TekVisions, Inc. v. The Hartford Casualty Insurance Company

Filing 38

ORDER denying Hartford's 14 Motion to Transfer Case; denying as moot Hartford's 26 Motion to Stay Discovery signed by Judge Richard A Jones.(RS)

HONORABLE RICHARD A. JONES

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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TEKVISIONS, INC.,
Plaintiff,

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Case No. 16-1946-RAJ

v.

ORDER

THE HARTFORD CASUALTY
INSURANCE COMPANY,

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Defendant.

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I.

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INTRODUCTION

This matter comes before the Court on Defendant The Hartford Casualty

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Insurance Company’s (“Hartford”) Motion to Transfer Case Venue (Dkt. # 14) and

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Motion to Stay Discovery (Dkt. # 26). Having reviewed the submissions of the parties,

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the relevant portions of the record, and the applicable law, the Court concludes that oral

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argument is unnecessary. For the reasons that follow, the Court DENIES Hartford’s

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motion to transfer and DENIES as moot Hartford’s motion to stay.
II. BACKGROUND

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The Court describes the facts as Plaintiff TekVisions, Inc. (“TekVisions”) alleges

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them in its complaint, expressing no position on whether these allegations will prove true.

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Dkt. # 1-1 (Complaint).

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TekVisions is a company that sells computer services. In 2011, TekVisions

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purchased a general liability insurance policy from Hartford. The policy included

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ORDER – 1

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coverage for “business liability” and “advertising injury.” In September 2015, Microsoft,
Inc. filed an action against TekVisions for violations of its intellectual property rights and
other wrongful business practices. In January 2016, TekVisions tendered its defense to
Hartford, yet Hartford failed to reasonably respond despite repeated requests and followup communications. In August 2016, without having received a coverage decision from
Hartford, TekVisions settled the lawsuit with Microsoft. In September 2016, Hartford
denied TekVisions’ insurance claim.
On December 20, 2016, TekVisions filed the instant action against Hartford
alleging claims for: (1) violation of the Insurance Fair Conduct Act, RCW 48.30.015, et
seq.; (2) violation of the Consumer Protection Act, RCW 19.86.020, et seq.; (3) breach of
contract; (4) insurance bad faith; and (5) equitable estoppel.
Now, Hartford moves to transfer venue to the Central District of California and to
stay discovery pending the Court’s decision on the motion to transfer. Dkt. ## 14, 26.
TekVisions opposes the motions. Dkt. ## 18, 31.
III. LEGAL STANDARD

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“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. § 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)). Applying this
case-specific approach requires the Court to balance a series of factors. Id. These factors
include:
(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
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forums, (7) the availability of compulsory process to compel attendance of
unwilling non-party witnesses, and (8) the ease of access to sources of
proof.

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Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). Additionally,

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“the relevant public policy of the forum state, if any, is at least as significant a factor in

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the § 1404(a) balancing.” Id. at 499. “The defendant must make a strong showing of

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inconvenience to warrant upsetting the plaintiff’s choice of forum.” Decker Coal Co. v.

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Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986).
IV. ANALYSIS

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A.

Location Where the Insurance Contract Was Negotiated

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The first Jones factor is the location where the agreement at issue was negotiated.

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Hartford contends that the insurance contract was negotiated in California because that is

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the location from which TekVisions sought insurance coverage. TekVisions contends

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that the insurance contract was negotiated in multiple locations. For support, TekVisions

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cites the signature page of the contract, which indicates that Hartford’s Operations

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Support Specialist signed it in New York State.

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The record does not support Hartford’s contention that the parties negotiated the

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contract solely in California. Rather, the record shows that negotiations took place in

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multiple locations. As such, the first factor does not weigh in favor of transfer. Ahead,

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LLC v. KASC, Inc., No. C13-0187JLR, 2013 WL 1747765, at *9 (W.D. Wash. Apr. 23,

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2013) (“This is a neutral factor when parties negotiate and execute a contract in multiple

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locations.”).

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B.

Whether Washington or California Is Most Familiar with the
Governing Law

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The second factor assesses which state is more familiar with the applicable law.

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The parties agree that there is no conflict of law regarding TekVisions’ breach of contract

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claim, but that there is a conflict concerning TekVisions’ extra-contractual insurance

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claims. Hartford contends in its Reply Brief that it would be premature to engage in a

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choice of law analysis at this juncture. Dkt. # 21 at 6 (“Hartford notes, however, that

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ORDER – 3

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neither it nor TekVisions has affirmatively moved this Court for a ruling on which state’s
law will apply to this dispute. . . . a final determination of which state’s law should apply
is not properly before the court”). But simultaneously contends that this Jones factor
nevertheless weighs in favor of transferring venue because “California law should apply
in this case” and “California law is complex and specialized.” Dkt. # 14 at 7.
The Court agrees with Hartford that engaging in a choice of law analysis would be
premature, as the relevant legal analysis requires determining whether Washington or
California has the most significant relationship to the conflict and parties. MKB
Constructors v. Am. Zurich Ins. Co., 49 F. Supp. 3d 814, 832 (W.D. Wash. 2014). This
analysis requires further development of the record.
The Court disagrees with Hartford that the second Jones factor weighs in favor of
transferring venue. Hartford discourages the Court from performing a choice of law
analysis—yet, notwithstanding that TekVisions has asserted multiple claims under
Washington State’s insurance laws, contends that California is more familiar with the
governing law. This argument is contradictory and unpersuasive. The second factor does
not warrant transfer.
C.

The third factor is the plaintiff’s choice of forum to which the Court must defer
absent a strong showing to the contrary. Decker Coal, 805 F.2d at 843. Hartford
encourages the Court to discount TekVisions’ choice of forum on the basis that it has no
offices, employees, or physical presence in Washington. Hartford also contends that the
wrongful conduct of mishandling and denying TekVisions’ insurance claim bears no
relationship to Washington. TekVisions responds that it maintains an office in
Vancouver, Washington where it employs a salesperson whose services customer
accounts in the Pacific Northwest. Dkt. # 20 ¶¶ 3-5. TekVisions further responds that
Hartford’s wrongful conduct is connected to Washington because that is where Microsoft
sued TekVisions and set in motion the insurance claim that gave rise to this lawsuit.

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TekVisions’ Choice of Forum

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Hartford has not made a showing that the Court should discount TekVisions’
choice of forum. The record supports TekVisions’ contention that it maintains a physical
presence and one employee in Washington. Moreover, the wrongful conduct that
TekVisions alleges in its complaint relates to Washington because it is where Microsoft
filed the lawsuit that Hartford refused to defend. The third Jones factor weighs against
transfer.
D.

The Respective Parties’ Contacts with Washington

The fourth and fifth Jones factors focus on the parties’ contacts with the forum
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apart from and related to the lawsuit. Hartford contends that TekVisions’ main office and
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principal place of business is in California, that the contract was negotiated in California,
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and that all of the allegedly wrongful conduct occurred in California because that is
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where Hartford’s claims handling took place. TekVisions contends that there are more
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than enough contacts with Washington for venue to be appropriate.
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The Court agrees with TekVisions. While TekVisions’ contacts apart from the
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lawsuit may be stronger in California, the fact remains that Washington is the location
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where the events leading to this lawsuit occurred. Hartford’s contention that Washington
bears no relationship to this action is without merit—indeed, Washington is where
Microsoft sued TekVisions, prompting TekVisions to tender its defense to Hartford,
thereby prompting Hartford to deny TekVisions’ insurance claim. The mere fact that
Hartford may have handled TekVisions’ claim in California—a disputed issue of fact—
does not erase Washington as the place where this lawsuit essentially began. The parties’
contacts relating to the lawsuit weigh against transfer.
E.

Litigation Costs

The sixth factor concerns litigation costs. “When considering the difference in
cost between two forums, courts disfavor transferring venue when litigation costs are not
significantly reduced.” Ahead, LLC, No. C13-0187-JLR, 2013 WL 1747765, at *12.
“The relative cost analysis focuses primarily on the venue’s proximity to witnesses.” Id.
Hartford contends that the Central District of California is in closer proximity to
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the majority of witnesses. For support, Hartford provides a chart purporting to list the
state in which each of the fact witnesses identified thus far resides. Dkt. # 21 at 4-5. This
chart, however, is unsupported by citation to any declaration, affidavit, or other
documentary support. As is, the record does not convincingly establish that litigation
costs would be significantly reduced by transferring this case to California.
F.

The Availability of Compulsory Process to Compel Attendance of
Unwilling Non-Party Witnesses

The seventh factor relates to the Court’s power to compel the attendance of un-

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willing non-party witnesses. The availability of compulsory process favors transfer only

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if California has the authority to subpoena more non-party witnesses than Washington.

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See Ahead, LLC, No. C13-0187-JLR, 2013 WL 1747765, at *12. In its Reply, Hartford

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identifies three third-party witnesses: one from Arizona, another from Washington, and a

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third from California. Dkt. # 21 at 5. Assuming, for the sake of argument, that Hartford

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is correct, California does not have a subpoena advantage over Washington, as each

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forum would lack the authority compel the attendance of the same number of third-party

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witnesses.

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G.

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The eighth factor concerns relative access to sources of proof, such as witnesses

Access to Sources of Proof

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and documentary evidence. Hartford contends that all of the evidence is in California

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because that is where the claims handling evidence and most witnesses are located.

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TekVisions asserts that it will be necessary to gather evidence from Microsoft witnesses

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familiar with the underlying lawsuit. TekVisions explains that this will be necessary

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because Hartford has asserted “failure to mitigate” as an affirmative defense. To

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overcome this defense, TekVisions will need to collect evidence from Microsoft that

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shows TekVisions settled the lawsuit for a reasonable amount. Hartford does not

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meaningfully rebut this assertion.

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The Court finds that the eighth factor is neutral. Hartford claims that all necessary

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evidence is in California, but does not counter TekVisions’ argument to the contrary. As

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such, this factor does not weigh in favor of transfer.
H.

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The ninth Jones factor regards the public policy interest, if any, of the forum state

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Public Policy Considerations

in having the dispute litigated there. The Court finds this factor weighs against transfer
because TekVisions alleges that Hartford denied coverage for a lawsuit that was filed
against TekVisions in Washington State. As a general principal, “[t]he state of
Washington has a strong interest in protecting insureds who must resort to litigation to

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establish coverage.” Axess Int’l Ltd. v. Intercargo Ins. Co., 30 P.3d 1, 8 (Wash. Ct. App.
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2001).
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Having considered all of the Jones factors, the Court finds that they do not weigh
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in favor of transfer so as to justify undermining TekVisions’ choice of forum.
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V. CONCLUSION
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For the reasons stated above, the Court DENIES Hartford’s Motion to Transfer
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Case Venue (Dkt. # 14) and DENIES as moot its Motion to Stay Discovery (Dkt. # 26).
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DATED this 13th day of June, 2017.

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A

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The Honorable Richard A. Jones
United States District Judge

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