Western Showcase Homes, Inc. v. Fuqua Homes, Inc., No. 2:2009cv02341 - Document 11 (D. Nev. 2010)

Court Description: ORDER Denying 3 Motion to Change Venue. Signed by Judge Robert C. Jones on 5/3/10. (Copies have been distributed pursuant to the NEF - EDS)
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' '. ; . Ct l L' :.)t..p' .f. C'' .:;. '7 .p--' :.. -.-'. ; 'tLt . . ...- . J' ' ' -. ' 1 ï . r 2 J 3 1 'JX , UNITED STA TES D ISTR ICT CO U RT DISTRICT O F NEVAD A W ESTERN SH OW CASE HOM ES,INC ., Plaintiff, vs. 2:09-cv-0234l-RCJ-RJJ FUQUA HOM ES,INC., O RDER 12 Dcfendant. 13 14 15 Thiscasearisesoutoftheallcged failureofDeftndanttopaycom m issionsowedto Plaintiff 16 forsalesofDcfendant'sproductsin Canada. Pending before the CourtisDefendant'sM otion to 17 ChangeVcnue(//3).Forthcreasonsgiven hercin,theCourtdeniesthemotion. Western Showcase Homes, Inc. v. Fuqua Homes, Inc. 18 1. Doc. 11 FAC TS A ND PRO CED URAL H ISTO R Y 19 In Novem ber 2007 Phil Daniels,President and CEO of Defendant Fuqua H om es,Inc. 20 (iiFuqua''),traveled to Las Vegas,Nevada to negotiate an agrecmentwith Plaintiff W estern 21 Showcase Homes,lnc.(ttW cstern'')forW estcz' n to actasthe cxclusivc salesrepresentative for Fuqua'sm anufactured hom esin Canada and othertenitoriesasagrecd from time to time (thc 23 i:ExclusiveTerritory'').(Compl.!g ! 5,8). OnNovember10,2007 Danielstraveled to LasVegas again,thistimewithotherFuquareprcsentatives,to signadealerrepresentativeagreement(the t'Agreem ent'').(1d.!g6).From November2007through Februaly 2008,Fuquarepresentativesmet Dockets.Justia.com 1 with W estern representatives severaltim es in LasVegasto executcthedetailsofthe Agreem ent. 2 (Id.!7).UndertheAgreem ent,W esternwastoreceivean 11% Gtdiscount''on al1ordersaccepted 3 by Fuqua originating in the Exclusive Territol'y during the tenn ofthe agreem ent.(1d.!J10). 4 W esternallcgesthatFuquafailcd to pay disceuntstotaling $40,215.93 forthreesalesinvoiced in 5 Augustand Octoberof2008.(/#.!(16). 6 PlaintiffsuedDefendantin theClark CountyDistrictCourtonfourcausesofaction:(1) 7 BreachofContract;(2)BreachofthelmpliedCovenantofGoodFaithandFairDcaling;(3)Unjust 8 Enrichmcnt;and(4)lntentionalIntcrfcrencewithContractualRelations.Dcfendantrcmovedtothis 9 Courtbased ondiversityofcitizenship'andhasnow movedunderRulc l2(b)(3)foratransferof l0 venueto thc N orthern DistrictofTexas. 11 lI. LEG AL STAN DA RDS 12 W henacourtm akesadetcrminationofvenueunderRule12(b)(3),thewell-pledallegations l3 ofthe Com plaintare taken astrue,and any evidence subm itted by thc non-m ovantin opposition 14 to theRule 12(b)(3)motion isviewedin thelightmostfavorableto thenon-movant.Ginterexrel. l5 Ballardv.Belcher,PrendergastutLaporte,536F.3d439,448-49(5thCir.2008).W hethervenue 16 lplaintiffclaim sonly $40,215.93 indamagesforbreach ofcontractand atleast$10,000 17 forintentionalinterferencewithcontractualrelations.Theotherclaimsforbadfaithandunjust enrichm entappearim plausibleunderthe factsalleged. However,itislegally plausible thatthe 18 claim fbrintentionalinterferencewith contractualrelationsisworth atleast$34,785.08. Furthennore,Plaintiffhasclaim ed an indetcrm inate am ountin attorneysfees,which considered 19 togetherwithcompensatorydamagescansatisfytherequisitejurjsdictionalamountifthe underlying statute supportsan aw ard ofattom eysfees.See GaltG/S v.JSS Scandinavia,142 F.3d 20 1l50 55(9thCir.1998).NevadaandTexasalikepcrmitattorneys'feesineontractactions , 11 21 based on contractualclausesproviding forthem ,seeKell y Broad.Co.,Inc.v.Sovereign Broad., lnc.,606P.2d 1089,1092 (Nev.1980)(citingNcv.Rev.Stat,' j 18.010),superseded by statute 22 on otherg?'ouuy. s'asstated in C' tprfn/rxwftï' eHomeLoansv.Thitchener,192 P.3d 243,254 (Nev. 2008). ,Tony GulloMotors1,L.P.v.Cllapa,2l2S.W .3d299,310-1l(Tex.2006),andthe 23 contractin thiscase provides forattorneys'feesto thc prevailing party in any litigation relating thereto,(s'cc//3-2!P.4.).Thereforc,the$75,000.01amount-in-controversyrequirementis 24 satisfied. 25 page 2 of 10 l liesin a particulardistrictisgovcrned by 28 U.S.C.j 139l. Undertherelevantsectionsofthat 2 3 4 stattzte,venue licswhere: (a)A civilactionwhereinjulisdictionisfoundcdonlyon divcrsityofcitizcnship may,exceptasotherwiseprovidedbylaw,bebroughtonlyin(1)ajudicialdistrict whereanydefendantresides,ifa11defendantsresideinthesameState,(2)ajudicial districtin which a substantialpartofthceventsorom issionsgivingrisetotheclaim 5 occurred,orasubstantialpartofpropertythatisthesubjectoftheactionissimated, or(3)ajudicialdistrictinwhich anydefendantissubjecttopersonaljurisdictionat 6 the tim e the action is com m cnced,îf there is no districtin whîch the action m ay othelavise bebrought. 7 8 9 10 1l 12 (c)Forpurposesofvenueunderthischapter,adefendantthatisacorporation shall be deemed to reside in anyjudicialdistrictin which itissubjectto personal jurisdictionatthetimetheactioniscommenced.InaStatewhichhasmorethanone judicialdistrictandinwhichadefendantthatisacorporationissubjecttopersonal jurisdictionatthetimeanactioniscommenced,suchcorporationshallbedeemed to reside in any districtin thatStatew ithin whieh itscontactswould bc sufficientto subjectittopersonaljurisdictionifthatdistrictwereaseparateState,and ifthere is no such district,the cop oration shallbe deem ed to reside in the districtwithin which ithasthe m ostsignificantcontacts. 13 28U.S.C.j1391(a),(c).Thcsearetherelevantscctionsofthestatute,becausejurisdictioninthis l4 caseisbasedpurelyondiversityofcitizenship.(See#15 11;seealsoCompl.atjg !24-50,attached 15 as#l-l(pleading onlystate-law causesofactionl).Thesubsectionsofj l391(a)aredisjunctivc' , 16 vcnue lies ifany ofthese subsectionsis satisfied fora given district. 17 Under28 U.S.C.j 1404,a districtcourtmay transfera case to any otherdistrictwhere 18 venuelies'igtlortheconvenienceofpartiesandwitnesses''evenifvenueisproperintheoriginal 19 districtunderj 139l.j 1404(a).A partymayalsomovefordismissalforimpropcrvenue.Fed.R. 20 Civ.P.12(b)(3). Under28 U.S.C.j 1406,a districtdetennining thatvenue isimproperhasa 21 choicebetweendismissalortransfertoadistrictwhercvenueproperlylies.Seejl406(a).Because 22 itfurthersthepurposeofjudicialeconomy,acasemaybetransfen'edunderj1406(a)evenwhere 23 venueisproper,butwhcrethereisnopersonaljurisdictionoverthedefendantin thetransferor 24 district.Goldlawr,Inc'.v.Heiman,369U.S.463,466-67(1962). 25 Page 3 of 10 1 W hen a districtcourtorders a change ofvenue,the choice of1aw rules ofthe transferor 2 jurisdictionfollow thecaseifvenuewasproperthere,VanDusenv.Barrack,?76U.S.612,639 3 (1964),butthechoiceoflaw rulesofthetransfereejurisdictioncontrolwherevenue(orpersonal 4 jurisdiction)inthetransftrorjurisdictionwasnotproper,Jaclo'onv.WestTelemarketing Corp. 5 Outbound,245F.3d518,522-23(5th Cir.2001), .Nelsonv.1nt'1PaintCo.,716 F.2d 640,643(9th 6 Cir.1983). The transfereecourtmustdetenuincwhetherthe transferhad the effectofcuring a 7 defectin personaljurisdiction,and ifso,itappliesthe choice of1aw rules ofthe transferee 8 jurisdiction.M uldoon v.TropitoneFurnitureCo.,1F.3d964,966-67 (9thCir.1993). 9 A districtcourt'srulingsonvenuearereviewed derlfavo,seeImmigrantAssistanceProject 10 v.INS,306 F.3d 842,868 (9th Cir.2002),and underlying factualtindingsarereviewed forclear 11 error,Colulnbia Pictures Television v.Klypton Broad.,Inc.,l06 F.3d 284,288 (9th Cir.1997), 12 rcv' J on othergrounds,523 U.S.340 (1998). 13 111. A NALY SIS 14 Defendanthas m oved for a change ofvenue to the N orthern District ofTexas based on 15 impropervenuein theDistrictofNevada,notforconvenienceofthepartiesandwitnesses.(See#3 16 at2).Therefore,themotionisarequestforatransferunderj1406,notundcrj1404,andifthe 17 Courtgrantsthem otion theU .S.DistrictCourtfortheNorthern DistrictofTexasm ustthen engage 18 in a choice-of-law analysisbased on thechoice-of-law rulcsoftheState ofTexas.Nationwide B à- l9 weeklyAdmin.,Inc.v.BeloCorp.,512F.3d 137,141(5thCir.2007). ,seeKlaxon Co.v.Stentor 20 Elec' .Mfg.,313U.S.487,496(1941). 21 AsPlaintiffnotes,28 U.S.C.j'1441(a)govelmsvenue in rcm oved actions,notj 1391, 22 Polizziv.CowlesM agazines,Wkc.,345U.S.663,665(1953),and apartyin aremovedaction may 23 notchallengevenue asbeing improperunderj 1406,butmay only challcngeitasbeing more 24 convenientelscwhereunderj l404.PT U?7ï/cJ CanCo.Ltd.v.Crown Cork (fSealCo.,138F.3d 25 Page 4 of 10 1 65,72-73(2dCir.1998).Defendantchallengedvenueonlyunderj1406initsmotionbutargued 2 undcr j 1404 in i(sreply and atthe hearing. The Courtdenics the motion on both grounds. 3 Defendantcannotbringaj 1406motionin thisremovedcase,andvenueisproperinNevadaeven 4 ifthepresentmotion isconsidered asonepursuantto j 1404. 5 First,DefendantarguesthatvcnucliesinanydistrictinTexasunderj 1391(a)(1),because 6 a1ldefendants thercisonly oneD efcndantin thiscasc- reside in Tcxas.Thisistnze,butitisnot 7 thewhole truth.Fuqua,the soleDefendant,isincorporatcd in Delaw areand hasitsprincipalplace 8 ofbusinessinTexas,(see//1!6),making itaresidentofeitherstateforthepurposesofdiversity 9 ofcitizenship,see jj28U.S.C.1332(c)(1).Defendantfailstonotethatin thecaseofcorporate 10 defendantssuch asFuqua,residency forthe purposesofvenue isdefined cven m ore broadly than 11 isresidencyforthepurposesofdiversityofcitizenship. Subsection 1391(c)statesthatforthe 12 purposesofvenuc,diacorporation shallbedeem ed to residein anyjudicialdistrictin which itis 13 subjcctto personaljurisdiction atthetïmetheaction iscommenced.''1d. Subsection l391(c) 14 thereforc m akes resideney for the purposcs of venue coextensive w ith the test for personal l5 jurisdictionundcrtheDueProcessClause. lfacourtofthc StateofNevada would havchad 16 pcrsonaljurisdiction overFuquainthiscaseonthedatethcactionwascommcnced,October6, 17 18 2009,VeeCompl.! 1),then venucisproperin thisdistrict,seej 1391(c). ThereisonlygeneraljurisdictionoverDefendantinDelawareandTexas.W herethereis 19 nogeneraljurisdîction,theassertionofspeciticjurisdictionoveradefendantisconstitutionally 20 properunder the Due Process Clauses ofthe Fifth and Fourtecnth A m endm ents when there are 21 sufficientminimalccmtactswiththeforum suchthattlleassertionofpersonaljurisdictiondoesnot 22 offendt'traditionalnotionsoffairplayandsubstantialjustice.''1nt'1ShoeCo.v.Statet?fWash., 23 Ojhce(funemploymentCompensationdcPlacement,326U.S.310,316(1945)(quotingMilliken 24 v.M eyer,311U.S.457,463 (1940)).Thestandardhasbeenrestatedusing differentverbiage.See 25 Page 5 of 10 1 Hansonv.Denckla,357U.S.235,253(l958)((1gI!tisessentialineachcasethattherebesomeact 2 byw hich thedefendantpurposcfullyavailsitselfoftheprivilegeofconducting activitiesw ithin the 3 forum State,thusinvokingthebenefitsandprotcctionsofitslaws.''(citing1nt'1ShoeCo.,326U.S. 4 at 319)), World-wide Volkswagen Corp.v. Woodson,444 U.S.286,297 (1980) (t6(T1he 5 foreseeability thatiscriticalto due process analysis isnotthe m ere likelihood thata productw ill 6 find itswayinto theforum State.Rather,itisthatthedefendant'sconductand conneetion w ith the 7 forum State are such thathe should reasonably anticipate being haled into coul' tthere.''(citing 8 Kulkov.Super.Ct.ofcal.,436U.S.84,97-98(1978))). 9 ThcCom plaint,w hich isto bebelieved,allegcsthatD efendantttata11tim esrelevantto this 10 mattcrwas,doing business in Clark County in tbe state ofNevada.''(Compl.IJ2). This is a ll conclusoly statementthatwillnotsupportpersonaljurisdiction. Plaintiffmustallege some 12 activities tl1atin factwould supportsuch a claim . Plaintiffalleges only thatDefendant'sagents 13 traveled to Las V egas severaltim es in late 2007 and early 2008 to negotiate,sign,and ftzl-ther 14 discusstheAgreement,andthatPlaintïffconductsitsbusinessinClarkCounty,Nevada.(1d.!r !. (1, l5 5-7).DefendantclaimsthatitsVicePresident,W illiam beach,signedtheAgreem entinTexasand 16 nevertraveledtoNevada.(#3at4:3--4).Uponcloserreview,thisisconsistentwiththeComplaint, 17 w hich only explicitly allegesthatttW estern''signed the Agreem entin Nevada afternegotiations 18 w ith Defendantthere. 19 TheFourth Circuitrecently held thattherewasnopersonaljurisdiction overaforeign 20 defendantin Virginia based on electronic com munications the defendanthad w ith plaintiffs in 21 V irginia where the contractw as negotiated and signed in Colorado' ,there w as a ehoice-of-law 22 clauscin favorofthelaw ofcolorado;thedefendanthad no ofticcs,ongoingbusiness,orin-person 23 contactw ith plaintiffsin Virginia;and the work w asto bcperform cd in India.Consulting Eng ' rs 24 Colp.v.Geonletric,Ltd.,561F.3d273,279-80(4thCir.2009).ButtheSeventhCircuithashcld 25 Page 6 of 10 1 thatnegotiatingand signingacontractin aforum willsubjectapartytothatforum 'sjurisdiction, 2 withoutmore,evenwhereneitherpartyisaresidentoftheforum.lnre011SpillbyAmocooffcoast 3 ofFranceonMarch l6,1978,699F.2d909,917(7thCir.l983)(findingthatdueprocesswasnot 4 offendedbytheNorthernDistrictofIllinois'assertionofpersonaljurisdiction overFrenchand 5 Spanish parties based on the negotiation and signing in lllinoisofa contractto build an allegedly 6 defective Spanish shipthatspilled oiInearFrance).TheSecond Circuithasalso found personal 7 jurisdiction properin New York based purely on thefinalnegotiation and signing ofacontract 8 9 there.United Statesv.M ontrealTrustCo.,358 F.2d 239,243-44 (2d Cir.1966). TheNinth Circuithasdevelopcd athree-parttcst:(1)thedefendantmusthavepurposely 10 availeditselfoftheprivilegeofconductingactivitiesintheforum;(2)theplaintiffsclaim must 1l ariseoutofthatactivity;and(3)thccxerciseofjurisdiction mustbereasonable.Shutev.Carnival l2 CruiseZï/?c, ç,897 F.2d 377,381(9th Cir.1990). The firstprong cannotbe satistied m erely by 13 enteringintoacontractwithaforum plaintiffRotlt>'.GarciaA/tzrtyôftTz,942F.2d617,621(9thCir. 14 1991)(citing Burger Aïn, g v.Rudzewicz,471 U.S.462,478 (1985)). However,in this case, 15 D efendantnegotiated the contractin LasV egas,and the location wasalm ostcertainly selected at 16 leastinpartfortheluxuriousam enitiesandrecreationalopportunitiesavailablein LasVegas.Also, l7 as in R0th,Plaintiff's efforts underthe contractwere to take place in Nevadaw here Plaintiff has l8 itsoftices.See 942 F.2d at622.BccauseD efendantsigned theA greem cntin Texas,thequestion 19 isclosc,buton balance the Courttindsthatthe tirstprong is satisfied. Thc sccond prong is also 20 close,butthe Courtfindsthatitissatistied basedon thecontracthaving beennegotiated in Nevada. 21 See id. The third prong isitselfa scven-factorbalancing testunderwhich thtlCourtm ustconsidcr; 22 çtl)thecxtentofthedefendant'spurposefulinterjectionintotheforum state'saffairs' ,2)theburden 23 onthedcfendant' ,3)contlictsof1aw betweentheforum anddefendant'shomejurisdiction;4)the 24 forum'sinterestinadjudicatingthcdispute' ,5)thcmostefticientjudicialresolutionofthedispute' , 25 Page 7 of 10 1 6)theplaintiff'sinterestin convenientand effectiverelief;and 7)theexisteneeofan alternative 2 fol-um.''1d.DefcndanthasminimallyinjecteditselfintotheaffairsofNcvadabyvisitingthestate 3 fornegotiations.A lthough D efendantsigned theA greem entin Texas,by doing so itengaged the 4 efforts of a N evada corperation in N cvada. D efcndant corporation willnot be unreasonably 5 burdened by defending in Nevada. Conflicts oflaw are nota concern,because the A greem ent 6 contains a choicc-of-iaw clause in favorofTexas1aw thatany fortzm willlikely honor. N either 7 NevadanorTexashasagrcaterinterestthantheotherinadjudicatingthedispute- each stateis 8 hometooneofthcparties,and thesubjectmatterofthedisputedoesnotuniquely affectthe 9 interestsofeitherstatc.Neitherforum willbcabletoadjudicatethcdisputemoreefticientlythan 10 theother.A lthough aTexasforum would bem ore fam iliarwith Ttxaslaw than thisCourtis,this 11 factorno Iongercarlies greatweight.ln the daysbeforcclectronic databasessuch aconsideration l2 w asm ore im portantducto lack ofaccessto otherstates'reportersand statutebooks,buttoday the 13 Am crican courts have im m ediate electronic access to the law ofcvery state. This Courtm ay 14 research and consîderTexaslaw when rulingon therelativelysim plecontractualissuesin thiscase 15 justasaTexascourtwill.Plaintiff'sinterestinconvenientandeffectivereliefisbestservedby l6 finding venue in N evada. An altelmative forum existsin Texas. W hen a11factorsare considered, 17 itisreasonable in thiscaseto requireDefendantto defend in N evada. Defendantcould reasonably 18 be expected to defend in N evada based on its negotiation ofa contractin N evada w ith a N evada 19 corporation thatw asto perform itswork undcrthe contractfrom itsN evada oftices. The Court 20 tindsthatthethirdprong issatistied,thereisspeciticjurisdiction overDcfendantinNevada,and 21 thereforevenueliesunder28U.S.C.jj l391(a)(1)and (c). 22 Second,Defendantarguesthatvenuedoesnot1icinthisdistrictunderj1391(a)(2),because 23 no substantialpartofthe eventsorom issionsgiving rise to theclaim occurred in N evada,and no 24 substantialpartofthepropcrtythatisthesubjectofthesuitissituatedinNcvada.Becausevenue 25 Page 8 of 10 1 liesintheDistrictofNevadaundertheçipersonaljurisdiction''testofjj 1391(a)(1)and(c),the 2 Courtneednotengageinananalysisofthemorestringcntiisubstantialpart''testofj1391(a)(2). 3 H owever,thc testissatistied.Thealleged wrongfulactsconcern theTexasD efendant'sfailure to 4 m akc paym ents to the Nevada Plaintiff. W here should an om ission be said to have occurred? 5 Philosophicallyspeaking,an om issionttoccurs''now herc,buttheCourtm ustconstrtlethelanguage 6 ofthe statute assensibly aspossibleso asto giveeach term som e m eaning.The question iswhere 7 the required actw asexpected to occurifperform ed asrequired. W here w aspaym entto occurin 8 thiscase? Paragraph 17ofthe A greem entisunclearon thispoint.ltindicatesthatpaym cntwasto 9 bemadettbycheckpayabletoDealer.''(#3-2! F.7.).Drawing areasonableinferencein favorof 10 thenon-m ovant,thcCourtfindsthatDefendantwasexpected tom ailchecksfrom Texasto Plaintiff 11 in N evada,presum ably fordepositthere.The actofan interstatepaym cntcan be said to occurin 12 tw o states.Thewrong from thefailureto m ailacheck occursm orally in thestatewherethedrawer 13 failsto actbutpractically in the state w herethe payee isharm ed by lack ofpapnent. The Court 14 thereforcfindsthattheseconddisjunctiveprongofj1391(a)issatistied. 15 Thîrd,Defendantarguesthatunderj l391(a)(3),becausethereisnodistrictinwhichthe 16 casemayotherwisebebrought,venueIiesinanydistrictwhereFuquawassubjecttopersonal 17 jurisdictionwhentheactionwascommenccd,e.g.,thcNorthcrnDistrictofTexas.Asamatterof 18 statutoryinterpretation,forcorporatedefendantsj1391(a)(3)isredundantwithjj1391(a)(1)and l9 1391(c)readinconjunction.Thelattertwo subsectionsread togethermakevenueproperfora 20 corporatedefendantwherevcrthereispcrsonaljurisdictionoverthecorporatedefendantwhenthe 21 actioniscommcnced.Hence,therewillneverbeanynccdtoresorttoj'1391(a)(3)withrespect 22 to a corporatedefendant,because there willneverbea case whcreiçthere isno districtin which the 23 actionmayotherwisebcbrought''wherethereispersonaljurisdictioninanydistrictatall.Inother 24 words,becauseofthebroad grantofvenucunderj 1391(c)with respectto corporatedefendants, 25 Pagc 9 of 10 adistrictcourtwillcmlyevermakeitttlthe j 1391(a)(3)analysiswhereithasalreadydetermined thereisnojurisdiction inanyAmcrican court.Asdiscussed,supra,underj 1391(a)(3)venuelies in eithcrNevada orTexas. 4 Defendantalso argues thatthere isa fortlm selection clause in the Agreem entin favorof 5 Texas. D efendantconflates choice oflaw with forum selection. The clause cited isnota forum 6 selectionclause,butachoicc-of-law clause.(See//3-2at!)Q.6.(çk-l-hisagreem entshallbegoverned by and construed in accordancewith thclawsot-Texas,U.S.A.'')). 8 CO NC LUSION 9 IT IS HEREBY ORDERED thattheM otion toChangeVenue(//3)isDENIED. 10 DATED :This 3rC1 day ofM ay, 2010. 12 13 R T C.JO United StatesD 't 'ctJudge 14 15 21 Page 10 of 10