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Midas Int'l Corp et al v. Chesley et al

April 19, 2012

MIDAS INT'L CORP ET AL
v.
CHESLEY ET AL



Name of Assigned Judge Amy J. St. Eve Sitting Judge if Other or Magistrate Judge than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT

Defendants' Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) [18] is denied.

O[ For further details see text below.] Notices mailed by Judicial staff.

STATEMENT

Before the Court is Defendants' Craig Chesley and ChesleyCo, Inc.'s Motion to Transfer Venue pursuant to 28 U.S.C. § 1404(a). For the reasons set forth below, the Court denies Defendants' motion.

BACKGROUND

Plaintiffs Midas International Corporation ("Midas International") and Midas Realty Corporation ("Midas Realty") (collectively, "Plaintiffs") are Delaware corporations that have their principal place of business in Itasca, Illinois. Midas International and its affiliates are engaged in the business of operating and granting franchises to operate automotive specialty shops, known as "Midas Shops," which engage in the sale of automotive products and related services. Midas Realty is a subsidiary of Midas International, and it owns, leases, and manages real estate for the purpose of operating Midas Shops. Defendant ChesleyCo, Inc. ("ChesleyCo") is a New York corporation with its principal place of business in New York. ChesleyCo formerly operated ten franchised Midas Shops in New York. Defendant Chesley, who resides in New York, is ChesleyCo's President.

On December 16, 2011, Plaintiffs filed their Complaint against Defendants (R. 1), and on February 15, 2012, they filed their Amended Complaint and their Motion for a Preliminary Injunction. (R. 20, 22.) In their Amended Complaint, Plaintiffs assert four separate breach of contract claims, as well as claims for trademark infringement, unfair competition, and trademark dilution, all in violation of the Lanham Act. (Id.)

According to Plaintiffs' allegations, Defendant ChesleyCo entered into four written franchise and trademark agreements (the "Franchise Agreements") with Midas International. (R. 1, Compl. ¶ 18.) In those agreements, Midas International granted franchise licenses to ChesleyCo in connection with its operation of Midas Shops at (1) 755 Panorama Trail South, Penfield, New York (the "Penfield Shop"); (2) 834 East Main Street, Rochester, New York (the "East Main Shop"); (3) 4900 Lake Road, Brockport, New York (the "Brockport Shop"); and (4) 4438 Dewey Avenue, Greece, New York (the "Greece Shop"). Id. ChesleyCo later acquired two additional franchised Midas Shops--one located at 2780 West Henrietta Road, Rochester, New York (the "West Henrietta Shop") and one located at 586 East Main Street, Batavia, New York (the "Batavia Shop"). (Id.)

Plaintiffs allegedly terminated Defendants' Franchise Agreements in November 2011 because Defendants failed to make the required payments under those agreements. (Id. ¶¶ 1, 36.) Despite their obligations to assign the leases governing the Penfield, Greece, and Batavia Shops to Midas Realty (and, in the case of the Brockport Shop, to lease the property to Midas Realty) and surrender possession of their shops, Defendants have refused to do so. (Id. ¶¶ 1, 38.) Defendants have also entered into a letter of intent to sell their business assets, including their leasehold interests, to one of Midas's competitors. (Id. ¶¶ 1, 39-41.) Plaintiffs alleged that Defendants continue to use Midas International's trademarks in connection with the operation of their formerly-franchised shops, and they continue to operate competitive businesses at the same locations of the Greece, West Henrietta, East Main, and Penfield Shops in violation of their non-competition covenant. (Id. ¶¶ 2, 45-52, 81.) Plaintiffs further allege that Defendants have failed and refused to take the necessary steps to transfer and assign to Midas International the telephone numbers they used at their shops. (Id. ¶¶ 79-80.)

On February 10, 2012, Defendants filed a motion to transfer venue to the United States District Court for the Western District of New York pursuant to 28 U.S.C. § 1404(a). (R. 18.) The motion is fully briefed and ripe for ruling.

LEGAL STANDARD

Pursuant to § 1404(a), a district court may transfer a civil action "'for the convenience of the parties and witnesses, in the interest of justice . . . to any other district or division where it might have been brought.'" Ace Hardware Int'l Holdings, Ltd. v. Masso Expo Corp., No. 11-cv-3928, 2011 WL 5077686, at *5 (N.D. Ill. Oct. 25, 2011) (quoting 28 U.S.C. § 1404(a)). Section 1404(a) "is intended to place discretion in the district court to adjudicate motions for transfer according to a 'case-by-case consideration of convenience and fairness.'" Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d 973, 977 (7th Cir. 2010) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S. Ct. 2239, 101 L. Ed. 2d 22 (1988)). A transfer under § 1404(a) is appropriate if "(1) venue is proper in both the transferor and transferee court; (2) transfer is for the convenience of the parties and witnesses; and (3) transfer is in the interests of justice." Methode Elecs., Inc. v. Delphi Auto. Sys. LLC, 639 F. Supp. 2d 903, 907 (N.D. Ill. 2009) (citation omitted). The moving party bears the burden of establishing these three factors. See Ace Hardware, 2011 WL 5077686, at *5 (citing Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986) and Tri3 Enters., LLC v. Aetna, Inc., No. 11 C 3253, 2011 WL 2550736, at *1 (N.D. Ill. June 24, 2011)). "The weighing of factors for and against ...


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