Auto-Owners Insurance Company v. Dotan Construction, LLC
3:09-cv-01212
M.D. Tenn.Nov 23, 2010Background
- In 2007, Defendants Dotan Construction, LLC and related individuals executed a General Agreement of Indemnity in favor of Auto-Owners Insurance Company to secure bonds for Dotan's Tennessee and Georgia projects.
- Auto-Owners issued performance and payment bonds for two projects: Murfreesboro Project in Tennessee and Naomi Project in Walker County, Georgia.
- Auto-Owners alleges Dotan breached the GAI by failing to prevent claims and by failing to post collateral for the bonds in both projects.
- Plaintiff filed suit in the Middle District of Tennessee on December 23, 2009 seeking breach of contract.
- Defendants moved to strike/dismiss the Naomi Project portion for improper venue and inconvenience; Plaintiff opposed.
- The court denied Defendants’ motion, finding substantial events related to the Naomi Project occurred in the Middle District of Tennessee and that transfer would not be warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper venue for Naomi Project claims | Substantial events occurred in MD Tenn, satisfying §1391(a)(2). | No Naomi Project activity occurred in MD Tenn; improper venue. | Venue is proper; not dismissed for improper venue. |
| Transfer for convenience under 28 U.S.C. §1404(a) | Striking Naomi Project would force multi-jurisdiction litigation and risk inconsistent outcomes. | Georgia forum more convenient due to witnesses and evidence. | No transfer; balance not strongly in favor of Defendants. |
| Application of §1391(a)(2) substantial-connection test | A substantial part of the events occurred in MD Tenn; there is substantial connection to both projects. | Many events and witnesses are in Georgia; MD Tenn is inconvenient. | Substantial connection found; MD Tenn proper forum for the Naomi Project. |
| Effect of 12(b)(3) improper-venue dismissal on Naomi Project | Dismissal would be unnecessary because MD Tenn has substantial events. | Venue not proper under 12(b)(3). | Denied; venue remains proper in MD Tenn. |
Key Cases Cited
- First Michigan Corp. v. Bramlet, 141 F.3d 260 (6th Cir. 1998) (substantial-connection venue analysis for §1391(a)(2))
- Moeckel v. Caremark Rx, Inc., 385 F.Supp.2d 668 (M.D. Tenn. 2005) (.plaintiff's forum choice rarely disturbed absent strong defendant showing)
- Moses v. Bus. Card Express, Inc., 929 F.2d 1131 (6th Cir. 1991) (private and public-interest factors in 1404(a) analysis)
- Blane v. American Inventors Corp., 934 F. Supp. 903 (M.D. Tenn. 1996) (transporting burden of transfer decisions; balance of factors)
- Mitranos v. Hawes, 377 F.3d 402 (4th Cir. 2004) (amended §1391 and substantial-connection rationale to reduce wasteful litigation)