National Center for the Employment of the Disabled v. Ross

Full title: NATIONAL CENTER FOR THE EMPLOYMENT OF THE DISABLED, Plaintiff, v. RICHARD…

Court: United States District Court, W.D. Texas, El Paso Division

Date published: Jun 29, 2005

EP-04-CV-0292-FM (W.D. Tex. Jun. 29, 2005)

Opinion

EP-04-CV-0292-FM.

June 29, 2005

MEMORANDUM OPINION AND ORDER TRANSFERRING THE CASE TO THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

FRANK MONTALVO, District Judge

On this day, the Court considered "Defendants' Motion to Dismiss/Motion for Change of Venue" [Rec. No. 16], "Plaintiff's Response to Defendants' Motion to Dismiss/Motion for Change of Venue" [Rec. No. 19], "Reply to Plaintiff's Response to Defendants' Motion to Dismiss/Motion for Change of Venue" [Rec. No. 21], "Defendant Judith B. Ross, Trustee's Motion to Dismiss for Want of Jurisdiction, Conditional Motion to Transfer Venue, and Answer" [Rec. No. 26], and "Plaintiff's Response to Defendant's Motion to Dismiss/Motion for Change of Venue" [Rec. No. 27] filed in the above captioned cause. After careful consideration of the motions, responses, case file, and applicable law, the Court is of the opinion that this case should be TRANSFERRED to the United States District Court for the District of Arizona; "Defendants' Motion to Dismiss/Motion for Change of Venue" [Rec. No. 16] should be GRANTED IN PART AND DENIED IN PART; and "Defendant Judith B. Ross, Trustee's Motion to Dismiss for Want of Jurisdiction, Conditional Motion to Transfer Venue, and Answer" [Rec. No. 26] should be GRANTED IN PART AND DENIED IN PART.

I. BACKGROUND

This lawsuit arises from a previously filed lawsuit and subsequent judgment rendered by the County Court at Law Number Seven, El Paso County, Texas against Defendant Richard M. Ross. Plaintiff's present suit bases its claims on the failure of Defendant Richard M. Ross to turn over his assets in satisfaction of the judgment entered against him in the El Paso County Court and the alleged fraudulent transfer by Defendant Richard M. Ross of his interest in the Tamarack Entities to Defendant Judith B. Ross and the Judith B. Ross Irrevocable Trust. The Court has removal jurisdiction over the cause under 28 U.S.C. § 1332(a)(1). Plaintiff National Center for Employment of the Disabled ("NCED") is a Texas non-profit corporation with its principal place of business in El Paso, Texas. Defendants Richard M. Ross and Judith B. Ross are both individuals residing in Arizona. The Judith B. Ross Revocable Trust and Judith B. Ross Irrevocable Trust are trusts organized and created under the laws of Arizona. Defendants Tamarack Insurance, LLC and Tamarack Capital, LLC are both Arizona limited liability corporations formed and existing under the laws of Arizona.

II. LAW AND ANALYSIS

A. Motion to Transfer Venue

In a suit based solely on diversity of citizenship, venue is governed by 28 U.S.C. § 1391. Specifically, section 1391(a) states as follows:

A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which 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 (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

28 U.S.C. § 1391(a). Under Section 1406(a), in the event the Court determines that venue is improper, either in the wrong district or division, the Court shall dismiss the case or transfer such case to any district or division in which it could have been brought if it is in the interest of justice. 28 U.S.C. § 1406(a). If venue is improper, a district court has broad discretion in determining whether to dismiss or transfer a case in the interest of justice. See Caldwell v. Palmetto State Savs. Bank of S.C., 811 F.2d 916, 919 (5th Cir. 1987). The analysis of whether or not venue is proper in a judicial district based upon the occurrence of a "substantial part of the events or omissions" does not require the Court "to determine the `best' venue for a cause of action pending before it, but rather must determine only whether or not its venue is proper." See Seariver Maritime Financial Holdings, Inc. v. Pena, 952 F.Supp. 455, 459 (S.D.Tex.,1996)

Defendants seek to have this case dismissed, or transferred to the Arizona District Court, for improper venue. Defendants contend venue is improper in the Western District of Texas under 28 U.S.C. § 1391 because all the Defendants reside in Arizona, a substantial portion of the events or omissions occurred in Arizona, and a substantial part of the property at issue is located in Arizona. [Rec. No. 16]. Plaintiff alleges that venue is proper because "a substantial part of the events or omissions giving rise to the claim occurred in El Paso County, Texas" citing 28 U.S.C. § 1391(a)(2). [Rec. No. 19]. Specifically, Plaintiff argues that Arizona does not have greater contacts with Plaintiff NCED's claim. Additionally, Plaintiff asserts that this district has a substantial connection to the fraudulent transfer claim because the lawsuit arises from and is collateral to the Judgment rendered by an El Paso County Court against Defendant Richard M. Ross.

In this case, Texas is not a proper venue for Plaintiff's claims. First, no Defendant resides in Texas. Second, a substantial part of the events giving rise to Plaintiff's claims did not occur in Texas. The Court disagrees with Plaintiff's argument that this judicial district has a substantial connection to its fraudulent transfer claim merely because of the judgment entered here by an El Paso County Court at Law. Plaintiff bases its claims on the failure of Richard M. Ross to turn over his assets in satisfaction of the judgment entered in the El Paso County Court and the transfer by Defendant Richard M. Ross of his interest in the Tamarack Entities to Defendant Judith B. Ross and the Judith B. Ross Irrevocable Trust. The Texas default judgment is the only event that occurred in Texas. A substantial part of the events giving rise to Plaintiff's fraudulent transfer claim and the alter ego claim occurred in Arizona. Moreover, all of the property owned by the Defendants is located in Arizona. Under all of the factors set forth in 28 U.S.C. § 1391(a), venue is not proper in the Western District of Texas.

The Court notes that Defendants move to dismiss the case on the basis of improper venue pursuant to Federal Rule of Procedure 12(b)(3) and in the alternative to transfer the case to the Arizona District Court. After due consideration, the Court finds that the interest of justice is best served by transferring this case to the District of Arizona.

B. Lack of Personal Jurisdiction

Because the Court has determined that it is appropriate to transfer this action to Arizona, it does not decide the issue of personal jurisdiction as it becomes moot.

III. CONCLUSION

IT IS THEREFORE ORDERED that Defendants' Motions to Dismiss/Motion for Change of Venue [Rec. Nos. 16, 26] should be and hereby are DENIED to the extent the motions seek dismissal.

IT IS FURTHER ORDERED that Defendants' Motions to Dismiss/Motion for Change of Venue [Rec. Nos. 16, 26] should be and hereby are GRANTED to the extent they seek transfer of this case to the United States District Court for the District of Arizona.

IT IS FURTHER ORDERED that this matter should be and is hereby TRANSFERRED to the United States District Court for the District of Arizona for further proceedings. The clerk of this Court is requested to take all steps necessary transfer this cause.