United States District Court, N.D. Illinois
January 13, 2004.
WESTCHESTER FIRE INSURANCE COMPANY, individually and as subrogee of PIONEER CENTER OF MCHENRY COUNTY, INC. Plaintiff,
CAROLINA CASUALTY INSURANCE COMPANY, Defendant
The opinion of the court was delivered by: RONALD GUZMAN, District Judge
MEMORANDUM OPINION AND ORDER
This is an action by Westchester Fire Insurance Company ("Westchester")
against Carolina Casualty Insurance Company ("Carolina") for a
declaratory judgment of bad faith and breach of duty by Carolina.
Carolina has moved to transfer venue to the United States District Court
for the Northern District of Illinois, Western Division. For the reasons
set forth in this Memorandum Opinion and Order, the Court grants the
defendant's motion to transfer
Carolina is a primary insurer incorporated in Florida, with its
principal place of business in Jacksonville, Florida. (Compl. ¶ 2.)
Carolina sold primary liability insurance to Pioneer Center of McHenry
County, Inc. ("Pioneer"), located in McHenry County, Illinois, with a $1
million "occurrence" limit of liability. (Id. ¶ 5.)
Westchester is an
excess insurer incorporated in New York, with its principal place
of business in New York City, New York. (Id. ¶ 1.)
Westchester provided excess liability insurance to Pioneer, for the
purpose of covering Pioneer's liabilities in excess of Carolina's $1
million liability limit. (Id. ¶ 6.) Neither Carolina nor
Westchester maintains offices in Illinois. (Pl.'s Mem. Opp'n Def.'s Mot.
Transfer at 3.)
In 1995, Sandra Wilburn ("Wilburn"), as Special Administrator of the
Estate of Charlotte J. Deckert, deceased, brought a wrongful death action
against Pioneer in McHenry County, Illinois. (Compl. ¶ 7.) Carolina
defended Pioneer in that action. (Id. ¶ 8.) Westchester
argues that Carolina could have settled the Wilburn action for less than
Carolina's $1 million liability limit, but failed to do so, in bad faith
and in breach of its duty to Pioneer's subrogee, Westchester.
(Id. Count I ¶¶ 25-30; Id. Count II ¶¶ 25-28.)
Westchester further claims that Carolina's failure to settle lead to a
$1.56 million judgment against Pioneer, leaving Westchester to pay the
amount in excess of Carolina's $1 million liability limit. (Compl.
¶ 24.) The instant suit is, in part, a subrogation action in which
Westchester stands in the shoes of its insured, Pioneer.
Carolina moves to transfer this action from the Northern District of
Illinois, Eastern Division, to the Northern District of Illinois, Western
Division, pursuant to 28 U.S.C. § 1404(a), which provides that: "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," Transfer is proper when: (1)
appropriate in the transferor court; (2) jurisdiction and venue are
proper in the transferee court; and (3) "transfer will serve the
convenience of the parties and witnesses and the interests of justice."
Sornberger v. First Midwest Bancorp, Inc., No. 02 C 246, 2002 WL
1182121, at *1 (N.D. Ill. June 4, 2002). The movant bears the burden of
showing that "the transferee forum is clearly more convenient."
Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286,
1293 (7th Cir. 1989).
There being no dispute as to the first and second factors, the Court
focuses on the third factor, i.e., whether the transfer will
serve private interests as well as public interests. Sornberger,
2002 WL 1182121, at *1, "Private interests include: `(1) plaintiff's
choice of forum, (2) the situs of material events, (3) the relative ease
of access to sources of proof in each forum . . . [and] (4) convenience
to the parties specifically, their respective residences and
abilities to bear the expense of trial in a particular forum.'"
Id. (quoting Von Holdt v. Husky Injection Molding Sys.,
Ltd., 887 F. Supp. 185, 188 (N.D. Ill. 1995)). "Public interest
factors include `such concerns as ensuring speedy trials, trying related
litigation together, and haying a judge who is familiar with the
applicable law try the case.'" Id. (quoting Heller, 883
F.2d at 1293).
First, the Court examines the private interests of the parties. As the
court explained in Sornberger v. First Midwest Bancorp, Inc.:
"Though plaintiffs' forum choice is usually accorded great deference,
such deference is inappropriate [where] plaintiff's do not reside in this
district and . . . the litigation has no significant contact with it."
2002 WL 1182121, at *2; see Celotex Asbestos Settlement Trust v.
Int'l Ins. Co., No. 98 C 8300, 1999 WL 284783, at *3 (N.D. Ill, Apr.
23, 1999). Westchester is not a
resident of the Eastern Division or the state of Illinois.
Furthermore, there is no substantial connection between this litigation
and the Eastern Division. Westchester asserts two connections to this
division: the delivery of mail related to the underlying litigation to
and from Cook County, and the presence of the lawyers in the underlying
litigation in Chicago. As Carolina points out, the fact that
correspondence was once physically within a division's boundaries does
not establish any connection between that division and the litigation.
Facing somewhat similar facts, where the events giving rise to the
litigation took place in Michigan but e-mails related to the events
passed through a computer server in Illinois, the court in Allstate
Insurance Co. v. Mathison held that the passage of e-mails through
Illinois was "too tenuous a connection" to Illinois for the purposes of
establishing venue. No. 02 C 418, 2002 WL 1396951, at *4 (N.D. Ill. June
26, 2002). Similarly, the origin or destination of any correspondence
related to the underlying litigation does not demonstrate any real
connection to the Eastern Division. Furthermore, because the insured,
Pioneer, resides in McHenry County and the underlying litigation occurred
in McHenry County, the situs of material events as they relate to the
underlying litigation, which, in turn, lead to the instant suit, occurred
in McHenry County, which is within the Western Division. Accordingly,
this factor strongly favors a transfer to that division.
Next, Westchester argues that access to, sources of proof favors the
Eastern Division. These sources of proof consist of the correspondence
between the parties to the underlying litigation and the files of
attorneys participating in that litigation. As an initial point, it is
unclear how much, if any, of this evidence is still physically located in
the Eastern Division. Westchester asserts that one of the critical
participants in the
underlying litigation, lawyer Kevin Shaw of Robins, Kaplan, Miller
& Ciresi, currently practices in Chicago, yet Carolina has proffered
evidence that Robins, Kaplan, Miller & Ciresi no longer has an office
in Chicago and that Mr. Shaw no longer works for that firm. Westchester's
failure to establish correctly the location of its proposed witnesses,
coupled with Carolina's proffer of an affidavit establishing an
alternative location of at least one of its proposed witnesses, places
Westchester at a disadvantage in this argument. Westchester's apparent
failure further undermines its claim of a connection between this
litigation and the Eastern Division; presumably, Mr. Shaw's files are
housed by his former firm, which is no longer located in Chicago.
Correspondence to and from defense counsel for Pioneer is located in the
claim file of Carolina in Minnesota. Other correspondence which may be
relevant to the issue of reasonableness is located on site at Pioneer's
offices in McHenry County or at the office of Pioneer's general counsel,
which is also in McHenry County.
Convenience to the parties is a neutral factor in this case with regard
to a transfer to the Western Division. Neither party resides in Illinois
and the parties' ability to bear the expense of trial is relatively the
same whether the litigation occurs in either division.
Convenience to the witnesses "is the factor often viewed as having the
most weight in determining whether to transfer venue." Concrete
Structures of Midwest, Inc. v. Treco Constr. Servs., Inc., No. 95 C
50211, 1996 WL 67213, at *4 (N.D. Ill. Feb. 16, 1996). To determine which
division would be more convenient to the witnesses, it is first necessary
to establish which witnesses might be relevant at trial. Westchester
argues that only the lawyers in and parties to the underlying litigation
will testify in the instant case, while Carolina includes several McHenry
County residents as potential witnesses.
Carolina argues that it can only be found liable in the instant case if
it acted unreasonably in declining the underlying plaintiffs offers to
settle the case. To prove it acted reasonably, Carolina thus proposes to
call at least some of the witnesses in the underlying action presumably
to demonstrate that the underlying plaintiff's case appeared weak to
Carolina's lawyers. In addition, Carolina seeks to call several attorneys
specializing in personal injury or wrongful death who practice and reside
in McHenry County to establish that, prior to the Wilburn case,
there had never been a personal injury or wrongful death settlement in
excess of $1 million. Carolina's argument that it will need to call as
witnesses attorneys from McHenry County to testify about the verdict
potential of personal injury cases in the area is persuasive. If Carolina
can demonstrate that the verdict against Pioneer far exceeded the norm
for personal injury cases tried in McHenry County, that may be relevant
to its claim that it reasonably decided not to settle the case. Further,
the general counsel for Pioneer, James L. Wright of McHenry County, may
be called to testify regarding the underlying litigation.
Without accurate information about the attorney or law firm that
represented Pioneer at trial, Westchester is left with a few attorneys
related to the underlying litigation and appeal who reside in Chicago.
The remainder of the witnesses listed by each party are employees of
Westchester and Carolina and will have to travel regardless of the venue.
Having analyzed how a transfer would effect the convenience of all of the
potential witnesses in this case, however, the Court holds that this
factor favors a transfer to the Western Division.
In this case, the final factor, the interests of justice, "is given
less weight, as a transfer between divisions does not involve any
conflict of laws issues, nor does it affect
the familiarity of the trial court . . . [with] the governing law or
the availability of unwilling witnesses to service of process."
Concrete Structures, 1996 WL 67213, at *5. This does not mean
that this factor carries no weight, however. In Concrete Structures, the
court held that where (1) the events giving rise to the litigation
occurred in the Eastern Division, with only a minimal connection to the
Western Division, (2) the balance of convenience to the parties and
witnesses favored transfer to the Eastern Division, and (3) the case was
still at the initial stage, transfer was appropriate and the interests of
justice were served. Id. Similarly, in the instant case, the
connection to the Eastern District is tenuous, many of the events leading
to this litigation occurred in the Western Division, the balance of
convenience to the parties and witnesses favors transfer to the Western
Division, and this case has not progressed to the point where a transfer
would significantly delay the proceedings. The Court therefore holds that
due to all of the above concerns, the interests of justice are best
served by transferring this case to the Western Division.
For the foregoing reasons, the Court grants defendant's motion to
transfer venue pursuant to 28 U.S.C. § 1404(a) [doc. no. 6-1] to the
Western Division of the Northern District of Illinois.
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