Summary
refusing to transfer an insurance case to the division where the underlying accident took place
Summary of this case from Chretien v. Home Depot U.S.A., Inc.Opinion
Civil Action No. 3:99-CV-2950-G.
March 22, 2000.
MEMORANDUM ORDER
Before the court is the motion of the defendant Acme Truck Line, Inc. ("Acme") to transfer the venue of this case, pursuant to 28 U.S.C. § 1404 (a), to the United States District Court for the Southern District of Texas. For the following reasons, Acme's motion is denied.
Acme also seeks dismissal of this case for improper venue. This being a diversity case, venue is proper in this district if "a substantial part of the events or omissions giving rise to the claim occurred" here. 28 U.S.C. § 1391 (a). For the reasons discussed below at 6-9, the court finds that venue in this district is proper and that this portion of Acme's motion should accordingly be denied.
I. BACKGROUND
The plaintiff, Nobel Insurance Company ("Nobel"), filed this action for a declaratory judgment against Acme and two other defendants, Discover Re Managers, Inc. d/b/a Discover Re ("Discover") and TIG Reinsurance Company ("TIG"), in the 191st Judicial District Court of Dallas County, Texas. Notice of Removal ("Notice") ¶ 1. Acme timely removed the action to this court on December 29, 1999. Id. ¶ 2. Discover and TIG consented to this removal. See Notice of Consent to Removal.
Discover and TIG have not challenged venue in this suit, but rather have responded in support of the Northern District of Texas as proper venue. See generally Defendants' Response to Motion to Transfer Venue.
From October 24, 1993 to February 1, 1996, Nobel fronted commercial truckers insurance coverage (the "Nobel Policy") for Acme. See Plaintiff's Original Petition for Declaratory Judgment ("Petition") at 2, attached as Exhibit 2 to Notice. The coverage was for $1,000,000.00 per accident, with a $500,000.00 deductible. Id. at 2-3. The non-deductible risk subject of the Nobel Policy was covered by a Reinsurance Agreement issued by TIG. Id. at 3. Discover is the successor in interest to TIG with regard to the Reinsurance Agreement. Id. On December 21, 1995, Acme also obtained "unladened" ( i.e., where the insured's vehicle in question was not loaded at the time of the loss) liability insurance coverage with Landmark American Insurance Company ("landmark"). Id. The limit of liability of the Landmark Policy was $500,000.00 per accident. Id.
This suit indirectly arises out of an event that occurred on December 24, 1995, when a vehicle operated by an Acme driver was involved in an accident in Houston, Texas, and an individual named Don Lewis ("Lewis") was injured. Petition at 4. Lewis initiated litigation in Harris County, Texas against Acme and others with regard to the accident. Id. Lewis' claims were settled on June 4, 1997. Id. In accordance with the Settlement Agreement, Landmark paid $500,000.00, pursuant to the Landmark Policy, and Nobel paid $198,167.70, pursuant to the Nobel Policy. Id.
By a June 30, 1997 statement, Nobel billed Acme for $198,167.70 as a deductible reimbursement pursuant to the Nobel Policy. Id. Thereafter, Nobel deducted $198,167.70 from a trust fund established by Acme for the purpose of collateralizing its deductible obligations pursuant to the Nobel Policy and its predecessors. On November 5, 1999, an attorney representing Acme made demand upon Nobel for return of the money. Acme argues that Noel diverted this money from Acme's trust fund in violation of Acme's fights under the Nobel policy. Answer of Defendant, Acme Truck Line, Inc. ("Answer") ¶ 29. As a result, Nobel initiated this suit seeking a declaration of the rights of the parties and a determination of liability for the $198,167.70 settlement payment. Petition at 5-6. Acme now moves the court to dismiss the case for improper venue, or, in the alternative, to transfer the venue of the case to the Southern District of Texas. See Motion to Transfer Venue of Defendant Acme Truck Line, Inc. ("Motion") ¶ 1.
II. ANALYSIS A. Legal Standard
"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 been brought." 28 U.S.C. § 1404 (a). The purpose of Section 1404(a) "is to prevent the waste `of time, energy and money' and `to protect litigants, witnesses and the public against unnecessary inconvenience and expense. . . .'" Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (quoting Continental Grain Company v. Barge FBL-585, 364 U.S. 19, 26-27 (1960)). The defendant has the burden of demonstrating that a change of venue is warranted. Gundle Lining Construction Corporation v. Fireman's Fund Insurance Company, 844 F. Supp. 1163, 1165 (S.D. Tex. 1994). Generally, a plaintiff is afforded some deference in choosing a forum. Lindloff v. Schenectady International, 950 F. Supp. 183, 185 (E.D. Tex. 1996). However, the plaintiff's choice of forum is afforded reduced significance where most of the operative facts occurred outside the district. Id.
In deciding whether to grant transfer, the court should consider: (1) the convenience of the parties, (2) the convenience of material witnesses, (3) the availability of process to compel the presence of unwilling witnesses, (4) the cost of obtaining the presence of witnesses, (5) the relative ease of access to sources of proof, (6) calendar congestion, (7) where the events in issue took place, and (8) the interests of justice in general. Gundle, 844 F. Supp. at 1165.
B. Factors (2), (3) and (4)
The convenience of the witnesses is often regarded as the most important factor to be considered in deciding whether to transfer venue. Gundle, 844 F. Supp. at 1166; Fletcher v. Southern Pacific Transportation Company, 648 F. Supp. 1400, 1401-02 (E.D. Tex. 1986). Acme asserts that most of the witnesses in this case reside in Louisiana, Chicago, or the Southern District of Texas. E.g., Brief in Support of Motion to Transfer Venue ("Motion Brief") ¶ 11; Reply to Plaintiffs' Response to Acme Truck Line, Inc.'s Motion to Transfer Venue ("Reply") ¶ 6. However, Acme has not identified any of the material witnesses who allegedly are located in the district to which it seeks a transfer. "[T]he party seeking transfer must dearly specify the key witnesses to be called and must make a general statement of what their testimony will cover." Continental Airlines, Inc. v. American Airlines, Inc., 805 F. Supp. 1392, 1396 (S.D. Tex. 1992) (quoting 15 C. WRIGHT A. MILLER, FEDERAL PRACTICE PROCEDURE § 3851, at 425). Thus, Acme has not met its burden on this issue.
Nobel, on the other hand, has identified several potential witnesses who reside in or near Dallas, Texas. See Plaintiff's Response to Acme Truck Line, Inc.'s Motion to Transfer Venue ("Response") ¶¶ 23-25, 37. One of these witnesses is Trudy Payne, who was involved in communicating with the parties regarding obtaining reimbursement for the deductible. Id. ¶ 23. Trudy Payne will be subject to the subpoena power of the Northern District of Texas, but not the Southern District. Response ¶ 23. As Acme notes, Trudy Payne no longer works for Nobel, see Motion Brief ¶ 23, and Nobel therefore could not compel her to testify at trial. See, e.g., Continental Airlines, 805 F. Supp. at 1397 (noting that when the key witnesses are employees of the party seeking transfer, their convenience is entitled to less weight because that party will be able to compel their testimony at trial.). The "convenience of the witness" factors do not favor transfer of venue of this case.
C. Factors (5) and (7)
Acme's primary argument for transfer to the Southern District is that Houston is the place where the accident giving rise to this claim occurred and where the underlying lawsuit was filed, litigated, mediated, and settled. Motion Brief ¶¶ 6-13. Consequently, Acme maintains, Houston has the most significant contacts to the controversy at issue in this suit. Id. ¶¶ 15, 16. In support, Acme cites to a handful of cases (but not to specific pages within those cases) which, it claims, buttress its position. Id. ¶ 14.
After conducting its own review of the cases cited, however, the court concludes that many of them either do not directly address the issue or contradict the position that Acme is taking here. For instance, in Americas Insurance Company v. Engicon, Inc., 894 F. Supp. 1068 (S.D. Tex. 1995), the court wrote:
Plaintiff asserts that the underlying personal injury suit was settled in Galveston. Therefore, according to Plaintiff, Galveston is the place of the alleged wrong because issues of Plaintiff's duty to defend and indemnify resulted from the settlement.
The Court recognizes that the underlying suit was filed with this Court on November 18, 1993. However, this case was settled following mediation in Houston. The settlement of a case that was originally pending before this Court does not, by itself, serve as a sufficient contact with the Galveston Division.Id. at 1075; also, e.g., AFA Enterprises, Inc. v. American States Insurance Company, 842 F. Supp. 902, 909 (S.D.W.Va. 1994) (transferring venue to the Western District of Pennsylvania and noting that "[a]lthough this case indirectly involves an auto accident which occurred in West Virginia, the material facts of this litigation surround plaintiffs' purchase of insurance from defendant and a previous insurer."); AVEMCO Insurance Company v. GSV Holding Corporation, 1997 WL 566149, at *6 (S.D.N.Y. Sep. 11, 1997) (transferring venue to New Jersey, even though the underlying accident occurred in New York, because "[t]he pivotal issue in this declaratory judgment action is the interpretation of an insurance policy between the defendants. . . . The insurance policy was issued as a result of telephone conversations made in New Jersey and correspondence both sent and received in New Jersey."); Evangelical Lutheran Church in America v. Atlantic Mutual Insurance Company, 973 F. Supp. 820, 823 (N.D. III. 1997) ("The parties dispute the site of the material events. [Defendant] argues that it is Texas — the place where the alleged sexual misconduct occurred. Plaintiffs say it is the place where the negotiation and purchase of the insurance policies occurred — Chicago and New York or Virginia. The court, however, believes the event underlying this declaratory judgment action is [defendant's] decision to deny coverage. . . . [T]his case is here because [defendant] denied coverage based on its interpretation of the insurance policies. That decision was made in its corporate offices located in New York.")
Acme cites Evangelical Lutheran as support for its claim that it is irrelevant where a decision regarding insurance coverage is made, since the Illinois district court there transferred the case to Texas after determining that the decision to deny coverage was made in New York. See Reply to Plaintiffs' Response to Acme Truck Line, Inc.'s Motion to Transfer Venue ("Reply") at 2. However, it followed from the Evangelical Lutheran court's determination that the site of material events occurred in New York that the events giving rise to the cause of action did not occur in Chicago, so that the plaintiffs' choice to initiate the action there was given little weight. 973 F. Supp. at 823. While it is true that the plaintiff's choice of forum is entitled to less deference when the plaintiff does not reside in its chosen forum and no operative facts occurred within that forum, see Robertson v. Kiamichi Railroad Company, L.L.C., 42 F. Supp.2d 651, 656 (E.D. Tex. 1999), Nobel has chosen here to bring suit in the forum in which it resides and in which many of the operative events occurred.
Acme does discuss Coregis Insurance Company v. Montelepre, No. Civ. A. 98-2167, 1999 WL 236616 (E.D. La. April 20, 1999), in some detail, but that case is distinguishable from the facts of the present case. There, the district court transferred the declaratory judgment action before it to the Western District of Louisiana because the plaintiff insurance company was already engaged in the transferee district in a defense of the defendant, albeit under a reservation of rights, in the underlying dispute. Id. at *2. The underlying dispute in this declaratory judgment action has already settled, and the facts of this case seem more analogous to those of Engicon than Coregis.
Moreover, Nobel has provided evidence that some of the operative events in this case occurred in the Northern District of Texas. Response ¶ 17. It contends, and the court agrees, that the actions which led to this suit were the efforts of the parties to seek a resolution regarding responsibility for the payment of the $198,167.70. Id. Since Nobel's acts to seek a resolution of the deductible amount occurred in Dallas County, Texas, much of the subject matter of this lawsuit could be said to arise in this district. Nobel has also offered evidence that its file relating to the insurance coverage dispute is maintained in Dallas, along with documents relating to the policies, negotiations relating to the polices, the issuance of the policies, and Nobel's attempts to collect money from Discover and/or Acme. See Affidavit of Trudy Payne, attached as Exhibit I to Response.
D. Factor (8)
In general, a court must exercise a strong presumption in favor of the plaintiff's choice of forum. E.g., Continental Airlines, 805 F. Supp. at 1395. While Acme argues that Nobel's choice of forum should receive little deference since none of the operative facts in this case occurred within the forum of original selection, see Reply at 3, this court has already determined that this is not so. Nobel has provided proof that some of the operative facts in this case occurred within this venue, and thus its choice of forum is entitled to the usual amount of deference.
E. Factor (1)
The convenience of the parties is neutral here, as Acme would best be served by a transfer of this case, while Nobel would be best served if this case were litigated here. While this factor may be neutral, it is the only factor that does not support Nobel's opposition to Acme's motion to transfer venue. Although Acme has presented evidence in support of its claims of inconvenience, the grounds alleged are insufficient to overcome the presumption in favor of preserving Nobel's right to select its forum. In this case, whether trial is held in the Northern or Southern District of Texas, one side or the other will suffer some inconvenience. To grant a transfer would negate Nobel's right to choose its forum and serve only to shift some of the inconvenience from Acme to Nobel.
The court does note that Nobel has submitted evidence to the effect that Acme regularly conducts business in the Northern District of Texas. See Response at 4.
III. CONCLUSION
For the above reasons, Acme's motion to transfer venue is DENIED.
SO ORDERED.
March 21, 2000.