convenient one, and the Court should only disturb this 

choice if the balance strongly favors the defendant, which, in this case, it does not. 

Wilson, 590 F.3d at 1270. 

Prime argues, on the other hand, that the Court should grant the Motion to Dismiss 

because the same claims are already being litigated in state court in Utah. The Court 

construes Prime’s argument as one of judicial economy. Judicial economy may be 

considered as a public interest factor courts look to when determining whether to transfer 

for forum non conveniens. Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 

422, 423 (2007). A district court, therefore, may dispose of an action by a forum non 

conveniens dismissal, bypassing questions of subject-matter and personal jurisdiction, 

when considerations of convenience, fairness, and judicial economy so warrant. Id. 

However, no judicial economy is served by transferring this action to a federal court in 

Utah. The parties would still be litigating this case in both federal and state court until 

one of the courts reaches a judgment on the merits of the claims.5

 Kizzire v. Baptist 

Health Sys., Inc., 441 F.3d 1306 (11th Cir. 2006). 

Weighing the public and private interest factors presented by both parties, the 

Court finds that the strong presumption in favor of Wildfire’s choice of forum, coupled 

                                                            

5

 The pendency of an action in state court “is no bar to proceedings concerning the same matter 

in federal court, and since the federal courts have a virtually unflagging obligation to exercise 

their jurisdiction,” abstention would apply in only extraordinary situations. Jackson-Platts v. 

General Electric Capital, 2013 WL 4463006, at *10 (11th Cir. Aug. 22, 2013). Because 

Wildfire has a right to bring suit in federal court, and because the law allows for two suits with 

the same parties and similar claims be pending in both state and federal court, Prime’s argument 

necessarily fails. 

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with the private and public factors weighing against dismissal, require denial of Prime’s 

Motion to Dismiss for forum non conveniens. 

V. CONCLUSION 

For reasons set forth above, it is hereby ORDERED that Defendant Prime’s 

Motion to Dismiss (Doc. #6) is DENIED AS MOOT, and its Motion to Dismiss 

Amended Complaint (Doc. #12) is DENIED. 

Done this the 30th day of September, 2013. 

 /s/ Mark E. Fuller 

 UNITED STATES DISTRICT JUDGE 

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