Aeschliman v. Dealer Marketing Services, Inc. et al

Filing 7

OPINION & ORDER entered by Judge Joe Billy McDade on 1/16/15. In conclusion, the Court finds that the Defendants have not carried their burden of persuading the Court that the interests of justice and the convenience of the parities and witnesses would be best served by transferring this matter to theSouthern District of Iowa. For the foregoing reasons, Defendants' Motion ToDismiss Or, Alternatively, To Change Venue 5 is DENIED. IT IS SO ORDERED. (VP, ilcd)

E-FILED

Friday, 16 January, 2015 03:30:58 PM
Clerk, U.S. District Court, ILCD

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
PEORIA DIVISION
STEVE AESCHLIMAN,
Plaintiff,
v.
DEALER MARKETING SERVICES,
INC., and Illinois Corporation, and
JOHN PALMER,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)

Case No. 14-cv-1448

OPINION & ORDER
This matter is before the Court on the Defendants’ Motion To Dismiss Or,
Alternatively, To Change Venue (Doc. 5). The motion is fully briefed and ready for
decision. For the reasons stated below, the motion is DENIED.
FACTUAL BACKGROUND1
Plaintiff, Steve Aeschliman, is a resident of Morton, Illinois, which is located
in Tazewell County and the Central District of Illinois. Plaintiff was employed by
Defendant Dealer Marketing Services, Inc. (“DMS”), of which Defendant John
Palmer is the owner and chief executive officer. DMS is an Illinois corporation doing
some business in Illinois but having its principal place of business in Iowa. Palmer
is a resident of Bettendorf, Scott County, Iowa. Plaintiff sued DMS and Palmer in
Illinois state court alleging state law claims of breach of contract and violation of
These facts are taken from the Complaint (Doc. 1-1) and are assumed to be true
for the purpose of adjudicating the motion sub judice.

1

the Illinois Wage Payment and Collection Act, 820 ILCS 115/1 et. seq., and a federal
claim of violation of the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et. seq. Since an ERISA claim arises under federal law,
Defendants removed the entire civil action from the Circuit Court of Tazewell
County, Illinois to this Court pursuant to 28 U.S.C. § 1441 on the basis of federal
question jurisdiction. Defendants now seek to dismiss the action for lack of venue or
alternatively, change venue to the Southern District of Iowa, Davenport Division.
DISCUSSION
I.

The Court Will Not Dismiss This Lawsuit For Lack Of Venue Under
Section 1391.
Defendants argue that this suit should be dismissed for lack of venue under

28 U.S.C. § 1391. While that statute governs venue generally, it is not applicable
here because this action was removed by the Defendants to this Court by
application of 28 U.S.C. § 1441. Courts in this judicial circuit apply the latter
statute when analyzing the venue of removed actions. See, e.g., Industrias Kirkwood
S.A. de C.V. v. Andrew Corp., No. 06-3242, 2007 WL 925511, at *2 (C.D. Ill. Mar. 23,
2007); Allied Van Lines, Inc. v. Aaron Transfer & Storage, Inc., 200 F. Supp. 2d 941,
945 (N.D. Ill. 2002); see also 14D Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure. § 3804 (4th ed. 2014).
Venue is proper for a removed action if it is removed to the district court and
its division in which the state action was pending. 28 U.S.C. § 1441(a); Andrew
Corp., 2007 WL 925511 at *2 (citing PT United Can Co. v. Crown Cork & Seal Co.,
138 F.3d 65, 72 (2d Cir. 1998)). Here, the original state action was brought in the
Circuit Court of Tazewell County, which sits in the territorial jurisdiction of the
2

Peoria Division of the Central District of Illinois. The action has been properly
removed to the United States District Court of the Central District of Illinois,
Peoria Division. Therefore, venue is proper and the action shall not be dismissed.
II.

28 U.S.C. § 1406 Does Not Apply To This Action.
Title 28, Section 1406 of the United States Code allows a district court to

dismiss or transfer an action that has been filed in the wrong division or district. As
explained above, this action was properly removed to this Court in conjunction with
28 U.S.C. 1441(a), which allows the removal of claims over which a district court
could have exercised original jurisdiction to “the district court of the United States
for the district and division embracing the place where such state action is
pending.” This action was properly removed to this Court in the Central District of
Illinois, Peoria Division, from the Circuit Court of Illinois in Tazewell County.
Venue is proper and § 1406 has no application to this action. The motion to dismiss
and/or transfer venue under 28 U.S.C. § 1406 is denied.
III.

Defendants Have Not Shown That Transfer Of Venue Under 28 U.S.C.
§ 1404 Is Appropriate.
The Seventh Circuit has explained that the purpose of “the federal change of

venue statute, codified at 28 U.S.C. § 1404,” is “to allow a district court to transfer
an action filed in a proper, though not necessarily convenient, venue to a more
convenient district.” Research Automation, Inc. v. Schrader-Bridgeport Int’l, Inc.,
626 F.3d 973, 977 (7th Cir. 2010). Section 1404(a) allows a court to transfer an
action either to another district court or division to which the parties consent or to a

3

district court or division in which the plaintiff could have originally brought the
action.
In this case, venue is proper in this Court and venue would be proper in the
proposed transferee court. Plaintiff could have originally filed this action in the
Davenport Division of the Southern District of Iowa. The action contains a federal
claim and state law claims that are subject to a federal district court’s original
jurisdiction. See 28 U.S.C. §§ 1331 and 1367. Both defendants are residents of Scott
County, Iowa, which sits in the Davenport Division of the Southern District of Iowa.
See 28 U.S.C. § 1391. Thus, while venue is proper in this Court under 28 U.S.C. §
1441 as explained above, venue would have been proper under 28 U.S.C. § 1391 in
the Davenport Division of the Southern District of Iowa had Plaintiff filed the
original action there. Therefore, the first required element for a transfer of venue
under § 1404(a) is present.
However, a transfer of venue must also be done in the interests of justice
and to enhance the convenience of the parties and witnesses. 28 U.S.C. § 1404(a).
The party seeking the transfer of venue bears the burden of demonstrating that the
transferee forum is clearly more convenient. Coffey v. Van Dorn Iron Works, 796
F.2d 217, 219-20 (7th Cir. 1986). When determining whether to allow a transfer in
venue, this Court generally considers the following factors: (a) the plaintiff’s choice
of forum; (b) the situs of events giving rise to the suit; (c) ease of access to evidence;
(d) convenience of the parties and (e) convenience of the witnesses. See Plotkin v. IP
Axess, Inc., 168 F. Supp. 2d 899, 902 (N.D. Ill. 2001). Among these factors, the

4

plaintiff’s choice of forum is accorded substantial weight if it is also the plaintiff’s
home forum. Id.
Defendants claim that the convenience of the parties and witnesses and the
interests of justice weigh in favor of transfer to the Southern District of Iowa,
Davenport Division. Defendant Palmer declares that the Defendants are residents
of Scott County, Iowa which sits in the territorial jurisdiction of the Davenport
Division of the Southern District of Iowa. They contend that the formation and
execution of the contract between DMS and Plaintiff occurred in Iowa; Plaintiff’s
salary and commissions were processed in Iowa; all DMS employees who are
possible witnesses either are “located” in Iowa or work in DMS’s Iowa office; the
investigation leading to Plaintiff’s termination occurred in Iowa; and finally, DMS
does relatively little business in Illinois. (Docs. 5 and 5-1).
Plaintiff responds that he lives in Morton, Illinois, which is in the Peoria
Division of the Central District of Illinois. He testifies via affidavit that he worked
exclusively out of his home for DMS since 2011 unless he was travelling for work to
places such as Nevada or Chicago, Illinois. DMS made payments to Plaintiff
pursuant to an employment contract by sending such payments to Plaintiff’s bank
located in Peoria, Illinois. Plaintiff states the negotiations over his contract took
place over the phone and through email. He also states that DMS has a
programming office and data collection center in Geneseo, Illinois, which is in the
Central District of Illinois, and that DMS’ chief technology officer, Darian Miller,
also lives and works in Geneseo, Illinois. Defendants actually listed Miller as a

5

possible witness (Doc. 5-1 at 2), but Defendants claim he works out of the DMS’s
Iowa office.
Consideration of the relevant factors leads the Court to conclude that
Defendants have not sufficiently demonstrated that transfer to the Davenport
Division of the Southern District of Iowa is in the interests of justice or would
enhance the convenience of all the parties and the witnesses.
First, the convenience of the Defendants does not trump the convenience of
the Plaintiff. This Court is the Plaintiff’s chosen home forum. Plaintiff chose to file
suit in Tazewell County, where he resides. Tazewell County is within this Court’s
territorial jurisdiction. Thus, this Court is deemed to be the Plaintiff’s chosen home
forum despite the fact that the action was not filed here originally but rather
removed here by the Defendants. Moreover, while John Palmer is a resident of Scott
County, Iowa, Defendants have not provided any reason why his convenience should
outweigh the convenience of the Plaintiff. Lastly, there is no question that DMS is a
corporation organized under the laws of Illinois. (See Doc. 6-3 at 2). As it is an
Illinois corporation, DMS is deemed a citizen of Illinois under 28 U.S. C. § 1441. A
citizen corporation of Illinois cannot be heard to be inconvenienced to face suit in
Illinois, whose laws and secretary of state allow it to exist and conduct business.
Second, neither party has presented the Court with sufficient information to
decide where the pertinent potential evidence is located, let alone that it is more
easily accessed in Iowa. DMS has its principal place of business in Davenport, Iowa,
but it maintains a data management center in Geneseo, Illinois. Defendant Palmer
states in his declaration that the investigation that led to Plaintiff’s termination

6

occurred in Iowa but he did not comment on where the documents or other evidence
detailing such investigation are actually located. Presumably, whatever evidence
Plaintiff possesses is with him in Morton, Illinois. Similarly, whatever evidence
Palmer possesses is presumably with him in Iowa.
This case involves claims of a breach of contract and violations of ERISA and
the Illinois Wage Payment and Collection Act. Defendants have not provided the
Court with any reason to conclude that the potential evidence pertinent to the
causes of action in this case will differ from the standard documentary and
testimonial evidence usually presented in such cases. Current technology is
sophisticated enough that there are several methods of efficiently and securely
sharing documentary evidence. In sum, the Defendants, who bear the burden of
persuasion here, have not provided any basis for the Court to conclude where the
evidence is located or why the evidence could not be efficiently transported to this
geographic location if it is in fact not located in this judicial district already.
Third, as to the witnesses, Defendants claim all of its witnesses, including
Plaintiff’s primary contacts at DMS, are either located in Davenport, Iowa or work
there. Defendants have listed Darian Miller as one of those contacts. Plaintiff has
presented evidence that Darian Miller actually resides and works in the Central
District of Illinois. The Court further notes that Defendants do not assert that any
of their potential witnesses reside in Davenport, Iowa, but rather are merely
“located” or work there. Plaintiff has not indicated where any potential witnesses
reside other than Miller. The Court concludes that the Defendants have not
provided a sufficient basis for the Court to find that the potential witnesses would

7

be any more inconvenienced having to testify at trial or depositions in Peoria rather
than in Davenport.
Fourth, the Court will consider the location of the events giving rise to the
suit. Again, Plaintiff is suing for a breach of an employment contract, a failure to be
paid wages under Illinois law, and a wrongful withholding of health insurance
benefits required by the ERISA plans to which DMS is a participant. This Court
agrees with the general premise that the situs of material events in a breach of
contract claim should be considered the location where ‘the business decisions
causing the breach occurred.” Rosman Adjustment Corp. v. Bernay, No. 12 C 8239,
2013 WL 453197, at *2 (N.D. Ill. Feb. 6, 2013) (internal citations and quotation
marks omitted). Where a contract was negotiated and executed are also important
considerations when determining the situs of material events for a breach of
contract claim, id., but those considerations should be given more significance when
the dispute before the Court purports to deal with issues of contract formation and
execution. Here, it seems that the business decision to breach the employment
contract was made and continues to be affirmed in Davenport, Iowa, 2 where DMS’
principal office is located and where the investigation that led to Plaintiff’s
termination occurred. This weighs in favor of the proposed transfer.
However, the contract at issue here itself states it is to be governed by Illinois
law. That the contract purports to be governed by Illinois law supports the
conclusion that the matter should be decided by an Illinois court. The Court

The Court interprets the complaint to plead the breach of contract involved the
decision not to pay money due to Plaintiff, not the decision to terminate him. Thus,
the purported breach is ongoing.

2

8

concludes the breach of contract claim provides no clear reason supporting transfer
to Iowa.
Obviously, the failure to a pay an Illinois citizen proper wages due under
Illinois law presupposes that Illinois is the forum with the greatest interest in the
adjudication of the claim. The Court also concludes that the prime issue for this
wage claim is whether the Illinois resident received the wages alleged to be due to
him. Here, the Plaintiff alleges that he would receive his wage payments from DMS
through his account at his bank located in Peoria, Illinois. The Court finds that
where DMS processed Plaintiff’s payments is not pertinent to the instant analysis
because DMS allegedly decided to not pay Plaintiff and continues to adhere to that
decision, and thus no payment has been processed for Plaintiff. Therefore, the
Illinois wage claim weighs in favor of keeping the action in Illinois.
Lastly, the Plaintiff’s ERISA claim is that DMS failed to notify its plan
administrator that Plaintiff was terminated, thus depriving him of COBRA benefits
under ERISA, which are available to employees after certain employment
separation events such as termination. Much like the breach of contract claim,
where the decision to withhold the COBRA benefits from Plaintiff is the location of
the material events for this claim. The parties have not given the Court any
information to definitively conclude where that decision was made. Nor is there any
evidence of where Lori Ward, DMS’ plan administrator alleged to be the individual
responsible for administering DMS’ ERISA plan obligations, works or resides.
Despite her mention in the complaint, Ms. Ward has not been specifically identified
as a potential witness in any submission to the Court in regard to the motion sub

9

judice. Presumably, Ms. Ward is a one of the DMS employees that Palmer referred
to generally in his declaration who “can testify to the nature of Plaintiff’s
employment relationship with” DMS that is located or works in Davenport, Iowa.
(Doc. 5-1 at 2). Thus, the Court will conclude the ERISA claim weighs in favor of
transferring the matter to Iowa.
Given all the above, the Court finds that more significant relevant factors
weigh in favor of keeping this action here in Peoria, Illinois. Most importantly, this
Court is the Plaintiff’s chosen home forum. There is no indication the potential
witnesses that have been identified to the Court so far would be anymore
inconvenienced attending proceedings here than in Davenport. There has been no
evidence presented that the potential witnesses reside in the Davenport, Iowa area
while there has been evidence presented that at least one of the potential witnesses,
Darian Miller, both resides and works in Illinois. Similarly, there has been no clear
showing of where the relevant potential documentary evidence in this matter is
located.
Also, DMS is an Illinois corporation that simply cannot be deemed to be
inconvenienced to face suit in Illinois. Finally, Defendant Palmer’s inconvenience in
travelling here from Iowa does not trump Plaintiff’s inconvenience in travelling to
Iowa from Illinois. See Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294
(7th Cir. 1989) ( explaining that shifting inconvenience from one party to another is
not a valid reason to grant a transfer of venue).

10

CONCLUSION
In conclusion, the Court finds that the Defendants have not carried their
burden of persuading the Court that the interests of justice and the convenience of
the parities and witnesses would be best served by transferring this matter to the
Southern District of Iowa. For the foregoing reasons, Defendants’ Motion To
Dismiss Or, Alternatively, To Change Venue (Doc. 5) is DENIED. IT IS SO
ORDERED.
Entered this 16th day of January, 2015.

s/ Joe B. McDade
JOE BILLY McDADE
United States Senior District Judge

11