Opinion
NOT FOR PUBLICATION
ORDER ON MOTION TO DISMISS AND TO TRANSFER ADVERSARY PROCEEDING
PETER W. BOWIE, Chief Judge United States Bankruptcy Court.
Debtor filed an adversary proceeding action against numerous prepetition lenders and the broker which arranged for the loans. A group of 15 lenders identifying themselves as "First Priority Sargent Ranch Lenders" (Movants) moved to dismiss several causes of action and to transfer venue of the adversary proceeding to the Northern District of California, Oakland Division, on the ground that the majority of parties reside there, the transactions upon which the adversary is based occurred there and the bulk of the documentary evidence is there." For the reasons set forth below, the Court grants the motion to transfer venue and declines to reach the merits of Movants' motion to dismiss.
The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1334 and General Order No. 312-D of the United States District Court for the Southern District of California.
Rule 7087 of the Federal Rules of Bankruptcy Procedure authorizes bankruptcy courts to "transfer an adversary proceeding or any part thereof to anther district pursuant to 28 U.S.C. § 1412 ..." 28 U.S.C. § 1412 provides in turn "A district court may transfer a case or proceeding under title 11 to a district court for another district, in the interest of justice or for the convenience of the parties."
A transfer under § 1412 requires a showing that granting the transfer either will be in the interest of justice or for the convenience of the parties. Creekridge Capital, LLC v. Louisiana Hosp. Center. LLC. 410 B.R. 623, 629 (D.Minn. 2009) (citations omitted). Section 1412 is phrased in the disjunctive, hence transfer is appropriate if either criterion is satisfied. Id. The party moving for a transfer has the burden to show by a preponderance of the evidence that transfer is warranted. Id. A determination under § 1412 requires a case specific analysis that is subject to broad discretion of the court. Id. The "interest of justice" option includes factors such as (1) the economical and efficient administration of the bankruptcy estate, (2) the presumption in favor of the forum where the bankruptcy case is pending, (3) judicial efficiency; (4) the ability to receive a fair trial, (5) the state's interest in having local controversies decided within its borders by those familiar with its laws, (6) the enforceability of any judgment rendered, and (7) the plaintiff's original choice of forum. Id. Other factors courts have identified in evaluating the interest of justice include the proximity of creditors to the court, the proximity of the debtor to the court, the proximity of the witnesses necessary to the administration of the estate, and the location of the assets. Id. For the "convenience of the parties" alternative, courts often consider (1) the location of the plaintiff and the defendant, (2) ease of access to necessary proof, (3) convenience of witnesses, (4) availability of subpoena power for unwilling witnesses, and (5) expenses related to obtaining witnesses. Id.
The Court finds that Movants have established that the this case should be transferred to the Northern District of California as that would serve the convenience of the parties. In support of its request to transfer Movants provided evidence that the vast majority of the defendants, including all of Movants, had mailing addresses in the Northern District of California. Though Debtor's principal, Wayne Pierce resides in this District and the bankruptcy case was filed here, the sole asset of the estate - 6, 400 acres of undeveloped real property is located in the Northern District of California. The real property lies at the center of this dispute as all of the defendants assert claims secured thereby. All of the transactions upon which the action is based took place in the Northern District. Further, the documentary evidence which is likely to be used in this case is located in the Northern District.
In response. Debtor provided no evidence on the issue of convenience. Debtor's response was the argument that the adversary proceeding would affect the administration of the Bankruptcy case and that a transfer would tie the hands of this Court "in terms of administering the case and/or confirming a plan of reorganization until a final order is entered in a foreign court." The Court is not persuaded by Debtor's argument. It may well be that resolution of the Bankruptcy case will depend on the outcome of this adversary proceeding. However, there is no evidence, nor reason to believe that it would be resolved more rapidly in this District than in the Northern District of California.
This Court can take judicial notice that it is up to its waist in pleadings in this bankruptcy case alone and that it has trials stacked on the horizon reaching well into 2011. The same facts which Movants have used to establish that the Northern District of California is a more convenient forum in general, namely that the vast majority of the parties and evidence are located up there, indicates that resolution of this litigation would be more readily done in the Northern District of California.
For the reasons set forth above the Court orders that this adversary proceeding be transferred from this Court to the Northern District of California, Oakland Division as requested by Movants.
In light of the transfer of venue, the Court declines to reach the merits of Movants' motion to dismiss the various causes of action. This is not an indication that the motion lacks merit. Rather, the Court is of the opinion that rather than send a piecemeal litigation to the new court, it is better to allow that court to address the cases in its entirety.
IT IS SO ORDERED.