Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Heartland Dental Care, Inc v. Mortenson Family Dental Center

August 22, 2011

HEARTLAND DENTAL CARE, INC., PLAINTIFF,
v.
MORTENSON FAMILY DENTAL CENTER, INC., DEFENDANT.



The opinion of the court was delivered by: Case Reagan, District Judge:

MEMORANDUM and ORDER REMANDING

A. Introduction

This lawsuit arises from a soured relationship between two corporate entities who executed a series of contracts governing a number of dental practices in Indiana and Kentucky. Stripped to its simplest elements, the question before the undersigned Judge is whether the above-captioned case should be litigated in this United States District Court. Plaintiff (who filed the suit in Illinois state court) says no and asks to remand the case to the Circuit Court of Effingham County, Illinois. Defendant (who removed the case here) also says no and moves to transfer the case to the United States District Court for the Western District of Kentucky.*fn1

So neither party wants the case here, but they argue strenuously over where this suit belongs. For the reasons explained below, the undersigned Judge concludes that he must honor a forum selection clause mandating that this case be remanded to the Circuit Court of Effingham County, Illinois.

B. Summary of Key Facts and Procedural History

Heartland Dental Care, Inc. ("Heartland"), a Delaware corporation with its principal place of business in Effingham, Illinois, is a dental practice management company that owns and manages dentist offices throughout the United States. Mortenson Family Dental Center, Inc. ("Mortenson"), a corporation incorporated and maintaining its principal place of business in Kentucky, is a dental practice holding company involved in over 40 dental practices in Kentucky and Indiana (Doc. 9, p. 2).

In May 2011, Heartland sued Mortenson in the Circuit Court of Effingham County, Illinois. Heartland claimed that Mortenson breached "contractual, legal, and equitable obligations" to Heartland by mismanaging a joint venture of the two companies. The joint venture -- Morheart Dental Management Services, LLC ("Morheart") -- is managed by Mortenson, receives profits from Mortenson, and disburses profits to Mortenson and Heartland (Doc. 9, p. 3).

Specifically, Heartland's complaint alleged that Mortenson breached fiduciary duties owed to Heartland (the minority member of the two-member LLC) and breached contractual obligations imposed by "the parties' operative contracts" (Doc. 2-1, p. 2). The complaint references several contracts but focuses on one contract in particular -- a 2008 Purchase and Sale Agreement which Heartland attached to the complaint in its entirety. The complaint declares: "A copy of the Purchase & Sale Agreement is attached hereto as Exhibit A. This action relates to and arises from the Agreement" (Doc. 2-1, p. 5). In compliance with a forum selection clause contained in that Agreement, Heartland filed its suit against Mortenson in Effingham County (Illinois) Circuit Court.

Mortenson removed the action to this District Court, invoking subject matter jurisdiction under the federal diversity statute, 28 U.S.C. 1332. On threshold review, the undersigned Judge verified the elements of diversity jurisdiction (the amount in controversy easily sufficed, and complete diversity exists between the only two parties to the suit -- Plaintiff Heartland and Defendant Mortenson). In reviewing the 2008 Purchase and Sale Agreement attached to the complaint, though, the undersigned Judge discovered the forum selection clause and directed counsel to brief the effect of that provision. They did so in a timely manner, but Heartland sought remand and Mortenson moved to transfer the case to another federal court under 28 U.S.C. 1404(a).

In a July 20, 2011 Order, the undersigned Judge summarized the parties' arguments to date, set a briefing schedule on Mortenson's transfer motion, and indicated that counsel should address certain specific issues in their briefs (Doc. 13). The issues were fully briefed as of August 10, 2011.

C. Analysis

In June 2003, Mortenson filed Articles of Organization forming Morheart, a Kentucky limited liability company. Initially, Mortenson held all 1000 units of (100% of the membership interests in) Morheart. In July 2007, Heartland and Mortenson executed a Purchase and Sale Agreement by which Heartland bought from Mortenson 25% of the membership interest in Morheart (see Exhibit A to Doc. 9-1).

On February 28, 2008, Heartland and Mortenson executed a second Purchase and Sale Agreement which, inter alia, gave Heartland a 40% ownership stake in Morheart. The Court refers to this contract as "the 2008 PASA." The 2008 PASA delineates certain rights of the parties as to the joint venture LLC (Morheart). For instance, the 2008 PASA imposes limitations on Mortenson's ability to sell or transfer material assets of Morheart, e.g., requiring advance written consent of Heartland to dispose of assets other than sales in the normal course of ordinary business.

Like its 2007 predecessor, the 2008 PASA contains a provision specifying jurisdiction and venue for any disputes arising thereunder. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.