ACADIA INSURANCE COMPANY v. LAKESHORE SAIL CHARTERS LLC
Filing
26
ORDER OF TRANSFER re 13 Motion to Dismiss By JUDGE GEORGE Z. SINGAL. (lrc)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
ACADIA INSURANCE COMPANY,
Plaintiff,
v.
LAKESHORE SAIL CHARTERS, LLC,
Defendant.
)
)
)
)
) Docket no. 2:13-CV-00459-GZS
)
)
)
)
)
ORDER OF TRANSFER
On November 19, 2014, the Court issued a Procedural Order requesting the parties to
appear at oral argument on December 10, 2014 and to be prepared to explain why this Court should
not transfer this case to the Northern District of Illinois. (See Procedural Order (ECF No. 20) at
1.) The Court also permitted the parties to submit supplemental briefing on this issue prior to oral
argument. (See id.) Having reviewed the parties’ submissions and considered the arguments
presented to the Court on December 10, 2014, the Court hereby TRANSFERS this case to the
Northern District of Illinois.
I.
BACKGROUND
A.
Factual Background
The S/V Halie & Matthew is a 79’ fiberglass hulled gaff-rigged schooner. (Compl. for
Decl. J. (ECF No. 1) ¶ 4.) Defendant Lakeshore Sail Charters, LLC (“Lakeshore”) is a limited
liability company organized under the laws of and with its principal place of business in Illinois.
(Id. ¶ 3.) Lakeshore acquired the S/V Halie & Matthew with plans to have the ship participate in
various Tall Ships Festivals throughout the Great Lakes during the summer of 2013. (April 3,
2014 Compl. for Breach of Contract and Other Relief filed in the Northern District of Illinois, N.D.
Ill. Docket # 1:14-cv-02410 (ECF No. 13-1) (“N.D. Ill. Compl.”) ¶ 9.)
Plaintiff Acadia Insurance Company (“Acadia”) is a New Hampshire corporation
authorized to do business in Maine. (Def. Acadia Insurance Co.’s Answer and Affirmative
Defenses and Countercl. filed Oct. 6, 2014 in the Northern District of Illinois, 1:14-cv-02410 (ECF
No. 22-1) (“Acadia’s Counterclaim”) Countercl. ¶ 2.)
On June 12, 2013, Acadia issued
commercial hull policy, No. CHA5107176-10, with a policy period of June 12, 2013 to June 12,
2014 to Lakeshore for the S/V Halie & Matthew. (Compl. ¶ 7.) On June 29, 2013, the S/V Halie
& Matthews was damaged in a storm while en-route from Maine to Chicago. (Compl. ¶ 12.) The
parties dispute whether the insurance contract provided coverage for loss of earnings of the S/V
Halie & Matthew.
B.
Litigation
Plaintiff Acadia commenced this action against Lakeshore on December 16, 2013. (Compl.
For Declaratory J. (ECF No. 1).) Through the Complaint for Declaratory Judgment Acadia seeks
a judgment “declaring that Acadia Policy No. CHA5107176-10 does not provide coverage for the
claims being asserted by Lakeshore Sail Charters, LLC for the alleged loss of earnings of the S/V
Halie & Matthew[.]” (Compl. at Page ID # 3.)
The Complaint was not served on Defendant Lakeshore Sail Charters, LLC until April 28,
2014. Between the time that Acadia filed the Complaint in this Court and the time that Acadia
served the Complaint on Lakeshore – a time period spanning four months – Lakeshore filed a
Complaint For Breach of Contract and Other Relief in the Northern District of Illinois on April 3,
2014. (ECF No. 13-1.)
2
On April 28, 2014, Acadia moved to dismiss, or in the alternative, to transfer venue to the
District of Maine the case filed by Lakeshore in the Northern District of Illinois. (Def. Acadia
Insurance Company’s Mot. to Dismiss or, in the Alternative Transfer Venue (ECF No. 13-2).) On
September 8, 2014, the Northern District of Illinois denied Acadia’s motion to dismiss and
declined to transfer the case to the District of Maine. (See Order (ECF No. 18-1) at 4-8.) On
October 6, 2014, Acadia filed its Answer, Affirmative Defenses and Counterclaim in the Northern
District of Illinois. (See Acadia Counterclaim (ECF No. 22-1).) For relief in its counterclaim,
Acadia requests a judgment “declaring that Acadia Policy No. CHA5107176-10 does not provide
coverage for the claims being asserted by Lakeshore Sail Charters, LLC for the alleged loss of
earnings of the S/V Halie & Matthew[.]” (Id. at Page ID # 250.)
On June 2, 2014, Lakeshore moved to dismiss the Complaint for Declaratory Relief in this
Court because this Court lacks personal jurisdiction over Lakeshore, venue is improper in this
Court and on equitable grounds. (Def.’s Mot. to Dismiss Pl.’s Compl. (ECF no. 13) at 2-6.)
II.
DISCUSSION
28 U.S.C. § 1404(a) provides:
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). Section 1406(a) similarly provides that “[t]he district court of a district in
which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the
interest of justice, transfer such case to any district or division in which it could have been
brought.” 28 U.S.C. § 1406(a). In addition, section 1631 states that “[w]henever a civil action is
filed in a court . . . and that court finds that there is a want of jurisdiction, the court shall, if it is in
the interest of justice, transfer such action . . . to any other such court in which the action . . . could
3
have been brought[.]” 28 U.S.C. § 1631. “It is well settled that a court may transfer a case sua
sponte pursuant to 28 U.S.C. §§ 1404(a) and 1406(a).” Desmond v. Nynex Corp., 37 F.3d 1484,
*3 (1st Cir. 1994); see also Halim v. Donovan, 951 F. Supp. 2d 201, 204 (D.D.C. 2013) (stating
that a court may transfer a case sua sponte pursuant to 28 U.S.C. § 1631).
In deciding whether to transfer venue, the district court should consider the convenience of
the parties and witnesses, the interest of justice, the availability of documents, the possibility of
consolidation, and the order in which the district court obtained jurisdiction. Coady v. Ashcraft &
Gerel, 223 F.3d 1, 11 (1st Cir. 2000). In accordance with the District of Illinois’s analysis, the
convenience to the parties and witnesses and the availability of documents do not clearly dictate
that Maine is the most convenient forum because it should not be overly burdensome for either
party to litigate in either forum. The possibility of duplicative litigation, however, is relevant to
the interest of justice and weighs in favor of transfer.
Courts consider many things relevant to “the interest of justice.” One frequently
mentioned is the desire to avoid multiplicity of litigation resulting from a single
transaction or event. In dictum, the Supreme Court hinted that great weight should
be given to this efficiency consideration:
“To permit a situation in which two cases involving precisely the same issues are
simultaneously pending in different District Courts leads to the wastefulness of
time, energy and money that § 1404(a) was designed to prevent. Moreover, such a
situation is conducive to a race of diligence among litigants for a trial in the District
Court each prefers.”
Thus, many courts have transferred to a forum in which other actions arising from
the same transaction or event, or which were otherwise related, were pending.
15 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 3854 (4th ed. 2013)
(quoting Continental Grain Co. v. The FBL-585, 364 U.S. 19, 26 (1960)). In this case, the issues
to be decided by this court are virtually indistinguishable from the issues to be decided by the
Northern District of Illinois. In addition, the Northern District of Illinois has declined to transfer
4
the case in that court to the District of Maine. Accordingly, if this Court does not transfer the case
to the Northern District of Illinois, two cases litigating identical issues will occur simultaneously,
wasting the parties’ and the judiciary’s resources.
The First Circuit has stated that “[w]here identical actions are proceeding concurrently in
two federal courts, entailing duplicative litigation and a waste of judicial resources, the first filed
action is generally preferred in a choice-of-venue decision.” Cianbro Corp. v. Curran-Lavoie, Inc.,
814 F.2d 7, 11 (1st Cir. 1987). In examining the first-to-file rule, the Northern District of Illinois
declined to place weight on Acadia’s first-filed declaratory judgment action in the District of
Maine because the court found that “Lakeshore was attempting to settle its insurance claim when
Acadia filed the declaratory judgment action.” (Order (ECF No. 18-1) at 5.) Further, the court
noted that Acadia sought only a declaratory judgment action while Lakeshore’s action in the
Northern District of Illinois seeks damages for a breach of contract. Id. This Court has refused to
follow the first-to-file rule where the first lawsuit was the product of a preemptive race to the
courthouse. See Angela Adams Licensing, LLC v. Dynamic Rugs, Inc., 463 F. Supp. 2d 82, 86
(D. Me. 2006) (stating that “I do not see what is gained by giving an advantage to the party that
beats the other party to the federal courthouse by one day, after being alerted that the other party
is about to sue.”). In this case, Acadia filed a declaratory judgment action and waited four months,
until after Lakeshore filed the action in the Northern District of Illinois, to serve Lakeshore.
Although it is disputed, Acadia’s actions appear to reflect some amount of gamesmanship.
Considering the convenience of the parties and witnesses, the interest of justice, the
availability of documents, the possibility of consolidation, and the order in which the district court
obtained jurisdiction and the Northern District of Illinois’s detailed analysis of the transfer factors
5
before declining to transfer that case to the District of Maine, the Court finds that this case should
be TRANSFERRED to the Northern District of Illinois.1
III.
CONCLUSION
For the foregoing reasons, this case is TRANSFERRED to the Northern District of Illinois.
In light of the transfer, the Motion to Dismiss filed by Defendant Lakeshore Sail Charters, LLC
(ECF No. 13) is deemed MOOT.
SO ORDERED.
/s/ George Z. Singal
United States District Judge
Dated this 10th day of December, 2014.
1
Without deciding the issue, the Court notes that even if the Court lacked personal jurisdiction over Defendant, the
Court could properly transfer the case. See Cimon v. Gaffney, 401 F.3d 1, 7 n.21 (1st Cir. 2005) (noting the dispute
over whether section 1631 permits transfer only where a court lacks subject matter jurisdiction or also whether a court
may transfer where it lacks personal jurisdiction and stating that “we are inclined to read § 1631 as allowing for
transfers where a federal court lacks any type of jurisdiction (including personal jurisdiction)” but declining to
definitively decide the issue); Henderson v. Am. Steamship Owners Mut. Prot. & Indem. Ass'n Inc., No. 2:11-CV-86DBH, 2011 WL 2194439, at *2 n.2 (D. Me. June 6, 2011) (noting that a court may transfer venue where it lacks
personal jurisdiction and declining to delineate whether the transfer was pursuant to section 1404(a), 1406(a) or 1631
where the parties did not press the distinction). Accordingly, because the Court need not determine whether it has
personal jurisdiction in order to transfer the case, it will not decide the issue.
6
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?