Kawamoto v. Cb Richard Ellis, Inc., Civ. No. 02-00283 SOM/KSC.

• Decision Date: 19 September 2002
• Docket Number: Civ. No. 02-00283 SOM/KSC.
• Citation: 225 F.Supp.2d 1209
• Parties: Gensiro KAWAMOTO, Plaintiff, v. CB RICHARD ELLIS, INC., a Delaware corporation, Defendant.
• Court: U.S. District Court — District of Hawaii

225 F.Supp.2d 1209

Gensiro KAWAMOTO, Plaintiff, v. CB RICHARD ELLIS, INC., a Delaware corporation, Defendant.

Civ. No. 02-00283 SOM/KSC.

United States District Court, D. Hawai`i.

September 19, 2002.

Shelby Anne Floyd (argued), Jerilynn Ono Hall (appeared, but did not argue), Alston Hunt Floyd & Ing, Honolulu, HI, for Plaintiffs.

Bruce L. Lamon (appeared, but did not argue), Goodsill Anderson Quinn & Stifel, Honolulu, HI, Gary M. Funamura (argued), Trainor Robertson, Sacramento, CA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO TRANSFER

MOLLWAY, District Judge.

I. INTRODUCTION.

Plaintiff Gensiro Kawamoto ("Kawamoto") has sued CB Richard Ellis, Inc. ("CBRE"), alleging that CBRE breached contracts for the management of more than 600 of Kawamoto's residential properties located in California. CBRE has moved (1) to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2); (2) to transfer this action on grounds of improper venue under Rule 12(b)(3); and (3) to transfer venue under 28 U.S.C. § 1404.

CBRE's motion to transfer venue is granted. This action is transferred to the Eastern District of California. In light of that transfer, this court declines to address the merits of CBRE's motion to dismiss the action for lack of personal jurisdiction. That motion is denied without prejudice.

II. BACKGROUND FACTS.

Kawamoto is a citizen and resident of Japan. CBRE is a Delaware corporation that performs real estate management services for property owners.

In May and June of 2001, Kawamoto and CBRE entered into three management agreements (the "Management Agreements"), under which CBRE was to manage various residential properties owned by Kawamoto and located in California. Compl. ¶¶ 7-12. Each agreement covered 200 or more dwellings or apartments. Compl. ¶¶ 7, 9, 11.

Kawamoto alleges that CBRE failed to use due diligence in its management of the properties and that it failed to perform various parts of the management agreements. Kawamoto specifically alleges that CBRE failed to make repairs in a timely fashion. Kawamoto contends that CBRE's actions or omissions in managing the properties caused two lawsuits (the "Sonoma County litigation") and various other actions to be filed against Kawamoto by and on behalf of Kawamoto's tenants. Kawamoto also contends that he faces future litigation relating to conditions in and on the properties managed by CBRE during the relevant period. Compl. ¶ 66.

III. ANALYSIS.

Because this court may transfer venue under either § 1404(a) or § 1406(a) without regard to whether it has personal jurisdiction over CBRE, this court need not decide the issue of personal jurisdiction before deciding to transfer venue. Under § 1404(a), a district court may transfer an action to any other district or division where it might have been brought "for the convenience of parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). Under § 1406(a), a district court may, "in the interest of justice," transfer an action "laying venue in the wrong division or district" to any district or division in which it could have been brought. 28 U.S.C. § 1406(a).

The Supreme Court held in Goldlawr, Inc. v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962), that a district transferring an action under § 1406(a) need not have personal jurisdiction over the defendant. Following Goldlawr, many district courts, including the District of Hawaii, have concluded that a district court may also transfer an action under § 1404(a) regardless of whether it has personal jurisdiction over the defendant. See Nelson v. Int'l Paint Co., 716 F.2d 640, 643 n. 4 (9th Cir.1983) (noting that several lower courts have relied on Goldlawr to transfer a claim where the transferor forum does not have personal jurisdiction over a party); United States v. Berkowitz, 328 F.2d 358 (3d Cir. 1964) (stating that § 1404(a) and § 1406(a) are "companion sections" and that "[the Goldlawr § 1406(a) ] rationale applies equally to § 1404(a)"); Reed v. Brown, 623 F.Supp. 342, 346 (D.Nev.1985) (transferring action under § 1404(a) where court did not have personal jurisdiction); Froelich v. Petrelli, 472 F.Supp. 756, 758-60 (D.Haw.1979) (concluding that both § 1404(a) and § 1406(a) permit transfer of venue in the absence of personal jurisdiction).¹ Therefore, this court concludes that it can transfer this action without regard to whether this court has personal jurisdiction over CBRE.²

Because this court concludes that Hawaii is a proper venue for this action, it transfers venue under § 1404(a). It notes, however, that it can and would transfer venue under § 1406(a) if venue were not proper in Hawaii. Section 1404(a) generally applies when the transferor court is a proper venue for the action, while § 1406(a) is generally relied on when venue is not proper in the forum where a plaintiff originally filed suit. In either case, the relevant inquiry involves the "interest of justice." As discussed below, the § 1404(a) analysis also takes into account the convenience of the parties and witnesses.

A. This Court Transfers Venue Under § 1404(a).

1. Venue in Hawaii Is Proper.

Venue can be transferred under § 1404(a) only if venue is proper in the transferor court. Because jurisdiction is based solely on diversity of citizenship in this case, venue is proper in "(1) a judicial district where any defendant resides, if all defendants reside in the same state, (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 ...." 28 U.S.C. § 1391(a).³ As a corporation, CBRE is deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.⁴ 28 U.S.C. § 1391(c).

Venue is proper here because a "substantial part of the events or omissions giving rise to the claim" occurred in Hawaii. 28 U.S.C. § 1391(a)(2). Kawamoto alleges that CBRE failed to perform various provisions of the Management Agreements, particularly those that required CBRE to report to Carol Asai-Sato, Kawamoto's agent in Hawaii, and to proceed as she directed. Under the terms of the Management Agreements, all communications from CBRE to Kawamoto, including copies of written notices to tenants regarding repairs, were sent to Asai-Sato. CBRE remitted rental payments from tenants to Kawamoto's bank account in Hawaii. Asai-Sato, who was the only person authorized to approve general repairs to the properties, received requests for repairs and communicated frequently with CBRE regarding management of the properties. At one point, CBRE employees traveled to Hawaii to meet with Asai-Sato to discuss the performance of the Management Agreements, including CBRE's alleged failure to resolve the matter of a furnace recall as directed. Though the bulk of CBRE's responsibilities under the Management Agreements involved the day-to-day management of the properties located in California, its communications with Asai-Sato constituted an integral part of its responsibilities and are a substantial part of the actions that give rise to Kawamoto's claims.

2. A Transfer Would Serve the Convenience of Parties and Witnesses and the Interest of Justice.

Under § 1404(a), the district court may transfer venue based on the convenience of the parties and witnesses and the interest of justice. 28 U.S.C. § 1404(a). "The purpose of § 1404(a) is `to prevent the waste of time, energy, and money' and `to protect litigants, witnesses and the public against unnecessary inconvenience and expense.'" Lung v. Yachts Int'l, 980 F.Supp. 1362, 1369 (D.Haw.1997) (quoting Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964)).

With the passage of § 1404(a), courts gained broader discretion over transfers than courts had had under the earlier doctrine of forum non conveniens. Even under § 1404(a), however, courts consider the traditional forum non conveniens "private and public interest factors." Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir.1986) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981)). Private factors include "the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises ...; and all other practical problems that make trial of a case easy, expeditious, and inexpensive." Id. at 843. Public factors include considerations of court congestion, court familiarity with relevant state law, avoiding conflict of laws problems, the fairness of burdening citizens in the forum state with jury duty, and the "local interest in having localized controversies decided at home." Id.

Litigating in Hawaii would cause substantial inconvenience and expense for CBRE and its witnesses. With few exceptions, all of the proposed witnesses, including current and former CBRE employees and current and former Kawamoto tenants, reside in California. CBRE has offered the declarations of a number of witnesses, including the two persons who managed the bulk of Kawamoto's properties for CBRE, who state that they would not voluntarily travel to Hawaii to testify at trial.

In comparison to the potential inconvenience to CBRE and its witnesses, Kawamoto and his witnesses face substantially less inconvenience if the case is litigated in California. Kawamoto himself is a citizen and resident of Japan, and he has not articulated a reason why travel to California poses significantly more inconvenience or expense to him than travel to Hawaii. Kawamoto has indicated that he will call a few witnesses who reside in Hawaii, including Asai-Sato, but none of those witnesses has stated that he or she would not be willing to travel to California. Other witnesses for Kawamoto reside in California, including Kawamoto's counse...