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Bankers Life and Casualty Co. v. Polonczyk

August 16, 2010


The opinion of the court was delivered by: Matthew F. Kennelly, District Judge


Bankers Life and Casualty Co. has sued its former agent Thaddeus Polonczyk for breach of contract between them. Polonczyk was a Bankers Life agent in Loveland, Ohio, which is near Cincinnati.

Polonczyk terminated his agent agreement in February 2010. Bankers Life alleges that after that, he caused two other men, Tony Cartisano and Bradley Leisure, to visit the homes of three holders of Bankers Life insurance policies to induce them to cancel their Bankers Life policies and purchase policies from another insurer. It does not appear that any of the policyholders ended up canceling their Bankers Life policies. If Polonczyk did what Bankers Life alleges, he likely violated a non-solicitation provision in his agent agreement, which prohibited him from soliciting, for anyone other than Bankers Life, policy holders within his territory, which included southwest and south-central Ohio and north-central Kentucky. Polonczyk says he had nothing to do with any attempts to solicit these or any other Bankers Life policyholders.

Bankers Life is headquartered in this district. It filed suit here pursuant to a provision in the contract stating that any lawsuits under the contract "shall be in a court located in Chicago, Cook County, Illinois." Agent Agr. ¶ 25. Polonczyk now lives in Latonia, Kentucky, which is a few miles south of the Ohio River just across from Cincinnati, Ohio. He has only a part-time job and says he cannot afford to retain counsel in Chicago. Polonczyk has moved to transfer the case to an appropriate district in Ohio or Kentucky pursuant to 28 U.S.C. § 1404(a).


Section 1404(a) provides that "[f]or 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." 28 U.S.C. § 1404(a). Because this case is in federal court based on diversity of citizenship, under 28 U.S.C. § 1391(a), the "other district[s]... where it might have been brought" include the Eastern District of Kentucky, where Polonczyk resides, see 28 U.S.C. § 97(a), or the Southern District of Ohio, where essentially all of the events giving rise to the claim took place.

In evaluating the convenience of the parties and witnesses, a court ordinarily considers the plaintiff's choice of forum; the situs of material events; the relative ease of access to sources of proof; the convenience of the witnesses; and the convenience of the parties of litigating in the respective forums. See, e.g., Brandon Apparel Group, Inc. v. Quitman Mfg. Co., 42 F. Supp. 2d 821, 833 (N.D. Ill. 1999). Polonczyk has the burden of showing that "the transferee forum is clearly more convenient." Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986).

The forum selection provision of the contract is "a significant factor that figures centrally in the district court's calculus" regarding whether transfer is appropriate. See Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). The presence of a contractual forum selection term, however, does not eliminate the court's authority to transfer a case under section 1404(a). "Despite the existence of a valid forum-selection clause, courts may still transfer a case under § 1404(a)." Heller Financial, Inc. v. Midwhey Powder Co., 883 F.3d 1286, 1293 (7th Cir. 1989) (citing Stewart Org., 487 U.S. at 31 (forum selection clause is not dispositive)).

That said, Polonczyk's agreement to the forum selection term amounts to a waiver of his "right to assert his own inconvenience as a reason to transfer a case." Id. (emphasis added). Rather, the court may consider only the convenience of Bankers Life, the convenience of the witnesses, and the interests of justice. For this reason, the Court does not consider Polonczyk's financial status or the inconvenience he would face in having to litigate the case in Chicago and instead focuses on the other section 1404(a) factors.

First, it would be more inconvenient for Bankers Life to litigate the case in Ohio or Kentucky than in Chicago. Specifically, Bankers Life's attorney is located in Chicago, and it would have to hire local counsel in the other forum were the Court to transfer the case.

Second, the parties' materials identify several potential witnesses (not including Polonczyk) who might be called upon to testify as the case proceeds. These include the three holders of Bankers Life policies; Leisure; Cartisano; Jeffrey Lambdin, the manager of Bankers Life's Loveland, Ohio branch; and Scott Goldberg, a Bankers Life vice-president. From what the Court can determine, all of these witnesses other than Goldberg reside in southern Ohio. Goldberg resides in Chicago.

Based on the record before the Court, it is clear that the Ohio witnesses' testimony will be crucial to determination of the parties' dispute. Because Polonczyk's defense is that he did nothing to solicit or cause others to solicit Bankers Life policy holders, the case likely will turn on testimony of the policy holders and the two men Polonczyk allegedly caused to solicit them. By contrast, the relevance, or at least the probative value, of Goldberg's testimony is questionable. The only information Bankers Life has given the Court about that testimony is an affidavit, submitted in support of Bankers Life's motion for a preliminary injunction, that the company's policy holders typically do not move their insurance to other companies. Even if admissible, such testimony is likely to carry little if any weight in a case in which the question is whether particular policy holders actually were solicited (unsuccessfully, it appears) to move from Bankers Life to another insurance company.

Bankers Life says that it is prepared to take the depositions of the Ohio witnesses by telephone. Our system of justice, however, prefers trials that involve live testimony. One of the aims of section 1404(a) is to "minimize the risk of 'trial by deposition.'" Worldwide Financial LLP v. Kopko, No. 1:03-CV-0428-DFH, 2004 WL 771219 (S.D. Ind. Mar. 18, 2004) (Hamilton, J.) (citing cases).

In sum, the factor of convenience of the witnesses weighs heavily in favor of transfer. It is fair to infer that all of the Ohio witnesses are within the subpoena power of the federal court in Cincinnati. It is less clear whether they would be within the subpoena power of a federal court in the Eastern District of Kentucky, though that district holds court in Covington, Kentucky, which is just across the border ...

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