Opinion
Civil Action No. 3:02-CV-0585-G
July 16, 2002
MEMORANDUM ORDER
Before the court is the motion of the defendants, National Union Fire Insurance Company of Pittsburgh, Pennsylvania ("National Union") and City Public Service Board of San Antonio, Texas (the "Service Board") (collectively, "the defendants"), to transfer venue in this case to the United States District Court for the Western District of Texas, San Antonio Division. For the reasons discussed below, the motion is granted.
The Service Board filed the motion initially, and National Union joined in while the motion was being briefed.
I. BACKGROUND
This is an insurance coverage dispute arising from the settlement of a wrongful death case formerly pending in Bexar County, Texas. Complaint for Declaratory Judgment and Damages ("Complaint") at 3-11. That suit, brought by the family of Jason Bedford ("the Bedford action"), an employee of Metco Environmental, Inc. ("Metco"), sought damages from the Service Board. Id. at 3-4. The plaintiffs, The Travelers Indemnity Company of America ("Travelers of America") and The Travelers Indemnity Company of Illinois ("Travelers of Illinois") (collectively, "Travelers"), who paid the entire settlement amount, seek a judicial determination allocating liability for payment of the settlement amount by analyzing various insurance policies between Metco, Travelers of America, Travelers of Illinois, and National Union, as well as a contract between Metco and the Service Board. Id. at 3-5. Specifically, Travelers seeks (1) a declaration of National Union's duty to indemnify the Service Board pursuant to the insurance policy between National Union and Metco and the contract between Metco and the Service Board, (2) a judgment in the amount Travelers of America alleges that the Service Board is responsible for in the settlement of the Bedford action, and (3) a judgment in the amounts that Travelers Illinois alleges that the Service Board and National Union are responsible for in the settlement of the Bedford action. Id. at 5-11.
Travelers of America is incorporated in Connecticut and maintains its principal place of business in that state. Complaint at 1. Travelers of Illinois is incorporated in Illinois and maintains its principal place of business in that state. Id. National Union is incorporated in Pennsylvania, and its principal place of business is in New York. Id. at 2. The Service Board is a municipal gas and electric utility provider for Bexar County, Texas, and is a citizen of Texas. Id.
Travelers filed the complaint for declaratory judgment on March 21, 2002. Id. at 1. The defendants then filed this motion on May 8, 2002, requesting that the case be transferred to the United States District Court for the Western District of Texas, San Antonio Division. Defendant City of San Antonio by and Through City Public Service Board of San Antonio's Motion to Transfer Venue ("Motion") at 1.
The Service Board filed the Motion to Transfer Venue, and National Union filed a brief in support of the Service Board's motion in which it stated that "Defendant [National Union] concurs in and supports [the Service Board's] Motion to Transfer Venue." Defendant National Union Fire Insurance Company's Response to and Brief in Support of Defendant City of San Antonio By and Through City Public Service Board of San Antonio's motion to transfer venue at 1. See note 1, above. Therefore, the arguments made in the motion to transfer venue will be viewed as asserted by the defendants collectively.
II. ANALYSIS A. Legal Standard
A district court may transfer any civil case "[f]or the convenience of parties and witnesses, in the interest of justice, . . . 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 decision to transfer a pending case is committed to the sound discretion of the district court. Jarvis Christian College v. Exxon Corporation, 845 F.2d 523, 528 (5th Cir. 1988). The plaintiff's choice of forum, however, is given substantial weight and should not be disturbed without giving full consideration to the equities of the particular case. See Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966). Accordingly, the defendants have the burden of demonstrating why the forum should be changed. Id.
In deciding whether to transfer a case, 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 Lining Construction Corporation v. Fireman's Fund Insurance Company, 844 F. Supp. 1163, 1165 (S.D. Tex. 1994). Each of these factors will be analyzed in turn to determine the appropriateness of transferring this case to the Western District of Texas, San Antonio Division.
A. Factor (1): The Convenience of the Parties
It is undisputed that the parties to this case, other than the Service Board, would be equally inconvenienced in San Antonio or Dallas. Motion at 5. Travelers of America, Travelers of Illinois and National Union are citizens of Connecticut, Illinois, New York and Pennsylvania, respectively. Complaint at 1-2; see also generally Plaintiffs' Brief in Response to Defendant City of San Antonio By and Through City Public Service Board of San Antonio's Motion to Transfer Venue ("Response"). Therefore, because the Service Board is the only defendant that resides in either this district or the proposed transferee district, this factor weighs in favor of transferring the case to the Western District of Texas, San Antonio Division.
28 U.S.C. § 1332 (c)(1) provides that a corporation is a citizen of the state in which it is incorporated and of the state in which it maintains its principal place of business.
B. Factors (2), (3), and (4): The Convenience of Material Witnesses, Availability of Process, and Cost of Obtaining Witnesses
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). However, it is the convenience of non-party witnesses "that is the more important factor and is accorded greater weight." Gundle, 844 F. Supp. at 1166.
In this instance, the defendants allege that several of their key witnesses are located in San Antonio, and that these witnesses would be inconvenienced by participating in a trial in Dallas. Motion at 4. However, the witnesses the defendant refers to are, for the most part, employees of the Service Board. Id. The only nonparty witness listed by the defendants is Jeff Harvey, outside counsel who represented the Service Board in the Bedford action. Id. According to the defendants, all of these witnesses will testify based on their knowledge of the circumstances surrounding the Bedford action, the negotiation of the settlement in the Bedford action, and the relationship between the defendants and the insured. Id. Although the relationship between the witnesses listed and the defendants is one that diminishes the importance of this factor, the court has not been made aware of any witnesses in Dallas that would be inconvenienced by transferring the case to San Antonio. Therefore, it appears that the convenience of the witnesses will be served by transferring the case to the Western District of Texas, San Antonio Division.
C. Factor (5): Sources of Proof
It is undisputed that the evidence the defendants seek to submit in support of their position is located in San Antonio. Response at 4. However, Travelers argues that the evidence is irrelevant and therefore should not be considered when determining whether the case should be transferred. Id. The evidence that the defendants seek to submit relates to the Bedford action and the settlement negotiations between the parties to that action. Motion at 5. Travelers argues that the circumstances surrounding the underlying Bedford action are irrelevant and the only evidence this court should consider is the three insurance policies and the contract between the Service Board and Metco. Response at 4-5.
Under Texas law, "the duty to indemnify is triggered by the actual facts that establish liability in the underlying lawsuit." Guaranty National Insurance Company v. Azrock Industries Inc., 211 F.3d 239, 243 (5th Cir. 2000) (citing Trinity Universal Insurance Company v. Cowan, 945 S.W.2d 819, 821-22 (Tex. 1997)). Additionally, "the duty to indemnify only arises after an insured has been adjudicated, whether by judgment or settlement, to be legally responsible for damages in a lawsuit." Reser v. State Farm Fire and Casualty Company, 981 S.W.2d 260, 263 (Tex.App. — San Antonio 1998, no pet.). Accordingly, because the duty of National Union to indemnify the Service Board, if existent, would be triggered by the facts underlying the Bedford action, the documents and witnesses in the underlying lawsuit are certainly relevant to a determination of the present dispute. Therefore, because the evidence the defendants seek to introduce is located in San Antonio, such evidence is relevant to this dispute, and the court has not been made aware of any evidence located in Dallas, the sources of proof factor weighs in the favor of transferring the case to the Western District of Texas, San Antonio Division.
D. Factor (6): Calendar Congestion
The court has before it no information on this factor and will therefore accord it neutral weight in the analysis.
E. Factor (7): Where the Events Took Place
The defendants argue that, because the death of Bedford and the subsequent Bedford action took place in San Antonio, that the Western District of Texas, San Antonio Division is the proper venue. Motion at 5. Travelers, on the other hand, again argues that the location of the underlying Bedford action is irrelevant, as the court's sole task is to interpret, as a matter of law, the insurance policies and the contract between the Service Board and Metco. Response at 6. As stated above, the proceedings in the Bedford action are relevant in determining whether National Union has a duty to indemnify. Azrock Industries, 211 F.3d at 243. Even if the location of the Bedford action were irrelevant, this dispute has no ties to the Northern District of Texas, Dallas Division other than the fact that Travelers filed its complaint here. To surmise that the dispute has stronger ties to Dallas than San Antonio, where Bedford's death occurred and where the Bedford action was pending before it was settled, borders on the frivolous. Therefore, the weight of this factor favors transferring the case to the Western District of Texas, San Antonio Division.
F. Factor (8): The Interest of Justice
Although the court, when considering transfer of venue under section 1404(a), does not necessarily exercise a strong presumption in favor of Traveler's choice of forum, that choice is certainly a factor to be considered. See Continental Airlines, Inc. v. American Airlines, Inc., 805 F. Supp. 1392, 1395 (S.D. Tex. 1992) (comparing the standard of 28 U.S.C. § 1404 (a) with the standard of forum non conveniens); Mohamed v. Mazda Motor Corporation, 90 F. Supp.2d 757, 771-74 (E.D. Tex. 2000). Traveler's choice of forum is given less weight, however, because none of the operative facts occurred within this district and neither of the Travelers entities is a citizen of this state. Fletcher, 648 F. Supp. at 1404; Quicksilver, Inc. v. Academy Corporation, 1998 WL 874929 at *4 (N.D. Tex. Dec. 3, 1998) (Buchmeyer, J.) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56 (1981)).
Therefore, Travelers' choice of forum, which is given diminished importance due to Dallas' lack of ties to the dispute and to the parties, is not enough to outweigh the balance of the other six factors discussed above, which favor a transfer to the Western District of Texas, San Antonio Division.
Due to the court's determination that the case should be transferred for the convenience of the parties and witnesses and in the interests of justice, it is unnecessary to address the defendants' argument that venue is improper because National Union is not a resident in the Northern District of Texas.