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Steadfast Insurance Co. v. Schindler Elevator Corp.

United States District Court, W.D. Missouri, Southern Division

December 16, 2016

STEADFAST INSURANCE COMPANY, Plaintiff,
v.
SCHINDLER ELEVATOR CORPORATION, Defendant.

          ORDER

          ROSEANN A. KETCHMARK, JUDGE

         Before the Court is Defendant Schindler Elevator Corporation (“Schindler”)'s Motion to Dismiss Complaint for Improper Venue or, in the Alternative, to Transfer Venue to the United States District Court for the District of Colorado. (Doc. 8.) Plaintiff Steadfast Insurance Company (“Steadfast”) opposes the motion. (Doc. 14.) For the reasons set forth below, the motion is DENIED.

         I. BACKGROUND

         This case involves a contract dispute related to a construction project at a hotel in Westminster, Colorado (the “project”). (Doc. 1 at ¶ 7.) Killian Construction Co. (“Killian”) was the general contractor for the project. (Id.) Steadfast issued an insurance policy to Killian that insured the cost of performance of the project. (Id. at ¶ 15.) Schindler was a subcontractor on the project. (Id. at ¶ 8.) Pursuant to the insurance policy, Steadfast issued payments to Killian for costs allegedly incurred due to Schindler's unjustified delays in construction. (Id. at 16.) In this action, Steadfast, as assignee and subrogee of Killian, is seeking damages from Schindler for breach of contract, negligent misrepresentation, equitable subrogation, equitable contribution, and unjust enrichment. The subcontract agreement at issue contains a forum selection clause requiring an action arising under the agreement, with federal jurisdiction, to be brought in the United States District Court for the Western District of Missouri, Southern Division. (Doc. 1-2 at 5.)

         Killian is a Missouri corporation with a principal place of business in Springfield, Missouri. (Id. at ¶ 3.) Steadfast is a Delaware Corporation with a principal place of business in Schaumburg, Illinois. (Id. at ¶ 1.) Finally, Schindler is a Delaware Corporation registered as a foreign corporation in Missouri and maintains a registered agent in Missouri. (Id. at ¶ 4.)

         II. DISCUSSION

         A. Motion to Dismiss for Improper Venue

         Rule 12(b)(3) of the Federal Rules of Civil Procedure allows a party to move for a dismissal based upon improper venue. Although there is a split in the circuits, the Eighth Circuit has held that the defendant bears the burden of establishing that venue is improper. Brigdon v. Slater, 100 F.Supp.2d 1162, 1164 (W.D. Mo. Apr. 16, 2000) (citing United States v. Orshek, 164 F.2d 741, 742 (8th Cir. 1947)); see also Luebbert v. Emp'rs & Operating Eng'rs Local 520 Pension Fund, No. 4:06CV01140 ERW, 2007 WL 1100455, at *2 (E.D. Mo. Apr. 10, 2007) (following Brigdon); Spanier v. Am. Pop Corn Co., No. C15-4071-MWB, 2016 WL 1465400, at *10 (N.D. Iowa Apr. 14, 2016) (reciting split in authority). Ordinarily, “when ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 572 (2007)).

         Venue in civil actions is generally governed by 28 U.S.C. § 1391. That section states in relevant part:

(b) Venue in general. A civil action may be brought in --
(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
***
(c) Residency. For all venue purposes -
(2) an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal ...

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