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Relational, LLC v. TDMK

July 7, 2008

RELATIONAL, LLC, AN ILLINOIS LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
TDMK, LLC, A FLORIDA LIMITED LIABILITY COMPANY; QUORUM BUSINESS NETWORK, LLC, A FLORIDA LIMITED LIABILITY COMPANY; AND KEITH R. ST. CLAIR, DEFENDANTS.



The opinion of the court was delivered by: Harry D. Leinenweber, Judge United States District Court

Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Relational, LLC (hereinafter, "Relational") filed suit against the three above-named Defendants on August 8, 2007, seeking to recover amounts due under an equipment lease agreement and its related guarantees. Defendant TDMK, LLC (hereinafter, "TDMK") was defaulted on February 26, 2008 for its failure to answer or appear. Quorum Business Network, LLC (hereinafter, "Quorum") was administratively dissolved by the Florida Secretary of State and was not served. Only Defendant Keith St. Clair (hereinafter, "St. Clair") has appeared and filed an answer. He now seeks to have the case transferred to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a). For the reasons stated below, the Motion to Transfer Venue is denied.

I. BACKGROUND

According to the complaint, Relational entered into an equipment lease agreement with TDMK in March 2006, under which TDMK agreed to make rental payments to Relational for various equipment, the description and rental rate of which were set out on future supplemental schedules. In order to induce Relational to enter into the lease, Keith St. Clair and Quorum Business Network, LLC ("Quorum") guaranteed the obligations of TDMK. As additional security, TDMK also granted Relational a first priority security interest in the accounts receivable of TDMK and of Quorum, TDMK's operating entity. Relational alleges that TDMK defaulted on or about July 18, 2007 by failing to make the required payments, and after making demand upon TDMK, Quorum, and St. Clair for the amounts due and owing, Relational filed this action. Count I of the Complaint alleges breach of contract against all Defendants and seeks the accelerated balance of rental payments, plus costs, late charges, expenses, and attorney's fees. Count II seeks a constructive trust over the accounts receivable of TDMK and Quorum.

TDMK and Quorum are both Florida limited liability companies whose members are residents of Florida. The individual guarantor, Keith St. Clair, is also a resident of Florida. None of the Defendants are residents of Illinois or do any business in Illinois. All of the equipment which is subject to the lease is located in Florida. It also appears that the negotiation and execution of the lease in question took place in Florida.

Relational is an Illinois limited liability company whose sole member has its principal place of business in Illinois. The master lease calls for payment of rent at Relational's Illinois address, and specifies that the lessee's obligation to pay is "absolute and unconditional" and is not subject to any abatement, reduction, defense, counterclaim, set-off, or recoupment against lessor or any other person or entity. The lease further states that it will be governed by Illinois law and that any suit arising out of the agreement will be commenced exclusively in a state or federal court in Illinois. The guarantee executed by St. Clair also is governed by Illinois law, requires payment at Relational's Illinois office, and provides that any action or proceeding thereunder may be brought in any federal or state court in Illinois.

II. ANALYSIS

Transfer is appropriate under 28 U.S.C. § 1404(a) when the movant establishes that: (1) venue is proper in the transferor district; (2) venue and jurisdiction are proper in the transferee district; and (3) transfer of the case will serve the convenience of the parties and witnesses as well as the interests of justice. See Allied Van Lines, Inc. v. Aaron Transfer and Storage, Inc., 200 F.Supp.2d 941, 946 (N.D. Ill. 2002). Because transfer under § 1404(a) should not be permitted merely to shift the inconvenience from one party to another, see Fink v. Declassis, 738 F.Supp. 1195, 1998 (N.D. Ill. 1990), the moving party bears the burden of demonstrating that the transferee forum is "clearly more convenient." Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986). In this case, both parties agree that venue is proper in both the Northern District of Illinois and the Southern District of Florida. Therefore, the Court only needs to address the third factor: the convenience of the parties and witnesses and the interests of justice.

A. The Convenience of the Parties and Witnesses

In weighing the convenience of the parties and witnesses, the Court considers: (1) the Plaintiff's choice of forum; (2) the site of material events; (3) the relative ease of access to sources of proof; (4) the convenience of the witnesses; and (5) the convenience of the parties. See Allied Van Lines, 200 F.Supp.2d at 946. However, where the parties have contractually agreed to a chosen forum (and St. Clair did at least agree in his guarantee that an action may be brought in Illinois), the movant is precluded from arguing for transfer based on his own personal inconvenience. See IFC Credit Corp. v. Aliano Bros. General Contractors, Inc., 437 F.3d 606, 613 (7th Cir. 2006).

The remaining considerations are decidedly ambivalent.

Although Plaintiff's choice of forum is usually entitled to considerable weight where it is also the venue designated by contract, see American Roller Co., LLC v. Foster Adams Leasing, LLP, 421 F.Supp.2d 1109, 1114 (N.D. Ill. 2006), the relatively minimal connection of the forum to this case reduces the weight of that presumption. See Chicago, R. I. & P. R. Co. v. Igoe, 220 F.2d 299, 304 (7th Cir. 1955). The material events are split between the jurisdictions, with negotiation and execution of the lease occurring in Florida, but the breach occurring in Illinois, when Defendant failed to remit the required rental payments to Plaintiff's Illinois address. See Fink, 738 F.Supp. at 1197. Access to the proof necessary in this case may favor venue in Illinois since this is where Plaintiff's records regarding payments are located, but production and transfer of such records is unlikely to be burdensome in either district. Finally, neither party demonstrates concrete evidence of inconvenience to witnesses. The potential record-keeping witnesses identified by Plaintiff appear to be employees of Relational whose inconvenience is entitled to little weight. See Allied Van Lines, 200 F.Supp.2d at ...


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