Steven Cohen Prods., Ltd. v. Lucky Star, Inc.

• Decision Date: 23 March 2016
• Docket Number: Case No.: 2:12-cv-01995-GMN-CWH
• Parties: STEVEN COHEN PRODUCTIONS, LTD., A Nevada Corporation, and ST. PAUL FIRE & MARINE INSURANCE COMPANY, a wholly owned subsidiary of The Travelers Companies, Inc., Plaintiffs, v. LUCKY STAR, INC., a Tennessee Corporation, Defendant.
• Court: U.S. District Court — District of Nevada

STEVEN COHEN PRODUCTIONS, LTD., A Nevada Corporation,and ST. PAUL FIRE & MARINE INSURANCE COMPANY,a wholly owned subsidiary of The Travelers Companies, Inc., Plaintiffs, v. LUCKY STAR, INC., a Tennessee Corporation, Defendant.

Case No.: 2:12-cv-01995-GMN-CWH

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

March 23, 2016

ORDER

Plaintiffs Steven Cohen Productions, Ltd. ("SCP") and St. Paul Fire and Marine Insurance Company, a wholly owned subsidiary of Travelers Insurance Company ("St. Paul"), brought this action against Defendant Lucky Star, Inc. ("LSI") alleging breach of contract. (Second Am. Compl. ("SAC") ¶ 1, ECF No. 78). LSI subsequently filed its First Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (First MTD 1:23-24, ECF No. 19). As an alternative to dismissal, LSI requested a transfer of venue in light of pending parallel litigation in the Middle District of Tennessee. (Id. 3:10-13). The Court denied LSI's request for lack of a "sufficient basis for the Court to order transfer." (Order 5:6-7, ECF No 42). Consequently, the Court later requested supplemental briefing on "why venue of this case should not be transferred to the Middle District of Tennessee for consolidation with case number 3:12-CV-00851." (Order 8:20-21, ECF No. 77). For the reasons discussed below, the Court orders this case be transferred to the Middle District of Tennessee pursuant to 28 U.S.C. § 1404(a).

I. BACKGROUND

SCP is a Nevada corporation in the business of providing specialized equipment to the music industry for live concert productions. (SAC ¶ 1, ECF No. 78). LSI is a Tennessee corporation that does business as the pop and country music band known as "Sugarland." (Id. ¶ 4). LSI is insured by Fireman's Fund Insurance Company ("Fireman's Fund"), and SCP is insured by St. Paul. (Id. ¶¶ 2, 20). In their Second Amended Complaint ("SAC"), SCP and St. Paul (collectively "Plaintiffs") allege a claim for breach of contract against LSI arising from LSI's failure to compensate SCP for equipment damage pursuant to the terms of a 2011 Agreement for Services ("Agreement") between SCP and LSI. (Id. ¶ 20; see also Agreement, ECF No. 78-1).

Pursuant to the Agreement, and in connection with the "Sugarland 'The Incredible Machine' Tour 2011," SCP provided lighting equipment, lighting services, video reinforcement, and other related services to LSI. (SAC ¶ 7). On August 13, 2011, SCP's equipment was damaged during a concert at the Indianapolis State Fair. (Id. ¶ 13). After the incident, SCP submitted an insurance claim with St. Paul and was reimbursed for the loss of the equipment. (Id. ¶ 22). SCP subsequently demanded payment from LSI pursuant to the Agreement, and LSI refused to provide compensation. (SAC ¶ 15).

On August 17, 2012, Fireman's Fund filed suit against St. Paul in the United States District Court for the Middle District of Tennessee (the "Tennessee Action"). (See Ex. B to First MTD, ECF No. 19-2). In the Tennessee Action, Fireman's Fund alleges that it has no obligation under the insurance policy to pay for any loss or damage to SCP's equipment until after SCP utilizes its policies with St. Paul. (Id. ¶ 22). Conversely, St. Paul maintains that Fireman's Fund's obligation is primary according to the Agreement, and that Fireman's Fund must pay for the loss and damage to the equipment. (Id.). At the time of this Order, cross-motions for summary judgment filed by St. Paul and Fireman's Fund have been held inabeyance pending the Court's decision in this case. See Fireman's Fund Ins. Co. v. St. Paul Fire & Marine Ins. Co., M.D. Tenn., 3:12-cv-00851.

On November 16, 2012, SCP initiated the present action for breach of contract, basing jurisdiction on the diversity of the parties pursuant to 28 U.S.C. § 1332. (Am. Compl. ¶ 3, ECF No. 9). LSI subsequently filed a series of motions to dismiss SCP's Amended Complaint. (See ECF Nos. 19, 51, 73). In LSI's Third Motion to Dismiss, LSI argued that without St. Paul as a party, SCP failed to meet the necessary amount in controversy requirement. (Third MTD 10:4-10, ECF No. 73). The Court agreed and granted LSI's Third Motion to Dismiss, but allowed SCP to amend the complaint to include St. Paul and resolve the subject matter jurisdiction issue. (Order 7:8-24, ECF No. 77). Further, the Court requested that the parties submit supplemental briefing on whether the case should be transferred to the Middle District of Tennessee. (Id. 8:18-21). Shortly thereafter, SCP and St. Paul filed the SAC adding St. Paul as a plaintiff, and both Plaintiffs as well as LSI filed the requested briefing. (SAC, ECF No. 78; see also Pls.' Opp'n to Transfer, ECF No. 80; LSI's Supp. for Transfer, ECF No. 81).

II. LEGAL STANDARD

"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 broughts." 28 U.S.C. § 1404(a). Determining whether to transfer an action calls for "an individualized, case-by-case consideration of convenience and fairness." Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). The Court considers multiple factors in determining whether transfer is appropriate. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). These factors include: (1) the location where the relevant agreements were negotiated and executed; (2) the state that is most familiar with the governing law; (3) the plaintiff's choice of forum; (4) the respective parties' contacts with the forum; (5) the contacts relating to the plaintiff's cause of action in thechosen forum; (6) the differences in the costs of litigation in the two forums; (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses; and (8) the ease of access to sources of proof. Id. at 498-99 (citing Stewart, 487 U.S. at 29-31; Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1987)).

Additionally, "[t]he feasibility of consolidation is a significant factor in a transfer decision, although even the pendency of an action in another district is important because of the positive effects it might have in possible consolidation of discovery and convenience to witnesses and parties." A.J. Indus., Inc. v. U.S. Dist. Ct. for Cent. Dist. of Cal., 503 F.2d 384, 389 (9th Cir. 1982). Likewise, "the presence of a forum selection clause is a significant factor in the court's § 1404(a) analysis." Jones, 211 F.3d at 499. "Weighing of the factors for and against transfer involves subtle considerations and is best left to the discretion of the trial judge." Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979).

III. DISCUSSION

The Court must first determine if the case "might have been brought" originally in the proposed transferee district. See 28 U.S.C. § 1404(a). Although LSI is a Tennessee corporation, SCP disputes that venue is proper in the Middle District of Tennessee in light of the Agreement's mandatory forum selection clause naming Nevada as the appropriate venue. (Pls.' Opp'n to Transfer 13:11-13, ECF No. 80). LSI argues, however, that the forum selection clause is invalid because the Agreement is unenforceable. (LSI's Supp. for Transfer at 8, ECF No. 81).

"[B]ecause the overarching consideration under § 1404(a) is whether a transfer would promote the interest of justice, a valid forum-selection clause should be given controlling weight in all but the most exceptional cases." See Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 134 S. Ct. 568, 581 (2013) (citations omitted). Accordingly, as a preliminarymatter the Court must determine whether the Agreement—and therefore the forum selection clause—is valid.

A. Validity of the Agreement¹

Pursuant to Nevada law, a valid contract requires: (1) an offer and acceptance, (2) a meeting of the minds, and (3) consideration. See, e.g., May v. Anderson, 119 P.3d 1254, 1257 (Nev. 2005). In regard to the first criterion, a party may accept an offer by "any reasonable manner" unless specific language or conduct indicates that a particular manner of acceptance is required. Jim L. Shetakis Distrib. Co. v. Centel Commc'ns Co., 756 P.2d 1186, 1188 (Nev. 1988). Indeed, "where the circumstances indicate that a particular manner of contract formation is contemplated by the parties, a binding contract is not formed in the absence of compliance with the contemplated procedure." Id. (citing Widett v. Bond Estate, Inc., 382 P.2d 212 (Nev. 1963)).

Numerous courts have held that if a written agreement indicates that a signature is required for acceptance, its terms are not binding unless the offeree actually provides a signature. Ergon Asphalt & Emulsions, Inc. v. Capriati Const. Corp, Inc., No. 2:13-cv-1683-GMN-NJK, 2015 WL 1959851, at *1 (D. Nev. Apr. 29, 2015); Leodori v. CIGNA Corp., 814 A.2d 1098, 1107 (N.J. 2003) ("Defendant's own documents contemplated plaintiff's signature as a concrete manifestation of his assent . . . . Our contract law does not permit defendant to contemplate or require plaintiff's signature on an agreement and then successfully to assert that the omission of that signature is irrelevant to the agreement's validity."); Open Sols. Inc. v. Granite Credit Union, No. 3:12-cv-1353-RNC, 2013 WL 5435105, at *2 (D. Conn. Sept. 29, 2013) ("On the last page of the Agreement, it states, 'ACCEPTED AND AGREED TO BY OPEN SOLUTIONS, INC.,' above a blank space for OSI's signature. Had it been the intent ofthe parties to not require OSI's signature, this section likely would not have been included.") (citation omitted); Pac. Photocopy, Inc. v. Canon U.S.A., Inc., 646 P.2d 647, 649-50 (Or. Ct. App. 1982) ("The document was written and contained a signature line for approval by defendant. Even though paragraph 23 does not specifically require a signature of defendant's authorized agent, it appears from the character and form of the document that the parties...