Kay v. National City Mortg. Co.

• Decision Date: 09 July 2007
• Docket Number: No. 3:03cv160.,3:03cv160.
• Citation: 494 F.Supp.2d 845
• Parties: Stacy T. KAY, Plaintiff, v. NATIONAL CITY MORTGAGE CO., Defendant.
• Court: U.S. District Court — Southern District of Ohio

Page 845

494 F.Supp.2d 845

Stacy T. KAY, Plaintiff, v. NATIONAL CITY MORTGAGE CO., Defendant.

No. 3:03cv160.

United States District Court, S.D. Ohio, Western Division.

July 9, 2007.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Brian K. Murphy, Joseph F. Murray, Murray Murphy Moul & Basil, Columbus, OH, Dennis T. Trainor, Barrett & Associates, Chicago, IL, John T. Murray, Murray & Murray, Sandusky, OH, M. Scott Barrett, Barrett & Associates, Bloomington, IN, Sylvia A. Goldsmith, Avon, OH, Charles R. Griffin, Jr., The Griffin Firm LLC, Anderson, SC, for Plaintiff.

Daniel Joseph Tobin, Kirkparick & Lockhart Nicholson Graham LLP, Washington, DC, Martin A. Beyer, Sebaly Shillito & Dyer, Dayton, OH, for Defendant.

DECISION AND ENTRY SUSTAINING DEFENDANT'S MOTION TO TRANSFER VENUE (DOC. # 14); CAPTIONED CAUSE TRANSFERRED TO DISTRICT OF SOUTH CAROLINA; TERMINATION ENTRY

RICE, District Judge.

Plaintiff is an individual mortgage borrower who filed the present two-count¹ class action² complaint against National City Mortgage Co. ("National City" or "Defendant"), his mortgage lender, alleging violations of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"). He alleges that Defendant charged broker fees and/or points on his loans, as well as on those of other putative class members, without treating such fees as prepaid finance charges as required by the TILA. The Complaint alleges that fees paid by Defendant to a broker — the Kelly Mortgage Group (the "Kelly Group") — were mischaracterized in order to avoid disclosure of finance charges (Compl.(Doc.# 1) at ¶ 13). This, according to Plaintiff, resulted in misrepresentation of the actual amount financed by Defendant, as well as understating the APR, thus masking the actual cost of the extension of credit (Id.). Subject matter jurisdiction is proper pursuant to 28 U.S.C. § 1331.

Plaintiff is a resident of South Carolina whose mortgage loan, which is the subject of this litigation, is purportedly secured by his home in South Carolina. The class that Plaintiff seeks to represent consists of "all persons who, during the applicable periods of limitations, were consumer customers of The Kelly Mortgage Group, Inc., f/k/a C & S Mortgage, Inc. (the `Kelly Group'), and financed a loan with [National City]" (Compl. at ¶ 16). Kelly Mortgage Group, Inc., is a mortgage broker based in South Carolina. Additionally, a preliminary review of National City's records reports that all borrowers who have connections to the Kelly Group are South Carolina residents whose mortgage loans are secured by property located in South Carolina (Affidavit of Daniel J. Tobin ("Tobin Affidavit"), Doc. # 14 Ex. 1, at ¶ 6). Defendant has also filed two counterclaims in this matter, alleging breach of contract (Count 1) and asking for a declaratory judgment that it is entitled to foreclose on the property at issue (Count 2) (Doc. # 11).

Defendant, which maintains its headquarters in Miamisburg, Ohio, has filed a Motion to Transfer Venue (Doc. # 14), pursuant to 28 U.S.C. § 1404(a), to the United States District Court for the District of South Carolina. For the reasons explained herein, Defendant's motion is sustained.

I. Analysis

Defendant does not suggest that venue in this Court is improper. Instead, it argues that this Court is not the most convenient forum for resolution of this matter. "Even in cases where venue is proper, a court may entertain a motion to transfer if there exists a better forum for the resolution of the dispute between the parties." SKY Technology Partners v. Midwest Research Institute, 125 F.Supp.2d 286, 290-91 (S.D.Ohio 2000), citing Martin v. Stokes, 623 F.2d 469, 474 (6th Cir.1980).

A. Standards Governing Motions for Transfer to a More Convenient Forum

The standard for transfer of venue to a more convenient forum is found in 28 U.S.C. § 1404(a), which 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." Accordingly, the threshold consideration under § 1404(a) is whether the action "might have been brought" in the transferee court. An action "might have been brought" in a transferee court if:

a. The court has jurisdiction over the subject matter of the action

b. Venue is proper there, and

c. The defendant is amenable to process issuing out of the transferee court.

SKY Technology, 125 F.Supp.2d at 291, citing Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960).

Since the present matter arises under a federal statute, the district court in South Carolina would have subject matter jurisdiction over it, pursuant to 28 U.S.C. § 1331. Additionally, venue would be proper in South Carolina under the general venue statute, 28 U.S.C. § 1391(b)(2), if "a substantial part of the events or omissions giving rise to the claim" arose there. This is true even if a substantial part of the events giving rise to the claims are found to have occurred in Ohio. The fact that substantial activities took place in Ohio does not disqualify South Carolina as a proper venue as long as "substantial" activities took place there, as well. See First of Mich. Corp. v. Bramlet, 141 F.3d 260, 263 (6th Cir.1998). South Carolina should not be disqualified even if it is shown that the activities in Ohio were more substantial. Id. Since all of the loan contracts in the case sub judice were negotiated in South Carolina and are secured by South Carolina property, venue would have been proper in South Carolina. Finally, Defendant, by bringing the instant motion, appears to concede that it would be subject to process issuing out of the court in South Carolina. In any case, as noted, the business relationship between the parties arose in South Carolina.

Once it is determined that a case could have been brought in the transferee court, the issue becomes whether transfer is justified under the balance of the language of § 1404(a), which analyzes whether transfer is justified for "the convenience of parties and witnesses" and "in the interest of justice." The moving party has the burden of establishing the need for a transfer of venue. Jamhour v. Scottsdale Ins. Co., 211 F.Supp.2d 941, 945 (S.D.Ohio 2002) (citations omitted). The Supreme Court has established standards for evaluating these private and public interests. The litigants' interests (i.e., the private interests) 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, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n. 6, 102 S.Ct. 252, 258, 70 L.Ed.2d 419, (1981), quoting Gulf Oil v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947). Public interests include "[d]ocket congestion, the burden of trial to a jurisdiction with no relation to the cause of action, the value of holding trial in a community where the public affected live, and the familiarity of the court with controlling law." Jamhour, 211 F.Supp.2d at 945, citing Gulf Oil, 330 U.S. at 508, 67 S.Ct. 839, 91 L.Ed. 1055.

The balance of convenience, considering all the relevant factors, "should be strongly in favor of a transfer before such will be granted." First Bank of Marietta v. Bright Banc Savings Assoc., 711 F.Supp. 893, 896-97 (S.D.Ohio 1988). The decision of whether to grant a change of venue, however, ultimately lies within the sound discretion of the district court. Hanning v. New England Mut. Life Ins. Co., 710 F.Supp. 213, 215 (S.D.Ohio 1989).

B. Application

Defendant urges that transfer to South Carolina is appropriate because the relevant sources of proof and potential witnesses are located in South Carolina and because transfer would avoid the multiplicitous litigation that would stem from its defense of a class action in this Court, due to the legal impossibility of joining absent class members in its counterclaims in this District. Conversely, it argues that the mere fact that its corporate headquarters are located in Ohio is insufficient to support Plaintiffs contention that this Court is the best venue. Plaintiff, on the other hand, discounts the significance of Defendant's alleged inability to join absent potential class members, and argues as well that Ohio is convenient both for the parties and the witnesses. Moreover, Plaintiff argues that its choice of forum should be given significant weight.

1. Interests of the Litigants

a. Plaintiff's Choice of Venue

A plaintiffs choice of forum is generally entitled to substantial weight. However, several courts have indicated that if the plaintiff chooses a forum that is not his residence, this choice is given less consideration. See, Lindley v. Caterpillar, Inc., 93 F.Supp.2d 615, 617 (E.D.Pa.2000) ("when the plaintiff does not live or work in [the chosen] jurisdiction, the significance of this preference is minimized"); Hanley v. Omarc, Inc., 6 F.Supp.2d 770 (N.D.Ill. 1998); Tranor v. Brown, 913 F.Supp. 388, 391 (E.D.Pa.1996); Verosol B.V. v. Hunter Douglas, Inc., 806 F.Supp. 582, 592 (E.D.Va.1992); Roberts Metals, Inc. v. Florida Properties Marketing Group, Inc., 138 F.R.D. 89, (N.D.Ohio 1991) (weight given to plaintiffs choice of forum diminished because acts occurred outside the forum but additional weight accorded because plaintiff was headquartered in Ohio), aff'd 22 F.3d 1104, 1994 WL 84735 (Fed. Cir.1994).

Plaintiff strives mightily to argue that, despite his being a resident of South Carolina, his preference to litigate in Ohio should still be given substantial weight. Plaintiff cites three cases in support (Doc. # 20 at 6-7, citing Steelcase, Inc. v. Mar-Mol, Inc.,* 210 F.Supp.2d 920, 938 (W.D.Mich.2002...