Opinion
Case No. 04-2359-JWL.
November 22, 2004
MEMORANDUM AND ORDER
This case is an insurance coverage dispute arising from an incident that occurred at a nightclub in New Jersey. This matter comes before the court on the motion of defendant Certain Underwriters at Lloyd's, London a/k/a Underwriters at Lloyd's (Lloyd's) motion to transfer venue (doc. 8) to the United States District Court for the District of New Jersey. Lloyd's motion is opposed by both of the other parties to this lawsuit, including plaintiff First Specialty Insurance Corporation (First Specialty) and defendant Ward North America Holding, Inc. d/b/a Ward North America, Inc. (Ward North America). For the reasons explained below, the court will deny Lloyd's motion.
NATURE OF THE CASE
Plaintiff's complaint alleges that this case originated with an incident that occurred at a nightclub in New Jersey called the Hunka Bunka Ballroom Nightclub (the Hunka Bunka). In April of 2000, Vincent Femia, a citizen of New Jersey, was attacked by unknown assailants while at the Hunka Bunka, and he suffered serious injuries. In October of 2001, he filed a lawsuit in New Jersey state court against the Hunka Bunka (the Femia lawsuit).At various relevant times, the Hunka Bunka carried commercial general liability insurance policies through Lloyd's and/or First Specialty. Ward North America was a third-party claims administrator on behalf of First Specialty. Ward North America received notice of the Femia lawsuit, and it agreed to defend under the Hunka Bunka's insurance policy with First Specialty. Ward North America notified Lloyd's of the lawsuit, but Lloyd's refused to defend. Ultimately, First Specialty paid to settle the Femia lawsuit.
First Specialty then filed this lawsuit in the United States District Court for the District of Kansas seeking to recover monies that it paid to settle the Femia lawsuit. First Specialty asserts five claims against Lloyd's for equitable subrogation, breach of contract upon assignment, bad faith, unjust enrichment, and declaratory judgment. In addition, First Specialty asserts one claim against Ward North America for Ward North America's alleged negligence in the manner in which it handled the claim on behalf of First Specialty. Lloyd's now seeks to transfer this case to the United States District Court for the District of New Jersey.
LEGAL STANDARD FOR A MOTION TO TRANSFER VENUE
A motion to transfer to a more convenient forum is governed by 28 U.S.C. § 1404(a), which provides: "For the convenience of the 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." Id. Section 1404(a) affords the district court broad discretion to adjudicate motions to transfer based upon a case-by-case review of convenience and fairness. Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1516 (10th Cir. 1991) (quoting Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). The court should consider the following factors in determining whether to transfer a case:
the plaintiff's choice of forum; the accessibility of witnesses and other sources of proof, including the availability of compulsory process to insure attendance of witnesses; the cost of making the necessary proof; questions as to the enforceability of a judgment if one is obtained; relative advantages and obstacles to a fair trial; difficulties that may arise from congested dockets; the possibility of the existence of questions arising in the area of conflict of laws; the advantage of having a local court determine questions of local law; and, all other considerations of a practical nature that make a trial easy, expeditious and economical.Chrysler Credit Corp., 928 F.2d at 1516 (quotation omitted). The plaintiff's choice of forum should rarely be disturbed unless the balance weighs strongly in favor of the movant. Scheidt v. Klein, 956 F.2d 963, 965 (10th Cir. 1992). The party seeking to transfer the case has the burden of proving that the existing forum is inconvenient. Id.
DISCUSSION
Applying these factors to the circumstances of this case, the court concludes that they weigh toward denying the motion to transfer. First Specialty chose to file this action in the District of Kansas. As noted above, this creates a strong presumption in favor of retaining this case.Lloyd's attempts to overcome this presumption by arguing that the accessibility of witnesses, including the availability of compulsory process to insure attendance of witnesses, weighs in its favor because numerous nonparty witnesses are located in New Jersey. A party who argues that a transfer is necessary to have nonparty witnesses testify must state a factual basis from which the court can ascertain whether the witnesses' testimony would be relevant and material, whether the witnesses are unwilling to come to trial, whether deposition testimony would be inadequate, or whether compulsory process would be useful. Scheidt, 956 F.2d at 966. Lloyd's argument is that numerous nonparty witnesses located in New Jersey are "crucial" to Lloyd's defense of this case. Lloyd's has not named these witnesses nor has it explained the anticipated substance of their testimony so that the court can ascertain whether their testimony would be relevant and material. Lloyd's has not addressed the issues of whether those witnesses would be unwilling to come to trial in Kansas, whether presenting their deposition testimony would be inadequate, or whether compulsory process would be useful. In sum, Lloyd's argument that these nonparty witnesses are crucial is simply too conclusory to allow the court to make a finding that Lloyd's, as the moving party, has satisfied its burden of demonstrating that this factor weighs in its favor. See, e.g., Freeman v. Gerber Prods. Co., No. 02-2249-JWL, 2003 WL 1906334, at *2 (D. Kan. Apr. 17, 2003) (denying motion to transfer where the moving party had failed to meet its burden of establishing that nonparty witnesses would not be able to attend trial in Kansas); Meek Assocs. v. First Union Ins. Group, No. 99-2519-CM, 2001 WL 58839, at *3 (D. Kan. Jan. 18, 2001) (finding this factor did not weigh in favor of transfer where the defendants had provided no information concerning the significance of the testimony of the potential witnesses who did not reside in Kansas or whether any of those witnesses would be willing to appear without subpoena).
Lloyd's also contends that the costs of making the necessary proof will be increased because these nonparty witnesses are located in New Jersey. Notably, however, both First Specialty and Ward North America favor retaining the case here because their local offices were directly involved with the underlying claim and/or the insurance policy. Ward North America handled the underlying claim almost entirely from its offices in Fairway, Kansas. The three adjusters who were involved in handling the claim on behalf of Ward North America who likely will be witnesses are located in Kansas, Louisiana, and North Carolina. First Specialty anticipates that it will obtain evidence from a local corporate representative of Ward North America. The employees of First Specialty who were involved in the underlying claim and/or policy at issue reside or may be found in Kansas. Lloyd's has not established that the parties will incur any greater expense in obtaining and presenting the testimony of the nonparties in New Jersey than if the court were to transfer the case to New Jersey, in which case the parties would have to travel back to Kansas to depose witnesses from First Specialty and Ward North America. In short, Lloyd's is merely attempting to shift the cost and inconvenience from itself to the other two parties, and that is an insufficient basis to warrant transferring this case. See Scheidt, 956 F.2d at 966.
Lastly, Lloyd's contends that choice-of-law principles will require most of the claims involved in this case to be governed by New Jersey law, and as such a district court in New Jersey would be better suited to resolve questions of New Jersey law. The Tenth Circuit, however, has held that this factor is given little weight if not dealing with a complex question of either state's law. Scheidt, 956 F.2d at 965 (holding that the "relative simplicity" of a common law claim neutralizes this factor). In this case, First Specialty's claims against Lloyd's appear to be relatively straightforward common law claims. The court is unpersuaded that these claims for equitable subrogation, breach of assigned insurance contract, bad faith, and unjust enrichment will present complex questions of New Jersey law. Furthermore, the parties seem to agree that Kansas law will govern First Specialty's negligence claim against Ward North America. Accordingly, this factor might weigh somewhat in Lloyd's favor, but not by much.
On balance, then, the court finds that Lloyd's has failed to satisfy its burden of demonstrating that the interests of convenience and fairness weigh sufficiently in its favor to overcome the heavy burden that the court must give to First Specialty's choice of forum. Accordingly, a transfer of the case is not warranted.
IT IS THEREFORE ORDERED BY THE COURT that Lloyd's motion to transfer venue (doc. 8) is denied.
IT IS SO ORDERED.