KUEHNE CHEMICAL COMPANY, INC. v. ADEX INTERNATIONAL, INC.
OPINION fld. Signed by Judge William J. Martini on 11/5/15. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
KUEHNE CHEMICAL COMPANY, INC.,
Civ. No. 2:14-05630 (WJM)
ADEX INTERNATIONAL, INC.
WILLIAM J. MARTINI, U.S.D.J.:
Plaintiff Kuehne Chemical Company, Inc. (“Kuehne”) brings this action alleging
fraud, conversion, breach of fiduciary duty, unjust enrichment, promissory estoppel,
indemnity, and intentional interference with contractual relations against Adex
International, Inc. (“Adex”). This matter comes before the Court on Adex’s motion to
dismiss for improper venue under Fed. R. Civ. P. 12(b)(3) or the doctrine of foreign non
conveniens. Alternatively, Adex moves to transfer this case to the Southern District of
Florida. For the reasons stated below, the Court will transfer this action to the Southern
District of Florida.
Unless otherwise stated, the following facts are alleged in the complaint. In 2011,
Plaintiff Keuhne, a New Jersey company, entered into a contract (“the EPC Contract”) with
non-party Conve AVS Vega Mesa LLC (“CAVM”) – a Florida limited liability company
– to construct a bleach manufacturing facility in South Kearny, New Jersey (“the Project”).
The EPC Contract provided that Kuehne would pay CAVM approximately $11 million for
minor equipment needed for the Project. While Defendant Adex was not a party to the
EPC Contract, it entered into a separate agreement (“the Agreement”) with CAVM under
which Adex would procure minor equipment as defined in the EPC Contract. CAVM
entered into the Agreement with Adex because it believed that Adex could obtain minor
equipment at a discount. In light of the Agreement, the EPC Contract provided that Kuehne
would submit minor equipment payments directly to Adex rather than CAVM.
The complaint alleges that Kuehne agreed to this arrangement only after Adex
assured that it (i) would receive Kuehne’s payments based on actual purchase orders from
vendors; (ii) would make payment to vendors for the total amount received by Kuehne;
(iii) would not mark-up purchase orders or receive any amount as a fee for compensation;
and (iv) would accept as its sole compensation savings realized on the purchases of minor
equipment. Limited venue-related discovery shows that Adex representatives gave these
assurances to Kuehne representatives at an October 2010 meeting that took place in South
Kearny, New Jersey.
The complaint alleges that contrary to its representations, Adex (1) marked up its
purchase orders; (2) did not pay vendors in full; and (3) submitted invoices to Kuehne for
purchase orders it did not place. Accordingly, Kuehne alleges the following causes of
action against Adex: (1) fraud; (2) conversion; (3) breach of fiduciary duty; (4) unjust
enrichment; (5) promissory estoppel; (6) common law indemnity; and (7) intentional
interference with existing contractual relationships. CAVM has also sued Adex in Florida
state court, and has similarly accused Adex of wrongdoing in connection with the
Agreement and the EPC Contract.
While conceding that the initial meeting between Kuehne and Adex took place in
New Jerey, Adex argues that New Jersey is not a proper venue and that the complaint
should be dismissed under Fed. R. Civ. P. 12(b)(3) or the doctrine of foreign non
conveniens. Alternatively, Adex moves for transfer of this case to the Southern District of
Florida. 1 In opposition, Kuehne contends that the District of New Jersey is a proper venue.
Federal Rule of Civil Procedure 12(b)(3) provides for a motion to dismiss for
improper venue. Fed. R. Civ. P. 12(b)(3). “Venue” is defined by statute at 28 U.S.C. §
1391, which sets forth where venue may properly be laid. Under 28 U.S.C. § 1391(b), a
civil action may be brought only in (1) a judicial district where any defendant resides, if
all defendants reside in the same state; (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 the
property that is the subject of the action is situated; or (3) a judicial district in which any
defendant may be found, if there is no district in which the action may otherwise be
brought. 28 U.S.C. § 1391(b). “In many cases . . . a plaintiff may properly file his action
in more than one venue.” Nat’l Micrographics Sys., Inc. v. Canon U.S.A., Inc., 825 F.
Supp. 671, 679 (D.N.J. 1993).
Adex also submits that if the case does remain in New Jersey, CAVM should be joined as a party. Adex further
argues that Kuehne has failed to state a claim upon which relief can be granted.
Because a substantial part of the events or omissions giving rise to Kuehne’s claims
occurred in New Jersey, the Court finds that venue is proper here. Venue-related discovery
has revealed that Adex made its alleged misrepresentations to Kuehne a meeting that took
place in South Kearny, New Jersey. Therefore, at least with respect to Kuehne’s fraud
claim, New Jersey is a proper venue. See, e.g., Fox v. Dream Trust, 743 F.Supp.2d 389,
396 (D.N.J. 2010) (where claims arise out of injurious misrepresentations conveyed within
a forum, venue is proper in that forum); Leone v. Cataldo, 574 F.Supp.2d 471, 485 (E.D.Pa.
2008) (venue proper in district where alleged misrepresentations were made). Similarly,
Kuehne received the allegedly fraudulent invoices from Adex in New Jersey. See Itche
Corp. v. G.E.S. Bakery, Inc., No. 08-CV-3103, 2008 WL 4416457, (D.N.J. Sept. 24, 2008)
(venue proper in forum where billing statements were received). Therefore, venue is
Adex argues that even if venue is proper under Rule 12(b)(3), the case should be
dismissed under the doctrine of forum non conviens, or alternatively, transferred to the
Southern District of Florida. As other courts in this circuit have done, the Court will
interpret Adex’s request for a transfer as a request made pursuant to 28 U.S.C. §1404. See
Jaff & Hough, P.C. v. Baine, No. 09-3000, 2010 WL 844748, *4 (E.D.Pa. March 10, 2010)
(citing Sinochem Int’l Co. v. Malay. Int’l Shipping Corp. 549 U.S. 422, 430 (2007)).
28 U.S.C. §1404 provides that “[f]or the convenience of the parties and the
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.” Adex is a Florida corporation with
its principle place of business in Florida; it is therefore readily apparent that this case could
have been filed against Adex in Florida. See, e.g., Yang v. Odom, 409 F.Supp.2d 599, 604
(D.N.J. 2006) (citing Shutte v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir. 1970).
Having found that this action could have been brought in Florida, the Court must
now determine whether transfer is appropriate by considering both the private and public
interests. Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995) (internal citations
omitted). Private interests include plaintiff’s forum preference as manifested in the original
choice; the defendant’s preference; whether the claim arose elsewhere; the convenience of
the parties as indicated by their relative physical and financial condition; the convenience
of the witnesses—but only to the extent that the witnesses may be unavailable for trial in
one of the fora; and the location of books and records. Id. Public interests include
enforceability of the judgment; practical considerations that could make trial easy,
expeditious, or inexpensive; the relative administrative difficulty each fora would face due
to court congestion; the local interest in deciding local factors at home; the public policy
of the fora; and the familiarity of the judge with the applicable state law in diversity cases.
The Court finds that the private factors favor transfer to the Southern District of
Florida. In doing so, the Court acknowledges that a plaintiff’s choice of venue should not
be lightly disturbed. Danka Funding, L.L.C. v. Page, Scrantom, Sprouse, Tucker & Ford,
P.C., 21 F.Supp.2d 465, 474 (D.N.J. 1998) (citing Jumara, 55 F.3d at 879)). However, the
unique circumstances of this case require that this case be transferred to Florida. First and
foremost, non-party CAVM has already sued Adex in Florida state court, similarly alleging
that Adex committed wrongdoing in connection with the Agreement and the EPC Contract.
Transfer of venue is likely appropriate where a closely related lawsuit has already been
filed in a different geographic location. See, e.g., Garlick v. Quest Diagnostics, Inc., No.
06-6224, 2010 WL 1490923, *3 (D.N.J. Apr. 13, 2010) (transferring case to Pennsylvania
where party was already defending similar suit in Pennsylvania state court); CIBC World
Markets, Inc. v. Deutsche Bank Securities, Inc., 309 F.Supp.2d 637, 650 (D.N.J. 2004)
(“[r]equiring [defendants] to defend factually and legally related cases in both Minnesota
and New Jersey would definitely cause them inconvenience that could be eliminated if the
case were transferred.”); In re Amkor Technology, Inc. Sec. Litig., No. 06-298, 2006 WL
3857488, *6 (W.D.Pa. Dec. 28, 2006) (“A compelling factor in favor of transferring venue
in this case to the District of Arizona is that there are currently two cases pending in
Arizona – one in federal court and the other in state court – that address the same matter.”)
Indeed, if the Court were to keep this case in New Jersey, Adex, CAVM, and minor parts
vendors would be simultaneously engaged in two substantially similar lawsuits occurring
at opposite ends of the eastern seaboard.
Moreover, while Adex made its alleged misrepresentations to Kuehne in New
Jersey, other aspects of Kuehne’s complaint is more largely connected to Florida. For
example, much of Kuehne’s complaint is grounded in allegations that Adex committed
misconduct when acting as a middleman between CAVM, a Florida company, and
numerous minor parts vendors, many of which are also based in Florida. Therefore, not
only did much of the alleged wrongdoing in this case occur in Florida, many of the relevant
documents and other evidence are also located in Florida.
Public factors similarly weigh in favor of transfer. Practical considerations indicate
that it would be more expeditious to try this case in the geographic location where CAVM’s
lawsuit is already pending. If this case were not transferred, numerous witnesses would be
required to travel back and forth to participate in two litigations taking place in different
parts of the country. This scenario would not only impose a serious inconvenience on those
witnesses, it would also cause significant scheduling delay issues that would hinder this
Court’s ability to move the case along expeditiously. In light of those circumstances, both
the public and private factors favor transferring this case to the Southern District of Florida.
While there is enough of a connection between Kuehne’s claims and New Jersey to
withstand a Rule 12(b)(3) motion, transfer to the Southern District of Florida is nonetheless
appropriate. This case could have been brought in Florida, many of the operative facts
occurred in Florida, most of the non-party witnesses are in Florida, important documents
are in Florida, and perhaps most importantly, a lawsuit arising out of the same subject
matter has already been filed in Florida. The case will therefore be transferred to the
Southern District of Florida.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: November 5, 2015
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