Lehman Brothers Holdings Inc. v. Universal American Mortgage Company, LLC
ORDER Denying Defendant's Motion to Transfer Venue (ECF No. 15 ). By Judge Raymond P. Moore on 10/03/13. (alvsl)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Raymond P. Moore
Civil Action No. 13-cv-00089-RM-KLM
LEHMAN BROTHERS HOLDINGS INC.,
UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC,
ORDER DENYING DEFENDANT’S MOTION TO TRANSFER VENUE (ECF No. 15)
This matter comes before the Court on Defendant Universal American Mortgage
Company, LLC’s “Motion to Enforce Compliance with Court Order and to Transfer Venue”
(“Motion”) (ECF No. 15). Subsequent to the filing of the Motion, Defendant withdrew that
portion of the Motion which sought to enforce an order issued by the U.S. District Court for the
Southern District of Florida (“SDFL”). (ECF No. 18.) Accordingly, the remaining issue before
this Court is whether Defendant has established this case should be transferred to the SDFL
pursuant to 28 U.S.C. § 1404(a). (ECF No. 24.) The Court has jurisdiction pursuant to 28
U.S.C. § 1332. (ECF Nos. 4, 8, 9.) Based on a review of the papers, the applicable law, and for
the reasons stated below, Defendant’s Motion is DENIED.
Plaintiff seeks redress for Defendant’s alleged breach of contract with respect to one of
eight mortgage loans. (ECF No. 7, Amended Complaint, ¶¶ 1-2; ECF No. 15.) The claim
(“Claim”) before this Court was one of several claims Plaintiff filed in a single action before the
SDFL. Pursuant to an order issued by the SDFL, that court dismissed the Claim and six others
without prejudice with leave to re-file each as a separate action/complaint. (ECF Nos. 7 & 15.)
Plaintiff re-filed the Claim and six others as seven separate actions1 but chose to do so in the
District of Colorado. After re-filing the claims as separate actions, Plaintiff moved to
consolidate the actions which motion Judge Arguello, to whom the first action filed was
assigned, denied. (Civil Action No. 13-cv-00087-CMA-MJW, ECF No. 21.) Defendant filed
motions to transfer venue in all seven actions. Six of the motions have been denied leaving the
Motion before this Court as the final pending motion on the issue.
As relevant to the Motion, Plaintiff alleges it is a Delaware corporation with its principal
place of business in New York, New York. (ECF No. 7, ¶ 3.) Defendant is a Florida limited
liability company with its principal place of business in Miami, Florida; has been registered to do
business in Colorado since 2002; and has maintained an agent in Colorado for the last ten years.
(ECF No. 7, ¶¶ 4, 8.) Defendant’s business in Colorado includes mortgage lending operations
and it has an office in Englewood, Colorado. (ECF No. 7, ¶ 9; ECF No. 22-1.)
In 2004, Defendant entered into a business relationship with Plaintiff for Defendant to
sell residential mortgage loans to Plaintiff. That relationship was overseen by Aurora Loan
The six other actions are Civil Action No. 13-cv-00087-CMA-MJW; No. 13-cv-00088-CMA-MEH; No. 13-cv00090-PAB-MJW; No. 13-cv-00091-REB-KMT; No. 13-cv-00092-WJM-BNB; and No. 13-cv-00093-CMA-MJW.
Services, Plaintiff’s subsidiary based in Littleton, Colorado. (ECF No. 7, ¶10.) In 2005,
Defendant entered into a loan purchase agreement with Plaintiff’s assignor. (ECF No. 7, ¶¶ 15,
19-21.) Pursuant to the terms of such agreement, as amended, Defendant sold mortgage loans to
assignor, including Loan ****1180. (ECF No. 7, ¶¶ 19-22.) Due to alleged breaches with
respect to Loan ****1180, and pursuant to the terms of the agreement, Plaintiff requested
Defendant to repurchase that loan and/or indemnify Plaintiff for its losses due to such loan, but
Defendant refused. (ECF No. 7, e.g., ¶¶ 31-35.) The division of Plaintiff that oversees its
residential mortgage loss recovery program is based in Greenwood Village, Colorado and its
witnesses and documents are located there. (ECF No. 7, ¶ 12.) The laws of the State of New
York govern the agreement. (ECF No. 7, ¶ 36.)
Pursuant to 28 U.S.C. § 1404(a), a district court may transfer any civil action to any other
district where it might have been brought “[f]or the convenience of parties and witnesses, in the
interest of justice.” In evaluating a motion to transfer under § 1404(a), the following
discretionary factors are to be weighed:
the plaintiff’s choice of forum; the accessibility of witnesses and other sources of
proof, including the availability of compulsory process to insure attendance of
witnesses; the cost of making the necessary proof; questions as to the
enforceability of a judgment if one is obtained; relative advantages and obstacles
to a fair trial; difficulties that may arise from congested dockets; the possibility of
the existence of questions arising in the area of conflict of laws; the advantage of
having a local court determine questions of local law; and . . . all other
considerations of a practical nature that make a trial easy, expeditious and
Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1167 (10th Cir. 2010)
(quoting Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1516 (10th Cir.
1991)). The party moving to transfer venue bears the burden of establishing that the
balance of factors strongly favors a transfer of venue. Id. at 1167 & 1168 n.13.
Based on the record before it, the Court finds Defendant has failed to show the factors
weigh in favor of a transfer. First, although Plaintiff’s principal place of business is not in
Colorado, it chose to file here where it does business and has an office which has connections to
the Claim at issue. Accordingly, Plaintiff’s choice of forum is entitled to some deference. See
Employers Mut. Cas. Co. v. Bartile Roofs, Inc., supra at 1167-1168.
Defendant argues Plaintiff’s choice of forum should be given less weight because it
litigated the Claim in Florida for almost two years and asserted venue was proper there, and the
filing of the lawsuit here is nothing more than improper forum shopping. In a footnote,
Defendant points to the fact that Plaintiff attempted to reset the original disposition in the SDFL
case in this District with its unsuccessful motion to consolidate.
The fact that venue was – and is – also proper in Florida, however, does not make this
forum any less proper. Plaintiff’s attempt to consolidate the seven actions in this District does
raise the question of whether such attempt supports a fair inference of improper forum shopping.
The Court, however, recognizes that inherent in the existence of choices of forums is that it
affords a party the ability to choose among appropriate forums, i.e., forum shop, and to seek a
forum it determines to be the most beneficial to its case. It is also mindful that the SDFL
specifically stated that it left to Plaintiff’s discretion as to whether to re-file and where to re-file.
In light of the foregoing, Plaintiff’s choice of forum is still entitled to some deference.
Next, as for the convenience of the parties and witnesses, Defendant is a Florida-based
company and therefore Florida would be more convenient for it to defend this case. The fact that
Plaintiff had been litigating the Claim (and the six others) in Florida shows it would not be
inconvenient for Plaintiff to litigate in Florida. Nonetheless, the Rule 30(b)(6) depositions of the
respective parties have already been taken, albeit in Florida. Further, Defendant did not dispute
that Plaintiff’s division that oversees the residential mortgage loss recovery program is based in
Greenwood Village, Colorado, and it has corporate representatives, witnesses and documents in
Colorado. More importantly, Defendant did not identify witnesses and their locations; indicate
the quality or materiality of their testimony; or show that any such witnesses are unwilling to
come to trial, that deposition testimony would be unsatisfactory, or that the use of compulsory
process would be unnecessary. Finally, in light of the six other pending cases before this
District, it appears it would be inconvenient for both parties to have to litigate this seventh case
in Florida. Accordingly, Defendant has not shown that a transfer should be made for the
convenience of parties and witnesses. See Employers Mut. Cas. Co. v. Bartile Roofs, Inc., supra
Defendant implicitly argues the cost of making necessary proof weighs in favor of a
transfer due to the expense of hiring local counsel and the location of its principal place of
business in Florida. The Court recognizes it may be more expensive for Defendant to litigate in
Colorado rather than Florida but in light of the six other pending cases in this District, this factor
no longer carries the weight it might otherwise have carried.
Defendant essentially hangs its hat on the fact that the Claim had already been litigated in
Florida for almost two years, the proposition that Plaintiff is simply forum/judge shopping, and
argument that the interest of justice dictates a transfer. Plaintiff argues it could not have been
forum shopping for Colorado law over Florida law as New York law governs this dispute.
Plaintiff also contends the interests of justice, including judicial economy, weigh in favor of this
District in light of the six other pending cases. Finally, Plaintiff asserts that even if it had re-filed
in Florida, the seven cases would have been blindly assigned to different judges who had not
presided over the previous SDFL action.
The Court finds merit in Plaintiff’s argument and is not persuaded this case should be
transferred based on improper forum shopping or under the factors identified in Employers Mut.
Cas. Co. v. Bartile Roofs, Inc., supra. As previously discussed, Plaintiff was not required to refile in any particular forum and chose to do so in a forum which admittedly has connections to
the parties’ dispute. If Plaintiff had re-filed in Florida, this case along with the six others would
have been blindly assigned to various judges. (Motion, ECF No. 15, Exhibit 5, page 67.) New
York law governs the parties’ dispute, regardless of the forum. Defendant has not shown that
any essential witness or evidence will be unavailable at trial in Colorado or addressed some of
the other factors the Court should weigh. In sum, Defendant has not established the existing
forum is inconvenient or the interest of justice supports a transfer.
For the reasons stated above, Defendant has failed to show this case should be transferred
“[f]or the convenience of the parties and witnesses, in the interest of justice.” 28 U.S.C.
§ 1404(a). Accordingly, it is
ORDERED the Defendant’s Motion to Enforce Compliance with Court Order and to
Transfer Venue (ECF No. 15) is DENIED.
DATED this 3rd day of October, 2013.
BY THE COURT:
RAYMOND P. MOORE
United States District Judge
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