Scheidt v. Klein

• Decision Date: 11 February 1992
• Docket Number: No. 90-6123,90-6123
• Citation: 956 F.2d 963
• Parties: William B. SCHEIDT and Wanda C. Scheidt, Plaintiffs-Appellees, v. William Randolph KLEIN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 963

956 F.2d 963

22 Fed.R.Serv.3d 112

William B. SCHEIDT and Wanda C. Scheidt, Plaintiffs-Appellees, v. William Randolph KLEIN, Defendant-Appellant.

No. 90-6123.

United States Court of Appeals Tenth Circuit.

Feb. 11, 1992.

Robert F. Bourk and Ben F. Meek, Oklahoma City, Okl., for plaintiffs-appellees.

William R. Klein, pro se.

Before LOGAN and BARRETT, Circuit Judges, and KELLY, ^* District Judge.

PATRICK F. KELLY, District Judge.

Defendant appeals ¹ from an adverse judgment entered by the district court following a jury trial of Plaintiffs' claims of fraud and breach of contract arising out of Defendant's limited representation of Plaintiffs in certain Tax Court proceedings. The jury returned a verdict for Plaintiffs on both claims and awarded them $200,000 in compensatory damages and another $130,000 in punitive damages. R.Vol. II tab 182. The district court subsequently denied Defendant's post-trial motion for judgment n.o.v. but granted a conditional remittitur of $170,000 with respect to compensatory damages. Id. tab 196. Plaintiffs accepted the remittitur, judgment was entered accordingly, and Defendant appealed. Id. tabs 201, 202.

The basic facts and allegations pertinent to this appeal are recounted in the parties' briefs and will not be recited in detail again here. To summarize, Plaintiffs paid Defendant $30,000 to join a litigation group that he represented, which consisted of taxpayers seeking reversal of substantial deduction disallowances and attendant penalties arising out of a mining investment scheme in which they all had participated (through the International Monetary Exchange, or IME). According to Plaintiffs, Defendant made numerous, false representations regarding witnesses and documentary evidence already obtained or readily available--through efforts to be funded by Plaintiffs' financial contribution--to induce Plaintiffs to join the group. When the case was called for trial before the Tax Court in Florida a month later, it became apparent that Defendant did not have the promised evidence but, rather, was woefully unprepared. Following continuance of the trial date for other reasons, Plaintiffs terminated their relationship with Defendant and demanded return of all or a majority of their funds. Defendant subsequently refused either to refund Plaintiffs' money or to provide them with an accounting of how their money had been spent. This lawsuit ensued.

I. Venue

Defendant's first assignment of error concerns the district court's denial of his two motions seeking a change in venue pursuant to 28 U.S.C. § 1404(a). Several principles combine to make such a challenge an unlikely basis for reversal of an adverse judgment. First of all, "[i]n order to find error in the refusal to transfer [under § 1404(a) ], it must appear that there was a clear abuse of discretion by the trial judge." Metropolitan Paving Co. v. International Union of Operating Eng'rs, 439 F.2d 300, 305 (10th Cir.), cert. denied, 404 U.S. 829, 92 S.Ct. 68, 30 L.Ed.2d 58 (1971); see Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515, 1516 (10th Cir.1991). Secondly, "party moving to transfer a case pursuant to § 1404(a) bears the burden of establishing that the existing forum is inconvenient." Chrysler Credit Corp., 928 F.2d at 1515. Finally, "[u]nless the balance is strongly in favor of the movant the plaintiff's choice of forum should rarely be disturbed." William A. Smith Contracting Co. v. Travelers Indem. Co., 467 F.2d 662, 664 (10th Cir.1972); see Texas E. Transmission Corp. v. Marine Office-Appleton & Cox Corp., 579 F.2d 561, 567 (10th Cir.1978) ("Plaintiff's choice [of forum] is also given considerable weight."). Defendant seeks to overcome these principles collectively favoring the district court's ruling by asserting that (1) the majority of contemplated witnesses resided in Florida, (2) the pertinent documentary evidence was located primarily in Florida, (3) the conduct complained of, which occurred in Florida, was to be assessed under Florida substantive law, and (4) for all these reasons, the less expensive and more convenient forum for the litigation was in Florida. See generally Chrysler Credit Corp., 928 F.2d at 1516 (factors pertinent to § 1404(a) determination) (quoting Texas Gulf Sulphur Co. v. Ritter, 371 F.2d 145, 147 (10th Cir.1967)).

Defendant identified eight Florida witnesses that he expected to call, six to testify regarding the work done in the IME case generally and two regarding his efforts on behalf of Plaintiffs in particular. R.Vol. I tab 41 (Defendant's affidavit). While, at least on the conclusory assertions made in support of Defendant's motion, ² the latter witnesses may have had pertinent testimony to present, "nothing has been submitted ... to indicate the quality or materiality of the testimony of said witnesses[,] [n]or has Defendant shown that any such witnesses [were] unwilling to come to trial in Oklahoma City; that deposition testimony would be unsatisfactory; or that the use of compulsory process [would] be necessary." ROC, Inc. v. Progress Drillers, Inc., 481 F.Supp. 147, 152 (W.D.Okla.1979). Since "it is necessary that some factual information relative to the materiality of witness testimony and the considerations mentioned above be supplied to the [trial court,]" id. (citations omitted), Defendant's meager showing failed to demonstrate the requisite inconvenience to his witnesses. Under essentially the same considerations, Defendant's conclusory averment regarding the boxes of (unidentified, undescribed) "documents existing relating to the instant cause of action, many of which will have to be produced in support of the defense," R.Vol. I tab 41 (Affidavit at 1), is clearly deficient. Defendant never attempted to explain, let alone substantiate, why these documents could not be sifted through (at his Florida offices) and the probative ones shipped at relatively minor cost to Oklahoma for trial. Finally, the applicability of Florida law is not a significant concern in light of the relative simplicity of the legal issues involved in the common law fraud and breach of contract claims tried in Oklahoma.

Undoubtedly, Defendant was inconvenienced somewhat by trial of the action in Oklahoma, as Plaintiffs would have been had the case been transferred to Florida. Merely shifting the inconvenience from one side to the other, however, obviously is not a permissible justification for a change of venue. ROC, Inc., 481 F.Supp. at 152. Under the principles set out above, we conclude that the district court did not abuse its discretion in denying Defendant's motions for transfer of the action to federal district court in Florida.

II. Choice of Law

Before turning to Defendant's assignments of error regarding the conduct of trial and the sufficiency of the evidence, we diverge here from the sequence of issues as presented in Defendant's brief in order to dispose of two more pretrial matters. First, Defendant complains that he was substantially prejudiced by the district court's assertedly tardy ruling on whether Florida or Oklahoma law controlled in this action. See Appellant's Brief at 19-20. Defendant states that "[o]nly after all the testimony had been entered and the parties had rested, did the Court advise the parties that it was applying Florida law," id. at 19, that "[h]ad Appellant known that the Court had determined that Florida law applied, Appellant would have taken a totally different approach at trial," id. at 20, and that "there was no way Appellant, after the Court announced it was applying Florida law, could possibly research and prepare any argument pertaining to Florida law ... the Court's decision was after the parties had rested, and prior thereto the Court has [sic] led Appellant to believe Oklahoma law was to be applied," id.

As Plaintiffs note in their Answer Brief, however, Defendant's own statements on the record below belie these protestations of ignorance, reliance, and prejudice and indicate, rather, that when the district court referred to Florida law at the close of the case, it was merely stating for the record a ruling it had already made known to the parties some time before. R.Vol. V at 511. Indeed, express confirmation of this point, which Defendant carefully sidesteps in his Reply Brief, is provided by Defendant's own motion and amended motion for judgment n.o.v., both of which begin with the acknowledgment that "[i]mmediately prior to commencing this proceeding, the Court ruled that Florida law was applicable...." R.Vol. II tabs 184, 189.

The only assertions of prejudice, aside from the dubious allegations of disrupted trial strategy in the quoted passages above, relate to the complication of the case by the initial uncertainty about controlling law. Obviously, this point applies with equal force to both sides in any action where choice of law is an issue. Moreover, although Defendant knew well enough to couch his motions in terms of Florida law from the beginning of the case, Defendant does not refer us to any place in the record to demonstrate that he ever expressly sought a definitive determination regarding the law governing the action. Nor did he move for continuance or mistrial on this basis. Finally, Defendant's argument is devoid of any citation to supporting authority for the facially unappealing proposition that a choice of law ruling rendered just prior to trial constitutes reversible error. Under the circumstances, we deem the argument meritless.

III. Motion to Strike

The other pretrial ruling challenged by Defendant is the district court's denial of his motion to strike the factual allegations supporting Plaintiffs' fraud claim. Defendant contended Plaintiffs did not comply with Fed.R.Civ.P. 9(b) in that (1) their allegations of fraud were based on information and belief and (2) their allegations of the requisite wanton, willful, or reckless intentions were conclusory. Allegations of fraud may be based on...