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Onset Financial Inc. v. Westchester Fire Insurance Co. Inc.

United States District Court, D. Utah, Central Division

December 22, 2016

ONSET FINANCIAL, INC., Plaintiff,
v.
WESTCHESTER FIRE INSURANCE COMPANY, INC., Defendant. WESTCHESTER FIRE INSURANCE COMPANY, INC., Third-Party Plaintiff,
v.
FAMILY PRACTICE OF ATLANTA MEDICAL GROUP, LLC, et al., Third-Party Defendants.

          District Judge Jill Parrish

          MEMORANDUM DECISION AND ORDER DENYING MOTION TO TRANSFER VENUE

          PAUL M. WARNER, United States Magistrate Judge

         District Judge Jill Parrish referred this matter to Magistrate Judge Paul M. Warner pursuant to 28 U.S.C. § 636(b)(1)(A).[1] Before the court is Defendant and Third-Party Plaintiff Westchester Fire Insurance Company's (“Westchester”) Motion to Transfer Venue.[2] Having reviewed the parties' briefs and the relevant law, the court renders the following Memorandum Decision and Order.[3]

         BACKGROUND

         This lawsuit arises out of a lease agreement between and Plaintiff Onset Financial, Inc. (“Onset”) and Third-Party Defendants Sondial Proprieties, LLC and Family Practice of Atlanta Medical Group, LLC (collectively, “Co-Lessees”).[4] On November 7, 2014, Onset and the Co-Lessees entered into a Master Lease Agreement (“Master Lease”) wherein Onset agreed to lease medical equipment to the Co-Lessees.[5] To facilitate the transaction, the Master Lease required the Co-Lessees to obtain a lease payment bond in favor of Onset in the amount of $2, 600, 000.[6]

         On November 24, 2014, Westchester executed a Lease Payment Bond (“Lease Payment Bond”) in favor of Onset for $2, 600, 000.[7] In exchange for the Lease Payment Bond, the Co-Lessees and the remaining Third-Party Defendants Sondial Pharmacy, LLC, Nexus Laboratories, Inc., Alphonso Waters, and Dr. Sondi Moore-Waters, each executed an Agreement of Indemnity.[8] The Agreement of Indemnity required each Third-Party Defendant to indemnify Westchester for any obligation Westchester may incur under the Lease Payment Bond.[9]

         Subsequently, the Co-Lessees failed to make payments required under the Master Lease.[10] Therefore, on December 7, 2015, Onset filed a lawsuit against Westchester in the Third Judicial District Court for the state of Utah.[11] Onset alleges that the Co-Lessees are in default and, therefore, Westchester is obligated to pay Onset $2, 600, 000 under the terms of the Lease Payment Bond.[12]

         On January 26, 2016, Westchester removed this case to the District of Utah. Additionally, on April 7, 2016, Westchester filed a third-party action against the Third-Party Defendants alleging that the Third-Party Defendants are obligated to pay Westchester for any amounts that Westchester may be obligated to pay Onset under the terms of the Lease Payment Bond.[13]

         Subsequently, Westchester motioned for the court to transfer this case to the Northern District of Georgia.[14] Westchester is a resident of Pennsylvania.[15] Westchester alleges that the Third-Party Defendants are residents of the Northern District of Georgia and that the majority of the witnesses and evidence in this case is located in the Northern District of Georgia.[16] Onset is a Utah corporation with its principle place of business in Salt Lake City, Utah.[17] Onset claims that the majority of its witnesses and evidence are located in Utah.[18]

         DISCUSSION

         Pursuant to 28 U.S.C. § 1404(a), “[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 . . . .” To satisfy § 1404(a), the moving party must establish two prerequisites. See RES-NV, LLC v. Rosenberg, No. 2:13CV00115DAK, 2013 WL 3548697, at *2 (D. Utah July 11, 2013). First, the moving party must establish that the transferee court is a forum in which the action could have been originally brought. Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991) (“[Section] 1404(a) does not allow a court to transfer a suit to a district which lacks personal jurisdiction over the defendants, even if they consent to suit there.”). Second, the moving party “bears the burden of establishing that the existing forum is inconvenient.” Id. Onset does not dispute that this action could have been brought in the Northern District of Georgia.[19] Therefore, the court is left to determine whether Westchester has met its burden to demonstrate that the District of Utah is inconvenient.

         “Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.'” Id. at 1515-16 (quoting Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). To determine whether a forum is inconvenient and transfer proper, the court weighs a number of factors, including:

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.

Texas Gulf Sulphur Co. v. Ritter, 371 F.2d 145, 147 (10th Cir. 1967). The moving party does not have to establish that every factor tips in his or her favor. See Rosenberg, 2013 WL 3548697 at *2-3. Rather, § 1404(a) allows the Court to evaluate the relevant factors that contribute to whether the chosen forum is inconvenient. Id.

         Westchester claims that the Northern District of Georgia has more ties to this case than the District of Utah because: (1) the Third-Party Defendants reside in the Northern District of Georgia; (2) primary witnesses and other sources of proof are located in the Northern District of Georgia; and (3) the assets at issue in the Master Lease and the Lease Payment Bond are located in the Northern District of Georgia.[20] Onset counters that its choice of forum should remain undisturbed because Westchester has failed to meet its burden to demonstrate the balance of relevant factors tips strongly in favor of transfer.[21] Onset argues that its primary witnesses and documentary evidence are located in Utah and Utah law governs the Master Lease.[22]

         For the reasons that follow, Westchester's Motion to Transfer Venue is denied. Where the balance of evidence and witnesses remains equal among forums, the court must defer to the plaintiff's chosen venue. Particularly, there are three relevant factors that demonstrate that this case should remain in Utah: (1) Onset's chosen forum is Utah; (2) Westchester has not demonstrated that the accessibility of witnesses and other sources of proof is harmed by the case proceeding in Utah; and (3) the Master Lease is governed by Utah law and contains a forum selection clause in favor of Utah.

         A. Plaintiff's Chosen Forum

         Onset's choice of forum weighs against transfer. “Unless the balance is strongly in favor of the movant[, ] the plaintiff's choice of forum should rarely be disturbed.” William A. Smith Contracting Co. v. Travelers Indem. Co., 467 F.2d 662, 664 (10th Cir. 1972). Indeed, the court will “honor the plaintiff's choice of forum ‘unless the balance in the defendant's favor is shown by clear and convincing evidence.” Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1168 (10th Cir. 2010) (citations omitted) (emphasis in original).

         Onset is a Utah corporation with its principal place of business in Salt Lake City, Utah.[23]The Lease Payment Bond executed by Westchester and Onset and delivered to Onset in Utah.[24]The Master Lease supported by the Lease Payment Bond is expressly governed by Utah law.[25]

         Furthermore, as discussed below, Westchester has not demonstrated the remaining relevant factors tip strongly in Westchester's favor. Therefore, the court will not disturb Onset's choice of forum.

         B. The Accessibility of Witnesses and Other ...


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