850 F. Supp. 2d 604
M.D.N.C.2012Background
- IHFC Properties, LLC sues APA Marketing, Inc. and Whalen Furniture Manufacturing, Inc. for breach of a North Carolina lease and related rent, interest, and fees.
- Whalen allegedly purchased APA’s assets, including the IHFC lease, under a 2008 Asset Purchase Agreement, and began occupying the showrooms during markets before vacating.
- IHFC filed the action in Guilford County Superior Court (NC); Whalen removed to federal court, arguing improper venue and seeking transfer.
- Magistrate Judge found venue proper in this district, struck Whalen’s lengthy reply brief, and recommended denying Whalen’s dismissal/transfer motions.
- Whalen appeals the strike/objections and challenges the placement of venue and jurisdiction; IHFC urges reaffirming venue and denying transfer.
- The district court affirmatively denies Whalen’s Rule 12(b)(3) dismissal and 1406/1404 motions and denies transfer, while addressing personal jurisdiction issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal fixes proper venue under 1441(a) | IHFC asserts venue is proper in NC because the action was removed to the district embracing the state court action. | Whalen argues improper venue under 12(b)(3) and seeks transfer under 1406/1404. | Venue proper under 1441(a); Rule 12(b)(3) and 1406(a) motions denied. |
| Whether the court may exercise personal jurisdiction over Whalen | IHFC argues Whalen purchased the Lease as a Purchased Asset, giving jurisdiction in NC; Lease forum clause supports NC jurisdiction. | Whalen contends Purchase Agreement excludes the Lease and California law governs, negating NC jurisdiction. | Court accepts prima facie showing of specific jurisdiction over Whalen; alternative basis via Purchase Agreement and forum clause. |
| Whether Whalen’s reply brief was properly struck | IHFC argues the 22-page reply exceeded Local Rule 7.3(d) and attached materials were improper. | Whalen contends objections to the Loney Affidavit should be considered and that rules were misapplied. | Affirmed striking the reply and not considering attached objections. |
| Whether the case should be transferred to the Southern District of California | IHFC contends transfer is unwarranted given NC ties and lease performance in NC. | Whalen argues factors favor California; appeals the Magistrate Judge’s minimal analysis. | Transfer denied; venue remains in NC. |
Key Cases Cited
- Polizzi v. Cowles Magazines, Inc., 345 U.S. 663 (1953) (venue in removed actions fixed by removal statute)
- Three M Enters., Inc. v. Texas D.A.R. Enters., Inc., 368 F.Supp.2d 450 (D.Md. 2005) (removal fixes venue; §1441(a) controls)
- Kerobo v. Southwestern Clean Fuels Corp., 285 F.3d 531 (6th Cir. 2002) (venue proper under removal; 1406(a) limitations)
- Godfredson v. JBC Legal Grp., P.C., 387 F.Supp.2d 543 (E.D.N.C. 2005) (removal venue rule; §1441(a) controls)
- Hollis v. Florida State Univ., 259 F.3d 1295 (11th Cir. 2001) (implications for transfer under 1406/1404 in removal cases)