Derry Finance NV v. Christiana Companies, Inc.

• Decision Date: 09 February 1983
• Docket Number: Civ. A. No. 82-412.
• Citation: 555 F. Supp. 1043
• Parties: DERRY FINANCE N.V., a Netherlands Antilles corporation, Plaintiff, v. The CHRISTIANA COMPANIES, INC., a Delaware corporation, Defendant.
• Court: U.S. District Court — District of Delaware

555 F. Supp. 1043

DERRY FINANCE N.V., a Netherlands Antilles corporation, Plaintiff, v. The CHRISTIANA COMPANIES, INC., a Delaware corporation, Defendant.

Civ. A. No. 82-412.

United States District Court, D. Delaware.

February 9, 1983.

Lawrence C. Ashby of Ashby, McKelvie & Geddes, Wilmington, Del., and Jerry J. Strochlic of Sage Gray Todd & Sims, New York City, of counsel, for plaintiff.

R. Franklin Balotti of Richards, Layton & Finger, Wilmington, Del., for defendant.

MEMORANDUM OPINION

LATCHUM, Chief Judge.

This diversity action has been brought by Derry Finance N.V. ("Derry"), a Netherlands Antilles corporation with its principal place of business in Curacao, Netherlands Antilles, seeking to recover payment on six promissory notes executed by The Christiana Companies, Inc. ("Christiana"), a Delaware corporation with its principal place of business in San Diego, California. Christiana has moved, pursuant to 28 U.S.C. § 1404(a), to transfer this case to the United States District Court for the Southern District of California ("the California Court").

The promissory notes in question are part of a series of business transactions involving the sale and leaseback of commercial jetliners. The amended complaint alleges that on or about December 31, 1979, Christiana executed and delivered to Aark Enterprises ("Aark"), a New York partnership, six promissory notes totalling $4,720,000.¹ Each note is fully transferable, requires the Payor (Christiana) to pay all costs of enforcement and collection if the note is not promptly paid when due, and becomes due and payable both as to principal and interest if the Payor fails to pay the note or its interest when due.² (Docket Item "D.I." 7, at 2-3.) Subsequently, Aark assigned and fully endorsed each note to Derry. Derry contends that on July 15, 1981, two of the notes became due and payable, but that Christiana did not pay any of the amounts due. Thus, Derry avers, Christiana's failure to make the July 15, 1981 payments resulted in the full amounts of the notes (including interest) becoming due.³

Christiana contends that this case should be transferred to California for the following reasons. Aside from Christiana being incorporated in Delaware, it has no other connection with Delaware; the underlying transactions and the parties have no connection with Delaware; the underlying transaction arose out of acts in California; the California Court will be more convenient for Christiana, but will not impose any additional inconvenience upon Derry; California is a more convenient forum for its witnesses; and there is no countervailing reason in the interest of justice to prevent transfer.

Derry disagrees, contending that it is far more convenient for its party witnesses, all of whom reside in Bermuda, to travel to Delaware rather than to California; its nonparty witnesses, who are located in New York, will find it is a far more convenient forum; the underlying agreements have choice-of-law clauses that designate New York law as being applicable; and the bulk of Christiana's documents are located in Chicago.

28 U.S.C. § 1404(a) provides:

For 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.

In order to transfer a case, the transferee court must be a district where the case "might have been brought." Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 809, 11 L.Ed.2d 945 (1964); Phillips Petroleum Co. v. Federal Energy Administration, 435 F.Supp. 1234, 1236 (D.Del.1977). This case could have been brought in the California Court because Christiana has its principal place of business in California. It is, therefore, subject to the personal jurisdiction of that court and venue would be proper under 28 U.S.C. § 1391(a).

The motion to transfer imposes upon the moving party the burden of establishing that the case should be transferred and it is important that the plaintiff's choice of forum be accorded grave weight. Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970), cert. denied, 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1971). This importance, however, decreases when the plaintiff sues in a district that is not its "home turf" nor connected with the subject matter of the litigation. Pall Corp. v. Bentley Laboratories, Inc., 523 F.Supp. 450 (D.Del.1981).

The Court must assess three factors in determining whether the motion to transfer will be granted: (1) the convenience of the parties; (2) the convenience of the witnesses; and (3) the interest of justice. See Gulf Oil v. Gilbert, 330 U.S. 501, 507-09, 67 S.Ct. 839, 842, 91 L.Ed. 1055 (1947); Moore v. Telfon Communications Corp., 589 F.2d 959, 968 (9th Cir.1978).

The first factor to be considered is the convenience of the parties. Christiana contends that the California Court is the most convenient forum for the parties since Christiana's principal place of business is in California. Moreover, Christiana avers, since Derry is located in Curacao and its directors and officers are located in Bermuda, they will have to travel regardless of which forum is selected. Christiana recognizes the differential in travel cost for Derry's directors between Delaware and California and therefore offered at oral argument on this motion to pay the cost differential for travel to California. Derry, however, contends that the inconvenience to it of having this case tried in California extends beyond the travel cost; more specifically, Derry notes, none of its directors travel to California on business and one of its managing directors is in poor health.

Derry, however, relies more upon the inconvenience that transfer would place upon its witnesses as a basis for denying Christiana's motion. In this respect, Derry points out that at trial it would rely upon the testimony of officers of Aark and AIG 737-I, Inc. ("AIG"), a New Jersey corporation with its principal place of business in New Jersey. Both Aark and AIG were involved in the transactions underlying the notes and Derry argues that the testimony of their officers will be critical at trial in order to establish that there were no defaults on performance of the underlying transactions, which, if such defaults did occur, would excuse Christiana's payment on the notes. Derry states that all these witnesses are located in New York or New Jersey and are therefore not subject to the California Court's service of process. Most importantly, Derry points to the fact that the Chief Executive Officer of Aark and the President of AIG, both of whom are important witnesses for Derry, have stated that they "would be willing to testify in Delaware at the trial of this...