Harry Pepper & Associates, Inc. v. Western Surety Company

Filing 13

ORDER granting, to the extent stated in the Order, 8 Defendant Western Surety Company's Motion to Dismiss, Transfer, or Stay and Order to Arbitration and transferring the case to the U.S. District Court for the Southern District of Mississippi, Southern Division. The Clerk should terminate all pending motions and deadlines, and after transfer has been effectuated, should close the file. Signed by Judge Timothy J. Corrigan on 1/6/2017. (SEJ)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
HARRY PEPPER & ASSOCIATES,
INC.,
Plaintiff,
v.

Case No. 3:16-cv-657-J-32PDB

WESTERN SURETY COMPANY,
Defendant.
ORDER
This breach of contract dispute is before the Court on Defendant Western
Surety Company’s Motion to Dismiss, Transfer, or Stay and Order to Arbitration (Doc.
8), to which Plaintiff Harry Pepper & Associates, Inc. (“HPA”) has filed a response
(Doc. 12).
I.

BACKGROUND
As part of a restoration project for the rocket launch site at the Stennis Space

Center in Hancock County Mississippi, NASA awarded a contract to Jacksonvillebased construction company HPA. Pursuant to a January 2014 task order, HPA
entered into a subcontract with PASI of LA, Inc. (the “Subcontract”) to perform
blasting and painting work on a structure at Stennis called the B2 Test Stand.
Western, as surety, issued Subcontract Performance Bond No. 58709779 (the “Bond”),
which named HPA as “Obligee (Contractor)” and PASI as “Principal (Subcontractor).”
(See Doc. 1-1, an excerpt of the Bond).

After work at the site had begun, NASA allegedly became aware that PASI had
failed to comply with its obligations under the Subcontract, specifically by failing to
properly abate lead-based paint, and shut down all work on the B2 Test Stand. (Doc.
1 ¶¶ 16-23). As a result, in February 2015, HPA terminated the Subcontract with PASI
for default, though PASI contests that it was in default and claims the termination
was wrongful. (Id. ¶ 30).
HPA demanded that Western undertake performance of its Bond obligations,
which include remedying the default, completing the Subcontract, obtaining new
contractors, paying HPA, or denying liability. (Doc. 1-1 at 3). In March 2015, a Western
representative visited the site at Stennis and met with HPA representatives regarding
PASI’s alleged default. (Doc. 1 ¶ 36; Doc. 8 at 3). Western allegedly notified HPA that
it was proceeding with a bid process for replacement contractors, and HPA obtained
bids from alternate subcontractors and alleges that it submitted those proposals to
Western. (Doc. 1 ¶¶ 50, 64-65). Despite the parties’ actions, replacement contractors
were not hired, and in October 2015, Western wrote to HPA that it disputes coverage
and liability for the damages arising out of the default. (Id. ¶ 67).
This confluence of events has spawned numerous legal actions. In August 2015,
HPA filed a demand for arbitration against PASI, and the parties are arbitrating their
dispute in Hancock County, Mississippi.1 (Doc. 8-1). In November 2015, PASI filed a
lawsuit against HPA and its Payment Bond Surety, Travelers Casualty & Surety

As neither party has informed the Court of the status of the arbitration, the
Court assumes the arbitration is ongoing.
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Company of America, in the U.S. District Court for the Southern District of
Mississippi, Southern Division (Doc. 8-5); the court stayed the case in the interest of
judicial economy pending the outcome of arbitration (Doc. 8-7). Finally, on May 27,
2016, HPA filed this lawsuit against Western, alleging two counts for breach of
contract (Doc. 1). 2 Now, Western contends that venue here is improper and thus
argues that the Court should dismiss or transfer the case, or stay the case and order
the parties to arbitrate the dispute. (Doc. 8). HPA opposes the motion on the grounds
that venue is proper here, as the Bond covers HPA, a Jacksonville-based company,
and the parties corresponded to and from Florida in the course of discussing their
obligations under the Bond. (Doc. 12).
II.

STANDARD OF REVIEW
A motion to transfer venue is governed by 28 U.S.C. § 1404(a). Section 1404(a)

is the statutory codification of the common law doctrine of forum non conveniens. See
Tampa Bay Storm v. Arena Football League, Inc., 932 F.Supp. 281, 282 (M.D. Fla.
1996). The section states: “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 brought.” 28 U.S.C. § 1404(a).
Under § 1404(a), a district court may transfer any civil action to any district
where it could have been brought for: (1) the convenience of the parties; (2) the

PASI also filed a lawsuit against HPA, Jacobs Technology, Inc., and NASA in
the U.S. District Court for the Middle District of Louisiana in October 2015 (Doc. 8-2),
but in August 2016, the court dismissed the case against HPA for lack of personal
jurisdiction (Doc. 11).
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convenience of the witnesses; and (3) the interests of justice. See Robinson v.
Giarmarco & Bill, P.C., 74 F.3d 253, 260 (11th Cir. 1996). The Eleventh Circuit has
determined that a court should be somewhat restrictive in transferring actions,
stating that “[t]he plaintiff’s choice of forum should not be disturbed unless the movant
can show that it is clearly outweighed by other considerations.” See id. (quoting Howell
v. Tanner, 650 F.2d 610, 616 (5th Cir. Unit B 1981), cert. denied, 456 U.S. 918 (1982)
(internal quotations omitted)). The movant has the burden of persuading the trial
court that the transfer is appropriate and should be granted. See id. In considering
whether to transfer, the Court must consider: the plaintiff’s initial choice of forum,
convenience of the parties and witnesses, relative ease of access to sources of proof,
availability of compulsory process for witnesses, location of relative documents,
financial ability to bear the cost of the change, and all other practical problems that
make trial of the case easy, expeditious, and inexpensive. See Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 508 (1947).
III.

ANALYSIS3
A.

Jurisdiction in the Southern District of Mississippi

HPA does not dispute that the matter could have been brought in the Southern
District of Mississippi; it merely argues that its chosen venue is proper and transfer
is unwarranted. (Doc. 12 at 1-6). Based on the allegations of HPA’s complaint, which
show that the vast majority of events giving rise to HPA’s cause of action occurred in

Because the Court determines that transfer is appropriate pursuant to
§ 1404(a), it shall not address Western’s requests for dismissal or a stay.
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Mississippi, the case could have been brought in Mississippi as well as in Florida.
Therefore, the initial requirement of transfer to a district where the cause of action
could have originally been brought is met.
B.

Convenience of the Witnesses and Parties, and Interest of Justice
1.

Convenience of the Witnesses and the Parties

The most important factor the Court must consider is the convenience of the
witnesses. Valentino v. Eli Lilly & Co., No. 6:14-CV-1816-ORL-41, 2015 WL 4352321,
at *5 (M.D. Fla. July 14, 2015). Here, Western identifies specific witnesses located in
Mississippi that it believes will be essential to understanding the performance of the
Subcontract and the condition of the Stennis work site. Specifically, Western points to
NASA employees Brennan Sanders and Jason Edge, who were involved in approving
the lead-based paint plan and suspending the work once problems arose. (Doc. 8 at
12). Both individuals work at Stennis in Mississippi. In addition, Western notes that
employees of Natal Contractor, Inc. and ADS Services, Inc., companies which HPA
considered as replacements for PASI and which performed some of the completion
work, are believed to be working at Stennis. (Id.). Finally, while not providing specific
names, Western emphasizes that many of the people who worked at the site and will
be key witnesses either still work there or are at least located in Mississippi. (Id.).
Western also identifies multiple individuals who might be important witnesses, such
as PASI employees and environmental testing workers, who are located in Louisiana
and Alabama.
In response, HPA reiterates that many of these witnesses are located in
Louisiana, not Mississippi. However, it fails to identify any key witnesses, other than
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possibly ADS (a Tampa-based company), in Florida who might be called to testify. And
Western has already stated that ADS employees are potentially still working at
Stennis. (Doc. 8 at 12). On balance, given that many of the potential witnesses are
located in Mississippi, the convenience of the witnesses lies in favor of Western.
Regarding the convenience of the parties, Western states that although HPA’s
home office is in Jacksonville, Florida, HPA also maintains an office at the Stennis
site. Accordingly, individuals at HPA’s Mississippi office would have the most
firsthand knowledge regarding the condition of the site and PASI’s performance. (Id.
at 13). Western’s own representatives involved with the Bond, however, are in
Chicago. Under these circumstances, this aspect of the convenience analysis weighs
slightly in favor of transfer or is neutral.
2.
Location of Relevant Documents and Other Sources of
Proof
“Relative ease of access to the sources of proof is an important consideration in
determining a motion to transfer venue.” See American Aircraft Sales Intern., Inc. v.
Airwarsaw, Inc., 55 F. Supp. 2d 1347, 1353 (M.D. Fla. 1999) (citing Cortez v. First City
National Bank of Houston, 735 F.Supp. 1021, 1024 (M.D. Fla. 1990)). Western states
that “all relevant documents will be in the files maintained by NASA, HPA[,] and
Jacobs Technology, Inc., the general contractor that was tasked with monitoring the
activities at the site.” (Doc. 8 at 13). Moreover, Western contends that additional
relevant documents are located in PASI’s files, likely in Louisiana.
HPA counters that PASI’s files in Louisiana do not favor a transfer, and
observes that Western offers no support for its assertion that HPA’s records are stored

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in Mississippi. (Doc. 12 at 5). Notably, HPA does not dispute that the relevant files are
in its Stennis office, nor does it state that there are any relevant documents in its
Florida office. As such, this factor weighs in favor of transfer.
3.

Locus of Operative Facts

Although HPA argues that Florida is the appropriate venue because the case
arises from “Defendant’s breach of promises made to a company that [it] knew was in
Jacksonville, Florida,” (Doc. 12 at 6), it is undeniable that a “substantial part” of the
events giving rise to the alleged breach occurred at Stennis in Mississippi.4 Here,
though it is true that HPA is based in Florida, and thus the Bond covered a Florida
company, HPA’s presence in Florida seems merely incidental. Therefore, this factor
weighs in favor of transfer.
4.

Remainder of the Factors

Although HPA does not specifically dispute the remaining factors under
consideration, for the sake of thoroughness, the Court will briefly address them. The
availability of compulsory process weighs slightly in favor of transfer, as it seems that

4

28 U.S.C. § 1391(b) provides:

Venue in general. —A civil action may be brought in—
(1) a judicial district in which any defendant resides, if all defendants are
residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions
giving rise to the claim occurred, or a substantial part of property that is the subject
of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as
provided in this section, any judicial district in which any defendant is subject to the
court's personal jurisdiction with respect to such action.

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most of the witnesses are located in Mississippi and would be subject to the subpoena
power of that district court. The parties agree that Mississippi law governs the
Subcontract, and because the Bond incorporates the Subcontract by reference,
Western argues that Mississippi law applies to it as well. While HPA hedges as to
what state’s law applies to the Bond, regardless, this Court is fully competent to apply
foreign law. However, it does not regularly apply Mississippi law as does the U.S.
District Court for the Southern District of Mississippi, and therefore this factor weighs
slightly in favor of transfer. Finally, even Western concedes that the relative means of
the parties is a neutral factor.
All that remains for review is HPA’s choice of forum. The Court acknowledges
that HPA’s choice to litigate in Florida should not be disturbed unless Western can
show that it is clearly outweighed by other considerations. However, HPA has offered
only tepid arguments why the case belongs here. In contrast, Western has met its
burden regarding transfer. Because the project, work, and those who worked on and
were involved with both are located in Mississippi, and related litigation is also
pending in the Southern District of Mississippi, the totality of the circumstances
militates in favor of a transfer of this case to that District.
Accordingly, it is hereby
ORDERED:
1.

Defendant Western Surety Company’s Motion to Dismiss, Transfer, or

Stay and Order to Arbitration (Doc. 8) is GRANTED to the extent stated herein.

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2.

Pursuant to 28 U.S.C. § 1404(a), this action is hereby TRANSFERRED

to the U.S. District Court for the Southern District of Mississippi, Southern Division.
3.

The Clerk should terminate all pending motions and deadlines, and after

transfer has been effectuated, should close the file.
DONE AND ORDERED in Jacksonville, Florida the 6th day of January, 2017.

sj
Copies:
Counsel of record

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