UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF INDIANA 

FORT WAYNE DIVISION 

VALLEY FORGE INSURANCE

COMPANY, 

 PLAINTIFF, 

 VS. 

HARTFORD IRON & METAL, INC.,

ET AL.,

 DEFENDANTS. 

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) CAUSE NO. 1:14-CV-6-RLM-SLC

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HARTFORD IRON & METAL, INC.,

ET AL.,

 THIRD-PARTY PLAINTIFFS, 

 VS. 

CONTINENTAL INSURANCE CO.,

ET. AL, 

 THIRD-PARTY DEFENDANTS

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OPINION and ORDER 

 Third-party defendants August Mack Environmental, Inc., Environmental 

Field Services, and James A. Berndt1 have moved to dismiss third-party plaintiff 

Hartford Iron’s claims against them or, in the alternative, to compel arbitration 

of the claims. 

 

1 EFS is an affiliate of August Mack, and Mr. Berndt is an August Mack employee. For 

convenience, the court refers to all three moving third-party defendants as “August 

Mack.” 
-2- 

The factual background of this dispute is complex and known to the 

parties, so only the bare essentials are included here. Hartford Iron runs a 

scrapyard that developed a series of environmental problems, most notably rain 

water picking up chemicals from the scrap yard soil and flowing off the property 

as contaminated stormwater. IDEM brought enforcement actions to make 

Hartford Iron remediate the site, particularly the stormwater discharge problem. 

Hartford Iron sought coverage from its liability insurer Valley Forge, and the two 

eventually entered into two settlements obligating Valley Forge to pay for the 

remediation and the defense of the regulatory actions; only the Second 

Settlement Agreement is relevant here. Valley Forge hired August Mack as an 

environmental contractor to do the actual remediation work. Remediation work 

hasn’t gone smoothly, and Valley Forge eventually sued Hartford Iron on breach 

of contract and various declaratory judgment claims. Hartford Iron filed 21 thirdparty claims against August Mack, blaming August Mack for shoddy work and 

various other sorts of malfeasance in connection with the remediation of the 

scrapyard. 

Now before the court are August Mack’s motions to dismiss and to compel 

arbitration. The motions argue generally that the third-party claims against 

August Mack must be dismissed: (1) for improper venue, because the contract 

applicable to the remediation work has a forum-selection clause; (2) because the 

contract also has a mandatory arbitration clause, and Hartford Iron hasn’t 

sought arbitration before filing suit; and (3) for failure to state a claim. The court 
-3- 

addresses the improper venue argument first, because if the forum selection 

clause applies, it would be inappropriate for this court to resolve the other two 

questions; disputes about the enforceability of the arbitration clause and about 

the legal sufficiency of the third-party claims should be resolved by one of the 

two courts specified by the contract. 

Federal Rule of Civil Procedure 12(b)(3) permits motions to dismiss based 

on improper venue. “A lack of venue challenge, based upon a forum-selection 

clause, is appropriately brought as a Rule 12(b)(3) motion to dismiss.” 

Continental Ins. Co. v. M/V Orsula, 354 F.3d 603, 606–607 (7th Cir. 2003) 

(citations omitted). In resolving issues related to improper venue, the court isn’t 

limited to the four corners of the complaint and can consider other evidence 

submitted by the parties. See Buffet Crampon S.A.S. v. Schreiber & Keilwerth, 

Musikinstrumente Gmbh, No. 3:09-CV-347RM, 2009 WL 3675807, at *4 (N.D. 

Ind. Nov. 2, 2009). The court must take all allegations in the complaint as true 

to the extent they aren’t contradicted by other evidence, and must resolve all 

factual conflicts, and draw all reasonable inferences, in the non-movant’s favor. 

See Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987) (superseded by statute 

on other grounds). Ultimately, “[w]hen a defendant moves to dismiss for improper 

venue pursuant to Rule 12(b)(3), the plaintiff bears the burden of proving that 

venue is proper.” Carr v. ABC Fin., No. 1:08–CV–0318, 2009 WL 1615396, at *1 

(S.D. Ind. June 9, 2009) (citations omitted). As the third-party plaintiff, Hartford 

Iron bears the burden of showing that venue is proper in this district. 
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Hartford Iron’s claims are based on a written agreement through which 

Valley Forge hired August Mack to remediate the scarp yard at Valley Forge’s 

expense, but ultimately for Hartford Iron’s benefit. Hartford Iron wasn’t a party 

to this agreement, but correctly identifies itself as a third-party beneficiary and 

seeks to enforce the contract on that basis. As a third-party beneficiary to the 

contract, Hartford Iron is bound by all the contract’s provisions – including any 

valid and enforceable forum selection clause. See Hugel v. Corp. of Lloyd’s, 999 

F.2d 206, 210 n.7 (7th Cir. 1993) (noting that “third-party beneficiaries of a 

contract would, by definition, satisfy the ‘closely related’ and ‘foreseeability’ 

requirements” necessary to bind a non-party to a contract’s forum selection 

clause); see also Cent. States, Southeast & Southwest Areas Pension Fund v. 

Gerber Truck Serv., Inc., 870 F.2d 1148, 1151 (7th Cir. 1989) (“Third-party 

beneficiaries usually take contracts as they find them.”); Hughes Masonry Co. v. 

Greater Clark County School Bldg. Corp., 659 F.2d 836, 839 (7th Cir. 1981) 

(holding that a party seeking to enforce a contract “cannot rely on the contract 

when it works to its advantage, and repudiate it when it works to its 

disadvantage”); TWH, Inc. v. Binford, 898 N.E.2d 451, 454 (Ind. Ct. App. 2008) 

(holding that non-signatory seeking to enforce a contract was bound by the 

contract’s arbitration provision, because one can’t “bring a claim under a 

contract and disavow a term therein”). 

Although several of Hartford Iron’s 21 claims against August Mack sound 

in tort rather than contract, that doesn’t necessarily permit Hartford Iron to 
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escape a contractual forum selection clause. When a dispute is fundamentally 

related to a contractual agreement, the terms of the contract – including a forum 

selection clause – govern the dispute, even if the plaintiff brings claims sounding 

in tort rather than contract law. See Am. Patriot Ins. Agency, Inc. v. Mut. Risk 

Mgmt., Ltd., 364 F.3d 884, 889 (7th Cir. 2004) (holding that common law fraud 

claims were still subject to forum selection clause because “the existence of 

multiple remedies for wrongs arising out of a contractual relationship does not 

obliterate the contractual setting, does not make the dispute any less one arising 

under or out of or concerning the contract, and does not point to a better forum 

for adjudicating the parties’ dispute than the one they had selected to resolve 

their contractual disputes.”); Hugel v. Corp. of Lloyd's, 999 F.2d 206, 209 (7th 

Cir. 1993) (“Regardless of the duty sought to be enforced in a particular cause of 

action, if the duty arises from the contract, the forum selection clause governs 

the action.”). A close examination reveals that all of the third-party claims 

against August Mack relate solely to August Mack’s conduct in remediating the 

scrapyard site in accordance with its contractual duties.2 

 

2 Count 21 of Hartford Iron’s third-party complaint, for example, alleges tort claims for 

misrepresentation and concealment. All of August Mack’s alleged misrepresentations 

and acts of concealment enumerated in the third-party complaint relate to the site 

remediation process. Count 24 alleges defamation against August Mack employee 

James Berndt, and Mr. Berndt’s allegedly defamatory statements were made to IDEM 

or other parties involved in this dispute and concerned Hartford Iron’s conduct in the 

remediation project. The other tort counts are all similarly grounded in the remediation 

of the scrapyard, and therefore arise from and concern August Mack’s contract with 

Valley Forge. 
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Accordingly, if the contract contains a forum selection clause and the 

clause is otherwise enforceable, Hartford Iron may only bring suit in the specified 

forum. August Mack points to a forum selection clause that unambiguously 

disqualifies this court from hearing the case, but the parties dispute whether 

that clause actually applies because they disagree about which documents 

constitute the contract underlying Hartford Iron’s claims. Hartford Iron’s thirdparty complaint says that it seeks to enforce the “Master Services Agreement,” 

which is a short letter from Valley Forge’s claim consultant to August Mack. The 

MSA recites that Valley Forge is hiring August Mack to fulfill Valley Forge’s 

obligations under the Settlement Agreement, and expressly incorporates as 

binding on August Mack the “relevant terms” of the Settlement Agreement. It 

then sets out the procedure by which August Mack will seek Valley Forge’s 

approval for specific projects, and states that prices will be set according to a 

separate August Mack fee schedule. Hartford Iron contends that this MSA – plus 

the undefined “relevant terms” incorporated from the Settlement Agreement – 

forms the entire contract of which it is a third-party beneficiary, and the letter 

doesn’t include a forum selection clause. 

August Mack insists that the MSA letter wasn’t the whole agreement; an 

additional document dated the day after the initial letter also concerns the 

relationship between Valley Forge and August Mack as it relates to the 

remediation work. The first part of that document is another letter from Valley 

Forge’s claim consultant to August Mack, and proposes four initial remediation 
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tasks for August Mack to begin: coordinating with the prior environmental 

consultant, reviewing documents, performing an introductory visit to the site, 

and establishing “scope for stormwater management activities.” This letter states 

that all work on these projects will be performed “in accordance with the terms 

and fees agreed to in the Master Services Agreement executed [the prior day] and 

the Valley Forge Conditions attached to this proposal.” The second part of the 

document is the referenced Terms and Conditions, which include detailed 

provisions on the nature of the contract and how it is to be enforced and 

interpreted. 

Two parts of the Terms and Conditions are relevant here. Under the 

heading “Agreement,” the document provides that: 

This agreement is governed by the following terms and conditions in the 

order of precedence: a) The December 12, 2012 Master Service Agreement 

(MSA); b) these Terms and Conditions; and c) August Mack’s Proposal 

recently accepted by the Client (the Proposal, the MSA and these Terms 

and Conditions shall be collectively referred to as the “Agreement”). This 

Agreement constitutes the entire agreement between the parties and shall 

supersede all prior oral or written communications. 

The other relevant provision is the forum selection clause on which August Mack 

bases its motion. The clause provides that any litigation brought in connection 

with the agreement shall be brought in either the district court for the Southern 

District of Indiana or in the Superior Court of Marion County. 

Accordingly, the chief point of contention between Hartford Iron and 

August Mack is whether the Terms and Conditions are part of the contract on 

which Hartford Iron is suing, such that the forum selection clause binds Hartford 
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Iron. Hartford Iron takes the position that the second letter and the Terms and 

Conditions don’t apply, because Hartford Iron’s third-party complaint against 

August Mack referenced and attached only the MSA, not the additional 

documents executed later. Because the second letter referred only to four initial 

tasks, Hartford Iron believes the Terms and Conditions only modified the MSA’s 

provision as to those four tasks – and because those tasks aren’t the basis for 

any of Hartford Iron’s claims against Valley Forge, the MSA without the Terms of 

Service governs this dispute. 

 Hartford Iron’s interpretation is inconsistent with Indiana contract law and 

with the plain terms of the documents. “When interpreting a contract, our 

paramount goal is to ascertain and effectuate the intent of the parties.” First Nat. 

Bank & Trust v. Indpls. Pub. Hous. Agency, 864 N.E.2d 340, 350 (Ind. Ct. App. 

2007). Whether multiple executed documents are separate agreements or parts 

of the same contract turns on whether the parties intended them to be separate 

agreements or parts of a unitary whole. The most important indicia of the parties’ 

intent on this point is whether the different writings involve different 

consideration. See Heritage Dev. of Ind., Inc. v. Opportunity Options, Inc., 773 

N.E.2d 881, 891 (Ind. Ct. App. 2002) (“The usual test of the severability of a 

contract is the entirety or divisibility of the consideration”). Judged from this 

perspective, the MSA standing alone can’t be a contract unto itself because the 

consideration exchanged necessarily depends on future agreements; the MSA 

merely states that Valley Forge will pay August Mack’s usual fees (with particular 
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modifications) for each part of the remediation if Valley Forge approves future 

project proposals. If Valley Forge never approved a proposal, it would never owe 

August Mack anything. Future agreements (in the form of proposals accepted by 

Valley Forge) are clearly contemplated and indeed are necessary, because 

without them Valley Forge has incurred no binding obligation and thus offered 

no consideration to support the contract. This is powerful evidence that the 

parties intended the MSA to be simply a framework which, when combined with 

the details embodied in future proposals, would constitute the full enforceable 

contract. 

 In addition to the severability of consideration, “the intention of the parties 

is to be ascertained from the whole instrument viewed in connection with the 

conditions when the contract was made.” Cricket Ridge, LLC v. Wright, 880 

N.E.2d 1271, 1275 (Ind. Ct. App. 2008). Temporal proximity and identity of 

parties and subject matter are important factors in deciding whether different 

writings should be construed as a unitary whole. See Peoples Bank & Trust Co. 

v. Price, 714 N.E.2d 712, 717 (Ind. Ct. App. 1999). Although the MSA and the 

subsequent letter regarding the first few tasks weren’t executed on the same day, 

they were dated only one day apart. And the parties and subject matter of the 

two writings is identical; both concern Valley Forge hiring August Mack to 

remediate the Hartford Iron site. 

It would make little sense for multiple separate contracts to govern the 

myriad of individual steps, tasks and projects associated with the remediation, 
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particularly with regard to procedural matters like forum selection. Under 

Hartford Iron’s interpretation, any claims about the initial site visit or the other 

preliminary tasks would be subject to the Terms and Conditions – and thus to a 

forum selection clause and an arbitration clause – while other similar tasks in 

the remediation process wouldn’t. Hartford Iron hasn’t articulated any reason 

that Valley Forge and August Mack would want to risk duplicative proceedings 

by making some tasks subject to arbitration and a limited forum while other 

tasks are not so limited. 

Finally – and most importantly – the plain language of the Terms and 

Conditions makes crystal clear that the parties intended the documents to be 

construed together. The Terms and Conditions define “Agreement” to include the 

MSA, the proposal, and the Terms themselves, and explicitly that that Agreement 

“constitutes the entire agreement between the parties and shall supersede all 

prior oral or written communications.” So even if the MSA constituted a contract 

unto itself, it existed for less than a day before it was superseded by a new 

contract comprising all the documents together. Because all of the conduct that 

forms the basis of Hartford Iron’s claims took place after the date of the second 

letter, the contract Hartford Iron seeks to enforce must be the later version 

constituting the MSA, the proposal letter, and the Terms and Conditions. 

Accordingly, Hartford Iron is bound by the Terms and Conditions in addition to 

the MSA. 
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Hartford Iron also argues that even if the rest of the Terms and Conditions 

apply to its claims against August Mack, the forum selection clause doesn’t. As 

already noted, the MSA incorporates by reference the “relevant terms” of the 

Settlement Agreement between Hartford Iron and Valley Forge, and the Terms 

and Conditions state that the MSA takes precedence over the Terms themselves. 

Accordingly, Hartford Iron argues, the “relevant” provisions of the Settlement 

Agreement trump any conflicting provisions in the Terms and Conditions – and 

the Settlement Agreement includes a different forum selection clause, which says 

that disputes over the agreement shall be brought in an “Indiana court of 

competent jurisdiction.” Because this court sits in Indiana and unquestionably 

has jurisdiction over these claims, Hartford Iron believes this is the proper venue 

for its claims. 

For Hartford Iron’s argument to succeed, the forum selection clause of the 

Settlement Agreement must be among the undefined “relevant terms” 

incorporated into the MSA. Neither Hartford Iron nor August Mack suggest a 

workable way for the court to determine which terms of the Settlement 

Agreement the parties to the contract thought were “relevant” at the time the 

MSA was executed. In any case, that thorny issue needn’t be resolved because 

even if the forum selection clause of the Settlement Agreement is among the 

terms incorporated into the MSA, it isn’t actually inconsistent with the forum 

selection clause in the Terms and Conditions. Courts will favor a reading of a 

contract that “harmonizes its provisions as opposed to one which causes the 
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provisions to be conflicting.” Peoples Bank & Trust Co. v. Price, 714 N.E.2d 712, 

717 (Ind. Ct. App. 1999); see also Bicknell Minerals, Inc. v. Tilly, 570 N.E.2d 

1307, 1316 (Ind. Ct. App. 1991). The forum selection clause in the Settlement 

Agreement limits actions only to courts that are in Indiana and of competent 

jurisdiction. The later forum selection clause in the Terms and Conditions merely 

narrows that set of options to two specific courts (the Southern District of 

Indiana and the Superior Court of Marion County). Both of the specific courts 

permitted by the forum selection clause in the Terms and Conditions also satisfy 

the forum selection clause in the Settlement Agreement, so the two provisions 

can be read in harmony and both given effect by requiring that disputes 

implicating the MSA be heard in one of the two specific courts named. In other 

words, Hartford Iron and Valley Forge are free to bring suit against each other in 

any Indiana court in accordance with their Settlement Agreement, but cases 

involving August Mack’s more limited role in the whole controversy must be 

heard in either the Southern District or Marion County. 

Hartford Iron has two more arrows in its quiver, but both miss the mark. 

First, it insists that even if the forum selection clause applies to these claims, 

the court shouldn’t enforce the clause because doing so would be inefficient – 

the claims against Valley Forge and the other insurers would proceed in this 

forum, while the other claims would be heard in a parallel proceeding in another 

court (and possibly in arbitration). That may be true, but Hartford Iron cites no 

legal authority suggesting that a valid forum selection clause is to be ignored 
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simply because it turns out to be inconvenient to one party. “[F]ederal courts are 

friendly to the use of forum selection clauses to determine which federal district 

court shall host a case,” and will generally be enforced absent compelling reasons 

to the contrary. IFC Credit Corp. v. Aliano Bros. Gen. Contractors, 437 F.3d 606, 

608 (7th Cir. 2006). Separating out the claims against August Mack likely won’t 

result in complete duplication of efforts in parallel forums, because August Mack 

is categorically different from the other twelve third-party defendants against 

whom Hartford Iron brings claims. All the other third-party defendants are 

insurance companies, and Hartford Iron’s claims against them relate to their 

alleged obligations under insurance contracts. August Mack, on the other hand, 

is the contractor performing actual remediation work on the ground, so the 

evidence relevant to Hartford Iron’s claims against August Mack is unlikely to be 

identical to the evidence relevant to the insurance disputes. August Mack agreed 

to carry out the site remediation on the express understanding that it was 

subjecting itself to suits over the project only in two particular courts. Though 

there will certainly be some overlapping evidence and witnesses if the claims 

against August Mack proceed in another forum, inefficiency alone doesn’t justify 

robbing a party to a contract of its bargained-for rights. 

Hartford Iron’s waiver argument fares no better. In addition to this case, 

Hartford Iron sued August Mack in a parallel case in Marion County Superior 

Court – one of the fora permitted under the clause. In that state court case, 

Hartford Iron moved to stay the proceedings so that all disputes related to the 
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remediation could be decided in this court. August Mack joined in a response 

brief prepared by another defendant, which agreed that a stay was “desirable.” 

Hartford Iron takes the position that agreeing to a stay of the state case 

amounted to waiver of any arguments based on the forum-selection clause. 

To begin with, the argument is wholly undeveloped – it constitutes a single 

sentence in Hartford Iron’s brief, and that sentence simply states without citation 

to any legal authority that August Mack waived its objections to venue. This 

deficiency alone justifies rejecting the argument; it isn’t the court’s role to make 

Hartford Iron’s legal arguments for it. Regardless, an objection to venue is 

generally waived only by waiting too long to raise the issue. See Fed. R. Civ. Pro. 

12(h)(1) (providing that an improper venue defense under Rule 12(b)(3) is waived 

by omitting it from a responsive pleading or motion). The record reflects that 

August Mack promptly objected to having this case heard in the Northern 

District of Indiana, moving to dismiss based on the forum selection clause on 

the day its responsive pleading was due. August Mack clearly made its venue 

objection within the limitations period listed in Rule 12(h)(1), and Hartford Iron 

offers no reason to think that August Mack waited an unreasonably long time to 

raise this issue. 

Hartford Iron cites no authority for the proposition that simply agreeing 

not to contest a motion to stay litigation in another forum waives rights 

bargained for in a forum selection clause. Regardless, there is no reason to apply 

the concept of waiver to such a situation. Hartford Iron apparently takes August 
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Mack’s decision not to contest the stay as an implicit agreement that the claims 

should be heard in this court. But a defendant may agree to stay a parallel case 

for a multitude of reasons other than conceding that the claims should be heard 

elsewhere – including simply to delay, in hopes that the matter will settle before 

the parties have to incur substantial litigation costs. The waiver argument would 

be much stronger had August Mack joined in a motion to transfer, but agreeing 

to a stay carries no suggestion that a party intends to relinquish its rights to a 

particular venue under the terms of a contract. Under these circumstances, 

August Mack can’t be said to have waived any objection based on the forumselection clause. 

Because the forum selection clause in the Terms and Conditions applies 

and is otherwise enforceable, this isn’t the proper venue for Hartford Iron’s thirdparty claims against August Mack and the court doesn’t reach August Mack’s 

other arguments for dismissal. The proper court should decide whether 

arbitration is mandatory, so the court’s conclusion that venue is improper 

renders August Mack’s motion to compel arbitration moot. 

The court hereby GRANTS August Mack’s motion to dismiss based on 

improper venue (Doc. No. 353) and DENIES AS MOOT August Mack’s motion to 

compel arbitration (Doc. No. 357). Hartford Iron’s claims against August Mack, 

James Berndt, and Environmental Field Services are DISMISSED without 

prejudice. Hartford Iron must bring these claims, if at all, in the U.S. District 
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Court for the Southern District of Indiana or the Superior Court of Marion 

County. 

 SO ORDERED. 

 ENTERED: May 12, 2016 

 /s/ Robert L. Miller, Jr. 

 Judge 

 United States District Court