Opinion
No. C 04-3071 FMS.
October 28, 2004
ORDER DENYING REMAND, TRANSFERRING CASE AND VACATING HEARING
Express Logistics Systems (hereinafter "Express Logistics") has filed a motion to remand this case back to the state court, and has requested a more definite statement from the Defendant on the counterclaim. Although Express Logistics does not challenge the jurisdiction of this court, it raises three arguments in favor of remand: 1) that the parties previously agreed to the litigation forum of the state court in Santa Clara County; 2) that remand is proper because Defendant failed to file the appropriate forms with the state court and 3) that removal to the United States District Court in San Francisco, instead of the San Jose division, was improper.
Because it is not clear that the parties agreed to a litigation forum in this matter, and Express Logistics has offered minimal and unpersuasive legal support for its remaining arguments, Plaintiff's motion to remand is DENIED and this action is TRANSFERRED on the Court's own motion to the San Jose division of this District.
BACKGROUND
Express Logistics began a business relationship with defendant Eagle Mountain Ventures, LLC (hereinafter "Eagle Mountain") in early 2003. Complaint at 2. Facing some financial trouble, Express Logistics engaged the help of Eagle Mountain to assist it in turning the company around. Answer and Counterclaim at 9. The officers of Express Logistics, Cathy and Robert Mack, negotiated with Jeffrey W. Fields and Robert J. Hodges, who later formed defendant company Eagle Mountain. Mack Decl. at 1:19-24.The parties entered into formal agreements on April 3, 2003. On that day, the parties signed two different documents: a Letter of Intent ("LOI") and an Independent Contractors Agreement ("ICA"). Mack Decl. at 1:25-28. These documents were signed by all four individuals: Jeffrey W. Fields and Robert J. Hodges for Eagle Mountain and Cathy and Robert Mack for Express Logistics.
Sometime after the agreements were signed in April of 2003, the relationship between the parties soured. Specifically, Express Logistics asserts that Eagle Mountain did not deliver the services promised while Eagle Mountain disagrees and demands payment. Eagle Mountain terminated the relationship with Express Logistics on July 27, 2003. Complaint at 4:4-7. Express Logistics then filed suit against Eagle Mountain in the California Superior Court in Santa Clara County in June of 2004. Eagle Mountain then removed the case to the Northern District of California in July of 2004 claiming diversity, it answered the complaint in August and filed a counterclaim against Express Logistics. See Answer and Counterclaim.
Plaintiff Express Logistics has claimed fraud, breach of contract (specifically breach of the ICA), professional negligence, and misappropriation of trade secrets against Eagle Mountain. See Complaint. Eagle Mountain has counterclaimed fraud, breach of contract, and promissory estoppel against Express Logistics. See Answer and Counterclaim.
JURISDICTION
Express Logistics is a corporation based and incorporated in California. Complaint at 1:19-23. Defendants Eagle Mountain and Fields are residents of Arizona. Notice of Removal at 2:10-14. Complete diversity exists, as required by 28 U.S.C. section 1441(b).
Further, Express Logistics initially claimed a loss of profits in excess of $150,000. along with $290,000. in damages from fraud. This amount in controversy exceeds the required amount for federal jurisdiction based on diversity of citizenship. Thus, federal jurisdiction in this case is proper.
DISCUSSION
Express Logistics asserts that the Letter of Intent is a binding contract that requires the parties to litigate in the California State Court in Santa Clara County. Motion to Remand 4:5-7. This Court disagrees with this assertion because the forum selection provisions of the Letter of Intent are in conflict with the Independent Contractor Agreement signed by the parties on the same day. Compare ICA and LOI. It is not clear how these two agreements work together, or what the final contract terms were; thus, a remand to state court based only on the Letter of Intent is inappropriate. Further, this Court finds Express Logistics remaining two arguments in favor of remand without merit. Express Logistics' motion to remand is therefore DENIED.
Because this case was initially filed in the State Court in Santa Clara County, this matter is TRANSFERRED to the San Jose Division of the Northern District pursuant to Local Rule 3-2(f), which allows a court, on its own motion, to transfer an action in the interests of justice to another division in the district.
CONCLUSION
The Court DENIES Plaintiff's motion to remand and TRANSFERS this action to the District Court in San Jose. The hearing on this matter is vacated.
IT IS SO ORDERED.