IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

SING FOR SERVICE, LLC, a Delaware )

limited liability company doing business as )

Mepco, )

)

Plaintiff, )

) No. 20 C 4018

v. )

) Judge Ronald A. Guzmán 

18W HOLDINGS, INC., )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

Defendant’s motion to dismiss and transfer is granted in large part for the reasons 

explained below.

BACKGROUND

Plaintiff, Sing for Service, LLC, which does business as Mepco (“Mepco”), filed this 

action against defendant 18W Holdings, Inc. (“18W”). In October 2019, Mepco and 18W 

executed a Dealer Agreement (the “Agreement”), pursuant to which Mepco provided 18W with 

funding and processing services with respect to monthly payment plans for consumer vehicle 

service contracts (“VSCs”). Essentially, Mepco bought the plans from 18W at a discount, and 

then over time recouped its payments (to which the parties refer as “funding”) by collecting 

monthly payments from consumers. Under the Agreement, Mepco had the opportunity to accept 

or reject any VSC, and was obligated to “fund” (pay for) the VSCs it accepted for servicing. The 

Agreement provided that in the event that a VSC was canceled, 18W had to refund to Mepco the 

amount of “funding” that remained unpaid, in addition to late fees and other charges. The 

Agreement also stated that Mepco would provide regular, periodic funding for VSCs (which was 

typically on a weekly basis), and that in the event that Mepco “in its sole discretion[] reasonably 

deem[ed] itself insecure,” Mepco would have the right to retain any funds due to 18W until 

Mepco “reasonably deem[ed] itself secure.” (ECF No. 1-1, Agreement at 3.) 

Mepco alleges that in March 2020, it deemed itself insecure with respect to potential 

cancellation liability from 18W and “withheld funding that it would have otherwise advanced” to 

18W. (ECF No. 6, Am. Compl. ¶ 14.) One reason for its decision, Mepco says, was that 18W’s 

predecessor company defaulted on its obligations to Mepco. (Id. ¶ 15.) 18W contested Mepco’s 

right to withhold the funding and asserted that Mepco did not act reasonably in deeming itself 

insecure. (Id. ¶ 17.) On March 27, 2020, 18W informed Mepco that it was terminating the 

Case: 1:20-cv-04018 Document #: 35 Filed: 02/04/21 Page 1 of 6 PageID #:352
2

parties’ Agreement.1 (Id. ¶ 18.) According to 18W, the parties exchanged multiple 

communications from March to July 2020 in an effort to reach an amicable resolution. (ECF No. 

14-1, Decl. of Edvie M. Castro ¶ 16.) 

On July 9, 2020, Mepco filed this action, asserting a single declaratory-judgment claim 

against 18W. Mepco filed an amended complaint the next day to cure its deficient citizenship 

allegations; the amended complaint is otherwise the same as the original complaint. The only

relief Mepco originally sought was declaratory relief “that Mepco properly deemed itself 

insecure and withheld funding from [18W], and that Mepco is not obligated under the parties’

Agreement to provide any additional funding to [18W].” (Am. Compl. at 5.) 

On October 26, 2020, 18W moved to dismiss the amended complaint for lack of 

jurisdiction, arguing that there was no actual controversy, and thus no subject-matter jurisdiction, 

because the parties’ Agreement had been terminated and Mepco had already engaged in the 

conduct as to which it sought a declaration—the withholding of funding. The same day, 18W 

filed an action against Mepco in the United States District Court for the District of New Jersey. 

18W asserted a claim for breach of contract based on Mepco’s withholding of funding, in 

addition to claims for fraud, unjust enrichment, tortious interference with contract and with 

prospective economic advantage, breach of the implied covenant of good faith and fair dealing, 

and fraudulent inducement. (ECF No. 29-1.) 

On November 16, 2020, Mepco filed a motion for leave to file a Second Amended 

Complaint in this action. In the motion, Mepco stated that it had “discovered and confirmed 

information giving rise to additional claims against 18W for breach of contract; tortious 

interference with contract, business relationship, and/or economic advantage; successor liability; 

and fraudulent inducement, each of which arises out of the same transactions and occurrences 

alleged in the First Amended Complaint.” (ECF No. 23, Mot. Leave ¶ 6.) Mepco described the 

facts underlying the additional claims (Counts II through V) and attached its proposed Second 

Amended Complaint. On November 17, 2020, the Court granted Mepco’s motion and set a 

briefing schedule on an anticipated motion to dismiss the Second Amended Complaint. Mepco 

filed its Second Amended Complaint on December 4, 2020. 

On December 7, 2020, 18W filed the instant motion with respect to the Second Amended 

Complaint. It moves (1) to dismiss Count I under Federal Rule of Civil Procedure 12(b)(1) and 

28 U.S.C. § 2201; (2) to transfer Counts II through V to the District of New Jersey under 28 

U.S.C. § 1404(a), or, in the alternative, to dismiss those claims under Rules 12(b)(6) and 9(b); 

and (3) for an award of costs and attorneys’ fees pursuant to the Agreement. 

DISCUSSION

For purposes of a motion to dismiss under Rule 12(b)(1), the Court accepts as true all 

well-pleaded facts in the complaint and draws all reasonable inferences in plaintiff’s favor. See 

Bultasa Buddhist Temple of Chi. v. Nielsen, 878 F.3d 570, 573 (7th Cir. 2017). A Rule 12(b)(1) 

 1 The Agreement contains a provision stating that either party may terminate it for any 

reason upon thirty days’ written notice to the other party. (Agreement at 3.) 

Case: 1:20-cv-04018 Document #: 35 Filed: 02/04/21 Page 2 of 6 PageID #:353
3

motion challenges federal jurisdiction, and the plaintiff bears the burden of establishing that the 

elements necessary for jurisdiction are met. Silha v. ACT, Inc., 807 F.3d 169, 173-74 (7th Cir. 

2015).

A. Dismissal and Transfer

18W contends that Count I, Mepco’s claim for declaratory judgment, should be dismissed 

because no actual controversy exists with respect to either of Mepco’s requests for declaratory 

relief (that it properly deemed itself insecure and that it is not obligated under the Agreement to 

provide 18W with additional funding). But even if a controversy exists, says 18W, the Court 

should exercise its discretion not to hear Mepco’s case, because Mepco filed this action to “take 

away” 18W’s choice of forum as the natural plaintiff on the breach-of-contract issue. (ECF No. 

29, Def.’s Mem. Supp. Mot. at 12.) 

The parties’ Agreement contains a forum-selection and choice-of-law provision that 

states as follows: 

Governing Law. This Agreement shall be construed in conformity with 

the laws of the State of Illinois without regard to choice of law or conflict of law 

rules should Mepco bring legal proceedings against 18W, but New Jersey law in 

the event 18W brings legal proceedings against Mepco. In the event Mepco 

initiates legal proceedings against 18W, the parties hereto irrevocably agree that 

such actions or proceedings in any way, manner or respect, arising out of or from 

or related to this Agreement, such proceedings shall be brought only in courts 

having situs within Cook County, Illinois. In the event 18W initiates legal 

proceedings in any way, manner or respect, arising out of or from or related to 

this Agreement, the proceedings shall be brought only in courts having situs 

within Passaic County, New Jersey. Each party hereby consents and submits to 

the jurisdiction of any local, state or federal court located within the counties and 

states set forth above and waives any right it may have to transfer the venue of 

any such action or proceeding. 

(Agreement at 6 (edited to substitute Mepco for “SING” and 18W for “SELLER”).)2 It is 

perplexing that two business entities dealing at arms’ length would agree to such obviously 

problematic terms. By including this provision in their contract, the parties set the stage for a 

race to the courthouse and the current dispute.

Under the Declaratory Judgment Act (the “Act”), federal courts may render judgment 

over “actual controvers[ies].” 28 U.S.C. § 2201; Trippe Mfg. Co. v. Am. Power Conversion 

Corp., 46 F.3d 624, 627 (7th Cir. 1995). Generally, an actual controversy exists where the facts 

alleged, under all the circumstances, show that there is a controversy, between parties having 

 2 This paragraph appears to be the only place in the Agreement where the term “SELLER”

is used. Elsewhere therein, the term “Dealer” is used to refer to 18W. The Agreement seems to

use the terms interchangeably, and it provides in the second paragraph that “Dealer is a seller of 

Service Contracts.” (Agreement at 1.) 

Case: 1:20-cv-04018 Document #: 35 Filed: 02/04/21 Page 3 of 6 PageID #:354
4

adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a 

declaratory judgment. Trippe, 46 F.3d at 627. The parties devote significant portions of their 

briefs to this issue. 18W maintains that Mepco has already engaged in the conduct as to which it 

seeks a declaration and that damages are not accruing and thus there is no actual controversy. 

Mepco argues that there is an actual controversy because its potential liability to 18W from 

continuing to “withhold funding” could increase and it must determine “on a weekly basis” 

whether to persist in the course it has chosen, to withhold funding. (ECF No. 31, Pl.’s Mem. 

Opp’n at 6.) 

18W has filed suit for a coercive remedy (damages), and Mepco has already engaged in 

the conduct that 18W contends was a breach. That conduct occurred in March 2020, well before 

even Mepco filed suit. There is no dispute that the parties’ Agreement was terminated later that 

month, and, because the set of VSCs that were encompassed by the parties’ Agreement is finite, 

it does not appear that Mepco’s potential contractual liability to 18W could increase. Thus, the 

Court is skeptical that Mepco’s claim for declaratory relief presents an actual controversy. But 

the Court need not reach a definitive determination because, even if Count I presents an “actual 

controversy” under the Act, the Court still “may properly refuse to grant declaratory relief for 

prudential reasons.” Coalsales II, LLC v. Gulf Power Co., No. 06-CV-488-DRH, 2007 WL 

612252, at *5 (S.D. Ill. Feb. 23, 2007) (citing Trippe, 46 F.3d at 627). One of those reasons—

that a declaratory judgment would serve no useful purpose—is present here. See Tempco Elec. 

Heater Corp. v. Omega Eng’g, Inc., 819 F.2d 746, 749 (7th Cir. 1987). 

“[T]he Declaratory Judgment Act is not a tactical device whereby a party who would be a 

defendant in a coercive action may choose to be a plaintiff by winning the proverbial race to the 

courthouse.’” Hyatt Int’l Corp. v. Coco, 302 F.3d 707, 712 (7th Cir. 2002) (internal quotation 

marks and citation omitted); see also Tempco, 819 F.2d at 750. Where a declaratory-judgment 

action and a mirror-image action for coercive relief exist, the Seventh Circuit ordinarily gives

priority to the coercive action, regardless of which case was filed first. Rsch. Automation, Inc. v. 

Schrader-Bridgeport Int’l, Inc., 626 F.3d 973, 980 (7th Cir. 2010). Mepco emphasizes that it 

filed first and 18W did not file until three months later, but the Seventh Circuit does not adhere 

to a rigid first-to-file rule. Id.; see also Trippe, 46 F.3d at 629 (affirming dismissal of first-filed 

declaratory-judgment action in favor of later-filed coercive action). Mepco also contends that 

18W is “transparently seeking to avoid the forum selection clause it freely entered into.” (Pl.’s 

Mem. Opp’n at 9.) But Mepco ignores the corresponding portion of the forum selection 

provision it also freely entered into, as well as the fact that it is not the natural plaintiff. The 

Seventh Circuit does not look favorably on suits for declaratory judgment that are “aimed solely 

at wresting the choice of forum from the natural plaintiff.” Hyatt, 302 F.3d at 718 (internal 

quotation marks and citation omitted). The Court agrees with 18W that Mepco brought this

action in an effort to thwart the operation of the forum-selection and choice-of-law provision for 

the natural plaintiff. Allowing the instant action to proceed along with 18W’s action for coercive 

relief in New Jersey, in which all of the parties’ disputes can be resolved, would lead to an 

“absurd duplication of effort,” Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 10 F.3d 425, 431

(7th Cir. 1993) (discussing parallel lawsuits in an abstention context), and an intolerable

imposition on the federal courts. As the Seventh Circuit observed in Tempco, “from society’s 

point of view it is essentially irrelevant which [party] bears the expense and inconvenience of 

litigating in a distant forum—someone must.” 819 F.2d at 749. 

Case: 1:20-cv-04018 Document #: 35 Filed: 02/04/21 Page 4 of 6 PageID #:355
5

Accordingly, the Court will exercise its discretion to decline jurisdiction over Mepco’s 

claim for declaratory relief. 18W seeks a with-prejudice dismissal of Count I. But the proper 

disposition is a dismissal without prejudice. See Int’l Harvester Co. v. Deere & Co., 623 F.2d 

1207, 1217-18 (7th Cir. 1980) (remanding case for dismissal without prejudice where court 

lacked subject-matter jurisdiction over claim for declaratory relief and noting that even if 

jurisdiction existed, it was appropriate to decline to exercise discretionary jurisdiction because 

declaratory relief would serve no useful purpose).

 

Mepco asserts that its addition of Counts II through V by way of its Second Amended 

Complaint in November 2020 “transforms” this action into a coercive action.3 The Court 

disagrees. In support of its argument, Mepco cites a single decision, Republic Technologies 

(NA), LLC v. BBK Tobacco & Foods, LLC, 240 F. Supp. 3d 848 (N.D. Ill. 2016), in which the 

court denied a motion to transfer venue of a case with claims for declaratory relief for trade-dress 

infringement and violations of state law. Republic Technologies, however, is distinguishable 

because it was an intellectual-property case, not a contract case, and it did not involve a 

contractual forum-selection clause, let alone one like 18W and Mepco’s. Nor did the court 

discuss prudential concerns under the Act. Mepco sought to add Counts II through V only after 

18W filed its coercive action in New Jersey; the additional claims are essentially another layer of 

gamesmanship. Considering the timing of those claims, it is the Court’s view that this action is 

properly characterized for purposes of the instant motion as one for mere declaratory relief. The 

Court will give priority to the coercive action in New Jersey and enforce the parties’ forumselection clause with respect to Counts II through V and transfer those claims to the District of 

New Jersey pursuant to 28 U.S.C. § 1404(a). See Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. 

Dist. of Tex., 571 U.S. 49, 59 (2013) (a forum-selection clause may be enforced through a motion 

to transfer under § 1404(a)); see also Ferens v. John Deere Co., 494 U.S. 516, 531 (1990) (“[T]o 

permit a situation in which two cases involving precisely the same issues are simultaneously 

pending in different District Courts leads to the wastefulness of time, energy and money that § 

1404(a) was designed to prevent.”). 

In light of this ruling, the Court need not reach 18W’s alternative argument that Counts II 

through V should be dismissed under Federal Rules of Civil Procedure 12(b)(6) and 9(b). 

 3 Mepco further asserts that Counts II through V “relate back” to the time of its original 

complaints such that the Court must treat this action as “coercive.” But Mepco cites no authority 

for the proposition that the relation-back doctrine, the purpose of which is to qualify statutes of 

limitations, see Krupski v. Costa Crociere S.p.A., 560 U.S. 538, 550 (2010), has any application 

to a Court’s decision on whether to exercise its discretion to hear a declaratory-judgment action. 

Nor is the Court persuaded by Mepco’s contention that Count I and the additional claims arise 

out of the same conduct, transaction, or occurrence, as Rule 15 requires for relation back. The 

new claims are premised on a different set of facts involving AA Auto Holdings, Inc. (“Auto 

Holdings”), an entity that Mepco characterizes as 18W’s predecessor. Mepco alleges that 18W 

breached the parties’ Agreement and engaged in tortious conduct by unlawfully scheming to 

induce purchasers of VSCs sold by Auto Holdings to cancel their contracts with Auto Holdings 

and enter into new contracts with 18W, thereby allegedly causing damage to Mepco. Mepco 

also alleges that 18W fraudulently induced Mepco to enter into the Agreement by making false 

statements about Auto Holdings’ intent to pay its debts to Mepco. 

Case: 1:20-cv-04018 Document #: 35 Filed: 02/04/21 Page 5 of 6 PageID #:356
6

B. Attorneys’ Fees

18W requests that the Court enter an order awarding it costs and attorneys’ fees “pursuant 

to the Dealer Agreement between the parties.” (ECF No. 28, Def.’s Mot. at 3.) The Agreement 

contains a provision stating that the “prevailing party” in any litigation in connection with the 

Agreement shall be entitled to recover from the “non-prevailing party” its costs and reasonable 

attorneys’ fees incurred in connection with such litigation. (Agreement at 7.) 18W does not 

address this request in its briefs, however, nor does it develop any argument for why it should be 

considered a prevailing party given the primary relief it seeks. Accordingly, 18W waives the 

argument. See Crespo v. Colvin, 824 F.3d 667, 674 (7th Cir. 2016) (perfunctory and 

undeveloped arguments are waived). Such an award would be improper in any event. A 

prevailing party is one who prevails on the merits of the action, and the Court’s disposition of 

this action is not on the merits. 

CONCLUSION

Defendant’s motion to dismiss and transfer [28] is granted in large part. Count I is 

dismissed without prejudice. Counts II through V are transferred to the United States District 

Court for the District of New Jersey in relation to 18W Holdings, Inc. v. Sing for Service, LLC, 

2:20-cv-15007-SDW-LDW. Those claims shall be transferred forthwith. Civil case terminated. 

DATE: February 4, 2021

Hon. Ronald A. Guzmán

United States District Judge

Case: 1:20-cv-04018 Document #: 35 Filed: 02/04/21 Page 6 of 6 PageID #:357