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Simpson v. William Dirks Dameron, LLC

United States District Court, W.D. Missouri.

May 22, 2018

MARSHAL T. SIMPSON, et al.
v.
WILLIAM DIRKS DAMERON, LLC, et al.

          ORDER-MEMORANDUM

          KEARNEY, J

         AND NOW, this 22nd day of May 2018, consistent with our May 7, 2018 Order (ECF Doc. No. 9) addressing Defendant's Motion to, among other things, transfer venue (ECF Doc. No. 6), after considering the Plaintiffs' Memorandum in opposition to transferring venue (ECF Doc. No. 10) and Defendants' response in continuing support of transferring venue to the Western District of Missouri (ECF Doc. No. 11), it is ORDERED the Clerk of Court shall forthwith transfer this case to the Clerk of the United States District Court for the Western District of Missouri under 28 U.S.C. §1404 (a) for all further proceedings and close this case in this District.

         Analysis

         Three Kansas investors ("Investors") in a Delaware entity are suing their Missouri lawyers for malpractice. The Kansas investors retained the Missouri lawyers to challenge certain decisions of a Delaware entity first in a Missouri federal court but later transferred to this District. After oral argument, we dismissed the Investors' complaint for failing to state a claim.[1]We held the Investors' fraud and negligent misrepresentation claims were barred by the statute of limitations and the Investors had not met their burden for equitable tolling. Even if the claims were not barred, the Investors did not plead fraud with particularity under federal law. We declined leave to amend finding, "The Investors elected not to amend their complaint to cure deficiencies. During oral argument, the Investors' counsel [our present Defendants] candidly conceded he knew of no additional facts to plead. The Investors admit wanting discovery to see if they can find fraud. Given [our present Defendants'] candor and professionalism, we find no basis to allow yet another time period to find facts they admit are not available to them."[2] The Investors initially appealed but then abandoned their appeal.[3]

         The Kansas Investors then promptly hired new counsel who filed this lawyer malpractice case in this District against the Missouri lawyers challenging lawyer strategies in drafting a complaint; effecting service; abandoning the Section 220 books and records demand; suing in Missouri; failing to learn the legal precedent; failing to seek entry of default; failing to disclose a defendant had been served; failing to attempt to amend the Complaint; being unprepared for our pretrial conference; and, failing to regularly communicate or ask questions with the Investors.[4]

         The Missouri lawyers moved to transfer venue to the Western District of Missouri. The Kansas Investors amended their complaint as of right under Fed.R.Civ.P. 15, requiring we deny the Missouri lawyers' motion to transfer venue but we required the parties show cause as to whether we should transfer venue under 28 U.S.C. §§ 1406 or 1404.[5]

         After considering the parties' briefing, we decline to decide whether the alleged conduct is "substantial" enough to warrant venue here under 28 U.S.C. §1406. The issues under §1406 are close. While the Missouri lawyers physically appeared here on one or two occasions, their alleged conduct affected litigation here. But we disagree with the Investors as to Delaware Law somehow having significant impact. The Investors' main claim - the lawyers' unwillingness to amend and candid assessment of an ability to amend - is governed by Federal Rule 15. There is no magic to the Delaware venue in applying Rule 15. As we detailed in dismissing Invicta, even if we applied Delaware Law on the tolling issues, the Investors failed to meet the pleading requirements of Fed.R.Civ.P. 9(b). As with Rule 15, there is no special magic under Delaware Law affecting pleading requirements under Rule 9(b). The alleged negligence - to the extent the Investors can claim damages from the dismissal of their case - involves interpretations of federal civil procedure.

         The issues are not close for transfer of venue under § 1404(a). The Kansas Investors are asking this District review the alleged negligence of their former Missouri lawyers because we dismissed their earlier case. The Kansas Investors argue since we dismissed the underlying case, we should retain venue. After considering our limited role in the underlying case, the Missouri lawyers met their burden of transferring venue to the Western District of Missouri under §1404 (a).

         We may transfer venue under § 1404(a) "[f]or the convenience of parties and witnesses, in the interests of justice." Because we do not "lightly disturb" the Kansas Investors' choice of venue, the Missouri lawyers bear the burden of establishing venue in the Western District of Illinois better serves the interests of justice and is the more convenient venue.[6]

         In Jumara v. State Farm Ins. Co., our court of appeals defined the relevant private and public interests we must consider when exercising our discretion under 1404(a). Private interests factors are the plaintiffs choice of forum; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties; the convenience of the expected witnesses; and the location of the books and records. The relevant public interests are the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases.[7] Applying these factors to the sworn facts, we are compelled to transfer venue under § 1404(a).

         A. Jumara private interest factors weigh in favor of transfer.

         The private interest factors weigh in favor of transfer.

         1. The Kansas Investors' preferred forum is entitled to little weight.

         While we accord deference to the Investors' choice, "deference given to the plaintiffs choice is reduced when the chosen venue is not the plaintiffs home forum."[8] The Investors swear they are from Kansas. In MoneyCat Ltd v. PayPal, Inc., an Israeli company which did not do business in the United States and had no apparent ties to Delaware law sued a company incorporated with its principal place of business in San Jose, California.[9] Plaintiff argued Delaware is more convenient because it is a shorter trip from Israel to Delaware than to California.[10] The court granted defendant's motion to transfer venue and gave the plaintiffs forum preference less deference because "whatever marginal additional inconvenience will be inflicted on [plaintiff] by having to litigate in California is outweighed by transferring this case to the place where the bulk of the evidence exists."[11]

         The Kansas Investors preference for Delaware weighs minimally against transferring venue. The bulk of evidence is located with the Missouri lawyers in Missouri. Curiously, while the Kansas Investors are concerned about hiring new counsel in Missouri, they did not alternatively argue for a Kansas home venue should we find transfer warranted under § 1404(a). As the Kansas Investors do not argue for more convenience in their home courthouse, we will not volunteer to transfer the case there. They may move the Missouri district court for transfer if warranted.

         2. The Missouri lawyers prefer the Western District of Missouri.

         The Missouri lawyers prefer to litigate in the Western District of Missouri, where they have their law office. Their preference weighs in favor of transferring venue to the Western District of Missouri but we accord its preference less weight than the Kansas Investors' preference (which we accord less deference than usual).[12] But given the Kansas Investors have not offered a preference other than this District, we will afford limited weight to the Missouri lawyers' preference.

         3. The claim largely arose in the Missouri lawyers' offices.

         The Investors' claims arose from decision making in Missouri, with one exception of an answer to our question during oral argument. Investors challenge strategy decisions regarding drafting of a complaint, selecting venue and deciding not to pursue litigation seeking books and records, effecting and reporting service, failing to learn the legal precedent; failing to seek entry of default; failing to attempt to amend the Complaint; being unprepared for our pretrial conference; and, failing to regularly communicate or ask questions with the Investors. As the Missouri lawyers do not have an office in this District and the Investors offer no evidence these decisions arose in this District, we can find no nexus between the claims and this District other than one argument made in a pretrial conference. This argument is based on decisions made long before walking into this District. This factor weighs in favor of transfer.

         4. The convenience of the parties.

         We consider the "(1) the parties' physical location; (2) the associated logistical and operational costs to the parties' employees in traveling to Delaware (as opposed to the proposed transferee district) for litigation purposes; and (3) the relative ability of each party to bear these costs in light of its size and financial wherewithal."[13]

         No party is physically located here. Proceeding in this District will require all parties to incur logistical and operational costs in traveling here. The Kansas Investors do not show how they are unable to incur costs of litigating in Missouri. Of course, the Kansas Investors and the Missouri lawyers once chose Missouri as a favored forum. We have no evidence to compare ...


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