Builders Bank v. Ruvalcaba
Filing
21
MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 8/8/2014:Civil case terminated. Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BUILDERS BANK, an Illinois
Bank,
Case No. 14 C 1116
Plaintiff,
Hon. Harry D. Leinenweber
v.
DAN RUVALCABA,
Defendant.
ORDER
Because no substantial part of the acts or omissions giving
rise to Plaintiff’s claims took place in this district, venue in
this Court is improper.
Defendant’s Motion [ECF No. 12] is
granted, and this case will be transferred to the Central District
of California pursuant to 28 U.S.C. § 1406(a).
STATEMENT
Plaintiff Builders Bank (the “Bank”) has brought suit against
its former employee and director, Defendant Dan Ruvalcaba (the
“Defendant”), for alleged breaches of fiduciary and contractual
duties. The Bank is organized under Illinois law and maintains its
principal place of business in Chicago.
Defendant resides in
California and worked in Plaintiff’s California office, located in
Los Angeles.
He started working for the Bank in October 2003, and
it appears that he became a director in 2007, at which point he
began traveling occasionally to Illinois for board meetings.
The
parties agree that in 2013, Defendant traveled to Illinois nine
times
to
attend
various
Board
meetings
and
participated
telephonically in three other board meetings and 23 loan committee
meetings.
It is reasonable to infer that while Defendant worked
principally in California, he communicated frequently with Bank
management in Illinois.
In
September
2013,
Defendant
learned
that
he
would
be
terminated at the end of the year because Plaintiff would be
closing its California office.
On December 11, 2013, the Bank’s
president e-mailed Defendant an unexecuted Separation Agreement and
Defendant signed the document in California.
The Separation
Agreement required Defendant to return all Bank property and
refrain
from
disparaging
the
Bank.
Plaintiff
alleges
that
Defendant “shopped around” the Bank’s most profitable loan and
misinformed competitors that Plaintiff would be liquidating in the
near future.
schedule
on
Defendant’s
December
31,
employment
2013.
with
His
the
service
Bank
as
a
ended on
director
culminated shortly thereafter.
The Complaint’s four state-law counts allege that Defendant
breached his fiduciary duties and the written Agreement. Defendant
has moved to dismiss for lack of personal jurisdiction and improper
venue. In the alternative, Defendant moves to transfer venue or
dismiss for failure to state a claim.
question
whether
this
Court
has
Because it is a close
personal
jurisdiction
over
Defendant, the Court will address venue first and turn to personal
jurisdiction, and then the 12(b)(6) motion, only if necessary to
adjudicate the rights of the parties.
Cote v. Wadel, 796 F.2d 981,
985 (7th Cir. 1986) (noting that a district court may transfer a
case for improper venue even if it lacks personal jurisdiction over
the defendant).
Because no defendant resides in this district, and because
there is at least one other court where venue would be proper (in
California, where Defendant resides), venue is proper here only if
“a substantial part of the events or omissions giving rise to the
claim” occurred in this district.
here,
a
defendant
challenges
28 U.S.C. § 1391(b).
venue
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under
Rule
Where, as
12(b)(3),
the
plaintiff bears the burden of establishing that venue is proper.
See, e.g., Faur v. Sirius Int’l Ins. Corp., 391 F.Supp.2d 650, 657
(N.D. Ill. 2005).
Plaintiff complains largely of actions that Defendant took in
California.
Count I for Business Disparagement alleges that
Defendant misrepresented to Plaintiff’s customers and competitors
“in the California market” that Plaintiff was liquidating.
¶ 10.
Compl.
Counts II and IV charge that Defendant breached fiduciary
and contractual duties when he stole corporate opportunities and
released internal documents to competitors.
place
in
California
and
related
to
These actions took
business
in
California.
Count III centers on Defendant’s interference with Plaintiff’s
business relationships with California clients.
The Separation
Agreement, which forms the basis for the contract claims, was
signed by Defendant in California.
Based on the Complaint, all of
Defendant’s alleged conduct occurred in California and harmed
Plaintiff in California.
But
just
because
venue
would
have
been
proper
in
some
California district does not mean that venue was improper here, as
venue “may be proper in more than one court.”
Armstrong v. LaSalle
Bank Nat’l Ass’n, 552 F.3d 613, 617 (7th Cir. 2009).
To show that
some of Defendant’s actions occurred in Illinois, Plaintiff argues
in its response brief that Defendant failed to disclose, during
board meetings in Chicago, that he was shopping around the Bank’s
most profitable loan.
But this alleged omission forms no part of
the Complaint and does not relate to the claims enumerated therein
(for business disparagement, tortious interference with prospective
economic advantages, usurpation of corporate opportunities, and the
like).
It is well settled that a complaint may not be amended by
briefs in opposition to a motion to dismiss.
Bissessur v. Ind.
Univ. Bd. of Trs., 581 F.3d 599, 603 (7th Cir. 2009); Car Carriers,
Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir. 1984)
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(explaining that “consideration of a motion to dismiss is limited
to the pleadings”).
The Complaint does not identify a single
action that Defendant took in Illinois that gives rise to any of
Plaintiff’s claims.
substantial
part
of
Therefore, the Court must conclude that no
the
acts
or
omissions
giving
rise
to
Plaintiff’s claims took place in this district, and venue in this
Court is improper. See, Hanyuan Dong v. Garcia, 553 F.Supp.2d 962,
965 (N.D. Ill. 2008) (venue improper where alleged tortious acts
took place out of state).
Because venue is improper, this Court may dismiss the case or
transfer it to any district in which it could have been brought.
28 U.S.C. § 1406(a).
Generally, the interests of justice weigh in
favor
rather
of
transfer,
appropriate forum elsewhere.
than
dismissal,
if
there
is
an
Georgouses v. NaTec Res., Inc., 963
F.Supp. 728, 731 (N.D. Ill. 1997).
Venue would have been proper in
the Central District of California, where Defendant resides and
worked for Plaintiff, and there is no question that California has
personal jurisdiction over Defendant.
It appears likely that
California law will govern at least some of Plaintiff’s tort claims
and some or all of the affirmative defenses or counterclaims that
Defendant intends to assert.
In addition, Defendant represents
that all third-party witnesses are located in California.
Given
the Court’s general preference for transfer over dismissal, and the
aforementioned factors, the Court will not dismiss the case but
rather will transfer it to the Central District of California.
Dated:8/8/2014
Harry D. Leinenweber, Judge
United States District Court
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