SALEM HOMES OF FLORIDA, INC. v. RES-CARE, INC.

Filing 24

MEMORANDUM OPINION AND ORDER, signed by MAG/JUDGE L. PATRICK AULD on 11/2/2018. that the Transfer Motion (Docket Entry16) is DENIED. (Butler, Carol)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

SALEM HOMES OF FLORIDA, INC.,
Plaintiff,
v.
RES-CARE, INC.,
Defendant.

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1:18cv290

MEMORANDUM OPINION AND ORDER
This case comes before the Court on the Motion to Transfer
(Docket Entry 16) (the “Transfer Motion”) filed by Res-Care, Inc.
(the “Defendant”) “[p]ursuant to 28 U.S.C. § 1404(a)” (id. at 1).1
Through the Transfer Motion, Defendant seeks “entry of an Order
transferring this case to the Middle District of Florida” (id.),
as, in Defendant’s view, “the Middle District of Florida has by far
the most significant connection to this lawsuit” (id. at 2).
Because, as explained below, Defendant has not shown that venue
exists in the Middle District of Florida, the Court will deny the
Transfer Motion.2

1 Citations herein to Docket Entry pages utilize the CM/ECF
footer’s pagination.
2 As the Transfer Motion involves a non-dispositive matter,
the undersigned United States Magistrate Judge will issue an order
rather than a recommendation on this motion.
See, e.g., IHFC
Props., LLC v. APA Mktg., Inc., 850 F. Supp. 2d 604, 622 (M.D.N.C.
2012) (explaining that “a Magistrate Judge is ordinarily authorized
to issue an order resolving a non-dispositive question such as a
motion to transfer venue under section 1404(a)”); Brown v. Wells
Fargo, N/A, No. 1:11cv686, 463 B.R. 332, 334 n.1, 2011 WL 5325599,
at *1 n.1 (M.D.N.C. Nov. 6, 2011) (collecting cases).

BACKGROUND
In

February

“Plaintiff”)

2018,

filed

a

Salem

lawsuit

Homes

of

against

Florida,

Defendant

in

Inc.
the

(the
North

Carolina General Court of Justice for Forsyth County, Superior
Court Division.

(See Docket Entry 3 (the “Complaint”) at 1.)

According to the Complaint, Defendant (i) breached an “Amended and
Restated

Management

Agreement

dated

December

1,

2013”

(the

“Management Agreement”) (id., ¶ 4), between the parties regarding
the

management

of

certain

residential

facilities

for

developmentally disabled adults in Florida (see id., ¶¶ 3-5, 7, 8,
11, 12); (ii) failed to provide an “accounting of all funds and
assets controlled by [Defendant] under the Management Agreement”
(id., ¶ 14; see id., ¶ 9); and (iii) “converted assets which
properly belong to [Plaintiff] to its own use” (id., ¶ 16; see id.,
¶¶ 6, 8).

In April 2018, “pursuant to 28 U.S.C. §§ 1441 and 1446”

(Docket Entry 1 at 1), Defendant removed the lawsuit to this Court
on the basis of diversity jurisdiction.

(See id. at 2, 3, 5.)

Thereafter, Defendant moved to transfer this action to the Middle
District of Florida pursuant to 28 U.S.C. § 1404(a), contending
that such transfer “would serve the convenience of the parties and
witnesses, as well as the interest of justice.”
at

1.)

Plaintiff

opposes

the

generally Docket Entry 21.)

2

transfer

(Docket Entry 16
request.

(See

DISCUSSION
“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.A.

of

§

1404(a).

“The

moving

party

bears

the

burden

establishing that transfer to another venue is proper.”

IHFC

Props., LLC v. APA Mktg., Inc., 850 F. Supp. 2d 604, 622 (M.D.N.C.
2012) (internal quotation marks omitted); see also Arabian v.
Bowen, No. 91-1720, 966 F.2d 1441 (table), 1992 WL 154026, at *1
(4th Cir. July 7, 1992) (“The defendant bears a heavy burden of
showing that the balance of interests weighs strongly in his favor
in a [Section 1404(a)] motion to transfer.”).

In resolving a

contested motion to transfer, “the Court must first find that the
action could have been originally brought in the transferee court.”
Blue Mako, Inc. v. Minidis, 472 F. Supp. 2d 690, 703 (M.D.N.C.
2007).

If so, the Court then engages in a multifactored analysis

of certain public-interest and private-interest considerations,
“weigh[ing]

the

relevant

factors

and

decid[ing]

whether,

on

balance, a transfer would serve ‘the convenience of parties and
witnesses’

and

otherwise

promote

‘the

interest

of

justice,’”

Atlantic Marine Constr. Co. v. United States Dist. Ct. for W. Dist.
of Tex., 571 U.S. 49, 62–63 (2013).
relevant factors).

3

See id. at 62 n.6 (identifying

According to Defendant, Plaintiff “could have brought its
claims in the Middle District of Florida because the district court
there would appear to have both subject matter jurisdiction over
[Plaintiff’s] claims and personal jurisdiction over [Defendant],
and because venue would be proper.”

(Docket Entry 17 at 5 (citing

Docket Entry 14 at 19-20).)3

In particular, Defendant maintains

that

of

the

Middle

jurisdiction

over

District
this

lawsuit

Florida
(see

id.)

possesses
and

that

diversity
“specific

jurisdiction over [Defendant] could be exercised in Florida” (id.
(citing Docket Entry 3, ¶¶ 3-5)). Defendant further maintains that
venue lies in the Middle District of Florida
because the vast majority of the events giving rise to
this dispute occurred in Florida.
Indeed, the group
homes that were operated under the Management Agreement
are all located in Florida — and [Plaintiff’s] lawsuit is
premised on alleged breaches of the Management Agreement
and other conduct by [Defendant] that could have occurred
only in Florida.
(Docket Entry 14 at 20 (citing Docket Entry 3, ¶¶ 3, 4, 7(l), (m),
(n), (r)).)

3 Rather than clearly contesting or conceding its ability to
have brought the lawsuit in the Middle District of Florida,
Plaintiff equivocates on that issue and instead focuses on the
balance of factors regarding transfer. (See, e.g., Docket Entry 21
at 4 (“Although [Plaintiff] does not necessarily dispute that this
action potentially could have been brought in the Middle District
of Florida, for the reasons explained below, each of the four
factors identified above counsels in favor of allowing this action
to proceed in this Court.
Thus, the Court should deny [the
Transfer] Motion.”).)
Plaintiff’s equivocation in this regard,
however, does not relieve Defendant of its burden of establishing
that venue exists for this action in the Middle District of
Florida.
4

As relevant to the Transfer Motion, the federal venue statute
authorizes bringing a civil action in “(1) a judicial district in
which any defendant resides, if all defendants are residents of the
State in which the district is located” and “(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
property that is the subject of the action is situated.”
§ 1391(b).

28 U.S.C.

It further provides that, for venue purposes, a

corporation “shall be deemed to reside, if a defendant, in any
judicial district

in

which

such

defendant

is

subject

to

the

[C]ourt’s personal jurisdiction with respect to the civil action in
question.” 28 U.S.C. § 1391(c)(2). Finally, it clarifies that, in
States — like Florida, see 28 U.S.C. § 89 — with multiple judicial
districts, a corporation “shall be deemed to reside in any district
in that State within which its contacts would be sufficient to
subject it

to

personal

separate State.”

jurisdiction

if

that district

were a

28 U.S.C. § 1391(d).

Because Defendant constitutes the only defendant (see Docket
Entry 3), either Section 1391(b)(1) or Section 1391(b)(2) could
support venue for this action. Notably, however, Florida possesses
three different districts. See 28 U.S.C. § 89 (“Florida is divided
into three judicial districts to be known as the Northern, Middle,
and

Southern

Districts

of

Florida.”).

As

such,

Defendant’s

assertion that “the vast majority of the events giving rise to this

5

dispute occurred in Florida” (Docket Entry 14 at 20), thereby
giving Florida “specific jurisdiction” over Defendant regarding
Plaintiff’s claims (Docket Entry 17 at 5), fails to establish that
venue lies in the Middle District of Florida.
Nor do the Complaint and the affidavit that Plaintiff relies
on in opposing the Transfer Motion provide sufficient detail
regarding the Floridian locations involved in the instant dispute
for purposes of a venue determination.
1.)

The

regarding

Management
any

Agreement

Floridian

(See Docket Entries 3, 20-

similarly

locations,

offers

aside

from

scant

detail

referencing

Defendant’s “management and operation of the Gainesville group
homes in Florida and the Facilities for the prior provider” as
sources (among others) of Defendant’s expertise “in the provision
of residential service for the developmentally disabled.”
Entry 3 at 9.)

(Docket

Defendant’s affidavit in support of its Transfer

Motion likewise identifies only Gainesville as the place in Florida
where the events underlying Plaintiff’s Complaint occurred.
generally Docket Entry 14-1.)

(See

More specifically, Defendant’s

Eastern Region President of Residential Services avers that:
10. On isolated occasions during the course of the
parties’ relationship, their representatives, including
[Plaintiff’s affiant], met face-to-face to discuss
operational matters in Gainesville, Florida, Louisville,
Kentucky, and Winston-Salem, North Carolina.
11. At all relevant times, [Defendant’s] core office for
its management of the Facilities was located in
Gainesville, Florida. The Gainesville office serves as
the centralized management hub for the Facilities, and
6

was the regular place of business for [Defendant’s]
associated managerial staff, including an Executive
Director, Business Manager, Human Resources Director,
Office
Coordinator,
Nursing
Manager,
Qualified
Intellectual
Disability
Professional,
Residential
Director and Program Manager.
12. My understanding is that [Defendant’s] managerial
staff was hired by its successor in interest, and are
still involved in the management of the Facilities from
the core office in Gainesville, Florida.
13. Relevant documents and other records related to the
operation of the Facilities, including all financial
records, are maintained in either Gainesville, Florida or
Louisville, Kentucky.
(Id. at 2-3 (emphasis added).)4
Gainesville,
Florida.

Florida,

lies

in

the

Northern

District

of

See, e.g., 28 U.S.C. § 89(a) (specifying, inter alia,

(1) that “[t]he Northern District comprises the counties of[, inter
alia,] Alachua,” which includes Gainesville, and (2) that “[c]ourt
for

the

Northern

District

shall

be

held

at

Gainesville”).

Accordingly, at best the current record reflects that proper venue
rests in the Northern, not Middle, District of Florida.

Defendant

has therefore failed to establish that “[Plaintiff] could have
brought this action in the Middle District of Florida” (Docket

4 Defendant further asserts that the parties entered into two
separate agreements that contain forum selection clauses for,
respectively, Duval County and Jacksonville, Florida (see Docket
Entry 17 at 3), but does not contend that those forum selection
clauses govern Plaintiff’s claims (see id. at 10). (See also id.
at 5 (raising no argument concerning those agreements in contending
that “[Plaintiff] could have brought this action in the Middle
District of Florida”); Docket Entry 14 at 19-20 (same re venue).)
7

Entry 17 at 5), as Defendant concedes it must show to prevail on
its Transfer Motion (see id. at 4-5).
CONCLUSION
Defendant has not shown the appropriateness of transfer to the
Middle District of Florida under Section 1404(a).
IT IS THEREFORE ORDERED that the Transfer Motion (Docket Entry
16) is DENIED.
This 9th day of November, 2018.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge

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