Ncr Credit Corp. v. Ye Seekers Horizon, Inc.

• Decision Date: 10 August 1998
• Docket Number: No. 98-Civ.-0741 (WGB).,98-Civ.-0741 (WGB).
• Citation: 17 F.Supp.2d 317
• Parties: NCR CREDIT CORPORATION, Plaintiff, v. YE SEEKERS HORIZON, INC., Defendant.
• Court: U.S. District Court — District of New Jersey

17 F.Supp.2d 317

NCR CREDIT CORPORATION, Plaintiff, v. YE SEEKERS HORIZON, INC., Defendant.

No. 98-Civ.-0741 (WGB).

United States District Court, D. New Jersey.

August 10, 1998.

Robert M. Leonard, Jeffrey S. Lipkin, Rachelle H. Milstein, Shanley & Fisher, P.C., Morristown, NJ, for Plaintiff.

David A. Stern, Howard M. Davis, P.C., West Orange, NJ, for Defendant.

OPINION

BASSLER, District Judge.

Defendant Ye Seekers Horizon, Inc. moves to transfer venue to Texas. This Court's jurisdiction is invoked pursuant to 28 U.S.C. § 1332 (diversity). For the reasons set forth below, the Court denies Defendant's motion to transfer venue.

I. BACKGROUND

Plaintiff is a Texas corporation, with its principal place of business in Houston, Texas. (See Affidavit of Richard C. Rolland ("Rolland Aff.") ¶¶ 2-3.) Defendant is a Delaware corporation, with its principal place of business in Parsippiny, New Jersey. (Complaint ¶ 1; see Affidavit of Dondra Benjamin in Opposition to Defendant's Motion to Transfer Venue ("Benjamin Aff.") ¶ 6.)

Pursuant to 14 separate subleases, Plaintiff leased equipment from Defendant. (Complaint ¶¶ 5-18; Benjamin Aff. ¶¶ 2-3.) All negotiations of the subleases took place in Texas. (Roland Aff. ¶ 5.) Defendant executed the subleases in Texas. (Id.) The equipment is in Defendant's stores, which are in Texas. (Id.)

A Master Lease Agreement ("Master Lease") governs 11 of the subleases. (Benjamin Aff. ¶ 2 & Ex. A, Master Lease.) The Master Lease does not contain a forum selection clause. (Id.) A Master Equipment Lease Agreement ("Master Equipment Lease") governs the final 3 subleases. (Id. ¶ 3 & Ex. B, Master Equipment Lease.) The Master Equipment Lease contains a forum selection clause, which states:

Lessor and Lessee consent to the jurisdiction of any local, state or Federal court located within [New Jersey], and waive any objection relating to improper venue or forum non conveniens to the conduct of any proceeding in any such court.

(Master Equipment Lease ¶ 30.) The forum selection clause also states that the Master Equipment Lease "SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW JERSEY (STATE)." (Id. (emphasis in original).)

On February 19, 1998, Plaintiff filed this action. The First Count is for breach of contract, alleging that Defendant is passed due on its monthly rent payments pursuant to the subleases. (Complaint, First Count.) The Second Count is for future rent payments that may become due. (Id., Second Count.) The Third Count is for the return of the leased equipment due to the defaults on the rent payments. (Id., Third Count.) Finally, in the Fourth Court, Plaintiff seeks to recover damages "in the amount of the Lessor's Return as defined in the Lease." (Id., Fourth Count.)

In support of its motion to transfer venue, Defendant contends that all of its witnesses, including two former employees, reside in Texas. (Roland Aff. ¶ 6.) Defendant's president also states:

If this matter were to proceed to trial in New Jersey, it would significantly interfere with the operation of our business. Additionally, the costs associated with transportation, lodging and travel expenses will be difficult to absorb by a company our size.

(Id. ¶ 7.)

Plaintiff's affiant responds that "[a]ll of NCR Credit's original records concerning this matter are located in New Jersey, as are all of its witnesses that would be called to testify at trial." (Benjamin Aff. ¶ 4.) Plaintiff's affiant also states that "[n]o documents or witnesses pertinent to NCR Credit's claim against the defendant are located anywhere other than in New Jersey." (Id. ¶ 5.)

II. DISCUSSION

A. Transfer for Improper Venue

Defendant argues that venue is not proper because "all defendants reside in the State of Texas[,] all of the events involved, including the signing of the contracts occurred in Texas[,][and] all of the property and equipment leased by the defendants [sic] from the plaintiffs [sic] is, and always has been, located in Texas." (Defendant's Memorandum of Law ("Moving Mem.") at 2.)

Title 28 U.S.C. § 1406(a), entitled "Cure or Waiver of Defects," governs a motion to dismiss or transfer for improper venue. That statute reads, in relevant part:

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.

28 U.S.C. § 1406(a). Both Federal Rule of Civil Procedure 12(b)(3) and Section 1406(a) are designed to operate where the case has been laid in an improper venue.

By allowing for transfer in lieu of dismissal, the statute, contrary to Rule 12(b)(3), was designed to prevent any injustice from occurring and save time and resources, should a plaintiff erroneously choose the wrong forum in which to bring an action. Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962). Dismissal is considered to be a harsh remedy in cases such as this, and transfer of venue to another district court in which the action could originally have been brought, is the preferred remedy. Id.; see, e.g., In re Longhorn Sec. Litig., 573 F.Supp. 274 (W.D.Okla.1983).

When venue is challenged, the plaintiff bears the burden of proving that venue is proper. Figgie Int'l, Inc. v. Destileria Serralles, Inc., 925 F.Supp. 411, 412 (D.S.C. 1996) (citation omitted). To determine whether venue is proper in New Jersey, the Court looks to 28 U.S.C. § 1391, which defines and sets forth where venue may properly be laid. National Micrographics Systems, Inc. v. Canon U.S.A., Inc., 825 F.Supp. 671, 678 (D.N.J.1993). In this case, the Court's jurisdiction is based entirely on diversity of citizenship under 28 U.S.C. § 1332.

Section 1391(a) specifically states that venue is proper in any civil action wherein jurisdiction is founded only on diversity of citizenship, except as otherwise provided by law, only 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 the property that is the subject of the action is situated, or (3) a judicial district in which the defendants are subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

28 U.S.C. § 1391(a).

Defendant, however, has waived any opposition to improper venue when it agreed to the forum selection clause in the Master Equipment Lease, which governs a substantial portion of each of Plaintiff's four claims. Moreover, 28 U.S.C. § 1391(c) provides that if a defendant is a corporation, it will be deemed to reside "in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." Plaintiff, in the Master Equipment Lease, consented to this Court's exercise of personal jurisdiction over it. (See Master Equipment Lease ¶ 30.) Because Defendant "ha[s] not alleged that this provision was unreasonable or resulted from anything other than an arm's-length bargaining agreement, it is enforceable." Heller Financial, Inc. v. Shop-A-Lot, Inc., 680 F.Supp. 292, 294 (N.D.Ill.1988) (citation omitted). Its consent subjects Defendant to this Court's jurisdiction. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972); Heller Financial, 680 F.Supp. at 294. Thus, pursuant to § 1391(c), Defendant resides in New Jersey.

Accordingly, the Court finds that New Jersey is a proper venue.

B. Transfer Venue for Convenience

The Court will next consider whether a transfer is appropriate for the convenience of the parties. 28 U.S.C. Section 1404(a) provides:

For the convenience of the 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.

The purpose of Section 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. ...'" Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) (quoting Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 26-27, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960)); accord Ricoh Co., Ltd. v. Honeywell, Inc., 817 F.Supp. 473, 479 (D.N.J.1993).

Since the parties do not contend that the action could not "have been brought" in Texas, the Court does not address that issue.

1. Standard of Review

The decision whether to transfer an action pursuant to Section 1404(a) rests in the Court's discretion and is reviewed for abuse of discretion. Cf. Lony v. E.I. DuPont de Nemours & Co., 886 F.2d 628, 631-32 (3d Cir.1989) (decision to grant or deny forum non conveniens motion is within sound discretion of trial court). The party seeking transfer of venue bears the burden of establishing that transfer is warranted and must submit "adequate data of record" to facilitate the Court's analysis. Ricoh, 817 F.Supp. at 480. Before transferring venue, the Court must articulate specific reasons for its decision. Lacey v. Cessna Aircraft Co., 862 F.2d 38 (3d Cir.1988); Ricoh, 817 F.Supp. at 480.

2. Factors Guiding Court's Discretion

The Court's analysis under Section 1404(a) is flexible and turns on the particular facts of the case. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29-30, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988). In Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), the Supreme Court listed several factors that guide the Court's decision-making in this area. These factors fall into two categories: (1) the private interests of the litigants; and (2) the public interest in the fair and efficient administration of justice. Gulf Oil, 330 U.S. at 508-509, 67 S.Ct. 839.

The private...