Opinion
Civil Action No. DKC 99-3281.
June 14, 2001
MEMORANDUM OPINION
Presently pending and ready for resolution are (1) Defendant Dawn Nowakowski's motion to transfer venue, pursuant to 28 U.S.C. § 1404(a); (2) Plaintiff's motion to amend the second amended complaint to add an additional defendant pursuant to Fed.R.Civ.P. 15; and (3) Plaintiff's motion for entry of default judgment, pursuant to Fed.R.Civ.P. 55(b) against Defendant Edward Long. The issues are fully briefed, and no hearing is deemed necessary. Local Rule 105.6. For the reasons that follow the court shall DENY Defendant Dawn Nowakowski's motion to transfer venue, GRANT Plaintiff's motion to amend his complaint, and GRANT in part Plaintiff's motion for default judgment against Defendant Edward Long.
I. Background
Plaintiff, Gordon Ralph, brings the following claims against some or all of several defendants: (1) Racketeer Influenced and Corrupt Organizations Act ("RICO") 18 U.S.C. § 1962, wire fraud (count I), and § 1962(d), conspiracy (count II); fraud (count III); trover and conversion (counts IV and V); and unjust enrichment (count VI). Plaintiff, a resident of Wisconsin, alleges that Defendants engaged in a scheme to defraud him of $500,000, in violation of RICO and state common law. Mr. Ralph alleges that on November 11, 1997, Defendant Cora Buckowich told him that Edward Long was vice chairman of Defendant Tri-Star and that Mr. Long, apparently through Tri-Star, "purchased investment products for or on behalf of clients." Ms. Buckowich allegedly solicited funds from Mr. Ralph for such an investment.
Plaintiff's second amended complaint has two counts numbered "five," one for trover and conversion against Edward Long, and another for unjust enrichment against Defendants Sharon and Edward Rudow and the Rudow Travel Group, Inc. For purposes of this opinion, and to alleviate confusion, the court has labeled the unjust enrichment claim count VI.
During late 1997 and early 1998, Plaintiff allegedly had numerous conversations with Ms. Buckowich, Mr. Long, and Dawn Nowakowsi regarding his investment.
Ms. Nowakowski is a Wisconsin resident, and Mr. Long, who is proceeding pro se, was served in Maryland, and allegedly regularly resides there. It is unclear in which state, if at all, Tri-Star is incorporated. It is also unclear how Plaintiff and Mr. Long communicated, but presumably they did so by telephone as there are no allegations that Mr. Long traveled to Wisconsin to meet personally with Plaintiff.
Plaintiff alleges that instead of investing the money, Ms. Buckowich, "with the aide, assistance and knowledge of" Mr. Long, Ms. Nowakowsi, and Defendants Sharon and Edward Rudow (the "Rudows"), and Rudow Travel Group, Inc., wrongfully appropriated it. Ms. Buckowich, a Wisconsin resident, who is proceeding pro se in this action, was eventually convicted in the United States District Court for the Eastern District of Wisconsin on wire fraud charges related to these events, and allegedly is incarcerated in West Virginia. The Rudows, who are also pro se litigants in this action, and Rudow Travel Group allegedly are domiciled in Maryland. Plaintiff further alleges that the money he gave to Defendants was ultimately transferred to a foreign account in the names of the above-mentioned Defendants and Joan Long, who is Edward Long and Sharon Rudow's mother. Plaintiff seeks to amend his complaint to add Ms. Long as a defendant in this matter.
With respect to Edward Long, on September 22, 2000, this court entered an order of default due to his failure to plead or otherwise respond to Plaintiff's second amended complaint. He has yet to respond to that complaint.
II. Analysis
A. Motion to Transfer Venue
Ms. Nowakowski moves this court to transfer this case to the United States District Court for the Eastern District of Wisconsin, pursuant to 28 U.S.C. § 1404(a). She claims that the federal court in that district is a more convenient forum for this action because she and Plaintiff reside there, all of the witnesses called during Ms. Buckowich's criminal trial live in Wisconsin or in states closer to it than to Maryland, and substantially all of the investment activities Plaintiff undertook that are at issue in this case transpired there. Plaintiff, on the other hand, asserts that Maryland is a more convenient forum in which to litigate his claims because most of the Defendants live in or close to this state. He acknowledges that most of the non-party witnesses called during Ms. Buckowich's trial live in or near Wisconsin, but claims that convenience of the parties and not the witnesses is of "paramount importance" in a § 1404(a) motion. He further argues that it is too early in discovery to determine which of these witnesses will be called to testify during trial in this court, and in any event, that the testimony of many of these individuals will be rendered unnecessary because of a lengthy trial transcript from Ms. Buckowich's criminal trial. Plaintiff completely fails to address Defendant's argument that the events that give rise to his claims occurred substantially in Wisconsin.
Pursuant to 28 U.S.C. § 1404(a), "[f]or the convenience of parties and witnesses, [and] in the interest of justice, a district court may transfer any civil action to any other district . . . where it might have been brought." Id. As the movant, Ms. Nowakowski bears the burden of proving transfer of venue is appropriate. Cronos Containers, Ltd. v. Amazon Lines, Ltd., 121 F. Supp.2d 461, 465 (D.Md. 2000). A plaintiff's choice of forum is generally accorded considerable deference, unless the plaintiff is a non-resident of either that forum or of the location where the cause of action arose. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981) (generally, there is "a strong presumption in favor of the plaintiff's choice of forum"); Biometics, LLC. v. New Womyn, Inc., 112 F. Supp.2d 869, 877 (E.D.Mo. 2000) (federal courts give great deference to plaintiff's choice of forum, except when it is not the plaintiff's residence) (citations omitted); Boyd v. Snyder, 44 F. Supp.2d 966, 969 (N.D.Ill. 1999) (less weight accorded, inter alia, when cause of action did not "conclusively arise in forum") (citations omitted); Tischio v. Bontex, Inc., 16 F. Supp.2d 511, 521 (D.N.J. 1998) (plaintiff's choice of forum is given less weight when he or she does not reside there or the forum has little connection to the "operative facts of the lawsuit") (citations omitted). Relevant factors to consider in analyzing the instant motion include: (1) convenience of the witnesses; (2) convenience of the parties; (3) the location of and ease of access to relevant documents and other sources of proof; and (4) all factors that make a trial affordable and expeditious and that bear on the interest of justice. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507-08 (1947); Cronos, 121 F. Supp.2d at 465; Xpressions Footwear Corp. v. Peters, 885 F. Supp. 630, 633 (S.D.N.Y. 1995) (citations omitted).
Neither party argues that this action could not have been brought in the Eastern District of Wisconsin. Further, as discussed later, the crux of the events that, at the very least, form the basis of Plaintiff's RICO and common law fraud claims transpired in Wisconsin. See 28 U.S.C. § 1391(b)(2) (venue appropriate in district in which a "substantial part of the events . . . giving rise to the claim occurred. . . .").
1. Convenience of the Witnesses
Convenience of the witnesses is perhaps the most important factor to consider when analyzing a § 1404(a) motion to transfer venue. See Charles Alan Wright, Arthur R. Miller Edward H. Cooper, 15 Federal Practice and Procedure § 3851 at 415 (1986) ("Probably the most important factor, and the factor most frequently mentioned, in passing on a motion to transfer under 28 U.S.C.A. § 1404(a) is the convenience of witnesses.").
Ms. Nowakowski argues that transfer is proper because none of the witnesses called to testify during Ms. Buckowich's criminal trial live in Maryland. Counsel for Ms. Nowakowski provides an affidavit, stating that according to the prosecutor in Ms. Buckowich's case, 11 individuals testified during the criminal trial. Of the nine non-party witnesses listed, six lived in Wisconsin at the time of the prior trial. The other three lived in or near Illinois and Oregon. Plaintiff does not list any other potential witnesses, and no witnesses from Maryland testified at the criminal trial or have been identified to testify at trial in this court.
The other two witnesses who testified were Plaintiff and Ms. Nowakowski.
Plaintiff asserts that because a "lengthy and relevant transcript exists of the prior court proceedings," "many, if not all" of the witnesses called during the criminal trial will not have to be called during a proceeding in this court. Further, he argues that if depositions are necessary, he might have to bear the cost of obtaining counsel in Wisconsin to depose the witnesses. However, use of a transcript or deposition may not be the most effective means of producing evidence. See Akers v. Norfolk and Western Railway Co., 378 F.2d 78, 79 (4th Cir. 1967) (explaining that if transfer were denied, parties would have to adduce evidence through deposition testimony, "a mode of proof universally acknowledged to be inferior to the personal appearance of witnesses in court") (citing Gilbert, 330 U.S. 501). Moreover, contrary to Plaintiff's assertion, convenience of the witnesses and not the parties is of paramount importance in determining whether to grant a motion to transfer venue.
However, in considering convenience of the witnesses, courts generally require the movant to indicate the key witnesses who will be called to testify during trial and the nature of their testimony. See Morehead v. Barksdale, 263 F.2d 117, 119 (4th Cir. 1959) (affirming district court's decision not to dismiss the action pursuant to § 1404(a), as defendant failed to indicate whether any of "the necessary witnesses" were still in Germany and thus unable to testify in proceedings in this country); see also Cronos, 121 F. Supp.2d at 465 (transfer proper where "key witnesses" reside in another district); Peters, 885 F. Supp. at 633 (explaining that when a motion to transfer venue is based on convenience of the witnesses, the movant "must clearly specify the key witnesses to be called" and "make a general statement of what their testimony will cover.") (citing Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978), rev'd on other grounds, 652 F.2d 278 (2d Cir. 1981)); Continental Airlines, Inc. v. American Airlines, Inc., 805 F. Supp. 1392, 1396 (S.D. Tx. 1992) (movant must designate the key witnesses who will be called to testify at trial, and make a general statement about the substance of their testimony or motion should be denied); Wright, Miller Cooper, supra, § 3851 at 425 (movant should list "key witnesses" and make a general statement concerning their testimony; and "the emphasis must be on this showing rather than on" the overall number of witnesses to be called from a given forum). Ms. Nowakowski fails to make this showing, but merely states that the people named on the list testified at Ms. Buckowich's trial. This proceeding and Ms. Buckowich's trial undoubtedly involve similar issues, especially as to the federal claims. On the other hand, there are several pro se defendants in this civil action, the majority of whom allegedly reside within or closer to Maryland than Wisconsin, and Plaintiff brings several common law causes of action against them, i.e., trover and conversion and unjust enrichment. At this point, it is impossible to state conclusively on this record whether all of the allegations raised against these Defendants or the critical issues regarding Plaintiff's claims in this court will be addressed by the witnesses Ms. Nowakowski provides.
Ms. Nowakowski cites Countryman v. Stein Roe Farnham, 681 F. Supp. 479, 483 (N.D.Ill. 1987), to support her argument that convenience of the witnesses necessitates transfer in this action. However, in that case, the movants asserted that the "pivotal" testimony would come from the parties, who resided in the transferee district. Id. at 483. Thus, that court found transfer appropriate. As already explained, on this record, there is no way to tell conclusively who the key witnesses will be in this action, let alone whether the testimony of the majority of the persons Ms. Nowakowski lists will be pivotal with respect to all claims and defenses.
2. Convenience of the Parties
Although Plaintiff brought this matter in this court, that factor is given less weight in this case as he does not reside in the forum he selected. Countryman, 681 F. Supp. at 482-83. He fails to state why he chose this forum to bring his suit, except that he "determined that litigating this matter in Maryland was preferable and not overly burdensome." Paper no. 56 at 3 n. 2. However, while not given great deference, Plaintiff's choice is still a factor to consider, and he brought this action in Maryland. Further, with the exception of Ms. Nowakowski, all other Defendants allegedly reside in or closer to Maryland than to Wisconsin, and thus it would be much more convenient for them to travel to this court than to the other.
In her affidavit, Ms. Nowakowski asserts that transfer is appropriate, among other reasons, because she is a mother, who has primary responsibility for her children, she works in Wisconsin, and it would be difficult for her to travel to Maryland to defend against this action. The court greatly appreciates Ms. Nowakowski's concerns. However, she fails to mention that there are other Defendants in this action, who either reside in or close to Maryland. Although she correctly asserts that the other Defendants, most of whom proceeding pro se, have not challenged transfer of venue, she has provided no authority stating that this court can not consider the convenience and/or residence of all the parties in deciding this motion.
3. Situs of sources of proof and location of relevant events that give rise to this action
Ms. Nowakowski also asserts transfer is proper because the claims and defenses in this case involve, among other things, written and computer communications; Plaintiff's business and investment activities were undertaken in Wisconsin; and substantially all the personal communications and personal interactions at issue in this case occurred in Wisconsin. The crux of Plaintiff's RICO and common law fraud is an alleged scheme by Ms. Nowakowski, Ms. Buckowich and Mr. Long, whereby they fraudulently induced him to give them, through Ms. Buckowich, $500,000 for investment purposes, but which they misappropriated. Plaintiff alleges that he had numerous conversations with these three Defendants regarding the status of his investment, and after it was stolen, regarding its return. He alleges that Defendants promised to repay him, as evidenced by a facsimile from Mr. Long to Plaintiff and his representatives. The funds in question were allegedly transferred to a foreign account to the above-named Defendants, as well as to the Rudows, Rudow Travel Group, and according to Plaintiff's third-amended complaint, Joan Long. Although Plaintiff alleges that facsimiles, cellular phone technology, and interstate and foreign banking institutions were used to carry out Defendants' acts, it is unclear how Maryland was involved, except for the fact that several Defendants reside here. It is not even clear where Mr. Long's alleged facsimile or communications with Plaintiff originated. Even accepting as true Plaintiff's allegations, there is no indication that the events about which he complains substantially occurred in Maryland.
Plaintiff also asserts trover and conversion and unjust enrichment claims against the Rudows, Rudow Travel Group, and in his third-amended complaint, Joan Long, all of which appear to have more of a connection with Maryland. According to Plaintiff's complaint, after her criminal conviction, Ms. Buckowich assigned a promissory note that she had received from a Tri-Star executive to Mr. Long. Plaintiff alleges that Mr. Long still is in possession of the note, and that he repeatedly has demanded it be tendered to him. He also alleges that Mr. Long transferred $70,000 to the Rudows and Rudow Travel Group, which comprises a portion of his $500,000 and that shortly thereafter, Defendants wired $7,000 of those funds to Joan Long.
The record is devoid of any evidence as to the location of the sources of proof with respect to Plaintiff's claims or Defendants' defenses.
After considering the above factors, the court determines that transfer is inappropriate at this time. Ms. Nowakowski fails to state who the key witnesses will be in this action or provide information concerning their testimony in relation to the claims or defenses at issue, the most important factor in a motion to transfer venue. Further, it is unclear from the current record the location of sources of proof regarding most of the claims and defenses in this action. In addition, in considering the interests of justice and other factors that make a trial affordable and expeditious, the court notes that most Defendants reside in Maryland or states closer to it than Wisconsin, this action has been pending before this court for more than a year, and discovery already has commenced. Thus, Ms. Nowakowski's motion to transfer venue will be denied.
Ms. Nowakowski asserts that Plaintiff brought his claims in this court solely to inconvenience her "in an attempt to coerce a higher nuisance value settlement." There is no evidence that this is so.
B. Motion to Amend Complaint
Plaintiff moves to amend his second amended complaint to add Joan Long as a Defendant in this matter. He alleges that Ms. Long, a North Carolina resident, participated in the racketeering activity by assisting Ms. Buckowich in depositing his funds and then transferring them to Defendant Edward Long and to a foreign bank account (count I). He also brings claims of trover and conversion and unjust enrichment against Ms. Long (counts IV and VI, respectively), alleging that she received $7,000 from the Rudows that Plaintiff apparently claims is part of his misappropriated $500,000.
Leave to file an amended complaint "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). Absent factors not relevant here, a motion for leave to amend generally should be granted. Foman v. Davis, 371 U.S. 178, 182 (1962) (explaining that such factors as undue delay, prejudice to the opposing party, bad faith, etc., might warrant denial of motion for leave to amend). The current motion is unopposed, and will be granted.
C. Motion for Default Judgment
On September 22, 2000, this court entered an Order of default as to Mr. Long for failure to plead or otherwise defend his suit. Plaintiff now moves this court to enter default judgment against Mr. Long, who has yet to respond to Plaintiff's second amended complaint, in the amount of $500,000 and unspecified court costs.
Pursuant to Fed.R.Civ.P. 55(b)(2), a party entitled to seek judgment by default must move for it, and if the defendant previously has appeared in the action, the defendant "shall be served with written notice of the application for judgment at least 3 days prior to the hearing on such application." Id. "[A]ppearance . . . involves some presentation or submission to the court." Charles Alan Wright, Arthur R. Miller Mary Kay Kane, 10A Federal Practice and Procedure § 2686 at 41 (1998). Mr. Long, who was represented by counsel until May 25, 2000, filed a motion to dismiss Plaintiff's original complaint, and an answer to Plaintiff's first-amended complaint. Paper nos. 6, 15. Thus, he has appeared in this action, and is entitled to Rule 55(b)(2)'s notice requirements if the court deems a hearing in this matter to be appropriate.
Upon default, well-pled allegations in a complaint as to liability are taken as true, while allegations as to damages are not. Dundee Cement Co. v. Howard Pipe Concrete Products, Inc., 722 F.2d 1319, 1323 (7th Cir. 1983). A hearing on damages is not mandated by Rule 55(b)(2), but should be held unless "the amount claimed is liquidated or capable of mathematical calculation." James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993) (citations omitted); see also United States v. Di Mucci, 879 F.2d 1488, 1497 (7th Cir. 1989) (if not liquidated, amount requested must be detailed in "documentary evidence or in detailed affidavits") (citation omitted).
When liability of multiple defendants is alleged to be joint and several, a hearing on damages is inappropriate "until the liability of each defendant has been resolved." Dundee, 722 F.2d at 1324. In the instant case, all but one claim against Mr. Long involve joint and several liability, and a hearing on damages as to those claims would have to await further findings as to the liability of the other Defendants. However, Plaintiff also brings a trover and conversion claim against Mr. Long individually (count V of the second amended complaint), seeking damages of $500,000. No hearing is necessary as to the damages requested under this claim, since the claim is against only Mr. Long, and the damages requested are liquidated, i.e., ascertained, determined, and fixed. Consequently, Plaintiff's motion for entry of default judgment is granted in part.
Black's Law Dictionary 930 (6th ed. 1990)
III. Conclusion
For the foregoing reasons the court will DENY Defendant Dawn Nowakowski's motion to transfer this case, pursuant to 28 U.S.C. § 1404(a), GRANT Plaintiff's motion to file a third-amended complaint, and GRANT in part Plaintiff's motion for default judgment.
A separate Order will be entered.
ORDER
For the reasons stated in the foregoing Memorandum Opinion, IT IS this day of June, 2001, by the United States District Court for the District of Maryland, ORDERED that:
1. The Motion to Transfer Venue, pursuant to 28 U.S.C. § 1404(a), by Defendant Dawn Nowakowski, BE, and the same hereby IS, DENIED;
2. The Motion to Amend the Second Amended Complaint by Plaintiff Gordon Ralph BE, and the same hereby IS, GRANTED and the Third Amended Complaint is deemed filed;
3. Plaintiff's Motion for Judgment by Default against Defendant Edward Long BE, and the same hereby IS, GRANTED as to count V (trover and conversion) only;
4. Judgment BE, and the same hereby IS, ENTERED in favor of Plaintiff and against Edward Long on count V (trover and conversion) in the amount of $500,000; and
5. The Clerk is directed to transmit a copy of the Memorandum Opinion and this Order to counsel for all parties and to Defendants Edward Long, Cora Buckowich, Sharon Rudow, and Edward Rudow.