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American Casualty Company of Reading v. Filco

June 22, 2009

AMERICAN CASUALTY COMPANY OF READING, ET AL., PLAINTIFFS,
v.
FILCO, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Defendants' (Filco) motion to transfer and Plaintiffs' motion to enjoin. For the reasons stated below, we grant Filco's motion to transfer and deny Plaintiffs' motion to enjoin.

BACKGROUND

In 2001, Filco decided to redevelop an idle piece of property in Niles, Illinois, which had formerly been operated as a laundry facility. After Filco voluntarily undertook an environmental evaluation of the property, perchloreoethylene, a chemical used in dry cleaning, was discovered in the soil on the property. Filco contends that the costs associated with the soil contamination are covered under insurance policies issued by Plaintiffs (Policies). In 2004, Plaintiffs brought an action in Illinois state court seeking a declaration that they owed no duty to defend or indemnify Filco and that certain costs relating to the cleanup of the soil contamination were not covered under the Policies (2004 Illinois Case). Filco subsequently removed the 2004 Illinois Case to federal court. Filco had also initiated a case in federal court in the Southern District of Indiana (2004 S.D. Ind. Case) addressing the same issues in the 2004 Illinois Case. On May 31, 2005, we granted Filco's motion to transfer the 2004 Illinois Case to the Southern District of Indiana Court (S.D. Ind. Court). The 2004 Illinois Case was then consolidated by the S.D. Ind. Court with the 2004 S.D. Ind. Case (2004 Consolidated Case). The Revised Case Management Plan in the 2004 Consolidated Case reflects that Filco and Plaintiffs "agreed to dismiss the portions of their respective breach of contract and declaratory judgment claims relating to [Plaintiffs'] duty to indemnify without prejudice upon the resolution of the remaining open issues." (P's Exbt 11). The 2004 Consolidated case was ultimately settled and terminated, but did not deal with the duty to indemnify.

On March 9, 2009, Plaintiffs brought the instant\t action in Illinois State court to obtain a declaratory judgment stating that they do not have to indemnify Filco for the cleanup and other costs. Filco then removed the instant action to federal court on April 8, 2009. Filco also then filed a new action in S.D. Ind. Court on April 15, 2009, (2009 S.D. Ind. Case) addressing some of the issues in this case.

Plaintiffs include in their complaint claims seeking a declaratory judgment that: (1) Plaintiffs owe no duty to indemnify based on the pollution exclusion in the Polices (Count I), (2) Plaintiffs owe no duty to indemnify for the extraction of pollutants (Count II), (3) Plaintiffs owe no duty to indemnify for costs arising from voluntary actions (Count III), (4) certain insurance contracts alleged by Filco do not exist or provide a basis for indemnification (Count IV), and (5) Plaintiffs owe no duty to indemnify under the insurance contracts that do not insure the Niles, Illinois, site (Count V). Filco now moves the court to transfer the instant action to the S.D. Ind. Court and moves in the alternative to dismiss or stay this proceeding. Plaintiffs move to enjoin Filco from proceeding in the 2009 S.D. Ind. Case with their first, second, and sixth causes of action filed in the 2009 S.D. Ind. Case as they relate to the Niles, Illinois site.

LEGAL STANDARD

A district court may transfer an action to another district where the action might have been brought pursuant to 28 U.S.C. § 1404(a) "[f]or the convenience of parties and witnesses, [if it is] in the interest of justice...." 28 U.S.C. § 1404(a).

In order to transfer a case, the transferor court must first find that: 1) venue is proper in the transferor district, see Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986)(stating that a court "in which a suit is filed with proper venue" may transfer an action pursuant to § 1404(a)), and 2) venue is proper in the transferee district, see 28 U.S.C. § 1404(a)(stating that transfer can only be made to a district in which the action "might have been brought"). In considering whether to transfer an action the court should "give some weight to the plaintiff's choice of forum." Federal Deposit Ins. Corp. v. Citizens Bank & Trust Co. of Park Ridge, Ill., 592 F.2d 364, 368 (7th Cir. 1979); See also in re National Presto Industries, Inc., 347 F.3d 662, 664 (7th Cir. 2003)(stating that "'unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed'")(quoting in part Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947))(stating in addition "[w]hen plaintiff and defendant are in different states there is no choice of forum that will avoid imposing inconvenience; and when the inconvenience of the alternative venues is comparable there is no basis for a change of venue; the tie is awarded to the plaintiff, as the cases cited earlier make clear"); Hewitt Associates, L.L.C. v. Enron Creditors Recovery Corp., 2008 WL 3889947, at *4 (N.D. Ill. 2008)(stating "[a] plaintiff's choice of forum is given less weight when another forum has a stronger relationship to the dispute").

In addressing the interest of justice factor, a court may consider: (1) whether a transfer promotes the "efficient administration of the court system," (2) whether the action could be consolidated with other actions in the transferee district, (3) whether the judges in the transferee district are more familiar with the pertinent state law, (4) whether jurors in a particular district have a "financial interest in [the] case," and (5) which district would have jurors that could "best apply community standards." Coffey, 796 F.2d at 220-21, 221 n. 4. The court should also consider whether the transferee district has a lighter docket than the transferor district. In re National Presto Indus., Inc., 347 F.3d at 664. In addressing the interest of justice factor, the transferor court should focus on whether the proposed transfer would promote the "efficient functioning of the courts." Coffey, 796 F.2d at 221. The interest of justice factor does not involve a consideration of the merits of the plaintiff's claim. Id. Filco has shown that both the instant court and the transferee court are appropriate venues for this dispute.

I. Motion to Transfer

Filco argues that the instant action should be transferred to the S. D. Ind. Court for the same reasons as when we transferred the case to that court in 2005. We agree. Such a transfer would promote judicial economy and the efficient resolution of the disputes presented in the instant action. This dispute was previously transferred to the S. D. Ind. Court. The issues in the 2004 Consolidated Case were voluntarily dismissed by Plaintiffs. Plaintiffs cannot circumvent the court's ruling concerning the transfer of such disputes by moving to dismiss them in the transferee court and refiling it again in this district. As it was contemplated in the Revised Case Management Plan, upon resolution of that case, Plaintiffs could pursue their indemnity claims with the S.D. Ind. Court if Plaintiffs desired to do so. There is no indication in the plan that the parties anticipated Plaintiffs returning to Illinois to begin anew with this court.

Also, as Filco correctly points out, despite the fact that the indemnity issue was excluded from the 2004 Consolidated Case, the S.D. Ind. Court made various rulings that could impact the indemnity issue. In addition, the S.D. Ind. Court's familiarity with the case as a whole would make it the most appropriate court to resolve the remaining issues in this case.

Plaintiffs argue that the reason that we transferred the case in 2005 was that the 2004 S.D. Ind. Case brought by Filco had proceeded farther along than the case before us. Plaintiffs contend that such a reason is no longer valid since the Consolidated 2004 Case has been terminated in the S.D. Ind. Court. Our transfer of the case in 2005 was not solely based upon the stage of the 2004 S.D. Ind. Case. We transferred the case based on a consideration of all the relevant factors before us. In addition, we note that the S.D. Ind. Court has proceeded farther than this court in this dispute. As Filco points out, the judge in the 2004 Consolidated Case in fact made various rulings concerning discovery and interpretations of the Policies, and ruled on cross motions for summary judgment. The S.D. Ind. Court in the 2004 Consolidated Case ...


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