Black v. USAA Financial Advisors, Inc. et al
Filing
41
MEMORANDUM OPINION AND ORDER granting 6 Motion to Change Venue. This case is transferred to the United States District Court for the Eastern District of Louisiana. Signed by District Judge Louis Guirola, Jr. on 2/26/2018 (wld)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
DR. ELLIOTT BLACK, III
PLAINTIFF
v.
CAUSE NO. 1:17CV150-LG-RHW
USAA FINANCIAL ADVISORS, INC.,
USAA INVESTMENT MANAGEMENT
DEFENDANTS
MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO TRANSFER VENUE
BEFORE THE COURT is the [6] Motion to Transfer Venue filed by USAA
Investment Management Company, in which USAA requests that this case be
transferred to the Eastern District of Louisiana on forum non conveniens grounds.
After a lengthy discovery period, the Motion has been fully briefed. The Court has
considered the briefs and the relevant law, and concludes that this case should be
transferred pursuant to 28 U.S.C. § 1404(a).
BACKGROUND
This is a declaratory judgment action filed by Dr. Elliott Black, III, to
establish the ownership of a brokerage account held by Defendant USAA
Investment Management Company. After removing the action from the Chancery
Court of Hancock County, Mississippi, USAA moves for a transfer of venue for
convenience to the Eastern District of Louisiana, arguing that the case is
predominated by issues relating to Louisiana law, residents, and witnesses.
Dr. Black has responded in opposition, arguing that the contractual choice of law is
Texas, the funds are held in Texas, many of the USAA witnesses are in Texas, and
he is a resident of Mississippi. Dr. Black contends that his choice of a Mississippi
forum should be given heavy weight.
The USAA brokerage account at issue was initially opened in 1995 by Dr.
Black’s parents, Elliott Black, Jr. and Billie Black, while they lived in Biloxi,
Mississippi. The account was held jointly, with rights of survivorship. Dr. Black’s
parents moved to Louisiana about ten years later, where Billie Black died in 2011.
In 2012, Dr. Black became the joint owner of the account with his father. In
February 2015, Dr. Black and his father sent a joint request to USAA that Dr.
Black be listed first on the account and Mr. Black second. They remained joint
tenants with rights of survivorship. About eighteen months later, Mr. Black died in
Louisiana. Dr. Black notified USAA and requested that his father’s name be
removed from the account. This lawsuit arose when USAA refused to follow Dr.
Black’s instructions or relinquish the funds to him, contending it was awaiting the
appropriate judgments of succession under Louisiana law.
DISCUSSION
USAA requests a transfer of venue pursuant to 28 U.S.C. § 1404. Section
1404(a) provides that “[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). The purpose of
Section 1404(a) is “to prevent the waste ‘of time, energy and money’ and ‘to protect
litigants, witnesses and the public against unnecessary inconvenience and
expense.’” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (quoting Cont’l Grain
Co. v. Barge F.B.L.-585, 364 U.S. 19, 26, 27 (1960)).
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1.
This Action Could Have Been Brought in the Eastern District of
Louisiana
Dr. Black does not consent to the transfer of venue. The Court therefore
must first determine whether the Eastern District of Louisiana is a district or
division where this case might have been brought. “A civil action may be brought 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). The Complaint asserts that
Dr. Black is and has at all relevant times been a resident of Hancock County,
Mississippi, and that USAA entered into a contract with him that was to be
performed in whole or part in Mississippi. No contacts with the Eastern District of
Louisiana are apparent from the Complaint. Thus, Dr. Black contends this action is
simply a breach of contract case that should be decided under Mississippi law.
USAA argues that the case could have been brought in the Eastern District of
Louisiana, since the events giving rise to the claim are changes to what was
initially Mr. Black’s account, which was sited in the Eastern District of Louisiana.
See Merrill Lynch, Pierce, Fenner & Smith Inc. v. Succession of Scott, No. Civ. A.
08-0819, 2009 WL 4405572, at *5 (W.D. La. Nov. 30, 2009) (“the situs of personal
(movable) property is the domicile of its owner and distribution of such property is
governed by the law of the domicile of the deceased owner.”).
The Court concludes that despite Dr. Black’s Mississippi residency, what is at
issue here is the ownership of Louisiana funds, and whether Dr. Black has a claim
to those funds. Dr. Black’s claim to the funds arises from changes to the account
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requested by Mr. Black. Thus, it appears that a substantial part of the events
giving rise to Dr. Black’s claims occurred in the Eastern District of Louisiana.
Accordingly, this case could have been brought in the Eastern District of Louisiana.
2.
The relevant factors weigh in favor of transferring this case to the
requested forum pursuant to 28 U.S.C. § 1404(a).
“[A] district court considering a § 1404(a) motion (or a forum non conveniens
motion) must evaluate both the convenience of the parties and various
public-interest considerations.” Atl. Marine Const. Co. v. U.S. Dist. Court for W.
Dist. of Texas, 134 S. Ct. 568, 581 (2013). The Fifth Circuit Court of Appeals holds
that a motion to transfer venue pursuant to § 1404(a) should be granted if “the
movant demonstrates that the transferee venue is clearly more convenient,” taking
into consideration (1) “the relative ease of access to sources of proof”; (2) “the
availability of compulsory process to secure the attendance of witnesses”; (3) “the
cost of attendance for willing witnesses”; (4) “all other practical problems that make
trial of a case easy, expeditious and inexpensive”; (5) “the administrative difficulties
flowing from court congestion”; (6) “the local interest in having localized interests
decided at home”; (7) “the familiarity of the forum with the law that will govern the
case”; and (8) “the avoidance of unnecessary problems of conflict of laws [or in] the
application of foreign law.” In re Radmax, Ltd., 720 F.3d 285, 288 (5th Cir. 2013)
(quoting In re Volkswagen of Am., Inc., 545 F.3d 304, 311 (5th Cir. 2008) (en banc)).
It appears that this action’s only nexus to Mississippi is Dr. Black’s residency
as the joint owner. USAA contends that it is necessary to investigate Mr. Black’s
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competency and the potential that Dr. Black exercised undue influence over his
father, and the identified fact witnesses on this issue are within the subpoena range
of the Eastern District of Louisiana. Furthermore, the Eastern District of
Louisiana is a more convenient travel destination for USAA’s employee witnesses
and Plaintiff’s brother, John Paul Black, who it intends to join as a party to this
action. The Court finds that the first four factors weigh in favor of transfer. See In
re Radmax, Ltd., 720 F.3d at 288.
The fifth factor is neutral, as there has been no suggestion that either court
has any administrative difficulties flowing from court congestion. See id. Because
Mr. Black’s home was in Louisiana, the sixth factor weighs in favor of transfer. The
Eastern Division of Louisiana would have some local interest in having localized
property interests decided at home. See id.
Both the seventh and eighth factors relate to the substantive law which will
be applied. See id. This is the area of greatest contention between the parties.
USAA argues that Louisiana law governing succession will apply to determine the
ownership of the account, and Louisiana does not recognize joint ownership with
rights of survivorship.
In Louisiana, funds deposited into a joint bank account remain the
property of its original owner and his or her estate at death, absent an
authenticate act of donation. The right of withdrawal, or having one’s
name listed on the account, is not tantamount to ownership.
In re Succession of Bella, 75 So. 3d 972, 975 (La. Ct. App. 2011) (internal citations
and quotation marks omitted). A joint account holder must prove his ownership of
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the funds deposited in a joint account. In re Succession of Elie, 50 So. 3d 262, 265
(La. Ct. App. 2010).
Dr. Black argues that it is error to presume that the funds will be passing
through Mr. Black’s estate rather than by operation of law. Dr. Black notes two
provisions in the Customer Account Agreement. The first, titled “Death of Joint
Owner,” states that upon the death of one joint tenant, all right title and interest in
the account “shall vest in the surviving joint owner(s).” (Def. Resp. Ex. L 7, ECF
No. 37-12) (ECF pagination). The second, titled “Governing Laws and Policies,”
states that the agreement and its enforcement is governed by the laws of Texas.
(Id. at 10) (ECF pagination). Dr. Black argues that under Texas probate law, the
“Death of Joint Owner” provision would prevent the account funds from becoming
part of Mr. Black’s Louisiana estate.
The Court starts with the principle that the situs of the funds in the account,
at least in regard to Mr. Black’s joint interest in the funds, was Louisiana at the
time of his death. With the addition of the principle that Louisiana does not allow
joint tenancy with rights of survivorship in funds on account, but requires proof of
ownership by the surviving joint owner, it appears that these funds might indeed go
through Dr. Black’s estate. It is the Court’s opinion that at the least, the question
will require an analysis of the interplay of the agreement provisions and Louisiana
law. Given the singular quality of Louisiana law, this is a task better suited to the
Eastern District of Louisiana.
Weighing the relevant factors, including giving “some weight” to Plaintiff’s
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initial choice of forum, see Atl. Marine Const. Co., 134 S. Ct. at 581 n.6, the Court
concludes that a transfer to the United States District Court for the Eastern
District of Louisiana would serve the convenience of parties and witnesses and
would otherwise promote the interest of justice. The Court will therefore grant the
defendant’s motion to transfer to that forum. To the extent the Court has not
addressed any of the parties’ arguments, it has considered them and determined
that they would not alter this result.
IT IS THEREFORE ORDERED AND ADJUDGED that the [6] Motion to
Transfer Venue filed by USAA Investment Management Company, is GRANTED.
IT IS FURTHER ORDERED AND ADJUDGED that this case is
TRANSFERRED to the United States District Court for the Eastern District of
Louisiana.
SO ORDERED AND ADJUDGED this the 26th day of February, 2018.
s/
Louis Guirola, Jr.
LOUIS GUIROLA, JR.
UNITED STATES DISTRICT JUDGE
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