Global Thermoforming Incorporated v. Auto-Owners Insurance Company
2:21-cv-00027
E.D. Wis.Jan 7, 2021Background:
- GTI (Wisconsin corporation; principal place of business in Tempe, Arizona) bought an AOI insurance policy covering facilities in Arizona, Tennessee, and Wisconsin.
- On May 25, 2019 GTI alleges a theft at its Racine, Wisconsin facility and submitted a claim to AOI; AOI investigated, delayed payment, and paid $141,138 in June 2020 which GTI contends was insufficient.
- GTI sued in Arizona state court for breach of contract and tortious bad faith; AOI removed to federal court and moved under 28 U.S.C. § 1404(a) to transfer to the Eastern District of Wisconsin.
- The parties agreed the action could have been brought in the Eastern District of Wisconsin; the dispute centered on which forum better serves convenience and justice under Ninth Circuit factors.
- The district court applied Arizona choice-of-law rules, concluded Wisconsin law governs the contract claim (and likely the bad-faith tort), and found most witnesses, evidence, and claim handling occurred in Wisconsin.
- The Court granted AOI’s motion and ordered transfer to the Eastern District of Wisconsin.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether transfer under 28 U.S.C. § 1404(a) is proper | GTI: Arizona is its principal place of business; plaintiff's forum choice entitled to strong weight; some claim-related activity occurred in Arizona | AOI: Most witnesses, evidence, and claim handling are in Wisconsin; convenience favors transfer | Transfer granted — balancing Jones factors favored Wisconsin despite plaintiff's home-forum choice |
| Which state law governs the substantive claims | GTI: Policy delivered to Arizona; Arizona law applies | AOI: Wisconsin law governs claims related to property and claim handling in Wisconsin | Court: Under Arizona choice-of-law rules, Wisconsin law governs the contract claim and likely the bad-faith tort |
| Weight to give plaintiff’s choice of forum | GTI: Selected its home forum (Arizona) so choice deserves great weight | AOI: Plaintiff’s selection is less persuasive because the dispute has stronger connections to Wisconsin | Court: Plaintiff’s choice has weight but is outweighed by other convenience and justice factors |
| Convenience of witnesses, evidence, and litigation costs | GTI: Key AOI communications and two GTI officers are in Arizona; evidence of coverage is in policy documents | AOI: Vast majority of non-party witnesses, police reports, damaged equipment, and AOI claim handlers are in Wisconsin | Court: Witness/evidence convenience strongly favors Wisconsin; physical evidence and unwilling witness subpoena power favor transfer |
Key Cases Cited
- Gherebi v. Bush, 352 F.3d 1278 (9th Cir. 2003) (plaintiff’s forum choice is presumptively entitled to weight in transfer analysis)
- Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (U.S. 1947) (forum non conveniens principles and considerations of convenience and fairness)
- Van Dusen v. Barrack, 376 U.S. 612 (U.S. 1964) (transfer should seek a more convenient forum, not merely shift inconvenience)
- Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir. 2000) (enumerates factors to consider under § 1404(a))
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (U.S. 1941) (federal courts apply state choice-of-law rules)
- Beckler v. State Farm Mut. Auto. Ins. Co., 195 Ariz. 282 (Ariz. 1999) (insurance-contract issues governed by law of principal location of the insured risk)
- Bates v. Superior Court, 156 Ariz. 46 (Ariz. 1988) (choice-of-law approach for insurance bad-faith torts under Restatement principles)