Northern Indiana Commuter Transp. Dist. v. Chicago Southshore and South Bend R.R.

Decision Date20 February 1996
Docket NumberNo. 46A03-9506-CV-187,46A03-9506-CV-187
Citation661 N.E.2d 842
PartiesNORTHERN INDIANA COMMUTER TRANSPORTATION DISTRICT, Appellant-Plaintiff, v. CHICAGO SOUTHSHORE AND SOUTH BEND RAILROAD, Appellee-Defendant.
CourtIndiana Appellate Court

Appeal from the LaPorte Superior Court; William J. Boklund, Judge, Cause No. 46D04-9409-CP-244.

Michael C. Harris, Harris, Welsh & Lukmann, Chesterton, for appellant.

Stanley C. Fickle, Barnes & Thornburg, Indianapolis, Michael J. Daley, Gregory C. Ward, Nisen & Elliott, Chicago for appellee.

OPINION

BAKER, Judge.

Today we review the scope of the trial court's subject matter jurisdiction, under Indiana's Uniform Arbitration Act (Act), 1 to review an arbitration award issued in Illinois where the parties had entered into a written agreement which provided that arbitration and any subsequent appeal would be held in Indiana. Appellant-plaintiff Northern Indiana Commuter Transportation District (NICTD) contends that the trial court erred in granting appellee-defendant Chicago SouthShore and South Bend Railroad's (SouthShore) motion to dismiss for lack of subject matter jurisdiction.

FACTS

SouthShore is an Indiana partnership that operates a railway freight business between Chicago, Illinois, and South Bend, Indiana, on railroad tracks referred to as the South Shore Line. NICTD is an Indiana municipal corporation that owns the South Shore Line and also operates a passenger service between Chicago and South Bend on the South Shore Line.

In September 1989, SouthShore's predecessor, Anacostia & Pacific (A & P), and NICTD entered into a Memorandum Agreement (Agreement) which provided that NICTD would be responsible for maintaining the South Shore Line to permit both freight and passenger operations. In return, A & P agreed to pay a portion of the maintenance costs, including a maintenance-of-way (MOW) fee equal to a specified percentage of its gross revenues. After entering into the Agreement, A & P assigned its rights and obligations under the Agreement to SouthShore.

During 1992, a dispute arose between NICTD and SouthShore concerning the provision in the Agreement regarding the MOW fee. NICTD and SouthShore were unable to resolve their differences through mediation. As a result, on April 8, 1993, NICTD filed a demand for arbitration, pursuant to the parties' Agreement, with the American Arbitration Association. The parties then selected three arbitrators from Chicago to hear their dispute. Although the Agreement provided that all arbitration proceedings must take place within the State of Indiana, the parties agreed to waive that requirement for the convenience of the arbitrators and to hold a portion of the arbitration proceedings in Chicago.

After a hearing, the arbitration panel issued its award on August 11, 1994. The award provided that SouthShore's annual MOW fee would be twelve percent (12%) of its gross revenues. On November 18, 1994, NICTD filed an amended complaint in the LaPorte Superior Court of Indiana, seeking to set aside the arbitration award. SouthShore filed a motion to dismiss NICTD's action for lack of subject matter jurisdiction arguing that the courts in Illinois had exclusive jurisdiction to review the arbitration award. Specifically, SouthShore alleged that because NICTD agreed to waive the provision in the Agreement requiring that all arbitration proceedings take place in Indiana, it similarly waived Indiana's jurisdiction to review the arbitration award.

On February 22, 1995, the trial court issued an order granting SouthShore's motion to dismiss. Specifically, the trial court found that the situs of the arbitration determines which courts have subject matter jurisdiction to review an arbitration award. Here, the trial court concluded that because the arbitration was held in Illinois, the Illinois courts were the only courts with subject matter jurisdiction to hear an appeal of the arbitration award. Record at 318.

DISCUSSION AND DECISION
I. Motion to Dismiss

NICTD contends that the trial court erred in granting SouthShore's motion to dismiss for lack of subject matter jurisdiction. A motion to dismiss for lack of subject matter jurisdiction presents a threshold question concerning the court's power to act. Perry v. Stitzer Buick GMC, Inc. (1994), Ind.App., 637 N.E.2d 1282, 1286. In ruling on a motion to dismiss for lack of subject matter jurisdiction, the court may resolve factual disputes. Id. The court has considerable latitude in devising procedures to ferret out the facts pertinent to jurisdiction, and it is well established that in doing so it may consider not only the complaint and motion but any affidavits or other evidence submitted. Id. Moreover, when considering a motion to dismiss for want of subject matter jurisdiction, a court may weigh the evidence to determine the existence of the requisite jurisdictional facts. Id.

Initially we note that, pursuant to the Act, the parties' Agreement conferred jurisdiction on the courts of Indiana to enforce the Agreement, hold arbitration proceedings and enforce awards therefrom. The Act in relevant part provides:

The term "court" shall mean any circuit or superior court. The making of an agreement ... providing for arbitration in this state confers jurisdiction on the court to enforce the agreement under this chapter and to enter judgment on an award thereunder.

IND. CODE § 34-4-2-17. In the instant case, the parties' Agreement provides as follows:

This Agreement is to be interpreted pursuant to the laws of the State of Indiana.

All arbitration proceedings shall take place within the State of Indiana and shall be governed by the Rules of the American Arbitration Association.

The decision of a majority of the three arbitrators shall be final and conclusive between the parties, except that if either party claims that the arbitrators' decision is based upon an error of law it may, within 30 days after receipt of such decision, institute an action at law within the State of Indiana to determine such legal issue.

R. at 50-51.

Although the Act and the parties' Agreement conferred subject matter jurisdiction on the courts of Indiana, SouthShore now maintains that because NICTD agreed to waive the situs of the arbitration, it also waived Indiana's jurisdiction to review the arbitration award. In support of its argument, SouthShore cites several cases from other states which have held that a court has subject matter jurisdiction to review an arbitration award if the court is in the state in which the arbitration was held. See Tru-Green Corp. v. Sampson (1991), Ky.App., 802 S.W.2d 951; State ex. rel. Tri-City Const. Co. v. Marsh (1984), Mo.App., 668 S.W.2d 148; Stephanie's v. Ultracashmere House, Ltd. (1981), Ill.App.3d, 98 Ill.App.3d 654, 54 Ill.Dec. 229, 424 N.E.2d 979; United Elec. Radio and Mach. Workers of America v. General Elec. Co. (1948), N.Y.Sup., 193 Misc. 146, 83 N.Y.S.2d 768, aff'd. Mem., 275 A.D. 908, 90 N.Y.S.2d 273; Stancioff v. Hertz (1980), 10 Mass.App. 843, 406 N.E.2d 1318; Kearsarge Metallurgical Corp. v. Peerless Ins. Co. (1981), 383 Mass. 162, 418 N.E.2d 580. However, the cases cited by SouthShore are distinguishable from the present case. In a majority of these cases, the parties had not entered into a specific written agreement specifying the location for arbitration or specifying where the parties were required to challenge an arbitration award. As a result, those courts did not have to consider the impact of an agreement conferring jurisdiction. Further, in the one case in which the parties had entered into a written agreement specifying the location for arbitration and had submitted to arbitration in that state, the parties were seeking to challenge the arbitration award in a state other than that provided for by agreement. See Tru-Green Corp., 802 S.W.2d at 953 (state specified in the parties' agreement had jurisdiction over the appeal of the arbitration award).

In the present case, SouthShore and NICTD entered into a written agreement which expressed the parties' intention of conferring jurisdiction over arbitration proceedings on the courts in Indiana. Although NICTD agreed to waive the situs of the arbitration, this waiver did not alter or nullify the provisions in the parties agreement which conferred subject matter jurisdiction on the courts of Indiana. We believe that where the parties have entered into an agreement, that agreement, and not the place of arbitration, controls the determination of which state has jurisdiction over an appeal of an arbitration decision. Therefore, we find that Indiana retains jurisdiction to review the arbitration award.

Further we note that had the parties intended to change the Agreement to confer jurisdiction in Illinois, Section 16.9 of the parties' Agreement specifies the procedures for amending the Agreement. Section 16.9 provides:

It is intended that the subject matter hereof shall be embodied in definitive agreements to be prepared and executed by the parties subsequent to the date hereof. However, pending execution of such definitive agreements, this Agreement shall be deemed binding and enforceable and shall reflect the entire agreement of the parties with respect to the subject matter hereof, superseding any prior agreements or understandings.

R. at 51. Pursuant to Section 16.9, the parties in the past had executed clarifications and amendments to the Agreement, all of which were in writing and signed by both parties. The parties in the instant case did not avail themselves of these procedures. Therefore, we find that the parties have not amended the Agreement to provide for jurisdiction in Illinois. Accordingly, Indiana retains jurisdiction.

II. ...

To continue reading

Request your trial
4 cases
  • Northern Indiana Commuter Transp. Dist. v. Chicago SouthShore
    • United States
    • Indiana Supreme Court
    • 8 Septiembre 1997
    ...review; and (2) the arbitrators' interpretation of the contract was contrary to law. Northern Indiana Commuter Transp. Dist. v. Chicago SouthShore and South Bend R.R., 661 N.E.2d 842 (Ind.Ct.App.1996). Even though the Indiana trial court's ruling dealt only with SouthShore's motion to dismi......
  • Chicago Southshore and South Bend R.R. v. Northern Indiana Commuter Transp. Dist.
    • United States
    • Illinois Supreme Court
    • 24 Septiembre 1998
    ...1996, the Indiana Court of Appeals reversed the decision of the Indiana trial court. Northern Indiana Commuter Transportation District v. Chicago SouthShore & South Bend R.R., 661 N.E.2d 842 (Ind.App.1996). The court of appeals held that jurisdiction was proper in the Indiana trial court, a......
  • NICTD v. Chicago SouthShore & South Bend RR
    • United States
    • Indiana Appellate Court
    • 7 Febrero 2001
    ...that Indiana had jurisdiction over the arbitration pursuant to the Agreement. Northern Indiana Commuter Transp. Dist. v. Chicago SouthShore and South Bend R.R., 661 N.E.2d 842, 846 (Ind.Ct. App.1996). We also addressed, in the interests of judicial economy, the merits of NICTD's claim, and ......
  • Northern Indiana Commuter Transp. Dist. v. Chicago Southshore and South Bend R.R.
    • United States
    • Indiana Appellate Court
    • 11 Junio 1996
    ...petitioned for rehearing asking us to set aside the portion of our decision in Northern Indiana Commuter Transportation District v. Chicago Southshore and South Bend Railroad, 661 N.E.2d 842 (Ind.Ct.App.1996), in which we overturned a portion of an arbitration award in favor of Southshore. ......
1 books & journal articles
  • Agreements to expand the scope of judicial review of arbitration awards.
    • United States
    • Albany Law Review Vol. 63 No. 1, September 1999
    • 22 Septiembre 1999
    ...agreement for judicial review of arbitration awards); Northern Ind. Commuter Transp. Dist. v. Chicago Southshore and South Bend R.R., 661 N.E.2d 842, 846 (Ind. Ct. App. 1996) (upholding judicial review clause, which allowed review if the decision was based on an error of law); see also Prim......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT