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American Property-Management Corp. v. Liberty Mutual Group, Inc.

United States District Court, D. Arizona

December 22, 2017

AMERICAN PROPERTY- MANAGEMENT CORPORATION, A NEW MEXICO CORPORATION, D/B/A ESPLENDOR RESORT AT RIO RICO, Plaintiff,
v.
LIBERTY MUTUAL GROUP, INC., Defendant.

          ORDER ON MOTION TO TRANSFER VENUE THIS MATTER

          KIRTAN KHALSA, United States Magistrate Judge

         THIS MATTER is before the Court on Defendant's Motion to Transfer Venue to the U.S. District Court of Arizona, Tucson Division, or, Alternatively, Dismiss on Grounds of Forum Non Conveniens and Supporting Authority (“Motion”), filed July 31, 2017. (Doc. 7.) The Court has considered the parties' submissions, the relevant law, and the record, and is otherwise fully advised in the premises. The Court finds that Defendant's Motion is well taken and shall be granted.

         I. Background

         This lawsuit, which was originally filed in the State of New Mexico, County of Bernalillo, Second Judicial District Court, was removed to this Court by Defendants on the basis of diversity jurisdiction. (Doc. 1-7 at 1.) Plaintiff, American Property Management, is a New Mexico corporation with its principal place of business in this state. (Doc. 1 at 2.) Plaintiff manages the Esplendor Resort at Rio Rico (the Resort), which is located in Rio Rico, Arizona. (Doc. 2-1 at 2.) Rio Rico is approximately 66 miles south of Tucson. (Doc. 7 at 1, 6.) Defendant, Liberty Mutual Group Incorporated, is a Wisconsin corporation with its principal place of business in Boston, Massachusetts. (Doc. 1 at 2.) The Resort is covered by an insurance policy issued by Defendant. (Doc. 2-1 at 2; Doc. 7 at 1.)

         A. Facts Related to the Issuance of the Insurance Policy

          As noted, Plaintiff is a New Mexico corporation, with its principal place of business in New Mexico. (Doc. 2-1 at 1.) James Long, the director of American Property Management is a resident of Albuquerque. (Id.) Plaintiff's headquarters and its corporate mailing address are in San Diego, California, where its president and CEO, Michael Gallegos live. (Doc. 7 at 2; Doc. 1-2 at 1; Doc. 1-3; Doc. 1-4.) The insurance policy was brokered by AmWINS Brokerage of the Midatlantic, LLC, which is located in Edison, New Jersey. (Doc. 1-5 at 4; Doc. 7 at 2.) The insurer, Defendant Liberty Mutual Group Incorporated, is a Wisconsin corporation with its principal place of business in Boston, Massachusetts. (Doc. 1 at 2.) The insurance policy reflects Plaintiff's San Diego, California mailing address. (Doc. 1-5 at 5.).

         B. Summary of Plaintiff's Factual Allegations

         On June 5, 2015, the Resort was damaged by a fire, whereupon Plaintiff filed an insurance claim with Defendant to recover its fire-related losses. (Doc. 2-1 at 2-3.) Two years later, in June 2017, Plaintiff filed the present lawsuit-claiming bad faith, breach of contract, unfair trade practices, and unfair claims practices, based on Defendant's handling of its insurance claim. (Doc. 2-1 at 10-13.) Briefly summarized from the complaint, Plaintiff alleges the following.

         The Resort's lobby, kitchen, dining area, and bar and lounge were damaged by the fire. (Doc. 2-1 at 2.) Plaintiff's claim for the loss was assigned to Defendant's Arizona-based adjuster, Steven Harkness. (Doc. 2-1 at 3.) To assist in managing its claim, and to act as its “point of contact” regarding its claim, Defendant hired The Greenspan Company (Greenspan), an independent insurance adjustment company located in Arizona. (Id.; Doc. 7 at 6; Doc. 16 at 6-7.) James Long-a resident of Albuquerque and the director of American Property Management- contacted Defendant on at least one occasion to request that it honor its obligations under the insurance policy by providing advanced funds. (Doc. 2-1 at 1, 4.) In addition to these individuals, a number of contractors, subcontractors, and “representatives” of each party were involved in assessing the damage at the Resort and estimating the value of the repairs. (See Doc. 2-1 at 3-4.)

         Plaintiff alleges that immediately after the fire, and for the two years that followed, it made several requests and claims for losses that, it maintains, should have been covered by the at-issue insurance policy-including claims for “Business Loss of Income, ” “Preliminary and Partial Business Loss of Income, ” bids for cleaning, bids for loss of personal property, a request to shut down the resort pending repairs, and an estimated cost of restoring the Resort to its pre-fire condition of $3.5 million. (Doc. 2-1 at 3-9.) Plaintiff alleges that in handling its claim, Defendant variously failed to respond or was dilatory in responding to Plaintiff's requests for coverage and to its coverage-related inquiries; refused to provide information regarding site visits by contractors and subcontractors; was dilatory in acquiring bids to repair the Resort; acquired an insufficient number of bids; and, when it ultimately estimated the cost of restoring the Resort, relied on a bid that grossly underestimated the cost of restoration and did not include the costs associated with county-mandated building code requirements. (Doc. 1-2 at 3-9.) Plaintiff alleges that Defendant's wrongful handling of its insurance claim resulted in a delay in reconstructing and repairing the Resort and, in August, 2016, led to the Resort's temporary closure. (Doc. 1-2 at 9.)

         II. Discussion

         In the Motion presently before the Court, Defendant seeks to have this case transferred to the Tucson division of the United States District Court of Arizona which, Defendant claims, is the proper venue for litigation of this matter because the resort is located within that Court's jurisdiction in Rio Rico, Arizona, and the “events and omissions” giving rise to this lawsuit occurred there. (Doc. 7 at 5.) Alternatively, Defendant moves for dismissal based upon a theory of forum non conveniens. (Doc. 7 at 11.) Plaintiff opposes the Motion, arguing that New Mexico, its “home state” and its chosen litigation forum, is the proper venue for litigation of this matter, and arguing further, that this case does not comprise the “rare circumstance” in which dismissal is warranted on the ground of forum non conveniens. (Doc. 16 at 1-2.)

         For the reasons that follow the Court concludes that it is appropriate, pursuant to 28 U.S.C. Section 1404(a), to transfer this case to the United States District Court for the District of Arizona. In light of this conclusion, the Court does not consider Defendant's argument that dismissal is warranted on the ground of forum non conveniens.

         A. The Law Governing a Motion to Transfer Venue

          28 U.S.C. Section 1404(a), which governs venue transfer, was enacted “to prevent the waste of time, energy and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense” by authorizing the easy transfer of actions to a more convenient federal forum. 17 James Wm. Moore, Moore's Federal Practice §111.11 (3d ed. 2013). It 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 or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a).

         The Court may generally transfer an action to another federal forum under Section 1404(a) if two requirements are met: (1) the transferee district is one in which the action might have been brought originally, and (2) the transfer will enhance the convenience of the parties and witnesses, and it is in the interest of justice. Van Dusen v. Barrack, 376 U.S. 612, 616-17 (1964). The party seeking the transfer bears the burden of establishing these factors. Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991) (“The party moving to transfer a case pursuant to [Section] 1404(a) bears the burden of establishing that the existing forum is inconvenient.”); Moore, supra, § 111.12[2][c] (“As with the other requisites for convenience transfers . . . the party seeking transfer . . . has the burden of clearly establishing that the action properly could have been brought in ...


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