Opinion
NOT FOR PUBLICATION
ORDER ON MOTION FOR TRANSFER OF VENUE
PETER W. BOWIE, Chief Judge, United States Bankruptcy Court.
On September 30, 2005, Alan Stanly commenced this case by filing an involuntary petition against alleged debtor, Francis J. Lopez. On July 20, 2005, Lopez moved to transfer venue to the Northern District of Florida. The Court denied the motion without prejudice. Since then Lopez has challenged the involuntary petition both on the ground that there were not enough petitioning creditors (§ 303(b)(1)) and that he was generally paying his debts as they came due (§ 303(h)(1)). The Court granted Lopez's motion to bifurcate the issues, addressing the number of petitioning creditors first. On September 26, 2006, after much argument and briefing, the Court entered an order granting summary judgment in favor of Stanly determining that the petition was properly filed under § 303(b)(1).
Discovery issues have continued to plague this case, and the Court has been compelled to impose sanctions against Lopez, both monetary and terminating. On January 28, 2008, the Court entered an order for relief on the involuntary petition as a sanction for Lopez's continued failure to comply with discovery requests and this Court's orders. Lopez's appeal of the order is pending.
On March 3, 2008, Lopez renewed his motion seeking to transfer venue of this case to the Northern District of Florida, where he resides. On April 7, 2 008, the Court held a hearing on the Lopez's motion to transfer venue and took the matter under submission.
This Court has subject matter jurisdiction over the proceeding pursuant to 2 8 U.S.C. § 1334 and General Order No. 312-D of the United States District Court for the Southern District of California. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A).
DISCUSSION
Venue for a bankruptcy case is proper in the district court for the district
(1) in which the domicile, residence, principal place of business in the United States, or principal assets in the United States, of the person or entity that is the subject of such case have been located for the one hundred and eighty days immediately preceding such commencement . . . .
28 U.S.C. § 1408(1). The parties agree that this Court is a proper venue based upon the related bankruptcy case of Prism Advanced Technologies, Inc., (Case No. 03-07777-JM7), which is pending in this district.
Nevertheless, 28 U.S.C. § 1412 allows the transfer of a case properly filed in one district to another district. Rule 1014(a)(1) of the Federal Rules of Bankruptcy Procedure sets out the procedure for a motion to transfer venue - if, upon a "timely motion" and after notice and a hearing, the Court determines that the transfer "is in the interest of justice or for the convenience of the parties," the case may be transferred to another district. 28 U.S.C. § 1412; Fed. R. Bankr.P. 1014(a)(1); In re Custom Builders of Steamboat, Inc., 349 B.R. 39, 42 (Bankr.D.Idaho 2005). The analysis of the combination of "interest of justice" and "convenience of parties" under § 1412 and Rule 1014 is fact specific to each case and necessarily requires the exercise of discretion based on the totality of the circumstances, which may include considerations regarding witnesses and the presentation of evidence. In re Donald, 32 8 B.R. 192, 204 (9th Cir.BAP 2005). The party urging a change of venue has the burden of showing, by a preponderance of the evidence, that the transfer is warranted. In re Kona Joint Venture I, Ltd., 62 B.R. 169, 172 (Bankr.D.Haw.1986). The resolution of an issue of venue is left to the sound discretion of the trial court, but the power of the court to transfer venue should be exercised cautiously. Id. (Citations omitted).
Counsel for Stanly suggests that, in an involuntary case such as this, deference should be paid to the will of the petitioning creditors. The Court finds that any such deference is unnecessary in light of the burden of persuasion placed upon the party seeking transfer - the party, presumably, which did not choose the original venue.
Several non-exclusive factors, which generally amounts to a totality-of-circumstances analysis, are to be considered: (1) proximity of creditors to Court; (2) proximity of debtor to Court; (3) proximity of witnesses necessary to administration of the estate; (4) location of assets; (5) economic and efficient administration of the case; (6) need for further administration if liquidation ensues. In re Donald, 328 B.R. at 204. See also Custom Builders of Steamboat. Inc., 349 B.R. at 42; In re Kona Joint Venture I, Ltd., 62 B.R. at 172.
(1) proximity of creditors to Court.
Lopez's schedules list several creditors with addresses throughout the nation. However, the most active creditor to date and likely for the remainder of this case is Stanly, who resides in this district.
Gregory Akers, the trustee in the Prism bankruptcy case, suggests that he has "substantial avoidance claims against Mr. Lopez" and that moving the case to Florida would increase his costs of pursuing such claims. To date though, no such actions have been commenced.
This factor weighs in favor of venue remaining in this Court.
(2) proximity of debtor to Court.
This factor is perhaps the simplest of all. Lopez undeniably lives in Florida, approximately 2,050 miles from this courthouse. This factor weighs in favor transferring venue to Florida. However, contrary to the suggestion by Lopez, this factor carries no more weight than the others - this case was properly commenced as an involuntary under § 303. Thus, reason dictates that the petitioning creditor(s) selects among the available venues. The involuntary debtor, as movant, bears the burden to show that the case should be moved.
(3) proximity of witnesses necessary to administration of estate.
Neither party has identified any witnesses who will be necessary for the administration of this estate other than themselves. Counsel for Stanly suggested at the hearing that if a § 523 or § 727 action were filed in this case, there might be witnesses who were "not in the Northern District of Florida." However, no such action is presently pending, and no such witnesses have been identified. Thus, the only two witnesses of which the Court is aware are Stanly and Lopez. Since one is here and one in Florida, this factor is a wash.
(4) location of assets.
Lopez's assets consist primarily of the residence in Florida which he owns with his wife, and personal property located in Florida. This factor weighs in favor of a transfer of venue.
(5) economic and efficient administration of case.
As Stanly suggests, this Court has spent a good deal of time with this case and with the parties. The Court has heard the discovery squabblings of the parties, and has been compelled to impose sanctions. Were the case to be transferred, the new court would have to spend some time and energy bring itself up to date. However, the Court notes that in connection with the present motion, counsel for both parties have ably set forth a complete history of the proceedings to date. The Court has no doubt that, with the assistance of counsel, a new court in Florida could get up to speed with little difficulty. This Court has, as Stanly points out, imposed monetary and non-monetary sanctions against Lopez. However, they are simple orders which can be as easily enforced in a Florida Bankruptcy Court as anywhere else.
Similarly, the Court is not concerned with the fact that Florida law may need to be applied with respect to Lopez's residence. Over the years this Court has been called upon to apply the laws of other states. The Court is certain that, with the guidance of counsel, it can navigate the Florida law if necessary. In fact, counsel for Stanly gave a seemingly sound summary of Florida exemption law at the hearing on this matter.
Stanly complains that Lopez has failed to provide authority for the proposition that an underlying case may be transferred when an order from the original court is pending. However, the Court notes that Stanly has provided no authority for the proposition that it cannot. The Court does not consider this to be a matter worth weighing - both this Court and any court of the Northern District of Florida would be competent to follow any instructions which might come from the appellate court.
Stanly also suggests that the case should remain in this district, because the Prism case, the affiliation to which was the basis of initial venue, is here. That factor was considered in the Kona Joint Venture case, where four related proceedings were pending in the district from which venue was sought to be moved. However, in our situation the Prism case has been dormant for some time. The case remains open only at the request of Stanly. Stanly and those supporting his opposition suggest that there may be avoidance actions brought in the case. However, as of the time this Court is asked to rule on this motion, no such actions have begun.
Thus, on the one hand this Court would have to spend a little time familiarizing itself with Florida law. On the other, a Florida court would need some little time to learn the facts of this case. Either Court could presumably follow any instruction the appellate court sees fit to give regarding the pending appeal. In summary, this factor is a wash.
(6) need for further administration if liquidation ensues.
This factor came into play in Kona Joint Venture, a case in which the debtor, along with its affiliates, looked to reorganize. As this is a chapter 7 case, this factor would not seem to apply.
Summary of factors.
Clearly, ours is not a case such as In re Donald where the factors were overwhelmingly in favor of transferring venue. Rather, the various factors seem to balance each other out. Given that the burden is on Lopez to demonstrate that venue ought to be transferred, this Court concludes that he has failed to meet his burden. This case will stay where it is.
In light of this ruling, the Court need not rule on Stanly's argument that the motion is not timely, as required under Rule 1014. However, the Court notes that since the denial of the previous motion to transfer, without prejudice, the parties have been actively addressing the first portion of the bifurcated § 303 issue as well as the related discovery disputes. The Court finds that Lopez's renewal of the motion is timely.
CONCLUSION
For the reasons set forth above, the Court denies Lopez's motion to transfer venue.
IT IS SO ORDERED.