March VII Investment Limited Partnership et al v. Kramer
Filing
38
Judge Mark L. Wolf: ORDER entered. MEMORANDUM AND ORDER: Case hereby transferred to the United States District Court for the District of Maryland.(Franklin, Yvonne)
UNITED STATES
DISTRICT COURT
DISTRICT OF MASSACHUSETTS
MARCH VII
INVESTMENT
PARTNERSHIP
INVESTMENT
LIMITED
and MARCH VIII
LIMITED
PARTNERSHIP
Plaintiffs
C.A.
V.
ANNE E.
No.
15-11917-MLW
KRAMER,
Defendant
MEMORANDUM AND ORDER
WOLF,
I.
September 14, 2016
D.J.
SUMMARY
Plaintiffs
are
Massachusetts law,
two
limited partnerships
established under
March VII Investment Limited Partnership and
March VIII Investment Limited Partnership (the "March Entities").
The March Entities are the limited partners in two Maryland limited
partnerships that own two senior living facilities in Maryland,
the Ridgely/Hampstead Limited Partnership and the Ridgely Black
Rock Limited Partnership (the "Partnerships").
have
sued
defendant
Partnerships,
Anne
alleging
Kramer,
that
the
Kramer
The March Entities
general
breached
partner
the
of
the
agreements
governing the Partnerships (the "Partnership Agreements") and her
fiduciary duties as general partner.
Kramer has moved to transfer this case to the United States
Court
for
Plaintiffs
the
District
oppose
of
Maryland
transfer.
For the
1
(the
"Transfer
reasons
Motion").
explained in the
Memorandum, the Transfer Motion is being allowed.
In essence, the
presumption in favor of the plaintiffs' choice of forum is weak in
this case.
It is outweighed by the convenience of the parties,
the convenience of the witnesses,
and the interests of justice,
which all favor litigating and trying this action in the District
of Maryland.
II.
PROCEDURAL HISTORY
On June 19, 2015, Kramer filed a motion to dismiss, arguing
that this court lacks personal jurisdiction over Kramer or, in the
alternative,
the case should be dismissed under the doctrine of
forum non conviens.
The March Entities opposed that motion.
The
court held a hearing on the motion and raised the question of
whether the case should be transferred to the District of Maryland
pursuant to 28 U.S.C. §1404.
The court subsequently issued an
order denying the motion to dismiss, ordering the parties to confer
and report whether they agreed to transfer the case to the District
of Maryland, and establishing a schedule for Kramer to file any
motion to transfer if the parties did not agree.
Transfer
Motion
Memorandum")
with
a
supporting
and three affidavits.
memorandum
Kramer filed the
(the
"Transfer
The March Entities filed an
opposition ("Transfer 0pp.") and supporting declaration.
III.
APPLICABLE
STANDARDS
"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 burden of proof rests with the party seeking
transfer." Coady v.
Ashcraft & Gerel,
223 F.Sd 1,
11
(1st Cir.
2000).
Ordinarily,
"there is a 'strong presumption in favor of the
plaintiff's choice of forum.'" Astro-Med,
Am., Inc., 591 F.Sd 1, 13 (1st Cir. 2009)
Inc.
v.
Nihon Kohden
(quoting Coady, 223 F.Sd
at 11). However, "[w]here the operative facts of the case have no
material
forum
connection
carries
less
with
[the]
weight."
district,
U.S.
ex
plaintiff's
rel.
Ondis
choice
v.
of
City
of
Woonsocket, Rhode Island, 480 F. Supp. 2d 434, 436 (D. Mass. 2007)
(quoting Goodman v. Schmalz, 80 F.R.D. 296, 302 (E.D.N.Y. 1978)).
More specifically:
[T]he plaintiff's venue choice is to be given less weight
if he or she selects a
district court with no obvious
connection to the case or the plaintiff is a nonresident
of the chosen forum or neither element points to that
court. Although not universally followed by other
courts,
this approach is one of sound judicial
administration and reflects good common sense.
Id.
(quoting 15 Wright,
Procedure §3848 at 134-39
A district
court
Miller & Cooper,
Federal Practice and
(2007)) .
considering
a
motion
for
transfer
"must
evaluate both the convenience of the parties and various publicinterest
considerations."
Atl.
Marine
Const.
Co.
v.
U.S.
Dist.
Court for W. Dist. of Texas, 134 S. Ct. 568, 581 (2013). In weighing
convenience, the court must consider both the "convenience of the
parties and the witnesses." 28 U.S.C. §1404(a).
"Judges in this
District agree that convenience of the witnesses is an extremely
important,
if not the most important,
factor to be analyzed in
determining whether to change a litigation's venue." Gemini Inv'rs
Inc. V. Ameripark, Inc., 542 F. Supp. 2d 119, 126 (D. Mass. 2008)
(citing Brant Point Corp. v. Poetzsch, 671 F. Supp. 2, 3 (D. Mass.
1987)) .
To
demonstrate
inconvenience,
the
movant
must
(1)
identify the witnesses and their locations; (2) indicate
the quality or materiality of the[ir] testimony; and (3)
show[] that any such witnesses were unwilling to come to
trial . . . [,] that deposition testimony would be
unsatisfactory[,] or that the use of compulsory process
would be necessary.
Employers Mut. Cas. Co.
1169
(10th Cir.
2010)
v.
Bartile Roofs,
Inc.,
618 F.3d 1153,
(internal quotations omitted).
The court
must also consider "relative ease of access to sources of proof;
availability of compulsory process . . .; possibility of view of
premises . . .; and all other practical problems that make trial
of a case easy, expeditious and inexpensive." Atl. Marine, 134 S.
Ct. at 581 n.6 (internal quotation mark omitted).
"The
'interest
of
justice'
is
a
separate
element
of
the
transfer analysis that relates to the efficient administration of
the
court
Bridqeport
system."
Intern.,
Research
Inc.,
626
Automation,
F.3d
973,
Inc.
978
v.
Schrader-
(7th Cir.
2010).
Factors that courts consider in determining whether transfer is in
the interest of justice include: (1) the time it will take to reach
trial
with
in each district;
the
relevant
(2)
law;"
(3)
"each court's
"the
relative
respective
familiarity
desirability
of
resolving controversies in each locale;" and (4) "the relationship
of each community to the controversy." Id.; see also Brant Point,
671 F. Supp. at 5 ("[T]ransfer . .
. would promote the interests
of justice by allowing the North Carolina zoning procedures at
issue in this case to be construed by a federal court sitting in
that state, rather than by a court unfamiliar with North Carolina
law.").
IV.
FACTS
The
March
Entities
contend
that
Kramer
has
breached
the
Partnership Agreements in a variety of ways since 2000, including
by: (1) failing to pay a required fee; (2) failing to pay the March
Entities
paying
their
annual
herself
Partnerships'
share
unauthorized
of
the
Partnerships'
compensation;
(3)
changing
(4)
profits;
the
accountants without the March Entities'
approval;
and (5) attempting to admit another entity, the Hampstead Group,
LLC,
as
approval.
the
a
second
general
partner without
the
March
Entities'
The Complaint makes four claims for relief flowing from
alleged
breaches:
(1)
declaratory
judgment
that
Kramer
breached the Partnership Agreements, entitling the March Entities
to remove her as general partner;
(2)
breach of the Partnership
Agreements;
(3)
breach
of
fiduciary
duty;
and
(4)
unjust
enrichment.
The
following
otherwise
facts
indicated.
are
Kramer
drawn
is
a
from
the
resident
complaint
of
unless
Maryland.
The
Partnerships were established in the 1980s to develop and operate
two
rental
communities
"Properties").
in Maryland for
low-income seniors
(the
The Partnership Agreements provide that they are
governed by Maryland law.
At the time the Partnership Agreements were negotiated, the
March Entities' operated from Boston, Massachusetts.
Affidavit in Opposition to Motion to Dismiss 53.
See Madrigal
In 1992, the
March Entities moved their offices out of Massachusetts.
See id.
In
to
2005,
the
March
Entities
moved
all
files
related
the
Partnerships to California, where the March Entities' offices are
now located.
See id.
52.
The March Entities are now controlled
by their general partner—another limited partnership based in
California, NPI Capital Associates, L.P
Declaration
in
Opposition
("Orenstein Dec.")
to
("NPI").
Defendant's
Motion
Orenstein
to
Transfer
55.
The parties have each submitted declarations concerning the
Transfer Motion.
Kramer submitted three:
Anne
the
Kramer;
(2)
the Declaration of
Declaration of Mario Nimock;
Declaration of Richard Lasley.
See Lasley Dec. 58.
(1)
and
(3)
the
Kramer lives in Parkton, Maryland.
She handles all of her "business activities
personally."
Id. SIS; see also Kramer S12.
She is 90 years-old and
requires "round-the-clock helpers" to assist her.
SIS; Kramer SI2.
See Lasley Dec.
Kramer states that traveling to Massachusetts would
be "a great burden .
.
age and limitations."
. personally and physically, given [her]
Kramer Dec. SI2.
Massachusetts for depositions or trial,
If Kramer must travel to
the helpers will have to
travel with her, and Kramer would need to find and pay for suitable
accommodations for them.
See Lasley Dec. SIS; Kramer SI2.
The Lasley Declaration identifies eleven Maryland witnesses,
including Lasley himself, that Kramer contends are "necessary to
[her] defense in this case . . . "
Lasley Dec. SI7.
Lasley lives
in Maryland and is Kramer's "estate planning counsel and personal
general
counsel"
potentially
and
relevant
has
personal
matters,
knowledge
including:
about
the
various
Partnership
Agreements; Lesley's conversations with agents of NPI concerning
the "payment of service fees and other sums"; and the addition of
the Hampstead Group, LLC as a general partner in the Partnerships.
See id. 5SI5-6.
In particular, Lasley states that he spoke with
NPI representatives about their demands for payment and was never
"provided
with
satisfactory
information
for
me
payments under the subject partnership agreements."
to
recommend
Id. SI9.
Lasley also asserts that Richard Lehman is an attorney who
has represented Kramer for many years and is located in Maryland.
He can testify concerning communications with the March Entities
or their agents "concerning the admission of Hampstead Group, LLC
as an additional general partner."
Id. ^7.
Lasley adds, without
elaboration, that Lehman can also testify about his firms' records
relating to the
Partnerships,
Kramer's defenses.
the March Entities'
claims,
and
See id.
In addition, Lasely states that two current and two former
accountants for the Partnerships, who are in Maryland, can testify
concerning
the
Partnerships'
Partnerships'
audit
finances,
reports,
and
the
details
creation
of
the
of
the
fees
and
distributions that the March Entities claim were paid or not paid.
See id.
Bruce Campbell, an officer with the Partnerships' property
manager in Maryland, Wallace H. Campbel & Co., Inc., can testify
about the management duties and payment of service fees, as well
as, conversations he has had with agents of NPI.
See id.
Linda
Wood, the onsite property manager for the Properties, and Deborah
Carlson, the management supervisor, can testify about the regular
operations and management of the properties, rent increases sought
for
the
properties,
revenues
and
properties, and contacts with the USDA.
disbursements
See id.
from
the
Sandra S. Hunter,
the local USDA Rural Development representative in Maryland, has
knowledge of the "operations and management of the properties,
decisions
on
requests
for
rent
increases,
audited
financial
statements relating to the properties" and USDA contacts with
Kramer and property management personnel.
Id.
Finally, John W.
Beckley is a Maryland attorney who can testify about the "role of
the Hampstead Group with regard to the [Partnerships]."
The
Nimock
Affidavit,
submitted
by
Kramer,
See id.
describes
and
provides public documents detailing the creation, administrative
dissolution, and reinstatement of the March Entities.
Attached to
it are documents from the Massachusetts Secretary of State's Office
indicating
that
the
March
Entities
made
no
filings
Secretary from the fall of 1992 through May 20,
11SI8,
20.
with
2015.
the
See id.
The March Entities were administratively dissolved on
June 13, 2013.
See id. SIS19, 21.
They were both reinstated on May
22, 2015 after filing Annual Reports for the years 2008 through
2015.
See id. 1^11-12, 23-24.
The March Entities filed this suit
four days after they were reinstated.
The
March
Entities
submit
See id. SI25.
the
Orenstein
Declaration
in
opposition to the Transfer Motion.
Orenstein identifies three
categories
who
of
Massachusetts.
ultimate
Dec. IS.
relevant
witnesses
reside
in
or
near
Jack Manning is the individual with the greatest
financial
stake
in the March Entities.
See Orenstein
Manning holds a 67% limited partnership interest in an
entity called JP Two LP, which holds a 99% limited partnership
interest
in
the
March
Entities.
See
id.
financial stake in the March Entities and,
Entities,
He
has
the
largest
according to the March
is the most qualified individual to testify about the
materiality
of
Kramer's
alleged
breaches
of
the
Partnership
Agreements.
See id.
Manning lives and works in Massachusetts,
and is not an agent of the March Entities.
See id.
The second category of witnesses is comprised of the former
principals of the March Entities' original general partner.
id.
SI9.
Jerome
Heller
and
Peter
O'Connor
are
See
Massachusetts
residents and have "first-hand knowledge of the negotiation of the
[Partnership Agreements], the intent of the parties at the time
they entered into
[them] ,
and the conduct of the parties after
entering into the [Partnership Agreements]."
Id.
The final category of plaintiffs' witnesses consists of four
individuals who were original limited partners in one or the other
of the March Entities.
See id. 510.
materiality of Kramers'
They can testify about "the
breaches of contract based on
[their]
expectations at the time [they] made [the] investment as well as
[their]
purchase of limited partnership interests pursuant to a
securities offering in connection with the [Partnerships]."
Id.
Three of the individuals are residents of Massachusetts and one is
a resident of New Hampshire who lives within 100 miles of Boston.
See
id.
V.
DISCUSSION
Kramer
Maryland.
seeks
to
transfer
She argues that:
this
(1)
case
to
the
District
of
the convenience of the parties
favors transfer because Kramer is elderly and requires full-time
care;
(2) the most important witnesses all reside in Maryland; and
10
(3)
Maryland has
the
greatest
interest
in this
action because
Maryland law governs the dispute, and the dispute concerns Maryland
limited partnerships operating senior housing in Maryland.
The
March Entities respond that Kramer has not overcome the presumption
in favor of their choice of venue.
Massachusetts entities,
their home forum.
in
or
They argue further that,
as
they have an interest in litigating in
They also identify several witnesses who reside
near Massachusetts.
The presumption in favor of plaintiffs'
choice of venue is
relatively weak in this case because the March Entities now have
"no material connection with this district."
2d
at
436.
The
Massachusetts,
March
despite
Entities
are
Ondis,
no
480 F.
longer
remaining Massachusetts
legal
Supp.
based
in
entities.
The presumption is not strengthened by the March Entities' choice
to bring this action in their home forum.
choice of home
forum
In the normal case, the
"more likely represents
considerations
of
convenience rather than vexation or harassment to the defendant."
See Kleinerman v. Luxtron Corp., 107 F. Supp. 2d 122, 125 (D. Mass.
2000).
Id.
undermines
for
The March Entities'
long absence from Massachusetts
the claim that Massachusetts
is much more
convenient
them.
In the usual case, the convenience of the parties is neutral
because
another.
transfer
merely
shifts
See Brant Point,
671 F.
11
the
burden
Supp. at 3.
from
one
However,
party
to
in this
case, the representatives of the March Entities will have to travel
from California either to Massachusetts or Maryland.^ Litigating
in
Massachusetts,
Kramer.
however,
would
be
particularly burdensome
to
She lives in Maryland, is 90 years old, and requires full-
time care-takers, with whom she would have to travel.
Often the most important factor in deciding whether transfer
is justified is the convenience of witnesses and the availability
of live testimony.
Here, the most important witnesses identified
by either party appear to be the Partnerships' accountants.
accountants can explain the complex financial
heart of the March Entities'
claims.
The
documents at the
See Transfer 0pp.
at 11-13
(stating they intend to rely at trial on audit reports produced by
the Partnerships' accountants).
"It is well settled that the trier
of fact should not be forced to rely on deposition evidence when
the deponent's live testimony can be procured [through transfer].
This
is
especially
so
when
witnesses' testimony is high."
(internal
citations
and
the
'qualitative
value'
of
the
Brant Point, 671 F. Supp. at 4-5
quotation
marks
omitted);
see
also
Kleinerman v. Luxtron Corp., 107 F. Supp. 2d 122, 125-26 (D. Mass.
2000)
("Section 1404(a)
of Title
28
also
requires
the
court
to
1 The March Entities argue that Manning, the individual with the
greatest financial interest in the case, is a Massachusetts
resident and important witness.
However, Manning is not a
party. Therefore, his location is not relevant to the
convenience of the parties factor.
12
consider the convenience of witnesses, with a preference of live
testimony over testimony by deposition.")'
The accountants are
located in Maryland and can, if necessary, be compelled to testify
in the District of Maryland.
See F.R.
Civ.
P.
cannot be compelled to testify in Massachusetts.
45(c) (1) .
They
In any event,
Maryland is more convenient for them.
It
is
not evident that the
testimony of any of the March
Entities' proposed witnesses would be admissible.
They argue that
their proposed witnesses can testify concerning the materiality of
the alleged breaches and the intent of the contracting parties.
However, "[t]he determination of the materiality of a breach must
be based largely on a standard of objective reasonableness, rather
than purely subjective belief."
(4th ed. 2016).
23 Williston on Contracts §63:3
The March Entities do not explain how testimony
from any of these witnesses would be more than subjective belief.
In
addition,
Maryland
follows
the
rule
that
extrinsic
evidence is only admissible to interpret a contract when the words
of the contract are ambiguous.
See Calomiris v.
Woods,
353 Md.
425, 437 (1999); Huggins v. Huqqins & Harrison, Inc., 220 Md. App.
405,
418
(2014).
The March Entities concede in their Opposition
that any relevance is conditioned on the court ruling that the
Agreements are ambiguous.
Partnerships are ambiguous.
However,
they do not argue that the
Rather, they assert that "extrinsic
13
evidence is unnecessary" to interpret the Partnership Agreements.
Transfer 0pp.
In
at 7.
addition,
the
March
Entities
have
admissible evidence that Manning may have.
not
identified
any
Nor have they argued
that Manning would be unwilling or unable to travel to Maryland
for trial if he were a
witness.
See Optos,
Sys., Inc., 111 F. Supp. 2d 217, 237
Texas Roadhouse,
Inc.
v.
Topcon Med.
{D. Mass. 2011); E.E.O.C. v.
Inc., No. 1:11-CV-11732-DJC, 2012 WL 5894910, at
2 (D. Mass. Nov. 9, 2012); F.A.I. Elecs. Corp. v. Chambers, 944 F.
Supp. 77, 80-81 (D. Mass. 1996).
Finally, the interests of justice weigh heavily in favor of
transfer to Maryland.
The case is still in its early stages,
transfer would not delay the time to get to trial.
so
If a jury view
of the properties would be valuable, it could occur if the trial
were in Maryland, but not if it were in Massachusetts.
.
would promote
the
interests
of
"[TJransfer
justice by allowing
the
[Maryland law] at issue in this case to be construed by a federal
court sitting in that state,
with [Maryland] law."
appropriate
that
these
rather than by a court unfamiliar
Brant Point, 671 F. Supp. at 5.
issues
be
decided by
a
It is most
Maryland court,
subject to appeals and authoritative decisions in the appellate
courts
familiar
with
Maryland
law.
stronger relationship with the dispute.
Finally,
Maryland
has
a
This case concerns two
Maryland Partnerships, application of Maryland law, and operation
14
of entities of significant public importance (public housing) in
Maryland.
Accordingly, the court concludes that transfer of this
case to the District of Maryland is justified.
VI.
ORDER
In view of the foregoing,
1.
it is hereby ORDERED that:
Plaintiff's Motion to Transfer Venue
(Docket No.
28)
is
This
the
States
ALLOWED.
2.
case
shall
be
TRANSFERRED
to
United
District Court for the District of Maryland.
UNITED SPATES DISTRICT JUDGE
15
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?