Alexander & Alexander v. Donald F. Muldoon & Co.

• Decision Date: 30 March 1988
• Docket Number: No. 86 Civ. 6568 (MGC).,86 Civ. 6568 (MGC).
• Citation: 685 F. Supp. 346
• Parties: ALEXANDER & ALEXANDER, INC., Plaintiff, v. DONALD F. MULDOON & CO., Miro & Associates Risk Management, Inc. and Carlos Miro, Defendants.
• Court: U.S. District Court — Southern District of New York

685 F. Supp. 346

ALEXANDER & ALEXANDER, INC., Plaintiff, v. DONALD F. MULDOON & CO., Miro & Associates Risk Management, Inc. and Carlos Miro, Defendants.

No. 86 Civ. 6568 (MGC).

United States District Court, S.D. New York.

March 30, 1988.

Wilson, Elser, Moskowitz, Edelman & Dicker, New York City, by James M. Kaplan and Pamela E. Kulsrud, for plaintiff.

Shea & Gould, New York City, Maloney & Smith, Dallas, Tex., by Martin I. Shelton, Charles H. Smith and John Moore, for defendant Miro & Associates Risk Management, Inc.

Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson & Casey, New York City, by Daniel J. Cooper and Sara Z. Schepps, for defendant Donald F. Muldoon & Co.

OPINION AND ORDER

CEDARBAUM, District Judge.

Defendant Miro & Associates Risk Management, Inc. ("Miro") moves to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(3) for lack of personal jurisdiction and improper venue. Miro moves alternatively, and defendant Donald F. Muldoon & Co. ("Muldoon") also moves, to transfer this action to the United States District Court for the Northern District of Texas, Dallas Division, pursuant to 28 U.S.C. §§ 1404(a) and 1406(a). For the reasons discussed below, Muldoon's transfer motion is denied, and plaintiff and Miro are directed to make further submissions concerning the propriety of a severance and transfer of the action as against Miro.

PARTIES

Plaintiff Alexander & Alexander, Inc. ("Alexander") is a Maryland corporation with its principal place of business in Baltimore, Maryland. Muldoon is a New York corporation with its principal place of business in New York City. Miro is a Texas corporation with its principal place of business in Dallas, Texas. Carlos Miro, a citizen of Texas, is the principal of Miro. Although named as a defendant in the complaint, he has not been served with process in this case.

FACTUAL BACKGROUND

Alexander is an insurance broker which placed insurance coverage for Wal-Mart Stores, Inc. ("Wal-Mart") with Transit Casualty Company ("Transit") through Miro, Carlos Miro and Muldoon. Muldoon, Transit's managing general agent, had the power to appoint sub-agents to act in Transit's behalf. Under this authority, Muldoon, as agent for Transit, appointed Miro as a sub-agent of Transit, and authorized Miro to solicit and issue policies of insurance on behalf of Transit. Miro and Muldoon memorialized this appointment by entering into a "Managing Agency Agreement," which was drafted, executed and mailed by Muldoon in New York, and executed by Carlos Miro for Miro in Dallas. Alexander was not a party to the Managing Agency Agreement, and apparently has no contractual relationship with either Miro or Muldoon.

In this action, Alexander seeks indemnification or contribution from defendants for any damages for which Alexander might be held liable to Wal-Mart or Transit in an action recently tried in the United States District Court for the Western District of Arkansas.¹ Alexander also seeks compensatory and punitive damages for defendants' negligence in the execution of their duties as agents of Transit. In addition, Alexander sues Miro and Carlos Miro for alleged misrepresentations to Alexander concerning Wal-Mart's insurance coverage — specifically, alleged misstatements that Miro would make and, later, that it had made all filings necessary to comply with various state workers' compensation insurance laws. Alexander's claims are based on Miro's alleged failure to make these filings, Miro's alleged misrepresentations concerning that failure, and Muldoon's alleged failure adequately to supervise Miro.

In a related action, now pending in the United States District Court for the Northern District of Texas, Dallas Division, Transit is seeking damages from Miro, Muldoon and others for alleged improprieties in connection with insurance placements for Wal-Mart. Miro has filed a third-party complaint in that action alleging that Alexsis, Inc., a subsidiary of Alexander, engaged in wrongful conduct, including misrepresentations concerning the claims and reserves of Wal-Mart upon which Miro relied in evaluating the Wal-Mart risk.

DISCUSSION

I. The Motions to Transfer

A district court has the power to transfer a case to another judicial district pursuant to 28 U.S.C. §§ 1404(a) and 1406(a) whether or not the transferor court has personal jurisdiction over the defendants, Corke v. Sameiet M.S. Song of Norway, 572 F.2d 77, 80 (2d Cir.1978), or venue is proper, Goldlawr, Inc. v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962). Therefore, where motions to dismiss for lack of personal jurisdiction and venue are joined with a motion to transfer, the transfer motion may be considered first. See Matra et Manurhin v. International Armament Co., 628 F.Supp. 1532, 1534 & n. 2 (S.D.N.Y.1986). In this case, since there are strong considerations favoring transfer, I turn immediately to the transfer motions.

A. Factors Favoring Transfer

The factors to be weighed in considering a motion to transfer include the convenience to the parties and witnesses and the interest of justice. See 28 U.S.C. § 1404. The burden is on defendants to establish that the plaintiff's choice of forum should be overturned. Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir.1978), cert. denied, 440 U.S. 908, 99 S.Ct. 1215, 59 L.Ed.2d 455 (1979). A plaintiff's choice of forum is entitled to substantial weight. A. Olinick & Sons v. Dempster Bros. Inc., 365 F.2d 439, 444 (2d Cir. 1966). However, that weight may be diminished where, as here, a plaintiff brings suit outside its home forum. Savin v. CSX Corp., 657 F.Supp. 1210, 1213 (S.D.N.Y. 1987), quoting Pesin v. Goldman, Sachs & Co., 397 F.Supp. 392, 394 (S.D.N.Y.1975). In this case, the factors enumerated in § 1404 support a transfer to Texas, and the deference due the plaintiff's choice of forum does not outweigh these considerations.

The convenience of the parties would be greater, on balance, were this case to proceed in Texas rather than in New York. Miro's principal place of business is Dallas. Although Muldoon's principal place of business is New York, in bringing its transfer motion Muldoon has made clear its preference for a Texas forum, where this action could be consolidated with or at least proceed side by side with the related Texas action. Alexander's argument that a New York forum would be more convenient for Muldoon is not persuasive in the face of Muldoon's express rejection of a New York forum. See Savin, 657 F.Supp. at 1213. As to Alexander, whose principal place of business is Baltimore, a Dallas forum may be more distant than a New York forum. This inconvenience may be somewhat abated by the pendency of the related litigation in Texas involving Alexander's subsidiary. At any rate, any increase in inconvenience to Alexander is outweighed by the added convenience of the Texas forum to Muldoon and Miro.

The convenience of witnesses also points toward a transfer of this action. Alexander has not named a single witness for whom New York would be a more convenient forum than Texas. Muldoon, on the other hand, has listed three trial witnesses who are located in or near the Northern District of Texas. According to Muldoon, these witnesses—Carlos Miro, Sheldon Irion and Doug Hale—would testify about Muldoon's lack of involvement or knowledge of the Wal-Mart transaction. It is undisputed that this testimony would be important to Muldoon's defense of this action. And Carlos Miro, who represented Miro in many of its contacts with the other parties to this lawsuit, is a Texas resident.

The existence of the related action in the Northern District of Texas provides the most compelling support for finding that a transfer of this case is in the interest of justice. The related action involves claims arising from the very same insurance placement. Miro, Muldoon and a subsidiary of Alexander are all parties to that action.

There is a strong policy favoring the litigation of related claims in the same tribunal in order that pretrial discovery can be concluded more efficiently, duplicitous litigation can be avoided, thereby saving time and expense for both parties and witnesses, and inconsistent results can be avoided.

Wyndham Associates v. Bintliff, 398 F.2d 614, 619 (2d Cir.), cert. denied, 393 U.S. 977, 89 S.Ct. 444, 21 L.Ed.2d 438 (1968); see also Savin, 657 F.Supp. at 1214. For these reasons, it is in the interest of justice to transfer this action to Texas. Alexander's argument that it would be unfair and burdensome to add its claims to the "morass of litigation" pending in Texas, Plaintiff's Brief at 17, runs directly counter to the well-founded policy expressed in Wyndham Associates of trying related claims together.

B. The Hoffman v. Blaski Test

28 U.S.C. §§ 1404(a) and 1406(a) provide that a district court may transfer an action only to a district or division where the action might have been brought initially. Venue must be proper and the defendants must be amenable to process in the transferee forum. These requirements cannot be waived by the party seeking the transfer. Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960). Since Miro and Muldoon are the proponents of the transfer motions, they bear the burden of establishing that personal jurisdiction and venue are proper as to them in Texas. In re Mid-Atlantic Toyota Antitrust Litigation, 1982-1 Trade Cases (CCH) ¶ 64,494, at 72,748 (D.Md.1982).²

Miro, which is incorporated in Texas and has its principal place of business in Dallas, is clearly subject to personal jurisdiction in Texas, as is Carlos Miro, who is a citizen of Texas. Venue is also clearly proper as to those defendants, pursuant to 28 U.S.C. §§ 1391(a), (c). But the moving parties have not established that personal jurisdiction lies over Muldoon in the proposed transferee district.

Personal jurisdiction over a defendant in a diversity action is determined by the law of the state in...