Hastings Mutual Insurance Company v. Atlantis Pools Inc et al
Filing
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OPINION entered by Judge Sue E. Myerscough on 4/6/2016. For the convenience of the parties and witnesses, and in the interest of justice, the Defendant's Motion to Transfer Venue, d/e 2 , is GRANTED. This case is TRANSFERRED to the Southern District of Illinois. (MAS, ilcd)
E-FILED
Friday, 08 April, 2016 02:20:35 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
HASTINGS MUTUAL INSURANCE
COMPANY,
Plaintiff,
v.
ATLANTIS POOLS, INC.,
CYNTHIA SMALLEY and DAVID
SMALLEY,
Defendants.
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No. 15-3341
OPINION
SUE E. MYERSCOUGH, U.S. District Judge.
This matter is before the Court on Defendant Atlantis Pools,
Inc.’s Motion to Transfer Venue (d/e 2). For the convenience of the
parties and witnesses and in the interest of justice, the Motion is
GRANTED. This case is TRANSFERRED to the United States
District Court for the Southern District of Illinois.
I. BACKGROUND
In December 2015, Cynthia and Davis Smalley (“the Smalleys”)
filed an Amended Complaint against Atlantis in Madison County
Circuit Court, Case No. 2015-L-132 (d/e 1-1). In that lawsuit, the
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Smalleys allege that they hired Atlantis to repaint the in-ground
pool on the Smalleys’ property in Godfrey, Illinois. Atlantis allegedly
failed to perform the work correctly and caused damage to the pool,
the deck, the piping, and an outbuilding. The Smalleys seek
damages in excess of $50,000 for damages including the cost of
replacing the pool, repairing damage to the deck surrounding the
pool, repairing ruptured pipes, and damages caused by draining
and refilling the pool.
In December 2015, Plaintiff Hastings Mutual Insurance
Company filed its Complaint for Declaratory Judgment (d/e 1) in
this Court against Atlantis and the Smalleys. The Smalleys are
named as necessary parties only. Compl. ¶ 11.
Hastings alleges that it issued a Commercial Package Policy to
Atlantis for the period of May 1, 2014 to May 1, 2015. See Compl.
¶ 3; Policy, Ex. B, Part 1. The Policy identifies Atlantis as the
named insured and lists Atlantis’ address in Alton, Illinois. The
Policy also lists the “Agency” as Downing Insurance Agency, Inc.,
located in Alton, Illinois. Finally, the “Location(s) of Premises”
section of the policy lists three locations for Atlantis: Alton, Fairview
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Heights, and Springfield, Illinois. See Policy, Exhibit B, Part 1 (d/e
1-2, page 4 of 25).
Hastings seeks a declaratory judgment that it has no duty to
defend or indemnify Atlantis in the underlying lawsuit brought by
the Smalleys. Count I alleges that Atlantis failed to satisfy
conditions precedent to coverage. Count II alleges that Hastings
has no duty to defend Atlantis because the underlying lawsuit falls
within the exclusions of the Policy. Count III alleges that, under the
Policy, Hastings has no duty to indemnify Atlantis. The Court notes
that Alton and Godfrey are located in Madison County, which is
within the Southern District of Illinois. See
www.ilsd.uscourts.gov/TheCourt.aspx (Division of Counties) (all
websites last visited April 6, 2016).
II. JURISDICTION
This Court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1332(a) (requiring complete diversity and
an amount in controversy in excess of $75,000 exclusive of interest
and costs). Based on the allegations in the complaint and Hastings’
Supplemental Response (d/e 15), complete diversity exists between
Plaintiff Hastings and the defendants, Atlantis and the Smalleys.
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Howell v. Tribune Entm’t Co., 106 F. 3d 215, 217 (7th Cir. 1997)
(complete diversity requires that “none of the parties on either side
of the litigation may be a citizen of the state of which a party on the
other side is a citizen.”).
Specifically, Hastings is a Michigan corporation with its
principal place of business in Hastings, Michigan. Compl. ¶ 6.
Atlantis is an Illinois corporation with offices located in Springfield,
Illinois. Compl. ¶ 8; see also www.ilsos.gov/corporatellc/ (showing
principal place of business in Alton, Illinois); Def. Mot. to Transfer
Venue, Affidavit of Patrick Halliday ¶ 5 (Atlantis’ corporate office is
located in Alton, Illinois) (d/e 2-2). The Smalleys are citizens of
Illinois. Compl. ¶ 10; Pl.’s Supp. Resp. at 4 (d/e 15).
The parties do not dispute that the amount-in-controversy
requirement is met, and the Court agrees. In a declaratory
judgment action, “the amount in controversy is measured by the
value of the object of the litigation.” Hunt v. Wash. State Apple Ad.
Comm’n, 432 U.S. 333, 347 (1977). The object of the litigation is
the pecuniary result that would flow to the plaintiff or the defendant
from the court granting the declaratory judgment. America’s
MoneyLine, Inc. v. Coleman, 360 F.3d 782, 786 (7th Cir. 2004). In
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this case, the value of the underlying lawsuit and the cost of
defending the underlying lawsuit count toward the jurisdictional
amount. See Meridian Sec. Ins. Co. v. Sadowski, 441F.3d 536,
539-40 (7th Cir. 2006); Midland Mgmt. Co. v. Am. Alt. Ins. Corp.,
No. 15 C 6203, 2015 WL 9582987, at *4 (N.D. Ill. Dec. 31, 2015).
The Court finds that the amount in controversy exceeds
$75,000. In the underlying lawsuit, the Smalleys seek in excess of
$50,0001 for damages including the cost of replacing the pool,
repairing damage to the deck surrounding the pool, repairing
ruptured pipes, and damages caused by draining and refilling the
pool. Moreover, defense costs in the suit could easily exceed
$25,000. In addition, Hastings submitted an affidavit from counsel
asserting that counsel for the Smalleys in the underlying action
advised counsel for Hastings that the most recent settlement
demand in the underlying action is $100,000. See Pl.’s Supp.
Resp., Affidavit of Jason E. DeVore ¶ 4 (d/e 15-1); see also, e.g.,
Grinnell Mut. Reinsurance Co. v. Haight, 697 F.3d 582, 585 (7th
Cir. 2012) (wherein the court considered the settlement negotiations
The Smalleys likely listed “in excess of $50,000” to enable them to file their
case as a Law Division case in state court.
1
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between the plaintiff and defendant in the pending declaratory
judgment action when determining whether the amount-incontroversy requirement was satisfied). Therefore, the Court finds
the amount-in-controversy requirement satisfied. See Back Doctors
Ltd. v. Metro. Property & Cas. Ins. Co., 637 F.3d 827, 830 (7th Cir.
2011) (“unless recovery of an amount exceeding the jurisdictional
minimum is legally impossible, the case belongs in federal court”).
Because the parties are diverse and the amount in controversy
exceeds $75,000, this Court has jurisdiction.
Venue is proper in this district because a civil action may be
brought in a judicial district in which any defendant resides, if all of
the defendants are residents of the State in which the district is
located. 28 U.S.C. § 1391(b)(1). Here, all of the defendants are
residents of Illinois. The Smalleys reside in Illinois. Compl. ¶ 10.
Atlantis, as a corporate defendant, is deemed to reside “in any
district in [Illinois] within which its contacts would be sufficient to
subject it to personal jurisdiction if that district were a separate
State . . . .” 28 U.S.C. § 1391(d) (addressing residency of
corporations in States with multiple districts). Atlantis maintains
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an office in Springfield, Illinois, which is within the Central District
of Illinois. Therefore, venue is proper in this District.
III. ANALYSIS
Atlantis requests that this Court transfer the case to the
District Court for the Southern District of Illinois pursuant to 28
U.S.C. § 1404(a). Section 1404(a) of Title 28 of the United States
Code provides the circumstances under which a court may transfer
a civil action to another district or division:
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 or to any district or division to which
all parties have consented.
28 U.S.C. § 1404(a). The moving party must show that (1) venue is
proper in the current district and would be proper in the transferee
district; (2) “the transferee district is more convenient for both the
parties and witnesses,” and (3) “transfer would serve the interests of
justice.” Gueorguiev v. Max Rave, LLC, 526 F. Supp. 2d 853, 856
(N.D. Ill. 2007). The moving party bears the burden of proving the
transferee district is more convenient. Id. at 857.
The parties agree that venue is proper in both this district and
the Southern District of Illinois. Venue is proper in the Southern
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District because a substantial part of the events or omissions giving
rise to the claim occurred in the Southern District and because the
defendants reside in the Southern District. See 28 U.S.C. §
1391(b)(1) (venue is proper in a judicial district in which a
defendant resides if all defendants are residents of the State in
which the district is locate), (b)(2) (venue is proper where a
substantial part of the events or omissions giving rise to the claim
occurred). The parties dispute, however, whether the Southern
District would be more convenient for the parties and witnesses and
whether transfer would serve the interests of justice.
When considering the convenience factor, the Court considers
the following: (1) the plaintiff’s choice of forum; (2) the situs of
events giving rise to the suit; (3) the ease of access to evidence; (4)
the convenience of the parties; and (5) the convenience of the
witnesses. See Research Automation, Inc. v. Schrader-Bridgeport
Int’l, Inc., 626 F.3d 973, 978 (7th Cir. 2010). The plaintiff’s choice
of forum is generally accorded substantial weight but is entitled to
less deference when the forum is not the plaintiff’s home forum or
lacks significant contact with the litigation. Plotkin v. IP Axess,
Inc., 168 F. Supp. 2d 899, 902 (N.D. Ill. 2001).
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In this case, the Central District of Illinois is not Hastings’
home forum. Hastings is a Michigan corporation with its principal
place of business in Hastings, Michigan. Moreover, as discussed
further below, the Central District lacks significant contact with the
litigation. Therefore, the Court will give Hastings’ choice of forum
little weight. See, e.g., Heartland Packaging Corp. v. Sugar Foods
Corp., No. 1:06-cv-0828, 2007 WL 101815, at *2 (S.D. Ind. Jan. 9.
2007) (giving little weight to the plaintiff’s choice of forum where the
forum had no relationship to the case other than being the home
base of the plaintiff).
The situs of the events giving rise to the lawsuit is the
Southern District of Illinois. The events leading to the underlying
lawsuit occurred in the Southern District; the underlying lawsuit is
pending in the state court within the Southern District; and the
insurance policy was issued to an insured located in the Southern
District by a broker in the Southern District. In fact, the only
connection the Central District of Illinois has to the case is the fact
that Atlantis maintains an office in Springfield. Atlantis’ principal
place of business is in Alton, which is within the Southern District
of Illinois.
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The ease of access to the evidence is a neutral factor. While
some of the documents are maintained in the Southern District of
Illinois and some are likely in Michigan, neither party suggests the
files and records are so voluminous that they cannot be easily
transferred from one district to the another. Therefore, based on
this factor, the Southern District and the Central District are
equally convenient. Great W. Cas, Co. v. DeKeyser Express, Inc.
No. 05 C 2681, 2005 WL 2861074, at *4 (N.D. Ill. Oct. 31, 2005)
(where there was no suggestion that the files and records could not
be easily transferred from one district to another, both districts
were equally convenient as it related to the relative ease of access to
sources of proof).
The convenience-of-the-parties factor slightly favors transfer.
Atlantis’ corporate offices are in the Southern District of Illinois.
The nominal defendants, the Smalleys, also reside in the Southern
District.
Atlantis argues that Hastings is located in Hastings, Michigan,
so Hastings will be inconvenienced in either forum.2 Atlantis points
The Court takes judicial notice that Hastings, Michigan is approximately 35
from Kalamazoo, 38 miles from Grand Rapids, and 43 miles from Lansing.
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out that if Hastings’ personnel fly into Lambert-St. Louis
International Airport, moving the case to the Southern District, East
St. Louis Division3 would reduce the trip to the courthouse by over
80 miles. Using MapQuest, the Court determined that the LambertSt. Louis International Airport is approximately 16 miles from the
Southern District, East St. Louis Division courthouse and
approximately 105 miles from the Central District, Springfield
Division courthouse. Atlantis did not provide evidence on the cost
of airfare between Hastings, Michigan and St. Louis, Missouri and
Hastings, Michigan and Springfield, Illinois but merely assumes
that fares would be lower at a larger metropolitan airport. This
Court recognizes this generally is true. Nonetheless, the Court
finds that, because Hastings will be inconvenienced in either forum,
transferring the case to the Southern District, which is more
convenient for Defendants, would not merely shift the
inconvenience from one party to the other. See, e.g., Gueorguiev,
See www.distances.io; Lowrance v. Pflueger, 878 F.2d 1014, 1018 (7th Cir.
1989 )(taking judicial notice of approximate distances between geographic
locations).
Cases arising out of Madison County are assigned to the East St. Louis
division of the Southern District of Illinois. See www.ilsd.uscourts.gov
(Division of Counties).
3
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526 F. Supp. 2d at 857 (“The burden is on the moving party to
demonstrate that the balance of the factors weighs heavily in favor
of transfer and that transfer would not merely shift inconvenience
from one party to another”).
The convenience-of-the-witnesses factor is neutral or weighs in
favor of transfer. Atlantis argues that almost all of its witnesses—
current and former employees—live in the Southern District of
Illinois. These witnesses would purportedly testify about Atlantis’
actions on the Smalleys’ property, communications regarding the
Smalleys’ claims, and communications with retained defense
counsel. Mot. at 12 (d/e 2-1). Atlantis further asserts that, while
Hastings may have witnesses located in Michigan, those witnesses
will have to travel to Illinois from Michigan regardless of the specific
district that tries the case. Id. at 12-13.
Hastings argues that this factor does not weigh in favor of
transfer because declaratory actions involving a duty to defend
generally involve only questions of law and are frequently resolved
by summary judgment and not trial. As such, Hastings argues, it is
not proper to consider whether one district is more convenient to
any witnesses. Hastings asserts that Atlantis cannot meet its
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burden of showing that it would be more convenient for a court in
the Southern District to compare the terms and conditions of the
policy to the allegations of the complaint instead of this Court in the
Central District. Hastings Resp. at 2-3 (d/e 7).
To the extent that this case will be resolved without a trial, the
convenience-of-the-witnesses factor is neutral. However, in Count I
of the Complaint, Hastings alleges that Atlantis violated conditions
precedent to coverage by failing to fully cooperate with Hastings and
provide requested information. Such a claim may require testimony
of witnesses regarding Atlantis’ compliance with the conditions
precedent to coverage. Such witnesses would be located in the
Southern District of Illinois and Michigan. Neither party has
identified any potential witnesses located in the Central District of
Illinois. Therefore, if the case proceeds to trial, the-convenience-ofthe-witnesses factor would weigh in favor of transfer.
The Court must also consider whether transfer would serve
the interest of justice. This requires the Court to consider (1) the
“docket congestion and likely speed to trial” in each forum; (2) “each
court’s relative familiarity with the relevant law;” (3) “the respective
desirability of resolving controversies in each locale;” and (4) “the
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relationship of each community to the controversy. “ Research
Automation, 626 F.3d at 978.
According to the U.S. District Courts Federal Management
Statistics4 for districts within the Seventh Circuit for the 12-month
period ending June 30, 2015, the average number of civil case
filings per judgeship in the Central District of Illinois was 485 cases
(1,939 pending cases and four judgeships) with a median time from
filing to disposition of 10.8 months. The median time from filing to
trial in civil cases was 35.1 months.
In the Southern District, the average civil-case filings per
judgeship was 1,149 (4,595 pending cases and four judgeships)
with a median time for disposition of 35.5 months. The median
time from filing to trial in civil cases was 30.1 months.
The Court notes, however, that the Southern District had
multidistrict litigation cases pending in 2015. See
www.ilsd.uscourts.gov/mdl/mdl2385.aspx. The U.S. District
Courts Federal Management Statistics reflects “weighted filings” of
371 per judgeship in the Central District and 390 per judgeship in
See http://www.uscourts.gov/statistics-reports/federal-court-managementstatistics-june-2015
4
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the Southern District. The “weighted filings” do not include data on
“cases arising by reopening, remand, and transfer to the district by
order of the Judicial Panel on Multidistrict Litigation[.]”
http://www.uscourts.gov/statistics-reports/federal-courtmanagement-statistics-june-2015 (Explanation of Selected Terms).
Taking into account the “weighted filings,” the relative congestion
factor is neutral.
The parties appear to assume that Illinois law applies to the
Policy. See Hastings Resp. at 2 (citing Illinois duty-to-defend law);
Atlantis Mot. at 9 (asserting that both courts are located in Illinois
and are “well-informed of the governing law in this case”). However,
the copy of the Commercial Package Policy attached to the
Complaint does not appear to be complete. See Policy, Exhibit B,
Part 2 (d/e 1-4, page 19 of 25) (identified as page 7 of 7 but pages 1
through 6 are missing). In any event, the Court agrees that both
courts would be equally well-informed in applying the applicable
law. Therefore, this factor is neutral.
Considering all of the factors, the Court finds transfer is
warranted. The Central District has absolutely no connection with
this case. The underlying lawsuit was filed in the state court in the
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Southern District; the policy was issued by Hastings to an insured
whose address listed on the declarations page is in the Southern
District of Illinois and sold through a broker located within the
Southern District; and Atlantis’ corporate offices are in the
Southern District. Further, if trial witnesses are necessary, many of
those witnesses—current and former employees of Atlantis—reside
in the Southern District and no witnesses reside in the Central
District. Therefore, considering all of the relevant factors, the Court
concludes that transfer is warranted.
IV. CONCLUSION
For the reasons stated, Defendant Atlantis Pools, Inc.’s Motion
to Transfer Venue (d/e 2) is GRANTED. This case is
TRANSFERRED to the United States District Court for the Southern
District of Illinois, East St. Louis division.
ENTER: April 6, 2016
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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