NHI-2, LLC v. Wright Property Management, Inc. et al

Filing 25

MEMORANDUM Opinion and Order. The Court denies defendants' motion to dismiss 13 for improper venue. Status hearing set for 1/19/16 at 9:30 a.m. Signed by the Honorable Jorge L. Alonso on 1/4/2016. Notice mailed by judge's staff (ntf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NHI-2, LLC, an Illinois limited liability
Company, d/b/a TRAVELLIANCE,
Plaintiff,
v.
WRIGHT PROPERTY
MANAGEMENT, INC., a Kentucky
corporation, and WELLINGTON
E, LLC, a Kentucky limited liability
company,
Defendants.

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No. 15 C 7913
Judge Jorge L. Alonso

MEMORANDUM OPINION AND ORDER
Plaintiff sues defendants for breach of contract. The case is before the Court on defendants’
Federal Rule of Civil Procedure (“Rule”) 12(b)(3) motion to dismiss for improper venue. For the
reasons set forth below, the Court denies the motion.

Facts
Plaintiff, which provides transportation administration services to airlines throughout the
country, is an Illinois limited liability company with its principal place of business in Arlington
Heights, Illinois. (2d Am. Compl. ¶ 1.) Defendant Wright Property Management, Inc. (“Wright”)
is a Kentucky corporation with its principal place of business in Lexington, Kentucky. (Id. ¶ 2.)
Defendant Wellington E, LLC is a Kentucky limited liability company with its principal place of
business in Lexington, Kentucky. (Id. ¶ 3.)

On August 17, 2014, plaintiff, on behalf of Air Wisconsin, and Wright, on behalf of The
Homewood Suites Hotel in Lexington, Kentucky (“Hotel”), entered into a contract for Wright to
provide hotel rooms for Air Wisconsin crews at a $59.00 per night from August 17, 2014 through
August 16, 2017. (Id. ¶ 13; see 2d Am. Compl. Ex. 1, Contract.) The contract required plaintiff to
notify the Hotel of crew room needs each month, which it did by preparing “Month at a Glance”
(“MAAG”) reports, through its Arizona-based agent, TLX. (Id. ¶ 15.)
On July 31, 2015, the Hotel told plaintiff that the Hotel’s ownership and management had
changed and, as a result, it no longer considered the contract with plaintiff to be valid and
enforceable. (Id. ¶ 17.) Nonetheless, the Hotel continued to provide rooms to Air Wisconsin crews
at the contractually-agreed rate. (Id.)
On August 11, 2015, plaintiff sent a letter to Wright and the Hotel’s new management
company, Commonwealth Hotels, LLC, saying that plaintiff had been unable to confirm that there
had been a change in the Hotel’s ownership and considered the contract to be binding and
enforceable. (Id. ¶ 18.)
On August 21, 2015, Wellington E sent a letter to plaintiff stating that Wellington E was still
the Hotel’s owner; it had terminated the property management agreement with Wright on May 1,
2015; it had not authorized Wright to execute the contract with plaintiff, which Wellington E viewed
as unconscionable and invalid; and the Hotel’s new management company, Commonwealth Hotels,
was willing to negotiate a fair agreement with plaintiff. (Id. ¶ 20.)
On September 1, 2015, the Hotel told plaintiff that it would not give rooms to Air Wisconsin
crews because the contract was unenforceable and the Hotel had not received from plaintiff the
contractually-required MAAG report for September. (Id. ¶ 22.) After several phone calls between
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the parties that day, the Hotel said it would provide a block of rooms for Air Wisconsin crews. (Id.
¶ 23.) By the time it did so, however, plaintiff had already made other, more costly, arrangements.
(Id.) Plaintiff then asked the Hotel, via email, whether it would honor the contract. (Id. ¶ 24.)
On September 2, 2015, the Hotel told plaintiff that it still believed the contract was
unenforceable but it would, nonetheless, “block 6 rooms per night through Labor Day” for plaintiff.
(Id. ¶ 25.) The next day, plaintiff told the Hotel that it had moved the crews to another hotel. (Id.
¶ 26.) Later the same day, the Hotel told plaintiff that it would honor that contract through the end
of September but did not commit to honoring it in its entirety. (Id. ¶ 27.)
On September 4, 2015, plaintiff told the Hotel that it considered the Hotel to have repudiated
the contract and asked it to state unequivocally that it would honor the contract. (Id. ¶ 28.) Plaintiff
received no response to that letter. (Id. ¶ 29.) This suit followed.

Discussion
As relevant here, venue for a civil suit is proper in “a judicial district in which a substantial
part of the events or omissions giving rise to the claim occurred.” 28 U.S.C. § 1391(b)(2).
“Substantiality” is “determined by assessing the overall nature of the plaintiff’s claims and the nature
of the specific events or omissions in the forum.” Daniel v. Am. Bd. of Emergency Med., 428 F.3d
408, 432-33 (2d Cir. 2005). “When material acts or omissions within the forum bear a close nexus
to the claims, they are properly deemed . . . substantial, but when a close nexus is lacking, so too is
the substantiality necessary to support venue.” Id. “Plaintiff has the burden of establishing proper
venue.” Grantham v. Challenge-Cook Bros., 420 F.2d 1182, 1184 (7th Cir. 1969).

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Plaintiff alleges that defendants breached the contract by refusing to provide hotel rooms to
Air Wisconsin crews. To prevail on this claim, plaintiff must prove: “(1) the existence of a valid
and enforceable contract; (2) performance by the plaintiff; (3) breach of the contract by the
defendant; and (4) resultant injury to the plaintiff.” Gonzalzles v. Am. Exp. Credit Corp., 733 N.E.2d
345, 351 (2000). As to these elements, the record shows that: (1) defendant executed the contract
in Kentucky, and plaintiff executed it in Illinois; (2) plaintiff performed its contractual duties in
Illinois and Arizona; (3) defendant allegedly breached the contract in Kentucky; and (4) plaintiff was
damaged in Illinois. (See Pl.’s Am. Resp. Mot. Dismiss, Ex. 1, Scislowski Aff. ¶¶ 4, 5, 7, 9, 11-13;
Defs.’ Mem. Supp. Mot. Dismiss, Ex. A, Wright Aff. ¶¶ 2-3, 9.) In short, the record shows that a
substantial part of the events giving rise to plaintiff’s claim occurred both in Kentucky and in
Illinois. See TruServ Corp. v. Neff, 6 F. Supp. 2d 790, 792 (N.D. Ill. 1998) (stating that “a
‘substantial part’ of the events can occur in more than one place, and thus, venue can be proper in
more than one district”). Because Illinois is a proper venue for this suit, the Court denies defendants’
motion.
Conclusion
For the reasons set forth above, the Court denies defendants’ motion to dismiss [13] for
improper venue. Status hearing set for 1/19/16 at 9:30 a.m.

SO ORDERED.

ENTERED: January 4, 2016

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HON. JORGE ALONSO
United States District Judge
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