Opinion
No. C 05-0434 SI.
May 10, 2005
ORDER GRANTING DEFENDANT'S MOTION TO TRANSFER VENUE AND TRANSFERRING ACTION TO THE EASTERN DISTRICT OF VIRGINIA
On May 6, 2005, the Court heard oral arguments on the defendant's motion to transfer venue from this District to the Eastern District of Virginia. Having carefully considered the arguments of counsel and the papers submitted, the Court hereby GRANTS the motion and transfers this action to the Eastern District of Virginia, for the reasons set forth below.
BACKGROUND
The current case stems from a car accident on July 18, 2001. On that date, William Libertore, an officer in the United States Navy, flew from Norfolk, Virginia to Los Angeles on military orders. In Los Angeles, Libertore rented a car from Dollar Rent-A-Car, Inc. ("Dollar") as a government employee and paid for the car with his U.S. Navy credit card. At that time, Dollar and the United States government were parties to the "U.S. Government Car Rental Agreement," which provided for car rentals by governmental employees. See Laird Decl., Ex. A. The Government Rental Agreement required Dollar to provide primary insurance coverage for liability and property damage arising from the use of Dollar's rental vehicles by government employees. Dollar's insurance obligations under the Government Rental Agreement were covered by a policy with Diamond State Insurance Company ("Diamond"). Liberatore, as an individual, had his own automobile insurance and umbrella policies with Nationwide Mutual Insurance Company ("Nationwide").
On July 18, 2001, Liberatore drove to Bakersfield to pick up Sherry Ivey, who was not a government employee. Before he could find Ivey, Liberatore drank several cans of beer. Liberatore met Ivey at her home and they decided to go to Nevada for the night to gamble. Liberatore consumed more alcohol while driving to Nevada. While driving in Kern County, California, Liberatore lost control of the car and it collided with a truck, causing serious injuries to Ivey.
As a result of the accident, numerous legal proceedings arose in several courts. Ivey filed damage actions in Kern County Superior Court and in federal district court for the Eastern District of California, naming Liberatore, Dollar and the United States government as defendants. The Kern County damage action was removed to the Eastern District of California, and consolidated with the federal case.
On February 11, 2003, Nationwide filed an action in federal district court for the Eastern District of Virginia, seeking declaratory judgment regarding whether Liberatore was acting within the scope of his employment during the events surrounding the accident. On May 3, 2003, on Dollar's motion, the Virginia action was transferred to the Eastern District of California, where the Ivey claims were pending. On February 5, 2004, Eastern District of California Magistrate Judge O'Neill found that Liberatore was not acting in the scope of his employment at the time of the accident. The original action brought by Ivey was then remanded to Kern County Superior Court, settled and was dismissed on February 1, 2005.
On December 8, 2004, Dollar and Diamond filed a complaint for declaratory relief in Contra Costa County, requesting a determination of the parties' obligations with respect to the defense of Liberatore and the subsequent settlement. On January 28, 2005, defendant Nationwide removed the Contra Costa case to the Northern District of California, on the basis of diversity jurisdiction.
After removing the case to this Court, Nationwide brought a motion to transfer to the Eastern District of Virginia. It is this motion that is before the Court today.
DISCUSSION
Nationwide argues that this Court should find venue in the Northern District of California to be improper under 28 U.S.C. § 1406(a). However, 28 U.S.C. § 1391(c) provides that a civil action may be brought against a corporate defendant under diversity jurisdiction in any district in which the defendant is subject to personal jurisdiction. Plaintiffs assert that defendant has sufficient contacts in California and in this district to find personal jurisdiction, and Nationwide effectively concedes the point. See Def.'s Reply at 2:1-5. Therefore, the Court will not transfer based on improper venue under 28 U.S.C. § 1406(a).However, Nationwide also argues that this Court should transfer the case to the Eastern District of Virginia under 28 U.S.C. § 1404, which provides for transfers "for the convenience of parties and witnesses, in the interests of justice."
No events relevant to this action or any other action related to the July 18, 2001 accident took place in the Northern District of California. At oral argument, plaintiffs' counsel acknowledged that the only reason for filing this action in Contra Costa County Superior Court, a location that has absolutely no connection to plaintiffs' claim, is that plaintiffs' attorneys have an office there. On the other hand, several events related to this case occurred in the Eastern District of Virginia. The Rental Agreement between Dollar and the U.S. government was executed in Alexandria, Virginia. The representatives of Dollar and the U.S. government responsible for the administration of the Government Rental Agreement are located in Virginia. Liberatore is also a resident of Virginia and he entered into his insurance policy with Nationwide in Virginia.
Plaintiffs argue that transfer is not appropriate given that the accident occurred in California. However, the factual issues surrounding the circumstances of the July 18, 2001 accident have already been resolved by Magistrate Judge O'Neill's ruling that Liberatore was not acting in the scope of his employment at the time of the accident. In any event, none of the events surrounding the accident occurred in this District.
Plaintiffs' complaint seeks resolution of a dispute about the parties' "respective rights and obligations under their respective policies for the defense and indemnification of Dollar and Mr. Liberatore." Complaint at ¶ 14. Therefore, the Nationwide policy and the Government Rental Agreement, which were both executed in Virginia, will be relevant to plaintiffs' claim. Plaintiffs argue that the Government Rental Agreement is irrelevant to the current action in light of Magistrate Judge O'Neill's ruling. However, Section 8 of the Government Rental Agreement is ambiguous and could be read to provide coverage even though Liberatore was acting outside of the scope of his employment duties. See Laird Decl., Ex. 1 at 4 ("Persons authorized to operate vehicles rented under this Agreement, if properly licensed, include the renter, and without additional charge, the renter's fellow employees while acting within the scope of their employment duties"). Thus, both the Agreement and the individuals with knowledge of the Agreement will be relevant to the issues in this case. Therefore, it would be in the interest of those witnesses to transfer the matter to the Eastern District of Virginia. Defendant has also identified several other potential witnesses who reside in Virginia.
Plaintiffs argue that the Court should give deference to its choice of forum. However, if the forum lacks any significant contact with the activities alleged in the complaint, the plaintiffs' choice of forum will be given less weight. Chrysler Capital Corp. v. Woehling, 663 F.Supp. 478, 482 (D. Del. 1987). Plaintiffs' only explanation for filing this action in this District is the attorneys' convenience, which is entitled to little weight Plaintiffs have identified no witnesses or parties which would be inconvenienced by a transfer to the Eastern District of Virginia.
Therefore, the Court GRANTS defendant's motion to transfer to the Eastern District of Virginia. The Court finds that transfer is appropriate because all potential witnesses at this point reside in Virginia and none of the relevant events occurred in this District.
CONCLUSION
For the foregoing reasons and for good cause shown, the Court hereby GRANTS defendant's motion and TRANSFERS the case to the Eastern District of Virginia.
IT IS SO ORDERED.