Arms v. Washington Mutual Bank

Filing 52

ORDER directing the Clerk to transfer this case to the Northern District of Georgia. Signed by Judge William T. Moore, Jr on 7/14/14. (bcw) [Transferred from Georgia Southern on 7/15/2014.]

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IN THE UNITED STATES DISTRICO1ItTPOR
THE SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION

GARY C. ARMS,
Plaintiff,
V.

CASE NO. CV408-128
FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver for
Washington Mutual Bank,
Defendant.

ORDER

Before the Court is Defendant Federal Deposit Insurance
Corporation's, acting as Receiver for Washington Mutual
Bank, Motion to Dismiss for Failure to State a Claim, or in
the alternative, Motion to Dismiss or Transfer for Improper
Venue. (Doc. 45.) Plaintiff Gary C. Arms has responded in
opposition. (Doc. 47.) For the following reasons, the
alternative relief sought in Defendant's motion is GRANTED
and the Clerk of Court is DIRECTED to TRANSFER this case to
the United States District Court for the Northern District
of Georgia, Atlanta Division. Because this action is
transferred pursuant to 28 U.S.C. § 1404(a), the Court makes
no ruling on Defendant's Motion to Dismiss for Failure to
State a Claim.

Upon transfer, the Clerk of Court is

DIRECTED to close this case.

BACKGROUND
In December 2006, Plaintiff entered into a contract
with Transland Financial Services, Inc., ("Transland") to
receive a series of loans to finance Plaintiff's acquisition
of undeveloped property and construction of a home at 9
Pinebrook Court, Savannah, Georgia. (Doc. 1, Compl. ¶ 4-7.)
Sometime around August or September 2007, Transland ceased
providing Plaintiff funds under the contract.
¶ 10.)

(Id. at

At this point, Plaintiff had purchased the

undeveloped property, but had yet to complete construction
of the residence. (Id.) Around September 2007, Washington
Mutual Bank ("Washington Mutual") acquired the contract from
Transland. (Id. at ¶ 13.) Prior to its acquisition of the
contract, Washington Mutual engaged in discussions with
Plaintiff regarding a possible loan modification.
First Am. Compl. ¶ 2-3.)

(Doc. 1,

However, no modification ever

materialized (Id. at ¶ 3-4) and Washington Mutual never
advanced the remaining funds pursuant to the terms of the
contract (Doc. 1, Compl. ¶ 13).
On March 20, 2008, Plaintiff filed suit in the Superior
Court of Chatham County, Georgia, alleging that Washington
Mutual breached the contract and committed various tortious
acts. (Doc. 1, Compi.) On June 28, 2008, Plaintiff filed an
amended complaint alleging fraud and promissory estoppel,
and sought punitive damages and attorney's fees.
First Am. Compl.)

(Doc. 1,

On July 10, 2008, Washington Mutual

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removed this action to this Court pursuant to 28 U.S.C.
§ 1332. (Doc. 1.) Approximately two months later,
Washington Mutual entered into receivership with the Federal
Deposit Insurance Corporation, which in turn replaced
Washington Mutual as Defendant in this action.
3.)

(Doc. 47 at

After a brief stay of proceedings in 2009, Defendant

subsequently filed this motion seeking dismissal or transfer
of the case.

(Doc. 45.)
ANALYSIS

Defendant first asks the Court to dismiss this case for
improper venue based on the forum selection clause contained
within the parties' contract, pursuant to 28
U.S.C. § 1406(a)
12(b) (3).

and Federal Rule of Civil Procedure

The forum selection clause in question dictates

that "venue is stipulated to be in Fulton County, Georgia."
(Doc. 45, Ex. A ¶ 21.h.) Section 1406(a) provides that a
district court shall dismiss or transfer a case filed in the
"wrong" district or division. 28 U.S.C. § 1406(a).
However, Defendant appears to have conflated the often
confusing—but legally distinct—concepts of venue and forum.
Whether venue is proper is a question determined solely by
the terms of 28 U.S.C. § 1391, which provides that a civil
action may be brought "where a substantial part of the
events or omissions giving rise to the claim occurred, or a

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substantial part of property that is the subject of the
action is situated." 28 U.S.C. § 1391(b) (2) . Obviously,
the property at issue in this case wholly exists in the
Southern District of Georgia, and even a valid forum
selection clause has no bearing on whether venue is proper
where the case is filed. Ati. Marine const. Co. v. U. S.
Dist. Court for the W. Dist. of Tex.,

U. S.

, 134 S.

Ct. 568 at 579 (2013) . As a result, the Southern District
of Georgia is clearly a proper venue for this case and,
accordingly, it will not be dismissed pursuant to
28 U.S.C. § 1406(a) or Rule 12(b) (3).
However, simply because venue is proper does not mean
that this case can, or should, remain in the Southern
District of Georgia. Defendant has sought, in the
alternative, a transfer of this case to the Northern
District of Georgia pursuant to 28 U.S.C. § 1404(a), which
provides that a district court may transfer a civil action
to another district for the convenience of the parties and
witnesses and in the interest of justice.
§ 1404 (a) .

28 U.S.C.

Although the contract does not require that

disputes be settled in federal court, this case is already
appropriately in federal court pursuant to 28 U.S.C. § 1332
and the language in the forum selection clause allows for
federal jurisdiction. See E & H Steel Contracting, Inc. v.

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Turner Constr. Co., 2006 WL 1731153, at

*2 (M.D. Ala. June

23, 2006) (unpublished) (finding a forum selection clause
requiring litigation in "a court in New York County, New
York" to include federal courts) . Accordingly, because the
contract's clause clearly points to another forum, the Court
must determine whether there exists any reason not to
enforce the parties' agreement and transfer this case.
Plaintiff argues that, although the forum selection
clause may be valid,' it should nonetheless not be enforced
and the case should remain in the Southern District of
Georgia. (Doc. 47 at 11.) While Plaintiff is correct in
stating that a forum selection clause is not invariably
definitive of where a case should be tried, and that other
factors may be considered in the interest of efficiency and
justice, he does not afford it the proper weight in his
analysis. (Doc. 47 at 11.) While they are not absolute,
nearly conclusive weight is given to forum selection clauses
in deciding a 28 U.S.C. § 1404(a) transfer motion. See In
re Ricoh Corp., 870 F.2d 570, 573 (11th Cir. 1989) (stating

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Plaintiff makes a brief indication that the forum selection
clause should not be enforced because the contract was
induced by fraud (Doc. 47 at 13), but fails to allege any
facts to support this claim. In addition, this argument
would clearly undermine Plaintiff's attempt to otherwise
enforce the contract. Accordingly, the Court finds this
argument without merit.

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that "while other factors might 'conceivably' militate
against a transfer . . . the venue mandated by a choice of
forum clause rarely will be outweighed by other 1404(a)
factors.")
Where a valid forum selection clause exists, the Court
will not engage in a traditional evaluation of the § 1404(a)
factors. 2 Crucially, a district court may only consider
matters of public interest in deciding whether to transfer a
case, as the parties have already waived their right to
challenge the pre-selected forum as inconvenient for
themselves or their witnesses. Atl. Marine, 134 S. Ct. at
582. Here, Plaintiff has offered only arguments concerning
the advantages of the Southern District of Georgia as a
forum because of its proximity to witnesses central to the
litigation and the property in question. (Doc. 47 at 1113.) Because these private interests have no bearing on the

2

Normal factors used in determining the appropriateness of
transfer where a forum selection clause does not exist
include: "(1) the convenience of the witnesses; (2) the
location of relevant documents and the relative ease of
access to sources of proof; (3) the convenience of the
parties; (4) the locus of operative facts; (5) the
availability of process to compel the attendance of
unwilling witnesses; (6) the relative means of the parties;
(7) a forum's familiarity with the governing law; (8) the
weight accorded a plaintiff's choice of forum; and (9) trial
efficiency and the interest of justice, based on the
totality of the circumstances." See Manuel v. Convergys
Corp., 430 F.3d 1132, 1135 n.1 (11th Cir. 2005).

Court's analysis, the forum selection clause must be
enforced and the case transferred to the appropriate court.
The Court agrees with Defendant that the parties'
contractual agreement that disputes be resolved in Fulton
County, Georgia makes the United States District Court for
the Northern District of Georgia, Atlanta Division the most
appropriate forum for this matter.
CONCLUSION

For the foregoing reasons, the alternative relief
sought in Defendant's motion

is GRANTED

and the Clerk of

Court is DIRECTED to TRANSFER this case to the United States
District Court for the Northern District of Georgia, Atlanta
Division. Because this action is transferred pursuant to
28 U.S.C. § 1404(a), the Court makes no ruling on
Defendant's Motion to Dismiss for Failure to State a Claim.
Upon transfer, the Clerk of Court is DIRECTED to close this
case.
SO ORDERED this

/#40day of July 2014.
iv—

-

WILLIAM T. MOORE, JR.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA

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