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OLD REP. INS. CO. v. NESS

April 5, 2004.

OLD REPUBLIC INSURANCE COMPANY, Plaintiff,
v.
NESS, MOTLEY, LOADHOLT, RICHARDSON & POOLE, P.A.; RICHARDSON, PATRICK, WESTBROOK & BRICKMAN, LLC; H. BLAIR HAHN; MICHAEL J. BRICKMAN; TERRY E. RICHARDSON, JR.; INTERCLAIM HOLDINGS, LTD; INTERCLAIM RECOVERY, LTD; and TWIN CITY FIRE INSURANCE COMPANY, Defendants



The opinion of the court was delivered by: BLANCHE MANNING, District Judge

MEMORANDUM AND ORDER

Plaintiff Old Republic Insurance Company ("Old Republic") brings this declaratory judgment action based on diversity jurisdiction. Before the court is defendants Richardson, Patrick, Westbrook & Brickman, LLC ("Richardson Patrick"), H. Blair Hahn, and Michael J. Brickman's Motion to Transfer Venue pursuant to 28 U.S.C. § 1404(a). In addition, defendant Terry E-Richardson, Jr. moves to dismiss (.he First Amended Complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). For the reasons that follow, both motions are denied.

I. BACKGROUND AND PARTIES

  The relief Old Republic seeks in this declaratory judgment action stems from a judgment entered against the now defunct law firm of Ness, Motley, Richardson & Poole, P.A. ("Ness Motley"), See Interclaim Holdings, Ltd. v. Ness, Motley, Loadhott, Richardson &. Poole, 2001 WL 1313799 (N.D.lll. Oct. 29, 2001) (hereinafter "Underlying Action"). Defendants Interclaim Holdings, Ltd. and Interclaim Recovery, Ltd. (collectively "Interclaim") filed the Underlying Action against Ness Motley alleging that Ness Motley engaged in wrongdoing in connection with its representation in the prosecution of certain class action claims that took place in the Circuit Court of Madison County, Illinois. The jury in the Underlying Action found Ness Motley breached its fiduciary duty and the parties' retainer agreement and awarded Interclaim $8,3 million in compensatory damages and S27.7 million in punitive damages.*fn1 The individual defendants in the present action arc now members of and are practicing law with defendant Richardson Patrick, a South Carolina limited liability company. At issue are the excess professional liability policies Old Republic issued to Ness Motley and its individual attorneys. In this action, Old Republic seeks a determination that it has no duty to defend, indemnify, or reimburse defense costs or make indemnity payments to the defendants because the defendants failed to disclose the Underlying Action as required when applying for their excess professional liability insurance coverage.

 II. MOTION TO TRANSFER VENUE

  The defendants seek to transfer this action to the United States District Court for the District of South Carolina, Charleston Division, pursuant to 28 U.S.C. § 1404(a), which provides that "[f]or the convenience of the parties and witnesses, in the interests of justice, a district court may transfer any civil action to any other district or division where it might have been brought." Under § 1404(a), the party seeking transfer mast demonstrate that: (1) venue is proper in both the transferor and transferee courts; (2) transfer will serve the convenience of the parties and witnesses; and (3) transfer will promote the interests of justice. See Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 n.3 (7th Cir. 1986); Amoco Oil Co. v. Mobil Oil Corp., 90 F. Supp.2d 958, 959-60 (N.D.Ill. 2000). "The weighing of factors for and against transfer necessarily involves a large degree of subtlety and latitude, and therefore, is committed to the sound discretion of the trial judge," See Coffey, 796 F.2d at 219, The movant "has the burden of establishing, by reference to particular circumstances, that the transferee forum is clearly more convenient" than the transferor court. Id, at 219-20.

  Here, it is undisputed that venue is proper in both the Northern District of Illinois and the District of South Carolina, therefore, the court turns to whether transfer will serve the convenience of parties and witnesses and promote the interests of justice.

  A. Convenience of Parties and Witnesses

  When evaluating the convenience of the witnesses and parties, also known as the "private interests" factors, the court analyzes four separate considerations; (1) the plaintiffs choice of forum; (2) the site of material events; (3) the availability of evidence in each forum; and (4) the convenience to the parties and witnesses of litigating in the respective forums. See IP Innovation, LLC v. Lexmark Int'l, Inc., 289 F. Supp.2d 952, 954 (N.D.Ill. 2003), First, the court gives substantial weight to Old Republic's choice of forum, especially because it is the plaintiffs home forum. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56(1981); United Air Lines, Inc. v. Mesa Airlines, Inc., 8 F. Supp.2d 796, 798 (N.D.Ill. 1998). Second, the defendants concede that given the realities of modem technology and in the absence of any unusual circumstances, it is unlikely that the ease of access to sources of proof will be significantly different in Illinois or South Carolina. The court thus considers the remaining "private interests" factors — the site of the material events and the convenience of the witnesses and parties.

  As for the site of the material events, the court notes that the trial and entry of judgment against Ness Motley in the Underlying Action occurred in the Northern District of Illinois. In fact, Ness Motley filed the underlying class action suit that formed the basis for the professional liability claims in Madison County, Illinois. In addition, the initial excess professional liability insurance application was submitted to Old Republic's Chicago offices and was underwritten by the Chicago office. Ness Motley applied for the second Old Republic insurance policy to Old Republic's Chicago office, again where the policy was underwritten. Also, the defendants reported the Underlying Action to the Old Republic Chicago office. Both the Richardson Patrick individual defendants and Ness Motley demanded their indemnity coverage under the Old Republic insurance policies by letter directed to Old Republic at its Chicago office. Finally, the defendants filed a Counterclaim against Old Republic in which Counts II and III assert claims against Old Republic for improper insurance claims handling practices. The handling of these claims was done in Old Republic's Chicago offices.

  On the other hand and without any substantiation, the defendants argue that the insurance policies were issued in South Carolina and that some of the acts of the alleged professional liability occurred there. These cursory assertions alone do not amount to a "significant portion of the events" occurring in South Carolina as the defendants claim. Therefore, the defendants have failed to establish that this factor weighs in favor of transfer. See Coffey, 796 F.2d at 219-20.

  With respect to the convenience of the parties, the court recognizes that it is easier for each party to litigate on its home turf, and thus, this (actor does not weigh in either party's favor. The proper consideration of the witnesses' convenience requires the parties to identify with some specificity the witnesses it intends to call as well as the general content of their proposed testimony, See Allied Van Lines, Inc., v. Aaron Transfer & Storage, Inc., 200 F. Supp.2d 941, 946 (N.D. 111. 2002) (convenience of witnesses not relevant if parties fail to produce witness lists); see also Brandon Apparel Group, Inc. v. Quitman Mfg. Co, Inc., 42 F. Supp.2d 821, 834 (N.D. Ill. 1999) (court cannot consider convenience of unidentified witnesses). Here, the defendants have not produced a witness list and admit that it is difficult to determine the identity of many of its witnesses at this procedural posture. Old Republic, on the other hand, has identified two non-party witnesses and the nature of their testimony via affidavit. Both named plaintiff witnesses reside in Illinois, In view of Old Republic's witnesses residing in Illinois and without more concrete information from the defendants, the defendants have not established that this factor weighs in favor of transfer, that is, that transferring this action to the District of South Carolina is "clearly more convenient." See. Coffey, 796 F.2d at 219-20.

  B. Interests of Justice

  The interests of justice inquiry involves judicial economy, not the private interests of the, litigants or witnesses. See Amoco. Oil, 90 F. Supp.2d at 961. Thus, this inquiry focuses on: (1) the court's familiarity with the applicable law; (2) the forum's relationship with the cause of action; and (3) the congestion of the respective court dockets and the prospects of an earlier trial. See id, at 961-62; see also IP Innovation, 289 F. Supp.2d at 955. Old Republic concedes that both Illinois and South Carolina have an interest in this dispute, making this factor neutral Thus, the court turns to the applicable law and court congestion factors. The defendants assert that South Carolina substantive law will most likely be applied to resolve this action. Specifically, the defendants claim that under S, C. Code Ann. § 38-61-10, all insurance contracts on property, lives, or interests in South Carolina are considered to be made in South Carolina and arc subject to the laws of South Carolina. On the other hand, as Old Republic correctly notes, under the ...


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