Opinion
CASE NO. 2:09-CV-927-WKW [WO].
July 6, 2010
MEMORANDUM OPINION AND ORDER
This cause is before the court on Defendants James Carter, Carter Tate, P.C., and James E. Carter Associates, LLC's Motion to Transfer Venue. (Doc. # 20.) On June 9, 2010, oral argument was held on the motion. ( See Doc. # 28.) Upon careful consideration of counsel's arguments, the relevant law, and the record as a whole, the court finds that the motion is due to be denied.
I. BACKGROUND
Plaintiff Scott T. McArdle filed suit in the Circuit Court of Montgomery County, Alabama, on August 20, 2009, asserting ten claims arising out of a fee-splitting arrangement between himself and Defendants. (Compl. (Doc. # 1, Ex. A).) Defendants removed the action to this court on October 2, 2009, (Doc. # 1), and the court subsequently denied Mr. McArdle's motion to remand (Doc. # 13).
Mr. McArdle claims that he and Defendants entered into a binding agreement under which Defendants would remit to Mr. McArdle forty percent of attorneys' fees earned from the prosecution of a Georgia civil suit stemming from the death of Justin Hall. (Compl. ¶ 6.) After the sole heir to Justin Hall's estate filed a bankruptcy action, the bankruptcy trustee hired Defendants to continue to represent the estate. (Compl. ¶ 10.) Mr. McArdle alleges that Defendants — without notifying or updating him — settled a portion of the suit and refused to remit Mr. McArdle's portion of the fees. (Compl. ¶¶ 12-13.) The record establishes the following facts.
Mr. McArdle is an attorney residing in Montgomery, Alabama, located in the Middle District of Alabama. (McArdle Decl. ¶ 2 (Doc. # 23, Ex. A).) His principal place of business — a private legal practice — is also located in Montgomery, Alabama. (McArdle Decl. ¶ 2.) Defendant James Carter is an attorney residing in Savannah, Georgia, with his principal place of business in Savannah, Georgia. (Carter Decl. ¶ 2 (Doc. # 21, Ex. A).) Mr. Carter is the corporate representative of Defendants Carter Tate, P.C. and James E. Carter Associates, L.L.C., two law firms located in Savannah, Georgia. (Carter Decl. ¶¶ 1, 3.) Savannah is located in the Southern District of Georgia. (Carter Decl. ¶ 4.)
Defendant Carter Tate, P.C., while not formally dissolved, is no longer an active professional corporation. (Carter Decl. ¶ 3.)
The parties' working relationship began in 2002, when Mr. McArdle and Mr. Carter agreed to jointly represent Abby Reid, an Alabama resident injured in an Alabama motor vehicle accident. (McArdle Decl. ¶ 4; Oct. 4, 2002 Letter from Carter to McArdle (Doc. # 23, Ex. A, Attach. 1).) During the pendency of the Reid matter, the parties agreed to jointly represent one of Mr. McArdle's clients, Harvey "Bo" Hall, whose son had died as a result of medical malpractice related to a bariatric surgery procedure in Macon, Georgia, located in the Middle District of Georgia. (McArdle Decl. ¶ 5; Carter Decl. ¶¶ 5-9.)
Mr. Hall previously had been referred to Mr. McArdle by Travis Creekbaum, an Alabama resident and Mr. McArdle's "long-time stockbroker and friend." (McArdle Decl. ¶ 6.) Upon receiving the referral, Mr. Hall contacted Mr. McArdle, requesting that he investigate the circumstances surrounding his son's death and assist in pursuing a lawsuit, if warranted. (McArdle Decl. ¶ 6.) Shortly thereafter, on January 8, 2003, Mr. Hall entered into a contingency fee agreement with Mr. McArdle. (McArdle Decl. ¶ 6.) Mr. McArdle maintains that, while working exclusively in Alabama, he "conducted an extensive pre-suit investigation and determined that suit was warranted." (McArdle Decl. ¶ 6.)
Mr. McArdle and Defendants then entered into the agreement that forms the basis of this lawsuit. (McArdle Decl. ¶ 5; Carter Decl. ¶ 8.) Pursuant to this April 2003 oral contract formed in Alabama, Mr. McArdle was to receive forty percent of any attorneys' fees recovered from the malpractice claim. (McArdle Decl. ¶¶ 5, 9; Carter Decl. ¶ 8.) Mr. Carter states in his declaration that this percentage was "based upon [Mr. McArdle's] anticipated level of participation in the prosecution of the case." (Carter Decl. ¶ 8.)
Around this time, Defendants contacted Mr. McArdle in Alabama and requested that Mr. McArdle engage in a targeted marketing campaign to advertise for victims of bariatric surgery in Alabama and divide the fees derived therefrom. (McArdle Decl. ¶ 8; Carter Decl. ¶ 5.) By letter dated April 16, 2003, Defendants noted that the joint advertising campaign had not "worked out as planned," but confirmed the earlier agreement with respect to the Hall matter. (McArdle Decl. ¶ 9; Apr. 16, 2003 Letter from Carter to McArdle (Doc. # 23, Ex. A, Attach. 2).) The letter, sent on Carter Tate, P.C. stationery from Savannah, Georgia, states as follows:
I propose we share the following cases on the basis of a 60% — 40% sharing as we originally discussed:
1. Hall v. Coliseum Park, et al;
2. Meador v. Coliseum Park, et al;
I think the Hall case is the better of the two. . . . .
We will bear the expenses of these cases and will divide the net attorney fees sixty percent to our firm and fourty [sic] percent to yours.
Best Regards,
James E. Carter
(Apr. 16, 2003 Letter from Carter to McArdle.)
On September 5, 2003, Defendants filed suit on behalf of Mr. Hall in Bibb County, Georgia, located within the Middle District of Georgia. (McArdle Decl. ¶ 10; Carter Decl. ¶ 9.) On October 6, 2003, represented by other counsel, Mr. Hall filed for bankruptcy in the Middle District of Georgia. (McArdle Decl. ¶ 10; Carter Decl. ¶ 10.) The bankruptcy judge appointed J. Coleman Tidwell, an attorney in Macon, Georgia, as the trustee for Mr. Hall's bankruptcy estate. (Carter Decl. ¶ 10.) Mr. Tidwell hired Defendants to represent the estate in March 2004. (McArdle Decl. ¶ 10; Carter Decl. ¶ 12.)
The parties to the malpractice suit reside in the Middle District of Georgia. (Carter Decl. ¶ 9.)
Mr. McArdle contends that Defendants failed to inform him of the bankruptcy or that Defendants had been hired by the trustee to prosecute the medical malpractice case. (McArdle Decl. ¶ 10.) Correspondence between the parties did, however, continue for several years, throughout Defendants' prosecution of the medical malpractice suit. ( See McArdle Decl. ¶ 11; Attach. 3.)
Letters from Carter Tate, P.C. in January and September 2004 and in April 2005 provided Mr. McArdle with updates of the ongoing case. (McArdle Decl., attach. 3.) In a September 8, 2004 letter from Mr. Carter to Mr. McArdle, Mr. Carter referred to Mr. Hall as " our very depressed client." (McArdle Decl., attach. 3 (emphasis added).) Mr. McArdle sent letters to Mr. Carter in February 2006, May 2007, and July 2007 expressing concern over the handling of the case and requesting additional updates. (McArdle Decl., attach. 3.)
Defendants settled with one of the defendants in the underlying medical malpractice case, and the bankruptcy court subsequently approved the settlement and the attorneys' fees. (Carter Decl. ¶ 15.) The attorneys' fees were deposited into Mr. Carter's firm's bank account in Savannah, Georgia. (Carter Decl. ¶ 15.) The underlying medical malpractice case remains pending against the other defendants. (Carter Decl. ¶ 15.)
II. STANDARD OF REVIEW
A district court may transfer a civil action to any other district in which it might have been brought "[f]or the convenience of the parties and witnesses," and "in the interest of justice." 28 U.S.C. § 1404(a). Because federal courts usually accord deference to a plaintiff's choice of forum, the burden is on the movant to show that the suggested forum is more convenient or that litigation there would be in the interest of justice. In re Ricoh Corp., 870 F.2d 570, 573 (11th Cir. 1989). Some lower courts have found, however, that the deference afforded to a plaintiff's choice of forum is somewhat diminished in a removal case. See First Fin. Bank v. CS Assets, LLC, No. 08-0731, 2009 WL 1211360, at *6 (S.D. Ala. May 4, 2009); Len Tran, Inc. v. Cal-Sungold, Inc., No. 808-CV-14, 2008 WL 2025287, at *3 (M.D. Fla. May 9, 2008); Jamhour v. Scottsdale Ins. Co., 211 F. Supp. 2d 941, 947 (S.D. Ohio 2002).
Ultimately, a district court has "broad discretion in weighing the conflicting arguments as to venue," England v. ITT Thompson Indus., Inc., 856 F.2d 1518, 1520 (11th Cir. 1988), and must engage in an "individualized, case-by-case consideration of convenience and fairness," Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (internal quotation marks omitted).
III. DISCUSSION
Section 1404(a) mandates a two-step analysis. First, the court must determine whether the case originally could have been brought in the proposed transferee district. § 1404(a); C.M.B. Foods, Inc. v. Corral of Middle Ga., 396 F. Supp. 2d 1283, 1286 (M.D. Ala. 2005). Second, the court must analyze whether, "[f]or the convenience of the parties and witnesses" and "in the interest of justice," the action should be transferred. § 1404(a); Corral of Middle Ga., 396 F. Supp. 2d at 1286.
To meet the threshold requirement under § 1404(a), Defendants must demonstrate that, pursuant to 28 U.S.C. § 1391(a), the Middle District of Georgia is a proper venue for this action. Section 1391(a)(2) states that a diversity action may be brought in "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." Substantiality is a qualitative inquiry, and is "determined by assessing the overall nature of the plaintiff's claims and the nature of the specific events or omissions in the forum." Daniel v. Am. Bd. of Emergency Med., 428 F.3d 408, 432-33 (2d Cir. 2005). According to the Eleventh Circuit, "[o]nly the events that directly give rise to a claim are relevant" to the analysis. Jenkins Brick Co. v. Bremer, 321 F.3d 1366, 1371 (11th Cir. 2003).
Subsections (1) and (3) of § 1391(a) do not apply to the case at hand. Section 1391(a)(1) states that a diversity action may be brought in "a judicial district where any defendant resides, if all defendants reside in the same State." Here, although all Defendants reside in Georgia, none reside in the Middle District of Georgia. ( See Carter Decl. ¶¶ 1-4 (stating that Defendants reside in Savannah Georgia, which is located in the Southern District of Georgia).) Section 1391(a)(3) only applies when "there is no district in which the action may otherwise be brought." Both parties agreed during oral argument that venue is proper in the Middle District of Alabama.
Defendants propound three arguments as to why venue is proper in the Middle District of Georgia: (1) the underlying medical malpractice case was filed and prosecuted in the Middle District of Georgia; (2) the plaintiff in the underlying medical malpractice case, Mr. Hall, filed for bankruptcy in the Middle District of Georgia; and (3) the settlement and payment of the disputed fees were approved by the bankruptcy court in the Middle District of Georgia. (Defs.' Br. 2-3 (Doc. # 21).) For the reasons discussed below, the court finds Defendants' arguments unpersuasive.
"[A]ssessing the overall nature" of the complaint, Daniel, 428 F.3d at 433, it is clear that the bulk of Mr. McArdle's claims stem from the oral agreement (later confirmed by the April 16 letter) between the attorney parties to split the fees received from the prosecution of Mr. Hall's medical malpractice suit. Indeed, the restitution claim (Count I), breach of contract claims (Counts II and III), fraud claims (Counts VI-VII), and breach of fiduciary duty claims (Counts VIII-IX) expressly reference the agreement between the attorneys. Defendants' emphasis on the underlying medical malpractice suit and the bankruptcy court's subsequent approval of the fees is misplaced. Though prosecution of the civil claims on behalf of Mr. Hall may have been a condition precedent to receipt of the attorneys' fees under the oral contract, the agreements between Mr. Hall and various attorneys related to that underlying suit are not at issue. Other than Defendants' alleged failure to keep Mr. McArdle informed, Mr. McArdle does not contest the manner in which the underlying case was prosecuted or settled. Instead, the claims arise out of the formation of the fee-splitting agreement, the representations made during and after the agreement, and the failure to remit forty percent of the attorneys' fees received from the settlement proceeds.
Because Bremer dealt with a breach of contract claim, its analysis is instructive. In Bremer, the plaintiff, Jenkins Brick Company, filed suit against an ex-employee, John Bremer, for violation of a non-compete agreement. 321 F.3d at 1368. In transferring venue to the Southern District of Georgia pursuant to § 1404 (rather than § 1406), the Alabama United States District Court implicitly held that venue was proper in the Middle District of Alabama. Id. at 1369. Thus, the issue on appeal was whether the district court's implicit finding was correct, i.e., whether venue was properly laid in the Middle District of Alabama. Id. at 1371. The court held that it was not. Id. at 1373.
In so holding, the Eleventh Circuit interpreted § 1391(a)(2)'s substantiality requirement narrowly: "[O]nly those acts and omissions that have a close nexus to the wrong" are relevant in the venue analysis. Bremer, 321 F.3d at 1372 (emphasis added). Because the agreement at issue in Bremer was presented to the defendant in Georgia, executed in Georgia, intended to be performed in Georgia, and breached in Georgia, and because none of these acts or events occurred in the Middle District of Alabama, the court held that a substantial part of the acts giving rise to the plaintiff's claim did not occur in Alabama (indeed, none of the acts giving rise to the claim occurred in Alabama). Venue, therefore, was not proper in the Middle District of Alabama. Id. at 1372.
Similarly, here, the agreement that forms the basis of this lawsuit was not executed, performed, or breached in the Middle District of Georgia. The parties do not dispute that they entered into the agreement in Alabama; nor do they dispute that performance under the contract would be complete upon Defendants' remittance to Mr. McArdle in Alabama of forty percent of the fees earned. The fees at issue were deposited in Mr. Carter's firm's bank account in Savannah, and, presumably, any money left over from those fees remains with Mr. Carter's firm in Savannah, in the Southern District of Georgia. Defendants' performance under the fee-splitting agreement would require Defendants to send forty percent of those fees from the Savannah to Mr. McArdle in Montgomery (in the Middle District of Alabama), where, upon his receipt, contract performance would be complete. Thus, although the underlying medical malpractice case that generated the fees occurred in the Middle District of Geogia, and although the Bankruptcy Court that affirmed the award of attorneys' fees is located in the Middle District of Georgia, the contract itself was to be performed — and was ultimately breached — elsewhere.
Counsel for Defendants admitted as much during oral argument on the motion.
Likewise, Defendants have not shown that a substantial part of the events or omissions giving rise to the restitution ("work and labor done"), fraud, or breach of fiduciary duty claims occurred in the Middle District of Georgia. The "work and labor done" claim stems entirely from Mr. McArdle's actions in the Middle District of Alabama. The alleged misrepresentations forming the bases of the fraud claims consist of statements made by Defendants to Mr. McArdle in Alabama (in conjunction with the agreement to jointly represent Mr. Hall) and the statements made by Defendants to Mr. McArdle from Savannah "maintain[ing] this misrepresentation." (Compl. ¶¶ 40, 42.) In fact, Mr. Carter stated in his declaration that all contact between Mr. McArdle and Defendants regarding the Hall matter were made "by phone, email or regular mail between [Mr. Carter's] office in Savannah, Georgia and [Mr. McArdle's] office in Montgomery, Alabama." (Carter Decl. ¶ 5.) Similarly, the breach of fiduciary duty claims arose from Defendants' alleged failure to pay Mr. McArdle in accordance with the agreement and from Defendants' alleged refusal to keep Mr. McArdle informed of the underlying medical malpractice case.
Based on the foregoing, the court finds that all of the events (and omissions) that form a "close nexus" to the wrong occurred in either Alabama or Savannah, Georgia, outside the Middle District of Georgia. The contract was executed and breached in Alabama; Defendants' alleged misrepresentations occurred in both Alabama (the original agreement) and Savannah (via communications from the office of Defendant Carter Tate, P.C.); Defendants' omissions relate to their failure to communicate, from their office in Savannah, the details of the ongoing case; Mr. McArdle's work on the Hall case was performed in Alabama; and the disputed fees were deposited in Savannah. Defendants have failed to explain how the actual litigation of the underlying medical malpractice suit constitutes a "substantial part" of the events giving rise to the claims. Accordingly, venue is not proper in the Middle District of Georgia, and Defendants § 1404 motion is due to be denied on this basis.
Even if this case could have been brought in the Middle District of Georgia, the court would nonetheless deny Defendants' motion. In determining whether "[f]or the convenience of the parties and witnesses" and "in the interest of justice" the case should be transferred, the court considers the following factors: "(1) the convenience of the witnesses; (2) the location of relevant documents and the relative ease of access to sources of proof; (3) the convenience of the parties; (4) the locus of operative facts; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum's familiarity with the governing law; (8) the weight accorded a plaintiff's choice of forum; and (9) trial efficiency and the interests of justice, based on the totality of the circumstances." Manuel v. Convergys Corp., 430 F.3d 1132, 1135 n. 1 (11th Cir. 2005).
Here, the parties and potential witnesses reside in both Alabama and Georgia, and the relevant documents and evidence are located in both states. Thus, these factors are neutral, weighing neither in favor nor against transfer. On the other hand, the forum's familiarity with the governing law, the weight (even if somewhat diminished) afforded Mr. McArdle's choice of forum, and considerations of efficiency and justice weigh against transfer. Accordingly, in balancing these factors, the court finds that the "convenience of the parties and witnesses" and "the interests of justice" do not warrant transfer.
IV. CONCLUSION
For the foregoing reasons, Defendants' Motion to Transfer Venue (Doc. # 20) is DENIED. A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1365 1368 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 69 S.Ct. 1221 1225-26 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. Gillespie v. United States Steel Corp. 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing Rinaldo v. Corbett 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal : See also 3pro se 4. Effect of a notice of appeal : 4
Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , , (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , , (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. , 486 U.S. 196, 201, , , (1988); , , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , , , , (1949); , 890 F.2d 371, 376 (11th Cir. 1989); , , , , , (1964). Rev.: 4/04 : The timely filing of a notice of appeal is mandatory and jurisdictional. , , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).