Opinion
Action 01-D-161-N
March 26, 2001
MEMORANDUM OPINION AND ORDER
Before the court is Defendant's Motion To Dismiss Or, In The Alternative, Motion To Transfer Venue, which was filed February 7, 2001. Plaintiff filed a Response on March 14, and Defendant issued a Reply on March 21. After careful consideration of the arguments of counsel, the relevant law, and the record as a whole, the court finds that the Motion To Transfer is due to be granted pursuant to 28 U.S.C. § 1406(a), rather than 28 U.S.C. § 1404 (a)
I. FACTUAL BACKGROUND
Plaintiff Colonial Bank is an Alabama corporation. It has offices in Georgia, but its principal place of business is in Montgomery County, Alabama. Defendant Clyde Culp is a Maryland citizen, who is an executive officer of a Georgia financing corporation named T.R.C. Acquisition ("TRC").
In May 1998, TRC's business plans called for an expansion into the restaurant business. TRC planned to site a new eatery in suburban Atlanta. A Colonial agent came to TRC's offices in Georgia and offered to finance the restaurant's equipment purchases. Colonial and Culp inked the loan in Georgia. Colonial also filed a security interest in Georgia in some of the restaurant's assets. Culp subsequently guaranteed the loan personally by signing the requisite papers at his Maryland home. Aside from Culp's single act in Maryland. all transactions and negotiations between the parties occurred in Georgia. TRC never did business in Alabama, and it had no agents or employees operating in Alabama.
Colonial allegedly suffered damages arising out a breach of the TRC-Colonial loan. Colonial filed this suit in Alabama state court, and Culp subsequently removed on the basis of diversity of citizenship.
II. DISCUSSION
The court need not consider the issue of personal jurisdiction, for the court finds that this case should be transferred to the United States District Court for the Northern District of Georgia, Atlanta Division. The parties will board "the midnight train" accordingly.
Section 1406(a) provides that "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a).
The venue statute, Section 1391, reads in the disjunctive. It provides that a civil action based on diversity jurisdiction may proceed only in a judicial district where either: (a) any defendant resides, if all defendants reside in the same state; (b) a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or (c) any defendant is subject to personal jurisdiction at the time the action is commenced, if venue is proper in no other district. See id. § 1391.
In this case, Culp is the only defendant, and he resides in Maryland. Thus, venue exists in the United States District Court for the District of Maryland, and § 1391(c) becomes null. Consequently, for venue to exist in this district, it must exist under subsection (b). The essential question under subsection (b) is whether Colonial's claim arose in this judicial district. The court finds that it did not.
Allegations in a complaint raise an inference that venue is proper. When a defendant challenges jurisdiction, however, the burden shifts to the plaintiff to present sufficient facts to support those allegations.See United States v. White, 611 F.2d 531, 536 (5th Cir. 1980); Ferrofluidics Corp. v. Advanced Vacuum Components, Inc., 789 F. Supp. 1201, 1206 (D.N.H.), aff'd, 968 F.2d 1463 (1st Cir. 1992); Ryan v. Glenn, 52 F.R.D. 185, 192 (N.D. Miss. 1971); Kraft v. Hoskins, 311 F. Supp. 1404, 1405 (E.D. Va. 1970).
The Eleventh Circuit adopted as binding precedent the decisions of the former Fifth Circuit rendered prior to October 1, 1981. See Bonner v. Prichard F.2d 1206, 1207 (11th Cir. 1981) (en banc)
Plaintiff's complaint is devoid of any allegations that indicate that its claim arose, in substantial part, in Alabama. Plaintiff submits no concrete evidence supporting its response; its brief merely cites to an inapposite case and urges the court to retain jurisdiction because it believes that TEC has filed for bankruptcy.
On the other hand, the affidavits filed by Culp and Timothy Robinson make clear that virtually all, if not all, of the events leading up to Colonial's lawsuit occurred in Georgia. That is where TRC is located and does business; where the loans were negotiated and closed; and the security interest was filed. Moreover, Defendant states that TEC's bankruptcy petition was dismissed in April 2000, that the majority of its property is still owned by solvent parties, and that Plaintiff may exercise its lien over that property and mitigate its damages claimed against Culp.
Based on these facts, pursuant to 28 U.S.C. § 1406, the court finds that this case belongs in the United States District Court for the Northern District of Georgia, Northern Division. See Woodward Park Imaging, Inc. v. Iwamoto, 955 F. Supp. 1006, 1007-08 (N.D. Ill. 1997). The parties will have easier access to the evidence and the witnesses if this case is heard there. Further, the court finds that transfer will serve the interests of justice.
III. ORDER
Based on the foregoing, it is CONSIDERED and ORDERED that Defendant's Motion To Dismiss Or In The Alternative, Motion To Transfer Venue be and the same is hereby GRANTED. This case be and the same is hereby TRANSFERRED to the United States District Court for the Northern District of Georgia, Northern Division, pursuant to 28 U.S.C. § 1406.
The Clerk of Court is DIRECTED to take all necessary steps to effectuate said transfer.