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finding that "[t]he relatively short distance between [the Eastern District of Pennsylvania] and the Southern District of New York weighs heavily against the transfer of this action"
Summary of this case from Gbforefront, L.P. v. Forefront Mgmt. Grp. LLCOpinion
Civil Action No. 04-2608.
October 1, 2004
ORDER-MEMORANDUM
AND NOW, this 1st day of October, 2004, upon consideration of Defendant's "Motion to Dismiss or for Alternative Relief" (Docket No. 2), Plaintiff's response thereto, and all related submissions, IT IS HEREBY ORDERED that said Motion is DENIED.
Presently before the Court in this diversity action for breach of contract is Defendant's Motion to Dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(3) or, in the alternative, to transfer this action to the United States District Court for Southern District of New York pursuant to 28 U.S.C. § 1404(a). The Complaint alleges the following facts. Plaintiff, a Pennsylvania corporation whose principal place of business is in Lehigh Valley, Pennsylvania, is in the business of supplying construction materials and supplies and installing kitchens, bathrooms, and cabinets. (Compl. ¶¶ 1, 3.) Defendant is a New Jersey corporation whose principal place of business is in Montague, New Jersey. (Id. ¶ 2.) Based on a Purchase Order dated August 20, 2002, the parties entered into a contract pursuant to which Plaintiff would provide cabinets, counter tops, and hardware for construction work to be performed by Defendant at the Chester Union Free School District ("Chester Union") in Chester, New York. (Id. ¶ 4.) The parties subsequently executed several written "Change Orders," pursuant to which Plaintiff would provide additional items for Defendant's construction work on the Chester Union project. (Id.) The Purchase Order price was $270,000.00. (Id.) The price of the Change Orders totaled $27,075.00. (Id.) Plaintiff provided all of the materials required under the terms of the Purchase Order and the Change Orders. (Id. ¶ 5.) A Change Order in the amount
Defendant has withdrawn with prejudice its Motion to Dismiss the Complaint for lack of personal jurisdiction pursuant to Rule 12(b)(1).
of $6,200 was cancelled by the parties. (Id. ¶ 6.) Defendant has made payments to Plaintiff in the total amount of $200,000.00, leaving a current unpaid balance of $90,875.00. (Id.) Plaintiff demands judgment against Defendant in the amount of $90,875.00, plus interest and costs. (Id.)
Defendant argues that this action should be dismissed for improper venue pursuant to Rule 12(b)(3) because the operative facts giving rise to Plaintiff's breach of contract claim occurred in New York. 28 U.S.C. § 1391(a) provides, in pertinent part, that "[a] civil action wherein jurisdiction is founded only on diversity of citizenship may . . . be brought only in (1) a judicial district where [the] defendant resides . . ., [or] (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred. . . ." 28 U.S.C. § 1391(a). For purposes of venue, a corporation is deemed to reside "in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c). Defendant has conceded that it is subject to personal jurisdiction in the Eastern District of Pennsylvania by stipulating to the withdrawal of its Rule 12(b)(1) motion with prejudice. Pursuant to 28 U.S.C. § 1391(a), therefore, venue properly lies in the Eastern District of Pennsylvania. The Court further concludes that venue properly lies in this judicial district pursuant to 28 U.S.C. § 1391(b), as the breach of contract claim in this case arises from Defendant's failure to make payments to Plaintiff's principal place of business, which is located in the Eastern District of Pennsylvania. See, e.g., TruServ Corp. v. Neff, 6 F. Supp.2d 790, 792 (N.D. Ill. 1998) (finding venue proper in district where payment was to be made "even though the defendants activities in another forum might be more significant"). Accordingly, Defendant's Motion to Dismiss pursuant to Rule 12(b)(3) is denied in this respect.
Defendant also argues that this action should be dismissed for improper venue pursuant to 12(b)(3) based on a forum selection clause contained in the construction contract between Defendant and Chester Union. The forum selection clause provides as follows:
The parties expressly agree that, in the absence of a written agreement to arbitrate, any claim, dispute, or other controversy of any nature arising out of the contract or performance of the work shall be commenced and maintained in New York Supreme Court located in the County where the project site is located.
The United States Court of Appeals for the Third Circuit has held that Rule 12(b)(6) is the appropriate vehicle for enforcing forum selection clauses. Instrumentation Assoc., Inc. v. Madsen Elec. (Canada), Ltd., 859 F.2d 4, 6 (3d Cir. 1988). The Court, therefore, treats Defendant's motion to dismiss based on the forum selection clause in the Chester Union contract as a motion to dismiss for failure to state a claim upon which relief may be granted pursuant to Rule 12(b)(6).
(Def. Ex. B.) Although Plaintiff was not a party to the Chester Union contract, Defendant argues that Plaintiff is nevertheless bound by the forum selection clause contained therein based on the following language from the August 20, 2002 Purchase Order: "You [Plaintiff] are hereby authorized to furnish as per the plans, specifications, and all addendum as prepared by Cannon Design the following: . . . Furnish and Deliver Plastic laminate cabinets countertops hardware as follows: [listing rooms in school building]." (Compl. Ex. A.) On its face, this language pertains only to "the plans, specifications, and all addendum prepared by Cannon Design" concerning the materials to be supplied by Plaintiff under the Purchase Order, and does not establish that the parties intended to incorporate the forum selection clause from the Chester Union contract into the Purchase Order. It is well-settled that a third party cannot have his rights altered, compromised, or redefined by the provisions of a contract he has not accepted. See, e.g., City of Peru v. Bouvier Hydropower, Inc., Civ. A. No. 00-1179, 2001 WL 59036, at *1 (N.D. Ill. Jan. 19, 2001) ("Defendants can point to no case in which a non-party to a contract was compelled to litigate its claim in a jurisdiction identified in a forum selection clause, which he did not agree to or bargain for."). Accordingly, Defendant's Motion to Dismiss pursuant to Rule 12(b)(6) is denied in this respect.
Defendant alternatively moves to transfer this action to the Southern District of New York pursuant to 28 U.S.C. § 1404(a). Section 1404(a) provides that "[f]or 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." 28 U.S.C. § 1404(a). The moving party bears the burden of establishing the need for transfer, and "the plaintiff's choice of venue should not be lightly disturbed." Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995) (quotation omitted). In ruling on a motion to transfer, the court must balance a variety of "private and public interests protected by the language of § 1404(a)." Id. The private interests include: (1) the plaintiff's forum preference; (2) the defendant's forum preference; (3) whether the claim arose elsewhere; (4) the convenience of the parties as indicated by their relative physical and financial condition; (5) the convenience of the witnesses, "but only to the extent that the witnesses may only be unavailable for trial in one of the fora"; and (6) the location of books and records "to the extent that the files could not be produced in the alternative forum." Id. (citations omitted). The public interests include: (1) the enforceability of the judgment; (2) practical considerations that could make the trial easy, expeditious, or inexpensive; (3) the relative administrative difficulty in the two fora resulting from court congestion; (4) the local interest in deciding local controversies at home; (5) the public policies of the fora; and (6) the familiarity of the trial judge with the applicable state law in diversity cases.Id. at 879-80 (citations omitted).
As to the private interest factors, Defendant notes that its non-party witnesses, which include the engineer, architect, and manager of the Chester Union construction project, are all located in New York, and their testimony is likely to concern the defectiveness of the materials supplied by Plaintiff and the delays on the construction project caused by Plaintiff's late and incomplete deliveries. Defendant maintains that it will incur additional costs to transport these non-party witnesses to the Eastern District of Pennsylvania and to provide them with lodging during the trial. Defendant also contends that it will incur additional legal expenses to have subpoenas issued if its non-party witnesses are unwilling to testify in the Eastern District of Pennsylvania. Defendant further notes that the construction materials delivered by Plaintiff have been incorporated as fixtures at a school building in New York, and cannot be removed from the premises without causing damage. Defendant also notes that the documents and records related to the Chester Union construction project are located at its office in northern New Jersey, which is much closer to the Southern District of New York. As to the public interest factors, Defendant argues that New York has a far greater interest than Pennsylvania in adjudicating this action since the project for which Plaintiff provided construction materials was located in New York.
The Court concludes that Defendant has failed to satisfy its burden of establishing the need for transfer of this action to the Southern District of New York. The relatively short distance between this judicial district and the Southern District of New York weighs heavily against the transfer of this action. See Jumara, 55 F.3d at 880 (noting that courts have deviated from the multi-factor balancing test "where the transfer involves a forum which is a relatively short distance from the original forum"); Hatfield, Inc. v. Robocom Systems Int'l, Inc., Civ. A. No. 98-4004, 1999 WL 46563, at *2 (E.D. Pa. Jan. 15, 1999) (denying motion to transfer to Eastern District of New York in part because "the distance between the two venues is not great and transportation is readily available"); Blanning v. Tisch, 378 F. Supp. 1058, 1060 (E.D. Pa. 1974) ("The court takes judicial notice of the comparatively short distance and the rapid, efficient transit between Philadelphia and New York. These factors have prompted several courts to deny transfer motions from Philadelphia to New York.") (citations omitted). Defendant does not suggest that relevant documents and files cannot be produced in this forum, and there is no evidence that Defendant's non-party witnesses will be unwilling to testify outside of the Southern District of New York. Moreover, none of the public interest factors strongly weigh in favor of transfer. As the Court cannot conclude that "the balance of convenience of the parties is strongly in favor of the Defendant," CAT Internet Serv., Inc. v. Magazines.Com Inc., Civ. A. No. 00-2135, 2001 WL 8858, at *9 (E.D. Pa. Jan. 4, 2001), Plaintiff's choice of forum must prevail. See Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970) ("[A] plaintiff's choice of a proper forum is a paramount consideration in any determination of a transfer request"). Accordingly, Defendant's Motion to transfer this action pursuant to § 1404(a) is denied.