Scottsdale Insurance Company v. PMG Industrial, LLC et al
OPINION AND ORDER: GRANTING 28 MOTION to Change Venue by Defendant PMG Industrial, LLC and 32 MOTION to Amend/Correct 29 Affidavit of Rick Flores by Defendant PMG Industrial, LLC. The Clerk of this Court is DIRECTED to transfer this case to the Southern District of Indiana, Evansville Division for all further proceedings. Signed by Magistrate Judge Paul R Cherry on 12/14/2016. (lhc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
PMG INDUSTRIAL, LLC, WALSH
CONSTRUCTION COMPANY, and
CHICAGO EXPLOSIVE SERVICES, LLC,
) CAUSE NO.: 2:16-CV-373-RLM-PRC
OPINION AND ORDER
This matter is before the Court on Defendant PMG Industrial, LLC’s Motion for Transfer
of Venue [DE 28], filed on November 16, 2016. Plaintiff Scottsdale Insurance Company filed a
response on November 30, 2016, and Defendant PMG Industrial, LLC filed a reply on December
7, 2016. This matter is also before the Court on Defendant PMG Industrial, LLC’s Motion to
Substitute Affidavit of Rick Flores [DE 32], filed on December 7, 2016. Defendant PMG Industrial,
LLC asks for a transfer of venue to the Southern District of Indiana, Evansville Division, pursuant
to 28 U.S.C. § 1404(a). For the reasons set forth below, the Court grants the Motion for Transfer of
Plaintiff Scottsdale Insurance Company (“Scottsdale”) filed its Complaint for Declaratory
Judgment in this District to obtain a declaration that it has no duty to defend or indemnify Defendant
PMG Industrial, LLC (“PMG”) in connection with a separate lawsuit pending in this District
brought by Walsh Construction Company (“Walsh”) against Chicago Explosive Services, LLC
(“CES”) and PMG (Walsh Constr. Co. v. Chi. Explosive Servs., LLC and PMG Indus., LLC, No. 14CV-84-RL-PRC).
Plaintiff Scottsdale is a corporation organized under the laws of Ohio, with its principal place
of business in Scottsdale, Arizona. Defendant PMG is a limited liability company organized under
the laws of Indiana, with its principal place of business in Evansville, Indiana, and with its members
citizens of Indiana. Defendant Walsh is a corporation organized under the laws of Illinois, with its
principal place of business in the State of Illinois. Defendant CES is a limited liability company
organized under the laws of Indiana, with its principal place of business in Evansville, Indiana, with
two of its members citizens of Indiana and a third member a citizen of either Illinois or Florida.1
Scottsdale represents that the amount in controversy, including the potential costs of defending and
indemnifying PMG with regard to the underlying lawsuit exceeds $75,000.00. Jurisdiction in this
matter is premised upon diversity of citizenship. See 28 U.S.C. § 1332(a).
In the Complaint in this case, Scottsdale notes that the complaint in the related litigation
brought by Walsh alleges that, on October 11, 2012, Walsh and CES entered into a Subcontract
Agreement for certain bridge demolition services, including demolition of two spans of the Cline
Avenue Bridge, in East Chicago, Indiana. The related complaint alleges that CES performed blasting
work through the use of explosives and that PMG assisted CES in the completion of the blasting.
Scottsdale further notes that the complaint in the related case alleges that the blasting caused severe
In the Complaint, Scottsdale alleges that Scottsdale is organized under the laws of Ohio with its principal place
of business in Scottsdale, Arizona; that Walsh Construction Company is an Illinois corporation with its principal place
of business in Illinois; and that the members of PMG Industrial LLC are citizens of Indiana. However, as for Defendant
Chicago Explosive Services, LLC, Scottsdale alleges only that Chicago Explosive Services, LLC is a limited liability
company organized under the laws of Indiana with its principal place of business in Evansville, Indiana, and does not
allege the citizenship of its members.
However, in the course of briefing the instant motion, the parties notified the Court that, in the related litigation
(Walsh Constr. Co. v. Chi. Explosive Servs., LLC and PMG Indus., LLC, No. 14-CV-84), a motion to dismiss has been
filed challenging the court’s subject matter jurisdiction on the basis that there is not complete diversity of citizenship
between the plaintiff Walsh Construction Company, a citizen of Illinois, and Defendant Chicago Explosive Services,
LLC, of which two members are citizens of Indiana and one member is a citizen of either Illinois or Florida. The motion
to dismiss has not yet been ruled on.
Based on that information, it appears that there is complete diversity in this case and the Court has subject
matter jurisdiction pursuant to 28 U.S.C. § 1332(a).
property damage that Walsh was contractually obligated to repair at a cost totaling approximately
$2,127,250.19. Finally, the related complaint alleges that “the blasting work performed by PMG was
an ultra-hazardous activity” and that, as a result, PMG is strictly liable for proximately causing the
damage. (Compl. ¶¶ 26, 27 (quoting Ex. B, Count VII, ¶¶ 29, 30)).
In this case, Scottsdale alleges that it issued to PMG a commercial general liability insurance
policy effective August 16, 2012, through August 16, 2013. The policy includes a Demolition
Exclusion endorsement that provides, in part, that the insurance does not apply to “‘property
damage’ arising out of any blasting operations” and does not apply to “‘property damage’ arising
out of the demolition of any building or structure that has a height in excess of three stories or fifty
(50) feet from the ground surface on the exterior of any building or structure.” (Compl. ¶ 12). The
Complaint further alleges that, although Scottsdale initially agreed to defend PMG in the related
case brought by Walsh under a reservation of rights, through the course of discovery, Scottsdale
learned that the bridge at issue has a height in excess of fifty feet from the ground surface and that
the work PMG allegedly performed included drilling holes in the bridge for the placement of
explosives. On information and belief, Scottsdale alleges that a portion of PMG’s work on the bridge
was performed at a height in excess of fifty feet from the ground surface.
Thus, Scottsdale asks for a declaratory judgment in this case that there is no coverage under
the Policy because the Demolition Exclusion endorsement precludes coverage entirely.
As an initial matter, the Court grants the Motion to Substitute Affidavit of Rick Flores to
allow the substitution of his signed Affidavit for the unsigned Affidavit filed with PMG’s opening
Defendant PMG seeks transfer of venue under 28 U.S.C. § 1404(a) from the Northern
District of Indiana, Hammond Division to the Southern District of Indiana, Evansville Division.
PMG argues that the convenience of the parties, the witnesses, and the interest of justice will be
better served by the transfer of venue. Plaintiff Scottsdale opposes the transfer of venue.
Pursuant to § 1404(a), “[f]or 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 . . . .” 28 U.S.C. § 1404(a). Therefore, (1) venue must be proper in the transferor
court; (2) venue must be proper in the transferee court; and (3) the transfer must serve the
convenience of the parties and witnesses and must be in the interests of justice. See Coffey v. Van
Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986); Law Bulletin Publ’g, Co. v. LRP Publ’ns,
Inc., 992 F. Supp. 1014, 1017 (N.D. Ill. 1998). Although specifically set forth in § 1404(a), “these
factors are best viewed as placeholders for a broader set of considerations, the contours of which
turn upon the particular facts of each case.” Travel Supreme, Inc. v. NVER Enters., Inc., No.
3:07CV194PPS, 2007 WL 2962641, at *8 (N.D. Ind. Oct. 5, 2007) (quoting Coffey, 796 F.2d at 219
n.3); see also Research Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d 973, 977 (7th
Cir. 2010) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). The party seeking
transfer has the “burden of showing that ‘the transferee forum is clearly more convenient.’” Heller
v. Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1293 (7th Cir. 1989). “[W]hen the
inconvenience of the alternative venues is comparable there is no basis for a change of venue[.]” In
re Nat’l Presto Indus., 347 F.3d 662, 665 (7th Cir. 2003).
First, venue is proper in this court under 28 U.S.C. § 1391(b)(2) as a substantial part of the
events or omissions giving rise to the related litigation occurred in this District and a substantial part
of the property that is the subject of the related litigation is situated in this District. East Chicago,
Indiana, where the blasting work occurred, is in this District.
Second, venue is proper in the Southern District of Indiana. In its opening motion, PMG does
not analyze any of the requirements of § 1391(b) as to venue in the Southern District of Indiana, and
Scottsdale comments only in a footnote that the parties do not dispute that venue is proper in the
transferee district but also offers no analysis of § 1391(b). The Court may only transfer venue under
§ 1404(a) if venue is proper in the transferee court.
Section 1391(b) provides.
(b) Venue in general.--A civil action may be brought in-(1) a judicial district in which any defendant resides, if all defendants are
residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions
giving rise to the claim occurred, or a substantial part of property that is the
subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as
provided in this section, any judicial district in which any defendant is
subject to the court’s personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b).
Venue is not proper under § 1391(b)(1). Defendant PMG is a resident of the Southern
District of Indiana as is Defendant CES. However, Defendant Walsh Construction Company is a
resident of Illinois, as a corporation organized under the laws of Illinois with its principal place of
business in Illinois. Because all Defendants are not residents of the State of Indiana, venue is not
proper in the Southern District of Indiana under § 1391(b)(1). Section 1391(b)(3) is not applicable
because there is a district in which venue is proper—the Northern District of Indiana.
However, venue is proper under § 1391(b)(2) because a substantial part of the events giving
rise to the claim in this case occurred in the Southern District of Indiana where the insurance policy
that is the subject of this declaratory action was negotiated, drafted, and entered into. See State Farm
Mut. Auto. Ins. Co. v. Estate of Bussell, 939 F. Supp. 646, 650 (S.D. Ind. 1996).
Thus, the Court turns to the question of whether the transfer would serve the convenience
of the parties and witnesses and would be in the interests of justice. The Court balances the
following “private interests” in the convenience analysis: “(1) the plaintiff’s choice of forum; (2)
the situs of the material events; (3) the relative ease and access to sources of proof; (4) the
convenience of the witnesses; and (5) the convenience of the parties of litigating in the respective
forums.” Schumacher v. Principal Life Ins. Co., 665 F. Supp. 2d 970, 977 (N.D. Ind. 2009) (citing
Law Bulletin, 992 F. Supp. at 1017); see also Research Automation, Inc., 626 F.3d at 978. In
addition, the Court considers the “interest of justice” or the “public interest,” which relates to the
efficient functioning of the courts. Coffey, 796 F.2d at 219-20. These “[p]ublic interest factors
include the court’s familiarity with the applicable law, the speed at which the case will proceed to
trial, and the desirability of resolving controversies in their locale.” Valbruna Stainless, Inc. v. ADT
Sec. Servs., Inc., 1:10-CV-77, 2010 WL 2772324, at *2 (N.D. Ind. July 12, 2010) (quoting
Omnisource Corp. v. Sims Bros., Inc., No. 1:08-CV-89, 2008 WL 2756345, at *4 (N.D. Ind. July
First, this District is the plaintiff’s choice of forum. Ordinarily, courts give substantial weight
to the plaintiff’s choice of form, particularly when it is the plaintiff’s home forum. See In re Nat’l
Presto Indus., 347 F.3d at 664. However, this District is not Scottsdale’s home forum. Thus,
Scottsdale’s choice of forum is entitled to less deference. Notably, it is not the home forum of any
Second, the situs of the material events relevant to the instant lawsuit is the Southern District
of Indiana. Although the underlying lawsuit based on breach of contract and negligence brought by
Walsh against PMG and CES is pending in this District and the blasting that led to that lawsuit
occurred in this District, the instant cause of action is one of indemnity under the insurance contract
between Scottsdale and PMG. The insurance contract was sold in Evansville, Indiana, in the
Southern District of Indiana where PMG resides. This factor strongly favors transfer.
Next, the relative ease and access to sources of proof as well as the convenience of the
witnesses favors transfer. The relevant parties and witnesses are those involved with the insurance
policy as well as those involved with the blasting and construction work that is the topic of the
insurance coverage at issue. Regarding the insurance policy, none of the witnesses are located in this
District; PMG’s president and other officers are residents of Evansville, Indiana, and all of the
business records of PMG are located in Evansville, Indiana. Scottsdale’s witnesses and records are
in Arizona. As for the witnesses involved with the work that is the topic of the insurance coverage,
the PMG supervisor of the employees who performed the work is a resident of Evansville, Indiana.
The Court notes that the parties have already obtained certain discovery regarding the related
complaint in the course of that litigation. In its reply brief, PMG represents that “[t]he events giving
rise to the Underlying Lawsuit were demolished and there is nothing to see.” (PMG Reply 2).
Scottsdale argues that transfer will impermissibly shift the inconvenience of travel from
PMG employees to Scottsdale employees. However, the burden is not shifted from PMG to
Scottsdale. Rather PMG’s inconvenience is alleviated, while Scottsdale’s already existing
inconvenience is relatively the same. Although Scottsdale represents that it can take a direct flight
from Arizona to Chicago, Illinois, the airports in Chicago are approximately an hour drive from the
courthouse in Hammond, Indiana. Although Scottsdale would have to take a connecting flight to get
from Arizona to the airport in Evansville, Indiana, PMG represents that the airport in Evansville is
approximately eight miles from the courthouse in the Southern District. In contrast, if transfer is not
granted, PMG would have to fly to Chicago, Illinois, and then drive to Hammond, Indiana, or drive
the approximately 550 miles round trip from Evansville, Indiana, to Hammond, Indiana. This favors
As for the burden on the remaining two defendants, who are not parties to the insurance
contract, the inconvenience is shifted from one to the other. Walsh will have to travel from Illinois,
which it can do by flying directly from Chicago, Illinois, to Evansville, Indiana, or by driving. And,
CES, like PMG, is located in Evansville, Indiana, so the same inconvenience that PMG would
sustain with traveling to the Northern District of Indiana, Hammond Division, is alleviated. The
inconvenience to these parties is neutral.
Finally, the convenience of the parties litigating in the respective forums weighs in favor of
transfer. The Northern District of Indiana is inconvenient for both Scottsdale and PMG, whereas the
Southern District of Indiana is only relatively equally inconvenient for Scottsdale. The Court finds
that, having considered all the factors, PMG has met its burden of showing that transferring the case
to the Southern District of Indiana would be “clearly more convenient.” Coffey, 796 F.2d at 219-20;
see also U.S. ex rel Reuille v. Comm. Health Sys. Prof’l Servs. Corp., No.: 1:09-CV-07, 2011 WL
5238826, at *2 (N.D. Ind. Nov. 1, 2011).
As for the interests of justice, the court in both Districts is equally able to apply federal and
Indiana law (which the parties agree applies) and there is no evidence that one forum will allow the
case to proceed to trial any faster than the other. Although Scottsdale argues that the citizens of the
Northern District of Indiana have a strong interest in resolving this dispute involving its residents,
the insurance dispute in this case is whether the insurer Scottsdale, a resident of Arizona, must
defend and indemnify the insured PMG, a resident of the Southern District of Indiana, Evansville
Division. Therefore, the residents of the Southern District of Indiana have a stronger connection to
the events of this litigation than those of this District.
Based on the foregoing, the Court hereby GRANTS Defendant PMG Industrial, LLC’s
Motion to Substitute Affidavit of Rick Flores [DE 32] and GRANTS Defendant PMG Industrial,
LLC’s Motion for Transfer of Venue [DE 28]. The Clerk of this Court is DIRECTED to transfer
this case to the Southern District of Indiana, Evansville Division for all further proceedings.
SO ORDERED this 14th day of December, 2016.
s/ Paul R. Cherry
MAGISTRATE JUDGE PAUL R. CHERRY
UNITED STATES DISTRICT COURT
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