Opinion
Cause No. 1:02-CV-230
November 21, 2002
MEMORANDUM OF DECISION AND ORDER
I. INTRODUCTION
This matter is before the Court on the October 10, 2002, motion filed by the Defendant, Irmscher, Inc. ("Irmscher"), to transfer this case to the Northern District of Illinois.
The Plaintiff, K-Five Construction Corporation ("K-Five"), responded in opposition, and Irmscher has replied. For the reasons hereinafter provided, the motion will be DENIED.
II. FACTUAL AND PROCEDURAL BACKGROUND
K-Five is an Illinois corporation and Irmscher is an Indiana corporation with its principal place of business in Fort Wayne, Indiana. In 1995, Irmscher entered into a contract with the United States of America to provide materials and labor for the construction of a post office annex in Hanover Park, Illinois. Irmscher then entered into a subcontract with Peco Construction, Inc. ("Peco") for Peco to perform the project's paving work. Peco then subcontracted with K-Five to perform certain paving work at the project. The Irmscher/Peco subcontract contained a choice of law provision requiring it to be "construed in accordance with the law of the State of Indiana." (Compl. Ex. A, ¶ 14.)
The contract may actually have been with the United States Postal Service.
K-Five contends that as a result of its performance, Peco substantially performed its contractual obligations with Irmscher. Apparently Irmscher did not pay Peco, and Peco has since assigned to K-Five any and all causes of action it may have against Irmscher.
The assignment apparently stems from some litigation brought by K-Five against Peco in the Cook County, Illinois Circuit Court. That case has since been dismissed.
This case commenced on July 8, 2002, when K-Five filed its complaint against Irmscher alleging a breach of contract (Count 1), or alternatively, quantum meruit (Count 2), and a different claim for quantum meruit (Count 3). Accordingly, under Count 1, K-Five, as an assignee, sues for the balance Irmscher owes Peco. Alternatively, K-Five sues under Count 2 for the value of Peco's services. Finally, K-Five sues under Count 3 for the value of the services it provided to Irmscher at the site.
This is actually the second lawsuit involving these claims. On April 19, 2002, K-Five, as the assignee of Peco sued Irmscher in the United States District Court for the Northern District of Illinois, but voluntarily dismissed that suit on June 28, 2002.
In the present motion, Irmscher, even though it is essentially being sued in its own backyard, argues that the case should be transferred to the Northern District of Illinois because the factors the Court must consider compel such a result. (See Def.'s M. at 6) (citing Gulf Oil Corp. v. Gilbert, 320 U.S. 501, 508 (1947)).
However, K-Five contends that the motion should be denied because Irmscher has not shown that "the transferee forum [i.e., the Northern District of Illinois] is clearly more convenient than the transferor forum [i.e., the Northern District of Indiana]." ( See Pl. Resp. Br. at 4) (citing Heller Financial, Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1293 (7th Cir. 1989). Since both sides suggest that the decision to transfer hinges, at least in part, on whether Indiana or Illinois law applies, that question will also be discussed.
III. DISCUSSION
A. Legal Standard 28 U.S.C. § 1404(a) provides "for the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have originally been brought." To satisfy § 1404(a), Irmscher must establish that "(1) venue is proper in the transferor district; (2) venue and jurisdiction are proper in the transferee district; and (3) the transfer will serve the convenience of the parties and witnesses and the interests of justice." Sornberger v. First Midwest Bancorp, Inc., 2002 WL 1182121, *1 (N.D. Ill. June 4, 2002); Nelson v. Aim Advisors, Inc., 2002 WL 442189, *3 (S.D. Ill. March 8, 2002); see also Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986). The parties do not dispute that venue is proper in this district, nor do they dispute that jurisdiction and venue would be proper in the Northern District of Illinois. The only question, then, is whether Irmscher has met its burden of establishing "that the [Northern District of Illinois] is clearly more convenient" Sornberger, 2002 WL 1182121, at *1; Heller Financial, 883 F.2d at 1293.
To answer that question, the Court must evaluate the private interests of the parties and the public's interest in the efficient administration of justice. Tensor Group, Inc. v. All Press Parts Equip., Inc., 966 F. Supp. 727, 728 (N.D. Ill. 1997); see Coffey, 796 F.2d at 219 n. 3 (the statutory factors are the "placeholders for a broader set of considerations, the contours of which turn upon the particular facts of each case"). Private interests include: (1) plaintiff's initial choice of forum; (2) the situs of material events; (3) ease of access to sources of proof, (4) the availability of compulsory process; and (5) the convenience to the parties, specifically their respective residences and their ability to bear the expense of litigation in a particular forum. Chukwu v. Air France, 218 F. Supp.2d 979, 989 (N.D. Ill. 2002) (citing Georgouses v. NaTec Resources, Inc., 963 F. Supp. 728, 730 (N.D. Ill. 1997)). Public interest factors include "such concerns as ensuring speedy trials, trying related litigation together, and having a judge who is familiar with the applicable law try the case." Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1293 (7th Cir. 1989).
B. The Private Interest Factors
1 The Plaintiff's initial choice of forum/Situs of material events
Generally, a plaintiffs choice of forum is entitled to substantial weight, particularly when it is also its home forum. Chukwu, 218 F. Supp.2d at 989; Vandeveld v. Christoph, 877 F. Supp. 1160, 1167 (N.D. Ill. 1995). The plaintiff's choice is not, however, conclusive. When "the conduct and events giving rise to the cause of action did not take place in the plaintiffs selected forum, the plaintiffs preference has minimal value" even if it is the plaintiffs home forum. Dunn v. Soo Line R. Co., 864 F. Supp. 64, 65 (N.D. Ill. 1994); see also Institute for Human Potential, Inc. v. Dr. John T. MacDonald Found., Inc., 2001 WL 709458, *2 (N.D. Ill. June 25, 2001); Pasulka v. Sykes, 131 F. Supp.2d 988, 995 (N.D. Ill. 2001).
While K-Five, an Illinois corporation, has chosen to litigate in Indiana, Illinois was the situs of the Peco/Irmscher contract, the construction project, and where K-Five furnished its materials and labor. Accordingly, the "substantial weight" normally afforded to a plaintiffs forum selection is effectively counterbalanced by these factors, and thus K-Five's selection of Indiana will be afforded only minimal value.
2. The ease of access to sources of proof/Availability of compulsory process
In determining the ease of access to sources of proof, the Court looks at the convenience of either forum to third-party witnesses and the availability of evidence in either forum.
"In resolving a motion to transfer, the convenience of the witnesses is one of the most important factors to be considered." Moore v. AT T Latin America Corp., 177 F. Supp.2d 785, 790 (N.D. Ill. 2001) (quoting Dunn v. Soo Line R.R. Co., 864 F. Supp. 64, 65 (N.D. Ill. 1994)). However, we must consider not only the number of witnesses located in the respective districts, but also the nature and quality of their testimony in relation to the issues of the case. Id.
In that regard, Irmscher identifies two Illinois "non-party" witnesses, Gene Wren ("Wren") and David Davenport ("Davenport"), but offers only vague generalizations about their proposed testimony. Id.; Kafka v. Bellevue Corp., 1991 WL 49619, *3 (N.D. Ill. April 1, 1991). In contrast, while K-Five has not specifically identified any witnesses, it submits Wren's affidavit committing to travel to Fort Wayne for trial. (Wren Aff. 6.)
Wren was at one time Peco's post office annex project superintendent, however, he no longer works for them. (Wren Aff. ¶¶ 3, 5.)
Davenport, who no longer works for Irmscher, was their post office annex project manager. (Kuntz Dep. at 11-12.)
Nevertheless, Irmscher speculates that because both witnesses may be unable to travel to Fort Wayne to testify, although no reason is stated about why this would occur, and because this Court lacks the subpoena power over them under Fed.R.Civ.P. 45, the Northern District of Illinois is clearly the more convenient forum. However, any witness unable to appear in Fort Wayne for trial can testify via videotaped deposition, Fed.R.Civ.P. 32(a)(3)(B), or videoconferencing. Fed.R.Civ.P. 43(a).
More importantly, however, we cannot say at this point that the testimony of either of these two witnesses, and particularly Davenport, would be of much significance because Irmscher simply does not tell us the nature of their testimony. Accordingly, this factor suggests that no transfer is needed.
3. The convenience to the parties
While generally neither party wants to litigate on the other's turf, see Riviera Finance v. Trucking Servs., Inc., 904 F. Supp. 837, 839 (N.D. Ill. 1995), the opposite seems to be the situation here.
This unusual posture leads to the conclusion that both forums are equally balanced as to convenience, particularly since both K-Five and Imrscher are willing to send their personnel to testify in either district. ( See Brooks Aff. ¶ 8; Kuntz Aff. ¶ 8.)
C. The Public Interest Factors
1. Ensuring speedy trial
We look to the respective court dockets to see where this case would receive a prompt resolution. Chukwu, 218 F. Supp.2d at 989. In that regard, "[t]he median time interval between the filing of a civil case and trial in the Northern District of Illinois is 25.5 months." Id. at 989-990. Indeed, Irmscher admits there is a "relative backlog" of cases in the Northern District of Illinois. In contrast, this Court can provide the parties with a prompt trial date at their earliest convenience. Accordingly, this factor weighs in favor of denying transfer.
2. Trying related litigation together
Because, this is apparently the only case involving this transaction, no related litigation exists, and this factor is inapplicable.
3. Familiarity with applicable law
Finally, the Court considers whether this or the transferee court would be familiar with the applicable law, and on this score, the parties disagree about whether Illinois or Indiana contract law governs.
A federal court sitting in diversity must apply the forum state's choice of law rules. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941); Land v. Yamaha Mtr. Corp., U.S.A., 272 F.3d 514, 516 (7th Cir. 2001). Indiana choice of law doctrine favors contractual provisions as to governing law, Allen v. Great American Reserve Ins. Co., 766 N.E.2d 1157, 1162 (Ind. 2002), and follows the Restatement (Second) Conflicts of Laws § 187 (the "Restatement"), which provides in part:
(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue was one which the parties could have resolved by an explicit provision in their agreement directed to that issue.
(2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either,
(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or
(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.
Restatement § 187; Wright-Moore Corp. v. Ricoh Corp., 908 F.2d 128, 132 (7th Cir. 1990) (Indiana follows the Restatement of Conflicts § 187); Austin Powder Co. v. Wallwork, 761 F. Supp. 612, 616 (S.D. Ind. 1990) (applying § 187); South Bend Consumers Club, Inc. v. United Consumers Club, Inc., 572 F. Supp. 209, 212 (N.D. Ind. 1983).
The parties focus almost exclusively on § 187(2)(b), ignoring § 187(1) which broadly provides, and which seemingly applies here, that the choice of law agreement controls if the issues in dispute could have been resolved by such an explicit provision. See Restatement § 187(1); Stromberg Metal Works, Inc. v. Press Mechanical, Inc., 77 F.3d 928, 933 (7th Cir. 1996).
However, since the patties focus exclusively on § 187(2)(b), we will turn our attention to that provision. Section 187(2)(b) requires the application of Indiana law, as provided in the contract, unless Illinois has a materially greater interest and to apply Indiana law would be contrary to a fundamental Illinois policy.
Quite properly, neither side suggests that § 187(2)(a) applies.
K-Five does not challenge Irmscher's contention that Illinois has the materially greater interest in this case. of course, such a contention is easily supported since the Irmscher/Peco contract was entered into in Illinois, the plaintiff-assignee, K-Five is an Illinois corporation, the construction project was in Illinois, the work was performed in Illinois, and K-Five furnished its materials and labor in Illinois. See cf. Wright-Moore, 908 F.2d at 133 (examining factors for "materially greater interest"). Therefore, we agree that Illinois has the materially greater interest.
Having established that Illinois has the materially greater interest, we must determine whether the choice of law provision in the Irmscher-Peco agreement is contrary to a fundamental Illinois policy. Irmscher argues that because Illinois public policy, as expressed in the Illinois Building and Construction Contract Act ("IBCCA"), disfavors allowing building and construction contracts that call for performance in Illinois to contain foreign choice of law provisions, the clause here runs afoul of a fundamental Illinois policy. See 815 Ill. Comp. Stat. 665/10 (2002) ("A provision contained in or executed in connection with a building and construction contract to be performed in Illinois that makes the contract subject to the laws of another state . . . is against public policy. Such a provision is void and unenforceable.").
Indiana has a somewhat similar statute, which declares such choice of law clauses to be "void." Ind. Code 32-28-3-17.
However, K-Five maintains that this provision of the IBCCA does not apply here because the choice of law clause is "contained in or executed in connection with [a] building and construction contract awarded by the United States[.]" See 815 Ill. Comp. Stat. 665/15 (2002) (emphasis added). We take Irmscher's silence as a concession on the point, but nevertheless also think it clear that the Irmscher/Peco subcontract was executed "in connection with" the prime contract award by the United States Postal Service. Although the IBCCA does not define what it means by "United States" and there is no case law on the subject since the Act was just enacted four months ago, we believe Illinois courts would consider the term "United States" to encompass the United States Postal Service since it is "an independent establishment of the executive branch of the Government of the United States," 39 U.S.C. § 201, and other courts have repeatedly held that it is part of the United States government. See, e.g., Baker v. Runyon, 114 F.3d 668, 670-71 (7th Cir. 1997) ("the Postal Service is part of the executive branch of government, . . . its employees are part of the federal civil service, and . . . it possesses certain powers unique to governmental entities, such as the authority to exercise the power of eminent domain in the name of the United States"); Silver v. United States Postal Service, 951 F.2d 1033, 1035 (9th Cir. 1991) ("Congress could not have made its intention more clear that the Postal Service was to remain a part of the U.S. Government and to perform executive branch functions within the government."). Accordingly, because the choice of law agreement here is not contrary to a fundamental Illinois policy, see 815 Ill. Comp. Stat. 665/15, we will enforce the parties' choice of Indiana law under the Restatement of Conflicts § 187.
K-Five also argues the IBCCA cannot be applied retroactively to this contract because such an application would have a retrospective impact, impairing its contract rights by making them time-barred under Illinois law. See Commonwealth Edison Co. v. Will Cty. Collector, 749 N.E.2d 964, 972 (Ill. 2001) (if a new statute has a retrospective impact, it cannot be applied retroactively). However, the Illinois Supreme Court recognizes that new statutes may be applied retroactively if they are only jurisdictional or procedural in nature. Id. at 971 (citing Landgraf v. USI Film Products, 511 U.S. 244, 273-76 (1994)). Here, the IBCCA affects only the procedural issue of what law applies, and it does not change the substantive rights of the parties. Accordingly, it is the Court's view that the IBCCA can be applied retroactively.
While the foregoing analysis certainly applies to Count 1 of the Complaint, the parties never argue how any of this applies to the quantum meruit claims, i.e., Counts 2 3. This is probably because they assumed, correctly, that whatever law controls the contract claim also applies to their quantum meruit claims. See Restatement (Second) Conflict of Laws § 221 comment d ("When the enrichment was received in the course of the performance of a contract between the parties, the law selected by the application of the rules of §§ 187-188 will presumably govern one party's rights in restitution against the other. The applicable law will be that chosen by the parties if they have made an effective choice under the circumstances stated in § 187."); Scheiber v. Dolby Laboratories, Inc., 293 F.3d 1014, 1023 (7th Cir. 2002) ( quantum meruit is a type of restitution); Gold v. Wolpert, 876 F.2d 1327, 1331 (7th Cir. 1989) ( quantum meruit claims sound in restitution and Illinois courts would follow the Restatement (Second) Conflict of Laws § 221). Thus, because the quantum meruit claims seek compensation for enrichment provided in the course of performing the Irmscher/Peco subcontract and because the parties made an effective choice of law, we will apply Indiana law to the quantum meruit claims.
Finally, because "an Indiana federal district judge is far better equipped to consider, construe, and apply Indiana law than his or her [Illinois] counterpart," this factor does not suggest that transfer is needed. Chapman Assocs. Gen. Bus., Inc. v. Justak, 734 F. Supp. 828, 830 (N.D. Ill. 1990).
D. Weighing the Factors
Having considered both the private and public interest factors, Irmscher has failed to carry its burden of demonstrating that the Northern District of Illinois is clearly the more convenient forum. Accordingly, its motion to transfer will be denied.
CONCLUSION
For the foregoing reasons, Irmscher's motion to transfer this case to the Northern District of Illinois is DENIED.
The Court, having denied the motion to transfer, hereby sets this matter for a further scheduling conference on December 5, 2002 at 11:00 am.
Enter for November 21, 2002.