SP Investment Fund I LLC v. Harold D. Lowry et al
Filing
36
MINUTES OF IN CHAMBERS - ORDER RE MOTION TO DISMISS, MOTION TO TRANSFER, AND MOTION TO REMAND by Judge Dolly M. Gee: The Court orders that: Plaintiff's Motion to Remand 21 is DENIED. Defendant's Motion to Transfer to the United States Dis trict Court for the Western District of New York 16 is GRANTED. Defendant's Motion to Dismiss for Lack of Personal Jurisdiction 13 is DENIED as moot. Case electronically transferred. (MD JS-6. Case Terminated.) Court Reporter: Not Reported. (gk) [Transferred from cacd on 2/12/2016.]
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.
Date
CV 15-6029 DMG (AGRx)
JS-6 / TRANSFER
February 11, 2015
Title SP Investment Fund I, LLC v. Harold D. Lowry, individually, and on
behalf of the Estate of Mary E. Lowry
Present: The Honorable
Page
1 of 12
DOLLY M. GEE, UNITED STATES DISTRICT JUDGE
KANE TIEN
Deputy Clerk
NOT REPORTED
Court Reporter
Attorneys Present for Plaintiff(s)
None Present
Attorneys Present for Defendant(s)
None Present
Proceedings: IN CHAMBERS—ORDER RE MOTION TO DISMISS, MOTION TO
TRANSFER, AND MOTION TO REMAND [13, 16, 21]
I.
PROCEDURAL BACKGROUND
On March 30, 2015, Plaintiff SP Investment Fund (“SP”) filed a complaint against
Defendant Harold Lowry individually and on behalf of the Estate of Mary E. Lowry for breach
of contract and conversion. (Notice of Removal, Ex. A (“Compl.”) [Doc. # 1-1].) The dispute
originates from a Purchase and Sale Agreement entered into by Lowry and SP in April of 2011.
(See Compl.)
On August 10, 2015, Mary Susan Morehouse, acting on behalf of the Estates of Harold
Lowry and Mary E. Lowry (“Defendant”), removed this case to this Court on the basis of
diversity jurisdiction. (Notice of Removal [Doc. # 1].)
On August 17, 2015, Defendant filed a motion to dismiss (“MTD”) for lack of personal
jurisdiction. [Doc. #13.] On September 4, 2015, SP filed an opposition (“MTD Opp.”). [Doc.
# 17.] On September 11, 2015, Defendant filed a reply (“MTD Reply”). [Doc. # 24.]
On August 17, 2015, Defendant filed a motion to transfer venue (“Transfer”) to the
United States District Court for the Western District of New York pursuant to 28 U.S.C.
§ 1404(a). [Doc. #16.] On September 4, 2015, SP filed an opposition (“Transfer Opp.”). [Doc.
# 19.] On September 11, 2015, Defendant filed a reply (“Transfer Reply”). [Doc. # 28.]
On September 9, 2015, SP filed a motion to remand (“Remand”), claiming that the forum
selection clause signed by both parties mandates this Court to remand the action to the Los
Angeles County Superior Court. [Doc. # 21.] On September 25, 2015, Defendant filed an
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CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
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CV 15-6029 DMG (AGRx)
Date
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Title SP Investment Fund I, LLC v. Harold D. Lowry, individually, and on
behalf of the Estate of Mary E. Lowry
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opposition (“Remand Opp.”). [Doc. #31.] On September 28, 2015, SP filed a reply (“Remand
Reply”). [Doc. #32.]
On October 8, 2015, the Court took the matters under submission, deeming them
appropriate for decision without oral argument. [Doc. # 35.] For the reasons stated herein, SP’s
motion to remand is DENIED; Defendant’s motion to transfer to the Western District of New
York is GRANTED; and Defendant’s motion to dismiss is DENIED as moot.
II.
FACTUAL BACKGROUND
SP is a California limited liability company doing business in Los Angeles County,
California. (Compl. ¶ 1.) At the time of his death and at all times relevant to the allegations in
the complaint, Lowry resided in and was a citizen of the State of New York. (Declaration of
Mary Susan Morehouse in support of Motion to Dismiss (“Morehouse MTD Decl.”) ¶ 2 [Doc. #
14].) Lowry passed away on October 24, 2014, and his daughter, Mary Susan Morehouse, is the
executrix of his estate. (Id.)
On April 5, 2011, Gil Seton, Jr., the manager of SP, sent a letter to the Estate of Mary E.
Lowry (“Estate”), care of Harold Lowry, soliciting the sale of a 0.91655% limited partnership
interest (“Partnership Interest”) in Newport Highlands Associates (“NHA”). (Declaration of
Susan Morehouse in Support of Motion to Transfer (“Morehouse Transfer Decl.”), Ex. 2
(“Solicitation Letter”) [Doc. #25.].) NHA is a New York limited partnership which owns lowincome residential rental property in New York. (Compl. ¶ 5.)
On April 8, 2011, SP sent Lowry a Purchase and Sale Agreement to sell SP all rights and
claims related to the Partnership Interest for $2,300. (Compl, Ex. A. (“Agreement”) at 1 [Doc. #
1-1].) Prior to sending the Agreement, Seton spoke with Lowry by telephone on more than one
occasion. (Declaration of Gil Seton, Jr. in Opposition to Motion to Transfer (“Seton Transfer
Decl.”) ¶ 2 [Doc. # 20].) During these telephone conversations, Lowry asked specific questions
about the Agreement, and, according to Seton, did not demonstrate any signs of dementia or lack
of understanding. (Id.) Lowry signed the Agreement on April 13, 2011 on behalf of himself and
the Estate. (Id. at 1, 3.) On or about April 8, 2011, SP paid Lowry $2,300, pursuant to the
Agreement. (Compl. ¶ 6; see also Seton Transfer Decl. ¶ 3, Ex. B.) Lowry was 83 years old at
the time the Agreement was executed. (See Morehouse MTD Decl., Ex. 1 (“Certificate of
Death”) [Doc. # 14-1].)
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The Agreement states, inter alia, that the Seller had a limited time period during which to
obtain any approvals, consents, or other actions of the Partnership that were necessary for SP to
receive the full benefits of the Partnership Interest (“Necessary Approvals”). (Agreement ¶ 1.m.)
The Agreement also states that the Seller has the full right, power, and authority to transfer the
partnership interest to the Buyer, subject to the Buyer obtaining any Necessary Approvals. (Id. ¶
4.e.) The Agreement states that the Buyer’s obligation to “close” the deal is conditioned upon
several “Conditions Precedent” which include the requirement that the Necessary Approvals
have been obtained or are no longer necessary and that the Seller has performed his obligations
under the Agreement. (Id. ¶ 8.) The Agreement provides for the possibility of closing without
the Necessary Approvals under certain conditions, including that the Buyer or Seller continue to
seek the Necessary Approvals or that the Buyer simply elect to accept the Assignment without
the Necessary Approvals. (Id. ¶ 10.)
Lowry was diagnosed with moderately severe Alzheimer’s dementia in 2007.
(Morehouse MTD Decl. ¶ 4.) By 2011, his dementia had become worse, and his memory was
very faulty. (Id.) Lowry’s tendency to become confused and forgetful was first brought to the
attention of his doctor, Dr. B. Tarantino of the Rochester Medical Group, by his family in
January of 2011. (Morehouse Transfer Decl., Ex. 1 (“Tarantino Note”) [Doc. # 25-1].) Around
that time, Lowry was given a CT brain scan, which showed evidence of small vessel ischemia
which can contribute to dementia. (Id.) Tarantino’s office notes in January and February of
2011 document that Lowry seemed confused and was forgetful. (Id.) In February, 2011, Lowry
was given medication for his dementia. (Id.) He did not tolerate the first therapy, and
discontinued it after the first month. (Id.) In April, 2011, Lowry started a new medication for
his dementia. (Id.) Lowry’s cognitive status did not show significant improvement after he
started the second therapy, and the Alzheimer’s dementia continued to cause him to have
cognitive and memory deficits and poor judgment. (Id.) Lowry’s condition was permanent and
continued to progress and worsen until his death on October 24, 2014. (Id.)
In April, 2011, Morehouse learned that her father had executed the Agreement purporting
to transfer the Partnership Interest. (Morehouse MTD Decl. ¶ 5.) She subsequently contacted
NHA and was informed that the interest in NHA could not be transferred without NHA’s
consent. (Id. ¶ 6.) On April 12, 2011, the attorney for NHA sent a letter to Seton stating that,
pursuant to the Limited Partnership Agreement, limited partners are not permitted to transfer
their partnership interest without the consent of the Operating General Partner (“OGP”), and any
transferee who proposed to acquire an interested of a limited partner is also subject to the consent
of the OGP. (Seton Transfer Decl., Ex. C (“NHA Letter”) [Doc. # 20-3].) The letter stated that
the OGP would not consent to any transfers of limited partner interest or entry of any new
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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
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Title SP Investment Fund I, LLC v. Harold D. Lowry, individually, and on
behalf of the Estate of Mary E. Lowry
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limited partners. (Id.) The letter stated that NHA would not provide copies of recent financial
reports, as such reports contained confidential personal information of NHA’s Limited Partners,
and that NHA’s counsel had not been able to locate any authorization for SP to do business in
New York State. (Id.)
On September 15, 2011, Morehouse sent a letter to Seton regarding the Agreement, and
requested that SP return Lowry’s Partnership Interest in exchange for a refund of the $2,300.
(Morehouse MTD Decl. ¶ 7, Ex. 4.) The letter stated that Morehouse had the Power of Attorney
for Lowry, and that, at the time SP offered to buy the Limited Partnership, Lowry suffered from
mild dementia and was not capable of being responsible for his own financial decisions. (Id.)
Morehouse stated in the letter that when Lowry saw the Agreement letter, he believed it to be an
offer from NHA to buy back his Partnership Interest. (Id.) Morehouse stated that Lowry signed
the Agreement and deposited the check without consulting anyone, and, in doing so, did not
remember that he was not allowed to sell his interest without NHA’s permission. (Id.) The letter
also stated that, because of Lowry’s age and condition, and her suspicion that SP knew of the
requirement that NHA agree to the sale when soliciting Lowry, Morehouse had contacted the
New York State Attorney General’s Office, and that the case was now under investigation. (Id.)
The letter stated that Morehouse had also contacted her father’s attorney, and he was similarly
concerned that this was a case of fraud. (Id.)
Throughout the remainder of 2011 and 2012, Seton, Morehouse, and Lowry’s attorney
exchanged numerous letters regarding the Agreement. (See Seton Transfer Decl., Exs. E-M.) In
spite of the disagreement over the validity of the Agreement, Seton sent a letter to Lowry dated
June 29, 2012 (“June 29 Letter”), in which he stated that, while the Necessary Approvals for the
transfer of the Partnership Interest had not yet been obtained, SP was electing to close the
transaction, and that Lowry would be obligated to immediately turn over all benefits related to
the Partnership to SP while continuing to seek the Necessary Approvals.1 (Seton Transfer Decl.,
Ex. H.) The letter stated that the closing would be effective as of June 29, 2012, the date of the
letter, and that as a result SP would be entitled to all income, loss, distributions, and proceeds
received from the Partnership Interest, even if Lowry’s name remained on the Partnership
Interest. (Id.) The letter stated that, in the future, Lowry would be obligated to vote as SP
directed in any decisions related to the Partnership. (Id.)
1
Seton’s June 29, 2012 letter appears to entirely ignore the fact that the Necessary Approvals not only had
not been obtained, but would, in fact, be impossible to obtain, given that NHA had previously informed SP that they
had not and would not grant the required approval for Lowry to sell or transfer his Partnership Interest. (See NHA
Letter.) The Court notes that this undermines any assertion that SP was engaged in good faith negotiations with
Lowry.
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CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.
Date
CV 15-6029 DMG (AGRx)
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The Agreement contains a forum selection clause and a choice-of-law clause, both of
which are relevant to SP’s motion to remand and Defendant’s motions to dismiss and transfer.
The Agreement states that:
The Agreement shall be governed by and construed under the laws of the State of
California. The parties consent to the jurisdiction of Los Angeles Superior Court of the
State of California to decide all disputes arising out of the Agreement. Seller waives any
claim that the Los Angeles Superior Court is an inconvenient forum or lacks jurisdiction
over Seller.
(Id. ¶ 11.)
Before this Court can evaluate Morehouse’s motions to transfer and dismiss, the Court
must first determine whether the removal based on diversity jurisdiction was proper and whether
the Agreement’s forum selection clause requires that this Court remand the case.
III.
DISCUSSION
A.
Motion to Remand
Morehouse removed this case from Los Angeles Superior Court on the basis of diversity
jurisdiction. (Notice of Removal.) SP has moved to remand the case on the basis that the forum
selection clause obligates the parties to litigate in Los Angeles Superior Court.
1.
Removal
A defendant may remove an action brought in state court to a federal district court where
the action is pending if the district court has original jurisdiction over the action. 28 U.S.C.
§ 1441. “The burden of establishing federal subject matter jurisdiction falls on the party
invoking removal.” Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 944
(9th Cir. 2009) (internal quotation marks omitted). There is a “strong presumption against
removal jurisdiction,” and courts must reject it “if there is any doubt as to the right of removal in
the first instance.” Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d
1102, 1107 (9th Cir. 2010) (internal quotation marks omitted.)
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CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.
CV 15-6029 DMG (AGRx)
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A district court shall have subject matter jurisdiction over a civil action where the matter
in controversy exceeds the sum or value of $75,000 and there is complete diversity of citizenship
between the parties. 28 U.S.C. § 1332.
Until the time of his death, Lowry was a resident and citizen of the State of New York at
all times relevant. Morehouse is a citizen of the State of New York and, in any event, as the
legal representative of Lowry’s Estate, is “deemed to be a citizen only of the same State as the
decedent.” 28 U.S.C. § 1332(c)(2). SP is incorporated in and/or its place of business is in the
State of California. (Compl. ¶ 1.) SP’s complaint specifies that it is seeking $145,000 in
damages. (Id. ¶ 19.) Defendant has met her burden of demonstrating that this Court has
diversity jurisdiction over this action, and that removal to this Court was proper.
2.
Forum Selection Clause
SPI contends that this case should be remanded because the forum selection clause
indicates that Los Angeles Superior Court is the exclusive forum in which the parties may
litigate any disputes arising out of the Agreement. (Remand at 6.) Lowry asserts that the forum
selection clause is permissive, and remand is therefore not required. (Remand Opp. at 2.)
In diversity jurisdiction cases, federal law applies to the interpretation of forum selection
clauses. Manetti–Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 513 (9th Cir.1988) (“We
conclude that the federal procedural issues raised by forum selection clauses significantly
outweigh the state interests, and the federal rule . . . controls enforcement of forum clauses in
diversity cases.”). In ruling on a motion to enforce a forum selection clause, a court need not
accept the pleadings as true, and facts outside the pleadings may be properly considered. Am.
Home Assurance Co. v. TGL Container Lines, Ltd., 347 F. Supp. 2d 749, 755 (N.D. Cal. 2004)
(internal citation omitted). The trial court must, however, draw all reasonable inferences and
resolve all factual conflicts in favor of the non-moving party. Id. (internal citation omitted).
A forum selection clause may be either mandatory or permissive. If a venue is specified
with mandatory language, a forum selection clause will generally be enforced. Docksider, Ltd. v.
Sea Tech., Ltd., 875 F.2d 762, 764 (9th Cir. 1989). “To be mandatory, a clause must contain
language that clearly designates a forum as the exclusive one.” N. Cal. Dist. Council of Laborers
v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1037 (9th Cir. 1995). “When only jurisdiction
is specified the clause will generally not be enforced without some further language indicating
the parties’ intent to make jurisdiction exclusive.” Docksider, 875 F.2d at 764.
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UNITED STATES DISTRICT COURT
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The primary rule of contract interpretation is that words will be given their common or
ordinary meaning. Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77 (9th Cir. 1987)
(internal quotations omitted). In this case, the plain language of the Agreement contains no
mandatory or exclusive language regarding venue. The Agreement states that the “parties
consent to the jurisdiction of Los Angeles Superior Court of the State of California to decide all
disputes arising out of the Agreement.” (Agreement ¶ 11.) This clause indicates that the parties
consent to the jurisdiction of Los Angeles Superior Court, but contains no language designating
it as the only forum for relevant disputes. See Hunt, 817 F.2d at 77 (forum selection clause
permissive where agreement stated that “Orange County courts shall have jurisdiction over this
action.”). Here, the plain language of the clause indicates that it is permissive, not mandatory.
Even if the Court found this language to be ambiguous (which it does not), “[a]nother
fundamental rule of contract interpretation is that where language is ambiguous the court should
construe the language against the drafter of the contract.” Hunt, 817 F.2d at 78. Construing the
language against SP, the Court would conclude that the clause does not provide for an exclusive
forum.
SP’s motion to remand on the basis of the forum selection clause is therefore DENIED.
B.
Motion to Transfer Venue
“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.”
28 U.S.C. § 1404(a). A motion to transfer venue lies within the broad discretion of the district
court, and must be determined on an “individualized, case-by-case consideration of convenience
and fairness.” Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000) (quoting
Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988)).
Defendant bears the burden to prove that the transfer forum is more convenient, rather than
“equally convenient or inconvenient.” Van Dusen v. Barrack, 376 U.S. 612, 646, 84 S. Ct. 805,
824, 11 L. Ed. 2d 945 (1964).
In determining whether a transfer is proper, a court must follow a two-step analysis.
First, as a threshold question, the court must consider whether the case could have been brought
in the forum the moving party seeks to transfer the case. Hatch v. Reliance Ins. Co., 758 F.2d
409, 414 (9th Cir. 1985). Second, a court must consider both private factors, which go to the
convenience of the parties and witnesses, and public factors, which go to the interests of justice.
CV-90
CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.
CV 15-6029 DMG (AGRx)
Date
JS-6 / TRANSFER
February 11, 2015
Title SP Investment Fund I, LLC v. Harold D. Lowry, individually, and on
behalf of the Estate of Mary E. Lowry
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The Action Could Have Been Brought in the Alternative Forum
Lowry and Morehouse are both residents and citizens of the State of New York, and the
events giving rise to the dispute took place in New York. Therefore, this action could initially
have been filed in the Western District of New York.
2.
Private Factors
In evaluating convenience and fairness, a court may consider the following private
factors: (1) the location where the relevant agreements were negotiated and executed; (2) the
state that is most familiar with the governing law; (3) the plaintiff’s choice of forum; (4) the
respective parties’ contacts with the forum; (5) the contacts relating to the plaintiff’s cause of
action in the chosen forum; (6) the differences in the costs of litigation in the two fora; (7) the
availability of compulsory process to compel attendance of unwilling non-party witnesses; and
(8) the ease of access to sources of proof. Jones, 211 F.3d at 498-99 (citing Stewart, 487 U.S. at
29-31; Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1987)).
a.
The Location of Agreement Negotiation and Execution
The parties appear to have negotiated and executed the Agreement by telephone and mail
from their respective residences and corporate headquarters in New York and California. There
is no indication that either party travelled outside of their home state for the negotiation or
execution of the Agreement. Therefore, both California and New York may be considered
locations where the Agreement was negotiated, and this factor is neutral as to transfer. See, e.g.,
W. Marine, Inc. v. Watercraft Superstore, Inc., No. C11-04459 HRL, 2012 WL 479677, at *8
(N.D. Cal. Feb. 14, 2012) (where the contract at issue was negotiated entirely through phone
calls and emails, the location of negotiation and execution factor was neutral).
Some courts have noted that, in assessing this factor, the contract may be considered to
have been formed “in the place where the last act occurred necessary to give the contract binding
effect under the forum’s rules of offer and acceptance.” Ezieme v. Ward Int’l Trading, Inc., No.
CV 08-6748 PSG JWJx, 2009 WL 2818394, at *6 (C.D. Cal. Aug. 31, 2009) (contract formed in
California where last party to sign the agreement signed in California). In this instance, while
the parties dispute whether the Agreement is valid, the last act in the formation of the Agreement
occurred when Lowry signed the contract in New York. This weighs slightly in favor of a
transfer of venue.
CV-90
CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.
CV 15-6029 DMG (AGRx)
Date
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Title SP Investment Fund I, LLC v. Harold D. Lowry, individually, and on
behalf of the Estate of Mary E. Lowry
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Familiarity with Applicable Law
The Agreement provides that California law will be the choice of law in case of dispute.
(Agreement ¶ 11.) Because district courts sitting in California are generally more familiar with
California law than courts sitting in New York, this factor weighs slightly against transfer. See
Burger King, 471 U.S. at 481-82.
Given that the crux of the dispute is whether or not Lowry’s dementia made him capable
of contracting, however, “it seems likely the resolution of this action will depend less on
expertise in California law and more on the court’s fact-finding function.” Hawkins v. Gerber
Products Co., 924 F. Supp. 2d 1208, 1216 (S.D. Cal. 2013). Thus, the familiarity of the law
factor carries less weight. Id. (familiarity with applicable law factor neutral where the facts, not
the law, were most central to the case).
c.
Plaintiff’s Choice of Forum
SP has chosen to litigate this action in California. Generally, a plaintiff’s choice of forum
will not be disturbed absent a showing that the convenience and justice factors weigh strongly in
favor of transfer. Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F. Supp. 2d 1109,
1131 (C.D. Cal. 2009) (internal citations omitted). The deference afforded a plaintiff’s choice of
forum is substantially reduced, however, when the venue lacks a significant connection to the
activities alleged in the complaint. See Pacific Car & Foundry Co. v. Pence, 403 F.2d 949, 954
(9th Cir. 1968) (“If the operative facts have not occurred within the forum of original selection
and that forum has no particular interest in the parties or the subject matter, the plaintiff’s choice
is entitled only to minimal consideration.”); see also Pfeiffer v. Himax Technologies, Inc., 530 F.
Supp. 2d 1121, 1126 (C.D. Cal. 2008) (“the Central District has little connection to the operative
facts, the parties, or the subject matter of the action and . . . as a result, plaintiff’s choice of
forum is entitled to only minimal consideration.”).
Here, the only connection SP has to the venue is that its principal place of business is in
California. There is no evidence from either party that Lowry was physically present in
California at any time relevant to the signing or executing of the Agreement. The Agreement
was signed in New York, NHA is located in New York, and evidence related to the validity of
the Agreement, namely evidence from Dr. Tarantino and Lowry’s family members, is also
located in New York. In sum, because California lacks a significant connection to the activities
alleged in the complaint, this factor weighs only minimally against transfer.
CV-90
CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.
CV 15-6029 DMG (AGRx)
Date
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Title SP Investment Fund I, LLC v. Harold D. Lowry, individually, and on
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The Parties’ Contacts with the Chosen Forum
As discussed above, the entire negotiation and execution of the Agreement was via phone
calls and mail. The only contact SP has to this forum is by virtue of its place of business and
place of incorporation. Lowry, on the other hand, was not a resident of California and made no
physical contact with California for the purpose of negotiating or executing the Agreement.
Lowry resided in New York at all relevant times, and Morehouse resides there now.
By sending a solicitation letter to Lowry, SP had at least some contact with New York,
while Lowry had none with California. See CFA N. Cal., Inc. v. CRT Partners LLP, 378 F.
Supp. 2d 1177, 1183 (N.D. Cal. 2005) (soliciting or engaging in business in forum state a factor
in considering the extent of a party’s contacts). Therefore, this factor weighs in favor of transfer.
e.
Differences in Litigation Costs
Neither party provides any evidence demonstrating any differences in litigation costs
between the Central District of California and the Western District of New York. Thus, this
factor is neutral.
f.
Availability of Compulsory Process to Compel Attendance of
Unwilling Non-Party Witnesses
SP has provided no indication of potential unwilling non-party witnesses it might wish to
call at trial. On the other hand, Morehouse identifies one non-party witness, namely Dr.
Tarantino, but fails to show why he would be an “unwilling” witness. This factor is, therefore,
neutral.
g.
Ease of Access to Sources of Proof
The ease of access to proof weighs considerably in favor of a transfer of venue. Lowry’s
primary physician, Dr. Tarantino, is located in New York. His testimony is likely to be critical
in establishing whether or not Lowry’s dementia renders the Agreement invalid, and SP will
likely wish to depose him. The convenience of non-party witness, such as Dr. Tarantino, is
“often the most important factor to be considered in ruling on a motion under [section] 1404(a).”
Saleh v. Titan Corp., 361 F. Supp. 2d 1152, 1160 (S.D. Cal. 2005) (holding that convenience of
the non-party witnesses weighs heavily in favor of transfer and was sufficient reason to grant a
transfer).
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CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.
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Because Lowry was a resident of New York, additional and potential evidence or
witnesses pertaining to his capacity to contract will likely be in New York. Any witnesses from
NHA itself are likely to be located in New York, and any activities related to the Partnership
Interest are likely to have occurred in New York. SP suggests no sources of proof originating
from California. In sum, New York provides a greater ease of access to evidence than
California. Accordingly, this factor strongly favors transfer.
3.
Public Factors
Relevant public interest considerations include degrees of court congestion, local interest
in deciding local controversies, potential conflicts of laws, and burdening citizens of an unrelated
forum with jury duty.” Brackett v. Hilton Hotels Corp., 619 F. Supp. 2d 810, 821 (N.D. Cal.
2008) (citing Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986)).
These public factors are largely neutral, in this case. Both California and New York have
an interest in deciding this action as SP and Lowry are citizens of their respective states. There
is no evidence of court congestion, conflicts of laws, or risk of burdening citizens of an unrelated
forum with jury duty. The public factors, therefore, are neutral as to transfer.
4.
Balancing of Private and Public Factors
In sum, three private factors discussed above are neutral; two weigh against transfer, but
given little weight; and three favor transfer, one of them strongly. The public interest factors are
neutral. Having weighed the factors, the Court concludes that transfer to the Western District of
New York is appropriate, particularly in light of the greater access to evidence and convenience
of the relevant witnesses. See Vu v. Ortho-McNeil Pharm., Inc., 602 F. Supp. 2d 1151, 1157
(N.D. Cal. 2009) (granting motion to transfer where transfer forum more convenient for
witnesses and provided greater ease of access to evidence and events giving rise to action
occurred in transfer forum). The Court, therefore, GRANTS Defendant’s motion to transfer to
the Western District of New York.
C.
Motion to Dismiss
Because the Court grants Defendant’s motion to transfer, the Court needs not address
Defendant’s motion to dismiss for lack of personal jurisdiction. Accordingly, Defendant’s
motion to dismiss is DENIED as moot.
CV-90
CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.
CV 15-6029 DMG (AGRx)
Date
JS-6 / TRANSFER
February 11, 2015
Title SP Investment Fund I, LLC v. Harold D. Lowry, individually, and on
behalf of the Estate of Mary E. Lowry
Page
12 of 12
IV.
CONCLUSION
In light of the foregoing, the Court orders that:
1.
SP’s motion to remand is DENIED;
2.
Defendant’s motion to transfer to the United States District Court for the Western
District of New York is GRANTED; and
3.
Defendant’s motion to dismiss for lack of personal jurisdiction is DENIED as
moot.
IT IS SO ORDERED.
CV-90
CIVIL MINUTES—GENERAL
Initials of Deputy Clerk KT
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