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HARRIS TRUST & SAV. BANK v. SLT WAREHOUSE
March 28, 1985
HARRIS TRUST AND SAVINGS BANK, PLAINTIFF,
SLT WAREHOUSE COMPANY, INC., DEFENDANT.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Harris Trust and Savings Bank ("Harris") has charged SLT
Warehouse Company, Inc. ("SLT") with breach of duty and failure
to exercise due care as a warehouseman of grain in which Harris
held a security interest. SLT now moves under 28 U.S.C. § 1404(a)
("Section 1404(a)") for transfer of this action to the
United States District Court for the Western District of
Kentucky. For the reasons stated in this memorandum opinion and
order, the motion is granted.
Both Harris' place of incorporation and its principal place of
business are in Illinois. As to SLT, both those relationships
are with Missouri. SLT is licensed to do business in both
Illinois and Kentucky and conducts field warehousing operations
in both states.
This action arises out of warehousing services SLT provided to
Wathen's Elevators, Inc. ("Wathen's")*fn1 in Henderson
County, Kentucky between 1977 and 1982. To obtain credit from
Harris for grain purchases, Wathen's turned over to SLT control
of the grain storage facilities and inventory on Wathen's
property. Wathen's would purchase grain from farmers and store
it with SLT. SLT would issue a non-negotiable warehouse receipt
to Harris, to secure the latter's interest in the
grain. SLT could not release grain for resale without Harris'
SLT hired Wathen's bookkeeper and office manager Raymond Sheets
("Sheets") to conduct SLT's warehousing operation on Wathen's
premises. Sheets' duties to SLT included maintaining grain
elevator and inventory records, preparing and issuing the
warehouse receipts to Harris and obtaining executed withdrawal
records for grain released for shipment. Harris in turn
employed the First National Bank in Henderson ("Henderson
Bank") as its agent to deal with Sheets and SLT. Henderson Bank
processed the paperwork, including the warehouse receipts, for
Wathen's line of credit. Upon notification by Henderson Bank
that the proper paperwork had been completed, Harris would wire
funds to Wathen's.
In March 1982 Wathen's ceased operations and filed for
bankruptcy. When Harris attempted to enforce its security
interest in Wathen's remaining inventory it discovered soybeans
and white corn valued at over $435,000 were missing. Harris
then filed its Complaint here against SLT:
1. Counts I and II charge SLT with failure to exercise the
due care required of warehousemen under Kentucky common law.
2. Count III asserts SLT (through Sheets) breached its duty
to notify Harris of a change in Wathen's financial condition
that rendered Wathen's unable to perform its agreement with
3. Count IV charges SLT violated its Kentucky statutory duty
(Ky.Rev.Stat. § 359.110) to deliver grain promptly upon
demand by Harris.
Wathen's bankruptcy has also given rise to other lawsuits
currently pending in the Western District of Kentucky.
Section 1404(a) Standards
Section 1404(a) provides:
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 ...
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