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National Group Underwriters v. Southern Security Life Ins.

United States District Court, N.D. Texas
Nov 19, 2001
4:01-CV-0403-E (N.D. Tex. Nov. 19, 2001)



November 19, 2001


Now before the Court is a Motion for Change of Venue filed by defendant Southern Security Life Insurance Company ("SSLIC") in the above-numbered and styled case. Plaintiff National Group Underwriters ("NGU") has responded in opposition, and SSLIC has submitted a reply brief. After considering the motions and arguments of the parties, the record before the Court, and the applicable law, the Court makes the following determinations.


Plaintiff NGU is an insurance agency based in Fort Worth, Texas. Defendant SSLIC, an insurance company headquartered in Florida, underwrites whole life insurance policies that are marketed to pay for burial expenses. On October 20, 1997, NGU and SSLIC entered into a contract whereby NGU agreed to market SSLIC's insurance policies to the public using a network of individual agents referred to as "producers". SSLIC agreed to pay a commission on the sale of each policy, with the individual producers receiving a majority of the commission and NGU taking a small percentage.

The whole life insurance policy marketed by SSLIC, NGU, and the producers has a high lapse rate, with customers often failing to pay their monthly premiums or terminating their policies. In the event of a lapsed policy, SSLIC "charges back" the unearned portion of the commission which it has already paid against the amounts payable to NGU and the producers. This fluid arrangement necessitated continual accounting adjustments by SSLIC that affected NGU's compensation under the parties' contract.

In the spring of 1999, SSLIC was purchased by Utah-based Security Life National, a subsidiary of Security National Financial Corporation. After the sale, NGU began to question SSLIC's accounting of NGU's debit balance, and also inquired into how SSLIC was calculating commissions and production bonuses under the parties' contract. On April 24, 2001, while these disputes were ongoing, SSLIC made demand on NGU for payment of a debit balance allegedly owed to SSLIC in the amount of $268,789.99. Two weeks later, on May 9, 2001, SSLIC increased the amount owed by NGU to $734,479.44.

NGU originally filed the instant action in Texas state court on March 7, 2000, claiming that SSLIC breached the parties' contract by improperly calculating the payment of commissions and production bonuses due to NGU. After removing the case to federal court on May 15, 2001, SSLIC asserted numerous counterclaims against NGU, including breach of contract, tortious interference with contract, and intentional interference with economic relations.


Defendant SSLIC moves to transfer this action to the United States District Court for the District of Utah pursuant to 28 U.S.C. § 1404(a). Section 1404(a) provides that "[f]or 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 decision on whether to transfer venue in a particular case is committed to the sound discretion of the district court. See Jarvis Christian College v. Exxon Corp., 845 F.2d 523, 528 (5th Cir. 1988). The moving party bears the burden of proving that transfer is appropriate.See Peteet v. Dow Chemical Co., 868 F.2d 1428, 1436 (5th Cir. 1989). The court may not transfer venue where the only practical effect will be merely to shift the burden of the trial from one party to the other. See The Bear Stearns Cos. v. Lavalle, 2001 WL 406217, at *5 (N.D. Tex. Apr. 18, 2001) (Fitzwater, J.).

The district court must consider several non-exclusive factors when deciding whether a proposed venue change comports with the interests of convenience and justice required by section 1404(a).See id. The plaintiff's choice of a proper forum is a key consideration in the weighing of a transfer request, and the choice "should not be lightly disturbed." Young v. Armstrong World Indus., Inc., 601 F. Supp. 399, 401 (N.D. Tex. 1984) (Sanders, J.). Other relevant factors include: the convenience of parties and witnesses; the place of the alleged wrong; the accessibility and location of sources of proof; the location and cost of counsel; the relative congestion of the courts' dockets; and the interests of justice in general. See Johnson v. Dillard Dep't Stores, Inc., 2001 WL 285248, at *1-3 (N.D. Tex. Mar. 17, 2001) (Kendall, J.).

Upon consideration of the briefs of the parties, and the appendices submitted therewith, the Court finds that the balance of factors weighs against transfer of this case to the District of Utah.

First, plaintiff NGU's choice of Fort Worth as a forum is "highly esteemed" and cannot be lightly disregarded. See Peteet, 868 F.2d at 1436. Moreover, the relative importance of NGU's selection of the forum is increased in this case because the company's principal place of business is in the Northern District of Texas. (Aff. of Gaylan Hendricks at ¶ 2.) See Continental Airlines, Inc. v. American Airlines, Inc., 805 F. Supp. 1392, 1396 (S.D. Tex. 1992) (holding that greater deference should be given to plaintiff's choice of forum because plaintiff had its principal place of business in the forum).

Second, the convenience of the parties does not support transfer of this case. Although its corporate parent is located in Salt Lake City, Utah, SSLIC is a Florida corporation with its principal place of business in that state. (Def.'s Written Notice of Removal at 1.) Because NGU has its principal place of business in the forum state of Texas, it would make little sense to transfer this matter to Utah, where neither of the parties are located.

Third, the convenience of the witnesses also weighs against transfer. Although SSLIC identifies seven key witnesses who reside in Utah, the Court notes that at least six of the potential witnesses appear to be employees of SSLIC or its corporate parent, and thus their testimony can be compelled in the Northern District of Texas. See TIG Ins. Co. v. NAFCO Ins. Co., 2001 WL 432369, at *6 (N.D. Tex. Apr. 23, 2001) (Sanders, J.) (less consideration given to convenience of witnesses who are employees of party, because their testimony can be compelled). The remaining named witnesses either reside in Texas, or in states (Florida, Georgia, and Alabama) where the burden of attending a trial in the Northern District of Texas would be no greater than traveling to a similar proceeding in Utah.

Finally, both parties have retained counsel in Fort Worth, Texas. (Aff. of Walker C. Friedman at ¶ 2; Mem. in Supp. of Mot. for Change of Venue at 11.) Litigating in the current forum would allow plaintiff NGU to retain the counsel of its choosing, while a transfer may force the company into a difficult and expensive search for new representation. This factor weighs against transfer.

The other factors relevant to a § 1404(a) analysis — the place of the alleged wrong, the accessibility and location of sources of proof, the relative congestion of the courts' dockets, and the interests of justice in general — do not weigh substantially for or against transfer of this case, and thus will not be discussed by the Court.

In sum, the Court finds that defendant SSLIC has not met its burden for a discretionary § 1404(a) transfer of this case to the District of Utah. Accordingly, SSLIC's Motion for Change of Venue is hereby DENIED.


Summaries of

National Group Underwriters v. Southern Security Life Ins.

United States District Court, N.D. Texas
Nov 19, 2001
4:01-CV-0403-E (N.D. Tex. Nov. 19, 2001)
Case details for

National Group Underwriters v. Southern Security Life Ins.

Case Details


Court:United States District Court, N.D. Texas

Date published: Nov 19, 2001


4:01-CV-0403-E (N.D. Tex. Nov. 19, 2001)

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