The Cadle Company v. Keyser et al
Filing
34
REPORT AND RECOMMENDATIONS re 18 Motion to Change Venue filed by Martin & Drought, P.C., Michael G. Colvard, 11 Motion to Dismiss filed by Jessie R. Castillo, 14 Motion to Change Venue filed by Thomas G. Keyser, The Law Offices of Thomas G. Keyser, P.C., 20 Motion to Change Venue filed by G. Wade Caldwell, Barton, East & Caldwell, P.L.L.C. Signed by Judge Andrew W. Austin. (td)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
THE CADLE COMPANY
§
§
§
§
§
v.
THOMAS G. KEYSER, et al.
A-14-CV-758 LY
REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
TO:
THE HONORABLE LEE YEAKEL
UNITED STATES DISTRICT JUDGE
Before the Court are the Defendants’ motions challenging venue of this case in the Austin
Division:
(1)
Defendant Thomas g. Keyser’s Motion to Transfer Venue Forum (Dkt. No. 14);
(2)
Motion of Defendants Martin & Drought, et al. to Transfer Venue Pursuant to 28
U.S.C. § 1404(a) (Dkt. No. 18);
(3)
Defendants’ G. Wade Caldwell, et al.’s Motion to Transfer Venue Under 28 U.S.C.
§ 1404(a) (Dkt. No. 20); and
(4)
Defendant Jesse R. Castillo’s Motion to Dismiss Plaintiff’s Original Complaint
Pursuant to Rule 12(b)(3) and 28 U.S.C. § 1406(a) (Dkt. No. 11).
The undersigned submits this Report and Recommendation to the District Judge pursuant to 28
U.S.C. § 636(b)(1)(B), Federal Rule of Civil Procedure 72, and Rule 1(d) of Appendix C of the
Local Rules of the United States District Court for the Western District of Texas, Local Rules for
the Assignment of Duties to United States Magistrate Judges.
I. GENERAL BACKGROUND
This is a legal malpractice suit filed by an Ohio real estate firm against a number of San
Antonio attorneys and law firms, based on allegedly negligent services provided by the attorneys
relating to litigation that took place in San Antonio. After a number of suits and appeals, all of which
took place in San Antonio, the underlying litigation was finally closed in late 2013. On August 12,
2014, The Cadle Company filed this lawsuit in the Austin Division of this Court, seeking to recover
damages from all defendants. In four separate motions, all Defendants request that the Court transfer
the case to the San Antonio Division of this Court, alleging that venue in San Antonio is more
convenient for the parties and witnesses, and that transfer would promote the interests of justice. The
Cadle Company responds that venue in its chosen forum of Austin is proper, and that the Defendants
have failed to demonstrate that transfer is warranted. Because it is overwhelmingly clear that venue
in San Antonio is more convenient for the parties and witnesses, and because this case bears absolutely
no connection to the Austin Division of this Court, the undersigned recommends that the case be
transferred to the San Antonio Division of the Western District of Texas.
II. ANALYSIS
Defendants move to transfer pursuant to 28 U.S.C. § 1404(a), contending that all of the facts
giving rise to this lawsuit occurred in San Antonio, and that all defendants reside there.1
A.
Standard of Review
“For the convenience of the 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
1
Defendant Castillo’s motion seeks dismissal of the suit under § 1406(a) and Rule 12(b)(3),
or alternatively, transfer pursuant to § 1406(a). Because venue in this Court is not improper, the
dismissal motion is without merit. Rather, the only appropriate remedy to consider in this situation
is transfer, not dismissal. See Atlantic Marine Const. Co., Inc. v. United States District Court for
the Western District of Texas, 134 S. Ct. 568, 577 (2013). Thus, it is RECOMMENDED that the
Court DENY Defendant Jesse R. Castillo’s Motion to Dismiss Plaintiff’s Original Complaint
Pursuant to Rule 12(b)(3) and 28 U.S.C. § 1406(a) (Dkt. No. 11).
2
U.S.C. § 1404(a). Section 1404(a) “is intended to place discretion in the district court to adjudicate
motions for transfer according to an ‘individualized, case-by-case consideration of convenience and
fairness.’” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack,
376 U.S. 612, 622 (1964)). “There can be no question but that the district courts have broad
discretion in deciding whether to order a transfer” under § 1404(a). In re Volkswagen of Am., Inc.
(“Volkswagen II”), 545 F.3d 304, 313–15 (5th Cir. 2008) (internal quotation marks omitted), cert.
denied, 555 U.S. 1172 (2009).
As a preliminary matter, the Ҥ 1404(a) factors apply as much to transfers between divisions
of the same district as to transfers from one district to another.” In re Radmax, Limited, 720 F.3d
285, 288 (5th Cir. 2013). The starting point on a motion to transfer venue is determining whether the
suit could have originally been filed in the destination venue. Id. at 312. If it could have, the focus
shifts to whether the party requesting the transfer has demonstrated the “convenience of parties and
witnesses” requires transfer of the action, considering various private and public interest factors. See
Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1974).2 Although these factors are “appropriate for
2
The private interest factors are:
(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; and
(4)
all other practical problems that make trial of a case easy, expeditious and
inexpensive.
The public interest factors are:
(1)
the administrative difficulties flowing from court congestion;
(2)
the local interest in having localized interests decided at home;
(3)
the familiarity of the forum with the law that will govern the case; and
(4)
the avoidance of unnecessary problems of conflict of laws [or in] the
application of foreign law.
In re Volkswagen AG (“Volkswagen I”), 371 F.3d 201, 203 (5th Cir. 2004) (citing Piper Aircraft Co.
v. Reyno, 454 U.S. 235, 241 n. 6 (1981)).
3
most transfer cases, they are not necessarily exhaustive or exclusive.” Volkswagen II, 545 F.3d at
315. In fact they are not necessarily exhaustive or exclusive, the Fifth Circuit has said that none of
them are of “dispositive weight.” Id. Moreover, in reviewing the facts, a court should engage in a
“flexible and individualized analysis,” and not be too formalistic in deciding whether to transfer
venue. Stewart, 487 U.S. at 29. Further, the movant need not show the Gilbert factors substantially
outweigh the plaintiff's choice of venue—it is enough to show the new venue is clearly more
convenient than the original one. Volkswagen II, 545 F.3d at 314. This does not mean that the
plaintiff’s choice of forum is to be ignored; the movant still has a “significant” burden of proof to
“show good cause for the transfer.” Volkswagen II, 545 F.3d at 314 n. 10. When the transferee
venue is not “clearly more convenient” than the plaintiff’s chosen venue, “the plaintiff's choice
should be respected.” Id. at 315.
However, the weight to give the plaintiff’s choice of venue remains case-specific; the
plaintiff’s chosen venue is not entitled to weight regardless of where it is. “[W]hen a plaintiff is not
a resident of the chosen forum, or the operative facts underlying the case did not occur in the chosen
forum, the court will not give as much deference to a plaintiff's choice.” Apparel Prod. Servs. Inc.
v. Transportes De Carga Fema, S.A., 546 F. Supp.2d 451, 453 (S.D. Tex. 2008). That lower
deference is lessened even further when the transfer sought is between divisions of the same district.
In re Radmax, 720 F.3d at 289 (“the traditional deference given to plaintiff’s choice of forum . . . is
less for intra-district transfers.”) (quoting 17 J. Moore, et al., MOORE’S FED. PRAC. § 111.22[2], at
111-155 (3d. ed. 2013)).
4
B.
Application
No one disputes that this case “might have been brought” in San Antonio; one might even
say that this case should have been brought there. The analysis is therefore focused on the Gilbert
factors. As noted in the background section, this case has virtually no connection to Austin. The
parties’ relationship started, fell apart, and ended in San Antonio. The Cadle Company hired Martin
& Drought—a San Antonio law firm—to assist it with the collection of a note in 1992.3 Cadle
received a judgment in that matter in 1993, and filed it in Comal County to place a lien on property
the debtor owned there. After largely fruitless collection efforts over the next decade, in 2003 Cadle
initiated a garnishment action in Bexar County to gain access to a bank account of the debtor. Cadle
was represented by Keyser, to whom it was referred by Martin & Drought, because M&D had a
potential conflict with the bank. That garnishment action “went south,” however, and ultimately the
Bexar County judge dissolved the writ and ordered Cadle to pay the debtor $1000 in attorney’s fees.
The debtor also filed a separate, affirmative lawsuit against Cadle, alleging wrongful garnishment,
breach of contract, and fraud. At this point, Castillo took over the case, and attempted to get the
dissolution order reversed. While the appellate court—the San Antonio Court of Appeals—reversed
the attorney’s fees award, it affirmed the dissolution of the writ, finding that Cadle had “failed to
prove a valid and subsisting judgment” to support the garnishment. The debtor’s lawsuit against
Cadle then went to trial—in Bexar County. The trial court in that case determined that Cadle was
collaterally estopped from claiming its original judgment was unsatisfied and could support the
garnishment, and thus, unsurprisingly, the jury found in the debtor’s favor and ordered Cadle to pay
him over $500,000 in damages and attorneys’ fees. Cadle then hired its current Dallas attorney, and
3
All of the facts set forth here come from Cadle’s Complaint (Dkt. No. 1).
5
he succeeded in getting the verdict reversed and the case remanded for a new trial. On the second
day of trial that case settled. A year later Cadle filed this lawsuit.
The immediately preceding paragraph, which summarizes the totality of the circumstances
that led to this filing of this case, is notable in one important respect—it does not contain a single
reference to the City of Austin, or to any county within the Austin Division of this District. Instead,
it contains frequent mentions of San Antonio and Bexar County, where all of the underlying
litigation took place. Indeed, a review of the 60 pages of briefs, and many more pages of exhibits,
on these motions reflects barely a mention of Austin. The only connection between Austin and this
case that Cadle has identified relates to an IRS lien on an unimproved piece of land in Comal
County,4 which was owned by the debtor from the 1993 judgment. In 1997, the debtor had a buyer
for the property, but had to satisfy both an IRS lien, and Cadle’s judgment lien, before he could sell
it. According to Cadle, the debtor negotiated a reduction in both liens to sell the property, and in
doing so dealt with two different IRS employees on the IRS’s lien, Lexie White and Bruce Wilpon.
From the materials submitted with Cadle’s response, at least as of 2009 and 2012, respectively,
White and Wilpon were employed by the IRS in Austin. Cadle contends that both IRS employees’
testimony will be needed in this malpractice case. But that is less than clear to the Court, as the issue
on which they would testify—whether or not Cadle and its debtor agreed in 1997 that the monies
Cadle received from the sale of the Comal County property fully satisfied Cadle’s judgment—is at
best a subsidiary issue in this legal malpractice case. Rather, this case will focus on the actions of
the attorneys, beginning in 2003, and continuing until the last underlying lawsuit ended in 2013, and
not on what happened in the 1997 land sale.
4
Comal County is in the San Antonio Division of the Western District of Texas.
6
Application of the Gilbert factors is quite straightforward with these facts. Starting with the
private factors, the first is the relative ease of access to sources of proof. Volkswagen II, 545 F.3d
at 315. Because all of the events or omissions giving rise to this lawsuit occurred in San Antonio,
the relative ease of access to sources of proof is better in San Antonio than in Austin. All of the
attorneys who provided the allegedly deficient services are in San Antonio, and Cadle Company is
in Ohio, so Austin is clearly inferior to San Antonio from the standpoint of access to the relevant
evidence. Similarly, the availability of compulsory process and cost of transportation for witnesses
also weigh in favor of transfer. Cadle is an Ohio company, and thus it will have to travel from out
of state regardless of whether the case is tried here or in San Antonio. All of the Defendants reside
in San Antonio. All of the important non-party witnesses that have been identified also reside in San
Antonio.5 Finally, considering “all other practical problems that make trial of a case easy,
expeditious and inexpensive,” see Volkswagen I, 371 F.3d at 203, it is clear that San Antonio is a
preferable forum. All Defendants reside in San Antonio, and all of the conduct at issue in this case
occurred in San Antonio. On the other hand, there does not appear to be anything about trying the
case in Austin that would make it easy, expeditious or inexpensive. In sum, consideration of the
private interest factors suggests that it would be more convenient for the parties and witnesses to
place venue in the San Antonio Division.
The public interest factors also counsel in favor or transfer. The Austin Division is one of
the busiest divisions in the Western District of Texas, which itself is one of the busiest districts in
the country. In 2014, there were 1097 civil cases filed in Austin, and 1092 in San Antonio. Austin
5
The only possible exception would be the two IRS employees. But as noted earlier, the
Court does not view them as important to the malpractice issues which are the focus of this case.
Further, they are well within subpoena range of the San Antonio Division.
7
has only two active district judges, while San Antonio has four. These figures suggest that it would
not be a prudent use of judicial resources for this Court to resolve a dispute that has no real
connection with this forum. In addition, the local interest factor clearly favors transfer. Given that
all of the events and omissions giving rise to this lawsuit occurred in the San Antonio Division, the
citizens there have a direct interest in the allegations made against the lawyers there. The last two
public factors are not at issue in this case and thus are neutral. After weighing all of the public
factors, the Court finds they weigh in favor of a transfer of venue to the San Antonio Division.
In sum, the San Antonio Division of this District is a clearly more convenient forum for this
case. Indeed, it is a bit puzzling why Cadle filed the case here in the first place. It has no connection
to Austin that would make it more convenient for it to litigate here. And, though it is not a factor
a court takes into account on transfer motions, Cadle’s attorney is located in Dallas, so that does not
explain the choice either. If the Court were to speculate about the reason behind Cadle’s choice, it
would guess that Cadle chose Austin because of the inconvenience it would cause the Defendants.
While there may be a more innocent explanation, it is less than obvious what that is.
III. RECOMMENDATION
Based upon the foregoing, the undersigned RECOMMENDS that the District Judge
GRANT Defendant Thomas g. Keyser’s Motion to Transfer Venue Forum (Dkt. No. 14); Motion
of Defendants Martin & Drought, et al. to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) (Dkt. No.
18); and Defendants’ G. Wade Caldwell, et al.’s Motion to Transfer Venue Under 28 U.S.C.
§ 1404(a) (Dkt. No. 20), and TRANSFER this case to the San Antonio Division of the Western
District of Texas. IT IS FURTHER RECOMMENDED that to the extent Defendant Jesse R.
8
Castillo’s Motion to Dismiss Plaintiff’s Original Complaint (Dkt. No. 11) seeks dismissal of the
case, that motion be DENIED.
IV. WARNINGS
The parties may file objections to this Report and Recommendation. A party filing
objections must specifically identify those findings or recommendations to which objections are
being made. The District Court need not consider frivolous, conclusive, or general objections.
Battles v. United States Parole Comm’n, 834 F.2d 419, 421 (5th Cir. 1987).
A party’s failure to file written objections to the proposed findings and recommendations
contained in this Report within fourteen (14) days after the party is served with a copy of the Report
shall bar that party from de novo review by the district court of the proposed findings and
recommendations in the Report and, except upon grounds of plain error, shall bar the party from
appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the
district court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140 (1985); Douglass v.
United Servs. Auto. Ass’n, 79 F.3d 1415, 1428–29 (5th Cir. 1996).
To the extent that a party has not been served by the Clerk with this Report &
Recommendation electronically pursuant to the CM/ECF procedures of this District, the Clerk is
directed to mail such party a copy of this Report and Recommendation by certified mail, return
receipt requested.
SIGNED this 23rd day of February, 2015.
_____________________________________
ANDREW W. AUSTIN
UNITED STATES MAGISTRATE JUDGE
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