HDMG Entm't, LLC v. Certain Underwriters At Lloyd's of London Subscribing to Policy No. L009082

• Decision Date: 25 January 2017
• Docket Number: Civil Action No.: 4:16-cv-01626-RBH
• Court: U.S. District Court — District of South Carolina
• Parties: HDMG Entertainment, LLC, Plaintiff, v. Certain Underwriters at Lloyd's of London Subscribing to Policy No. L009082, Defendant.

HDMG Entertainment, LLC, Plaintiff, v. Certain Underwriters at Lloyd's ofLondon Subscribing to Policy No. L009082, Defendant.

Civil Action No.: 4:16-cv-01626-RBH

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA FLORENCE DIVISION

January 25, 2017

ORDER

This matter is before the Court upon Defendant's motion to dismiss for improper venue or in the alternative to transfer venue. See ECF No. 4. The Court denies the motion for the reasons set forth below.¹

Background

Plaintiff, HDMG Entertainment, LLC, is a limited liability company organized under the laws of Delaware and doing business in Marion County, South Carolina. See Complaint [ECF No. 1-1] at ¶ 1. Plaintiff's principal place of business is located in Milford, Connecticut, and its managing member and president is Robert Hartmann, Sr., who is a citizen and resident of Connecticut.² See Notice of Removal [ECF No. 1] at ¶ 4; Def.'s Motion to Dismiss [ECF No. 4] at 2; Hartmann Affidavit [ECF No. 6-1] at ¶ 2.

Defendant, Certain Underwriters at Lloyd's of London Subscribing to Policy No. L009082, consists of an unincorporated association of individuals and/or corporate entities authorized tounderwrite insurance issued at Lloyd's of London and doing business in Marion County, South Carolina. Compl. at ¶ 2. Defendant's underwriters are neither incorporated nor maintain their principal places of business in Delaware, South Carolina, or Connecticut; and none of Plaintiff's members maintain a domicile in a country in which Defendant's underwriters are incorporated or maintain their principal places of business.³ Not. of Rem. at ¶ 5.

Plaintiff's business is sponsoring and producing entertainment events. Compl. at ¶ 3. Plaintiff planned to sponsor and produce an entertainment event known as the Swamp Fox Biker Bash ("the Bash") that was scheduled to occur at the Swamp Fox Entertainment Complex in Marion, South Carolina between May 8 and 15, 2015.⁴ Id. Defendant issued Plaintiff an event cancellation insurance policy ("the Policy") under which Defendant agreed to indemnify Plaintiff up to $4,490,480.00 for losses resulting from cancellation of the Bash. Id. at ¶ 4; see Policy [ECF No. 9-3 at 3-16]. The Policy was underwritten by HCC Speciality Underwriters, Inc. from its office in Massachusetts and delivered to Plaintiff's principal place of business in Milford, Connecticut; Steven Perlini was HCC's vice president and was the underwriter for the Policy. Perlini Affidavit [ECF No. 9-3] at ¶¶ 5, 7-9. The Policy does not contain a choice of law provision or a forum selection clause. Pl.'s Response [ECF No. 6] at 4. Plaintiff alleges that it was forced to cancel the Bash for reasons beyond its control, that itsuffered damages as a result, that the cancellation of the Bash was a covered event under the Policy, and that Defendant refused to pay Plaintiff's claim. Compl. at ¶¶ 5-10.

On April 15, 2016, Plaintiff initiated this action by filing a complaint in the Court of Common Pleas for Marion County, South Carolina, asserting causes of action for breach of contract and bad faith. See ECF No. 1-1. On May 20, 2016,⁵ Defendant timely removed the action to this Court asserting diversity jurisdiction under 28 U.S.C. § 1332. See ECF No. 1. On May 27, 2016, Defendant filed the instant motion to dismiss for improper venue or in the alternative to transfer venue. See ECF No. 4. Plaintiff filed a timely response in opposition, and Defendant filed a timely reply. See ECF Nos. 6 & 9.

Discussion

Defendant moves to dismiss based on improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a). Alternatively, Defendant moves to transfer venue to the United States District Court for the District of Connecticut pursuant to 28 U.S.C. § 1404(a).

I. Motion to Dismiss for Improper Venue

A. Legal Standards: Rule 12(b)(3) and § 1406(a)

"The appropriate venue of an action is a procedural matter that is governed by federal rule and statutes." Albemarle Corp. v. AstraZeneca UK Ltd., 628 F.3d 643, 650 (4th Cir. 2010). Under Federal Rule of Civil Procedure 12(b)(3), a party may seek dismissal for improper venue. "On a motion to dismiss under Rule 12(b)(3), the court is permitted to consider evidence outside the pleadings. A plaintiff is obliged, however, to make only a prima facie showing of proper venue in order to survivea motion to dismiss." Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355, 365-66 (4th Cir. 2012) (internal citation omitted). The court must view the facts in the light most favorable to the plaintiff when determining whether there has been a prima facie venue showing. Id.

28 U.S.C. § 1406(a) provides, "The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." Section 1406(a) "authorizes the transfer of a case to any district, which would have had venue if the case were originally brought there, for any reason which constitutes an impediment to a decision on the merits in the transferor district but would not be an impediment in the transferee district." In re Carefirst of Maryland, Inc., 305 F.3d 253, 256 (4th Cir. 2002). "[T]he choice to transfer or dismiss a case afforded by § 1406(a) lies within the sound discretion of the district court." Quinn v. Watson, 145 F. App'x 799, 800 (4th Cir. 2005).

B. Analysis

In seeking dismissal for improper venue, Defendant relies on 28 U.S.C. § 1391(b)(2)⁶ to support its argument that venue is improper, asserting a substantial part (if not all) of the events surrounding the Policy and Plaintiff's insurance cancellation claim occurred in Connecticut, not South Carolina. Def.'s Motion at 3-4. In response, Plaintiff contends 28 U.S.C. § 1441—not § 1391—governs the venue of removed actions and that venue is proper in this Court.⁷ Pl.'s Response at 1-2. Plaintiff is correct.

The United States Supreme Court has squarely held that 28 U.S.C. § 1441(a) governs the venueof an action removed to federal court from state court, not the general venue statute found in 28 U.S.C. § 1391. Polizzi v. Cowles Magazines, Inc., 345 U.S. 663, 665 (1953). See also Selective Ins. Co. v. Schremmer, 465 F. Supp. 2d 524, 525-26 (D.S.C. 2006) (citing Polizzi and recognizing "[t]he general venue statute is 28 U.S.C. § 1391, but venue in a removed case is governed exclusively by 28 U.S.C. § 1441(a) . . . ."); Lynch v. Vanderhoef Builders, 228 F. Supp. 2d 644, 645 (D. Md. 2002) ("The Supreme Court has explained that 28 U.S.C. § 1391(a) has no application to a removed action." (citing Polizzi)). Section 1441(a) provides:

Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

28 U.S.C. § 1441(a). Plaintiff originally filed this action in the Marion County Court of Common Pleas, and Defendant removed the action to this Court—the Florence Division of the United States District Court for the District of South Carolina—which is the district court "for the district and division embracing the place where such action is pending." Id. Thus, under section 1441(a), this Court is the proper venue for this removed action. See, e.g., Polizzi, 345 U.S. at 665-66 (finding venue was proper in a removed action that was filed in the Circuit Court of Dade County, Florida, and removed to the United States District Court for the Southern District of Florida); Schremmer, 465 F. Supp. 2d at 526 (finding venue was proper in a removed action that was filed in the Beaufort County Court of Common Pleas and removed to the Beaufort Division of the United States District Court for the District of South Carolina); Lynch, 228 F. Supp. 2d at 645-46 (finding venue was proper in a removed action that was filed in the Circuit Court of Cecil County, Maryland, and removed to the United States District Courtfor the District of Maryland). Accordingly, dismissal based on improper venue is not warranted.

II. Motion to Transfer Venue

Defendant alternatively moves to transfer venue to the United States District Court for the District of Connecticut pursuant to 28 U.S.C. § 1404(a).

A. Legal Standard: § 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."⁸ 28 U.S.C. § 1404(a). A district court has broad discretion in deciding whether to transfer a case under section 1404(a). Brock v. Entre Computer Centers, Inc., 933 F.2d 1253, 1257 (4th Cir. 1991). "The burden is on the moving party to show that transfer to another forum is proper." State Farm Fire & Cas. Co. v. Blanton, No. 4:13-cv-02508-RBH, 2014 WL 7146980, at *2 (D.S.C. Dec. 15, 2014). Specifically, the moving party "must show by a preponderance of the evidence that the proposed transfer will better and more conveniently serve the interests of the parties and witnesses and better promote the interests of justice." Id. (internal quotation marks omitted).

When considering whether to exercise discretion to transfer a case, the court must first consider "whether the action sought to be transferred is one that might have been brought in the transferee court." Id. If the court determines the proposed venue is proper, it must then consider "a number of case-specific factors" pertaining to convenience, fairness, and the interest of justice. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988).

B. Analysis

The threshold inquiry is whether this action "might have been brought" in the District of Connecticut. 28 U.S.C. § 1404(a); see Blanton, 2014 WL 7146980, at *2; United States v. $78,850....