Sierra Nevada Holdings, Inc. v. United Leasing Corporation et al, No. 3:2010cv00047 - Document 17 (D. Nev. 2010)

Court Description: ORDER GRANTING IN PART and DENYING IN PART Ds' 4 Motion to Dismiss for Lack of Jurisdiction, or in the alternative, Motion to Transfer Venue : Ds' motion to dismiss is denied. Ds' motion to transfer to the United States District Court for the Eastern District of Virginia is granted. Signed by Judge Robert C. Jones on 7/15/2010. (Copies have been distributed pursuant to the NEF - DRM)
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. ...., ...- . f ! ... -.. --.. ) . . c. ' '-'- '' .) ... . l . . . ) 1 ...... . y 1 i ;' ,.'ê. 1@l ; l n!lg1i *1!1 t. t I ' . . . ! , , 3 ' - - -' f j . . .. I' * . 'ï 4 ! ' 1 ; '''Y ' ''' 5 6 UN ITED STATES DISTR ICT C O URT 7 DISTR ICT O F NEVA DA 8 SIERRANEVA DAHOLDINGS,INC., Plaintift 9 ) ) ) l o v. ll UNITED LEASING CORPORATION' , y ) 1 2 13 j ) EDW ARD H.SHIELD, Defendants. l4 ) 3;1O-cv-00047-RCJ-RAM ORDER Currently before the Courtis a M otion to Dism iss for Lack ofJurisdiction or,in the 15 16 17 alternative,Motion to TransferVenue (#4)filed by DefendantsUnited Leasing Corporation (' Iunited Leasing'') and Edward H. Shield ('ishield''ltcollectively referred to herein as d'Defendants'')on March 15,2010. PlaintiffSierra Nevada Holdings,Inc.(' Isierra Nevada'') l8 filed an Opposition (#11)onApril14,2010,and Defendantsfiled a Reply (#14)on May3, 19 Sierra Nevada Holdings, Inc. v. United Leasing Corporation et al 20 2010. Doc. 17 The Courtheard oralargum enton the m atteron June 11,2010,and now grants the 21 M otion to TransferVenue. 22 BAC KG RO UND 23 This case involves severalfraud based claim s arising from a loan transaction entered 24 into between Plaintil and DefendantUnited Leasing. Plaintifffiled a Complaint(#1)inthis 25 action on January 25,2010. According to the allegations in the Complaint,Plaintiff''is and 26 was,ataIItimes materialhereto,a corporation in good standing organized underthe Iawsof 27 the State ofNew Ham pshire w ith its principalplace ofbusiness Iocated in the State of New 28 Hampshire.'' (Complaint(#1)at1). DefendantUnited Leasing ''is and was,atalltimes l m aterial hereto, a corporation organized under the Iaws of the State of Virginia w ith its 2 principalplace ofbusiness Iocated in the State ofVirginia.''.1 #sDefendantShieldd'isandwas, 3 atalItim es m aterialhereto,a residentand citizen of,and dom iciled in,the State ofVirginia, 4 andwasgunited Leasing's!President.''. 1j=. 5 Plaintiffallegesthatthe Coul' thasjurisdiction overthis matterpursuantto 28 U.S.C. 6 j 1332''inthatthe amountin controversyexceeds$75,000.00''and ''is betweencitizensof 7 different states.'' 1 #sat2. In addition,Plaintiffalleges thatvenue is properin this district . 8 because ''a substantialpartofthe events orom issions giving rise to the dispute''occurred in 9 Norlhern Nevada.J#-. 10 According tothe allegationsin the Com plaint,the causes ofaction asserted in thiscase 11 arise from a loan transaction entered into betw een Plaintiffand United Leasing to pay for 12 repairs to a Bell212 helicopter. Plainti; asserts thatin July 2004,it''purchased a Bell212 13 helicopterw hich needed a substantialoverhauland refurbishm ent in orderto perform w ork 14 forthe United States ForestService.''J. 4..The costfortheoverhauland refurbishmentwas 15 approximately$1,300,000,and Plaintiffneeded a Ioantofinancethework.Plaintiffstatesthat 16 it''approached the Defendantsaboutfinancing the necessaryIoan.' $...at3.Becauseofa 17 priorbusiness dealing w ith United Leasing,Plaintiffstates thatitand its principal,Jon M ayer 18 (ddMayer''),ddreposed specialtrustand reliance''inShield and United Leasing.. !#=. 19 According to the Complaint,'liln a telephone conversation in early 2005,Shield (in 20 Virginia)spoke telephonically with Sierra Nevada's principal,Jon Mayer(who is and was 21 locatedinReno)andindicatedthathe(Shield)couldprobablysecureIoanfinancingforsierra 22 Nevada ateightpercent.''l 1j .a.The complaintassel 'tsthata month Iater,Shield told Mayer .. 23 thatd'he couldfinancethe Ioan atathirteen (13$$)interestrate,''J#=. 24 Plaintiffstates thatitintended forthe financing with United Leasing ''to be short-term , 25 notpermanent,and EthatPlaintifrs)representatives communicated this factto Shield on 26 27 1ThisistheonlydirectrefcrcnceintheComplaintto anyactivityrelatingto thecaseoccurring in N evada. However, the Court notes that Plaintlff did provide cvldence of additionaltelephone 28 corpmunicationsandwrittgncorrespondencethatoccuaedbetwcenthepartiesdurzgtherelevantperiod whlle M ayerwaslocated m Reno,N evada. 2 1 several occasions.' Id. ln addition,Plaintil asserts that its representatives d'specifically 2 advised Defendants thatthe helicopterwas forUnited States ForestSen/ice operations but 3 was on a standby capacity untila contractw as secured,atw hich tim e any tem porary Ioan from 4 Defendants w ould be refinanced w ith a perm anent,Iower-rate Ioan.'' Id. Plaintiffstates that 5 during thistime,Shield madeverbalstatem entsto Plaintiff'sprincipal,Mayer,to the effectthat 6 Shield ''would take care or'Plaintiff,and so Plaintiffdiscontinued negotiations w ith other 7 potentialIenders and Iooked to Defendants to finance the Ioan. Id. 8 According to Plaintiff,the Ioan process w ith Defendants ''dragged on form onths,''and 9 eventually the interestrate was raised to 15.150:. Id.at4. In addition,Plaintiffasserts that 10 Defendants neveradvised Plaintiffthatitwould have to pay any ''residual''or''early paym ent l1 penalties.h'z Id 12 In 2007,Plaintiff''secured a fire fighting contractw ith the United States ForestService 13 and,based upon the guaranteed incom e was able to secure regularbank financing atm ore 14 com petitive m arketrates.' ld.at5. As a result,one ofPlaintifrs representatives ''contacted 15 the Defendants via an interstate telephone call to advise them of Sierra N evada's new 16 financing and its desire to pay-off the outstanding Ioan balance.'' Id. A ccording to the 17 com plaint, during a series of telephone calls regarding the pay-off issue, Defendants 18 dem anded a substantialpay-offpenalty. Plaintig states thatitprotested the pay-offpenalty, 19 butthatthepartiesultimatelysettledonademandof$285,508,33.Plaintisassertsthatithad 20 no choice butto pay this am ountotherwise United Leasing would notrelease the Iien itheld 21 againstthe helicopter,thereby causing cancellation ofPlaintiff's new ,Iower-rate loan. 22 5. 23 24 aPl aintifrscomplaintallegcsthatUnited Leasingw assufrcringfm ancialdio cultiesbetw eenzoos 25 and2007. Asaresult jPlaintiffasserk tsthatDefendan, tstthatchedaschemewherebytheydecidedjto stnlcturetheloanto ( laintifrlasan equipmentlease becausethatstructureentitledthem toderve ;!t5 certaintaxandotherfmancialadvantages.''ld.PlaintifrasscrtsthatShieldinfonnedMayerthatbecause the transaction was strujtured asa $lease,,,Plaintiffcould ignore the ;çcontract.s boilerplate term sy,,, 27 including avenueprovislon which stated thatany actionsin law orequityrelating to theIease should be comm enced andm aintainedirlk:theGeneralDistrictCourtorCircuitCourtforHanoverCounty,V irginia 28 OrtheCityofRichmond,Virginia,ortheUnited StatesDistrictCourtfortheEastem DistrictoiVirginia.''J. 1. J .S 3 1 Based on the foregoing allegations, Plainti: filed this Iaw suit asserting claim s for 2 fraudulentconcealm ent,false prom ise/econom icduress,fraud/m isrepresentation,constructive 3 fraud,civilextortion,conversion,and civilRIC O regarding the Ioan transaction and pay-off 4 penalty, 5 Defendants have now filed a M otion to Dism iss forLack ofPersonalJurisdiction,orin 6 thealternative,MotiontoTransferVenue(#4),Accordingto Defendants,the claimsasserted 7 againstthem shouldbedismissedpursuanttoRule 12(b)(2)becausethecomplaint'isdevoid 8 ofanyfactualallegationsthatestablishpersonaljurisdictionovereitherdefendant.''(Motion 9 to Dismiss (#4)at3). Moreover,Defendantsstate thatneitherUnited Leasing norShield 10 ''haveanycontactswith Nevadathatwouldjustifytheassedion ofpersonaljurisdiction,'. !. (s l1 at 3, In the alternative,Defendants seek an order transferring venue to the United States 12 D istrictCourtforthe Eastern DistrictofVirginia. .$..at4.Defendantsnote thatbcth Uni ted 13 Leasing and Shield are residents ofV irginia. Defendants further note thatPlaintiffis a New 14 Ham pshire corporation, and was neither registered nor qualified to conduct business in l5 Nevada atthe relevanttime,giving Nevada very little interestinthisdispute,!#.at4-5. 16 lnresponse,PlaintiffassertsthatpersonaljurisdictionexistsoverDefendantsbecause l7 Shield,'personally and on behalfofUnited Leasing .,.m ade a num berofm isrepresentations, 18 omissions and extortions in multiple telephone calls,m ailings and e-mails with M r.Mayer 19 while(Mayer)resided,andwasIocated in,Nevada.''(Oppositionto Motionto Dismiss(#11) 20 at2).lnaddition,Plainti:assertsthatdespitetheallegationsinthecomplaintthatPlaintiffis 21 a New Ham pshire corporation, Plaintiffis actually a resident of Nevada:'Sierra Nevada, 22 although incorporated in New Ham pshire and m aintaining a m ere office presence there in 23 orderto comply with New Hampshire Iaw,is actually a Nevada resident(orcitizen)as its 24 'nel' ve center'and thusprincipalplace ofbusiness,isIocated here.'3 1 #aPlaintiffalsoargues . 25 26 3A snotedbyDgfendants,PlaintifrwasnotregisteredwiththeNçvadaSecretalyofStateaseither 27 an entity incorporated m N evada oran entity registered to do businessm N cvada atthetim ethealleged unlaw fulconductoccun' ed orevcn when the motion to dism issw astiled by Defendants. Plaintiffstates 28 thatthiswysamereçioversight,''andregisteredwiththeNevadaSecretaryofStatein2010beforefiling itsoppositlon. 4 1 thatthe case should not be transferred to Virginia because itwould be inconvenientfor 2 Plaintifrs principal,M ayer,to travelto Virginia from Nevada to Iitigate the claim s. 3 As w illbe discussed in the follow ing,the Courtfinds thatitis appropriate to transferthis 4 case to the United States DistrictCourtforthe Eastern DistrictofV irginia, 5 6 D ISC USSIO N 28 U.S.C.5 1404(a)provides:''Forthe convenienceofpartiesandwitnesses,inthe 7 interestofjustice,adistrictcourtmaytransferanycivilactiontoanyotherdistrictordivision 8 w here itm ighthave been brought.' According to the United States Suprem e Coul 't,section f) 14O4(a)''isintended toplacediscretioninthedistrictcourtto adjudicate motionsfortransfer 10 according to an dindividualized,case-by-case consideration ofconvenience and fairness.'' lj StewartOrq.,Inc.v.RicohCorp.,487U.S.22,29(lg88ltquotingVan Dusenv.Barrack,376 12 U.S.612,622 (1964)).A motiontotransferundersection 14O4(a)''callsonthe districtcoud 1? to w eigh in the balance a num berofcase-specific factors,' ! #z.IntheNinthCircuit,thefactors 14 to considerinclude:(1)the Iocation where the relevantagreements were negotiated and l5 executed,(2)thestatethatismostfamiliarwiththegoverningIaw,(3)the plaintifrschoiceof 16 forum,(4)the respective parties'contacts with the forum,(5)the contacts relating to the . 17 plaintiff'scause ofaction inthechosenforum,(6)thedifferencesinthe costsoflitigation in )g the two forums,(7)the availabilityofcompulsoryprocessto compelattendance ofunwilling 19 non-pady witnesses,and (8) the ease ofaccess to sources of proof. Jones v.GNC atl Franchising,Incs,211F.3d495,498-99(9thCir,2000),Additionally,'thepresenceofaforum zj selection clause is a 'significantfactor'in the court's section 14O4(a)analysis.' . 1 .(s(citing 22 Stewart,487 U.S.at29). 23 In this case,upon a review ofthe aforementioned factors,the Courtfinds thatthe :4 United States DistrictCourtforthe Eastern DistrictofV irginia is the mostappropriate forum 2j forthis action. Defendants have shown thatVirginia is the mostconvenientforum based on 26 the ease ofaccess to w itnesses and evidence,as wellas the respective parties contacts with gy Virginia. In this regard,itappears thataIIthe relevantw itnesses,besides Plaintiff's principal 2g Mayer,areIocatedinVirginia.Inaddition,thecontractwasexecutedinVirginiaand issubject 5 l to a forum selection clause providing thatclaim s arising underthe Iease agreem entm ay be 2 broughtin the courts ofVirginia. 3 AlthoughPlaintiff'schoiceofforum isNevada,NevadahasIittleinterestinadjudicating 4 the m erits ofthis dispute. First,the parties are notcitizens of N evada,4 Second,Plaintiff 5 concedesthatitapproached Defendants inV irginia to initiate the businesstransaction entered 6 into between the parties. Third ,the helicopteratthe centerofthe Iease agreem entw as not 7 Iocated in Nevada during the contractnegotiations and execution. In fact,the purpose ofthe 8 Iease agreem entw as to finance repairs to the helicopteroccurring in Canada -notNevada.s 9 As such,based on the foregoing,the Coud finds thatforthe convenience ofthe parties l0 andwitnesses,and in the interestofjustice,thiscase should be transferredtothe Eastern 11 DistrictofVirginia, 12 l3 CO NC LUSIO N For the foregoing reasons,IT IS O RDERED that Defendants'M otion to D ism iss for 14 Lack of PersonalJurisdiction,or in the alternative, Motion to TransferVenue (//4) is 15 G RANTED IN PART and DEN IED IN PART. Defendants'm otion to dism iss is denied. 16 Defendants'm otion to transferto the United States DistrictCourtEastern DistrictofVirginia 17 is granted, l8 DATED :This 15'hday ofJuly, 2010. 19 20 nled jtate IstrictJudge 2l 22 23 4plaintifl-claim sthatitisnow acitizenofN evadabecause itsprincipalplace ofbusinessisReno. 24 However,atthetimetheallegedurtlalfuleventsoccurred7PlaintifwasnotreyisteredwiththeNevada Secretary ofStateaseitheran entlty mcorporated in Nevadaoran entity reglstered to do businessin 25 Nevada.Plaintiffdid notregisterwith theNevady Secretary ofStateuntllApril7,2010 -threeweeks afterDefendantsfiledtheirmotiontodismissinthlsmatter.(OppositiontoMotiontoDismiss(#l1)at 26 Ex.l,p.2). 11 5PlaintifrstatcsthatNevadahasaninterestinthesubjectmatterofthislitigationbecausePlaintit: r intendqd to usetheheliqopterip Nevqdaunderagovenunentcontractto fightforestfires. However, 28 yccordlngtothecomplamt,PlamtiffdldnothaveacontractwiththeUnitedStatesForestServiceatthe tlmetheloantransagtionoccurredin2005.(Complaint(#1)at5). ltwasn'tuntil2007 thatPlaintifr ''secured a flre fightlng contractw ith the United States ForestService''to use the helicopter irlthe N evadaregion. Id. 6