United States District Court, D. Utah
Magistrate Judge Paul M. Warner
MEMORANDUM DECISION AND ORDER TRANSFERRING VENUE TO
THE NORTHERN DISTRICT OF GEORGIA
N. PARRISH UNITED STATES DISTRICT COURT JUDGE
matter is before the court on Third-Party Plaintiff
Westchester Fire Insurance's (“Westchester”)
Motion for Default Judgment as to Family Practice of Atlanta
Medical Group, LLC (“Family Practice”), Sondial
Pharmacy, LLC (“Sondial Pharmacy”), Sondial
Properties, LLC (“Sondial Properties”), and Nexus
Laboratories, Inc. (“Nexus”) (collectively
“Sondial Entities”), its Motion for Summary
Judgment against Alphonso Waters and Dr. Sondi Moore-Waters
(the “Waters”), and its Response to the
Court's Order for Supplemental Briefing.
lawsuit arises out of a lease agreement for medical equipment
between Onset Financial (“Onset”) and Sondial
Properties and Family Practice (“Master Lease”).
The Master Lease required Sondial Properties and Family
Practice to obtain a lease payment bond. Westchester executed
the lease payment bond (“Bond”) in favor of Onset
for $2, 600, 000.00. In exchange for the Bond, the Sondial
Entities and the Waters (collectively “Third-Party
Defendants”) signed an Agreement of Indemnity
(“Indemnity Agreement”) wherein they agreed to
indemnify Westchester for any obligation under the Bond.
Sondial Properties and Family Practice defaulted on the
Master Lease. Onset then sued Westchester in the Third
Judicial District Court in and for Salt Lake County, State of
Utah on December 8, 2015.
removed the action to the United States District Court,
District of Utah on January 26, 2016. Westchester then filed
a Third Party Complaint against the Sondial Entities and the
Waters (collectively “Third-Party Defendants”) on
April 7, 2016. Westchester served the Sondial Entities on
April 14, 2016. Westchester served Alphonso Waters on May 5,
2016 and Dr. Sondi Moore-Waters on December 23, 2016.
Alphonso Waters, acting pro se, filed an answer on behalf of
himself and the Sondial Entities on April 27, 2016, wherein
he asserted all seven of the defenses available under
Fed.R.Civ.P. 12(b), including lack of personal jurisdiction.
Dr. Sondi Moore-Waters, acting pro se, filed her answer and
asserted the same affirmative defenses on December 27, 2016.
Neither Mr. Alphonso Waters nor Dr. Sondi Moore-Waters have
filed any subsequent responsive pleadings or otherwise
appeared. Although Mr. Waters purported to act on behalf of
the Sondial Entities, Mr. Waters could not act pro se on
behalf the business entities and thus his answer was only
effective as to himself. As of this date, the Sondial
Entities have not answered or otherwise appeared. The clerk
of court has entered default certificates against the Sondial
17, 2017, the court dismissed all claims between Onset and
Westchester pursuant to the parties' Stipulation to
Dismiss Claims with Prejudice, leaving only Westchester's
third-party claims against Third-Party Defendants. On
November 21, 2018, Westchester filed its Motion for Default
Judgment and its Motion for Summary Judgment on the
third-party claims. Both motions are unopposed.
reviewing the motions, the court became concerned that
Westchester had failed to meet its burden to establish that
this court has personal jurisdiction over the Third-Party
Defendants. While personal jurisdiction is not routinely
raised sua sponte, the court determined it must raise the
issue here because “[a] judgment is void when a court
enters it lacking subject matter jurisdiction or jurisdiction
over the parties.” Williams v. Life Sav. & Loan,
802 F.2d 1200, 1202- 03 (10th Cir. 1986). Thus, “when
entry of a default judgment is sought against a party who has
failed to plead or otherwise defend, the district court has
an affirmative duty to look into its jurisdiction both over
the subject matter and the parties.” Id. And
when evaluating a motion for summary judgment, even
“[i]f the nonmoving party fails to respond, the
district court may not grant the motion without first
examining the moving party's submission to determine if
it has met its initial burden.” Hansen v. Jenson, 2008
WL 4145976, at *1 (D. Utah 2008) (quoting Reed v.
Bennett, 312 F.3d 1190, 1194-95 (10th Cir.2002)).
Westchester had not alleged any facts suggesting that this
court may exercise personal jurisdiction over the Third-Party
Defendants, the court ordered that Westchester file a
supplemental memorandum alleging its basis for personal
jurisdiction or notifying the court of its non-opposition to
a transfer of venue. Westchester responded with a notice of
non-opposition to a transfer of venue.
has failed to make any allegations establishing a factual
basis for this court's exercise of personal jurisdiction
over the Third-Party Defendants. Accordingly, this court
finds that it may not exercise personal jurisdiction over the
Third-Party Defendants and therefore may not enter default
judgment or summary judgment against them. See Williams v.
Life Sav. & Loan, 802 F.2d 1200, 1202-03 (10th Cir.
1986). In the Tenth Circuit, there is precedent for transfer
to another district pursuant to 28 U.S.C. section 1404(a)
when the court sua sponte finds lack of personal
jurisdiction. See Williams v. Life Sav. & Loan, 802 F.2d
1200, 1203 (10th Cir. 1986) (citing favorably First National
Bank of Louisville v. Bezema, 569 F.Supp. 818 (S.D. Indiana
1983) wherein the district court transferred a case after sua
sponte raising the issue of lack of personal jurisdiction).
Under 28 U.S.C. section 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 or to
any district or division to which all parties have
outset of this action, Westchester moved to transfer the case
to the Northern District of Georgia pursuant to 28 U.S.C.
§ 1404(a). Westchester alleged the Northern District of
Georgia was the more convenient forum because Third-Party
Defendants reside in the Northern District of Georgia,
primary witnesses are located in the Northern District of
Georgia, and finally the assets at issue in the underlying
lawsuit are located in the Northern District of Georgia.
Magistrate Judge Paul Warner denied the motion to change
venue because Onset had chosen Utah as the forum and
Westchester had not met its burden to overcome the preference
given to the plaintiff's choice of forum. See Memorandum
Decision and Order Denying Motion to Transfer Venue, ECF No.
54. However, on July 17, 2017, the court dismissed all claims
between Onset and Westchester. Thus, the court need no longer
consider the plaintiff's choice of forum. Westchester has
already indicated that it consents to a transfer to the
Northern District of Georgia and Third-Party Defendants have
not objected. Thus, the court must now evaluate only whether
the action could have been brought in the Northern District
to 28 U.S.C. § 1391(b): “A civil action may be
(1) a judicial district in which any defendant resides, if
all defendants are residents of the State in which the
district is located; (2) a judicial district in which a
substantial part of the events or omissions giving rise to
the claim occurred, or a substantial part of property that is
the subject of the action is situated; or (3) if there is no
district in which an action may otherwise be brought as
provided in this section, any judicial ...