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Dakota Hotel Ventures, LLC v. Baumann-Architect, Ltd.

United States District Court, D. South Dakota, Western Division

March 2, 2016

DAKOTA HOTEL VENTURES, LLC, Plaintiff,
v.
DAVID BAUMANN-ARCHITECT, LTD., and LIGHTOWLER JOHNSON ASSOCIATES, INC., Defendants.

ORDER

JEFFREY L. VIKEN CHIEF JUDGE

INTRODUCTION

Defendants David Bauman-Architect, Ltd., and Lightowler Johnson Associated, Inc., filed a joint motion to transfer venue to the District of North Dakota. (Docket 12). Plaintiff opposes defendants’ motion. (Docket 16). For the reasons stated below, defendants’ motion is denied.

ANALYSIS

Plaintiff Dakota Hotel Ventures, LLC, commenced this action against the defendants in Seventh Judicial Circuit Court, Pennington County, South Dakota. (Docket 1-1). Defendant Lightowler Johnson Associates, Inc., (“Lightowler”) removed the case to this court pursuant to 28 U.S.C. § 1332 based on diversity jurisdiction. (Docket 1). Defendant David Bauman-Architect, Ltd., (“Bauman-Architect”) consented to the removal. (Docket 1-3). Both defendants filed answers to plaintiff’s complaint. (Dockets 1-2 & 11).

Defendants filed the present motion to transfer venue to the District of North Dakota, Eastern Division, pursuant to 28 U.S.C. § 1404(a). (Docket 12). Defendants seek transfer to the United States District Court in Fargo, North Dakota, because Lightowler is a North Dakota corporation with its principal place of business in Fargo and Bauman-Architect is also a North Dakota corporation with its principal place of business in Reile’s Acres, North Dakota. (Docket 13 at p. 5). The court takes judicial notice of the fact that Fargo and Reile’s Acres are both in Cass County, and within the Eastern Division of the District of North Dakota. Fed.R.Evid. 201(b)(2).

A transfer of venue is controlled by 28 U.S.C. § 1404(a). “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought . . . .” 28 U.S.C. § 1404(a). In determining whether “the interests of justice” are promoted by transfer, the court may consider factors such as: “(1) judicial economy, (2) the plaintiff’s choice of forum, (3) the comparative costs to the parties of litigating in each forum, (4) each party’s ability to enforce a judgment, (5) obstacles to a fair trial, (6) conflict of law issues, and (7) the advantages of having a local court determine questions of local law.” Terra International, Inc. v. Mississippi Chemical Corp., 119 F.3d 688, 696 (8th Cir. 1997). To evaluate the “balance of convenience” the court should consider factors such as: “(1) the convenience of the parties, (2) the convenience of the witnesses—including the willingness of witnesses to appear, the ability to subpoena witnesses, and the adequacy of deposition testimony, (3) the accessibility to records and documents, (4) the location where the conduct complained of occurred, and (5) the applicability of each forum state’s substantive law.” Id. “These considerations parallel the factors that courts typically analyze under section 1404(a).” Id.

“[U]nless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). See also Terra International, Inc., 119 F.3d at 695 (“In general, federal courts give considerable deference to a plaintiff's choice of forum and thus the party seeking a transfer under section 1404(a) typically bears the burden of proving that a transfer is warranted.”); Austin v. Nestle USA, Inc., 677 F.Supp.2d 1134, 1137 (D. Minn. 2009) (“A ‘heavy’ burden rests with the movant to demonstrate why a case should be transferred. . . . To satisfy that ‘heavy’ burden, the movant must demonstrate that the relevant factors weigh ‘strongly’ in its favor.”) (citations omitted).

Because the “interests of justice” and “balance of convenience” factors overlap, the court will address the factors in a combined analysis.

PLAINTIFF’S CHOICE OF FORUM

Plaintiff Dakota Hotel Ventures, LLC, is a South Dakota corporation with its principal place of business in Summerset, South Dakota. (Dockets 1-1 ¶ 1; 1-2 ¶ 1 & 11 ¶ 1). Bauman-Architect is licensed to do business and is actually doing business in South Dakota. (Dockets 1-1 ¶¶ 4-5; 1-2 ¶ 1 & 11 ¶ 2). Lightowler is licensed to do business and is actually doing business in South Dakota. (Dockets 1-1 ¶ 10-11; 1-2 ¶ 1 & 11 ¶ 4).

Plaintiff and Hospitality Builders, Inc., (“HBI”), as the general contractor, entered into a contract for the construction of a motel in Stanley, North Dakota. (Dockets 1-1 ¶ 12; 1-2 ¶ 2 & 11 ¶ 5). See also Docket 1-1 at pp. 15-41 (“Construction Agreement”). HBI is a South Dakota corporation with its principal place of business in Rapid City, South Dakota. (Dockets 1-1 ¶ 2; 1-2 ¶ 1 & 11 ¶ 2). Plaintiff, HBI and Bauman-Architect entered into an architectural services agreement for the project. (Dockets 1-1 ¶ 15; 1-2 ¶ 4 & 11 ¶ 15). See also Docket 1-1 at pp. 42-50 (“Architectural Services Agreement”). Bauman-Architect subsequently contracted with Lightowler for engineering services for the design of the motel. (Dockets 1-1 ¶ 23; 1-2 ¶ 6 & 11 ¶ 9).

Defendants do not claim plaintiff’s lawsuit was improperly initiated in South Dakota. See Docket 13. This factor weighs in favor of plaintiff.

QUESTIONS OF SUBSTANTIVE LAW

The Construction Agreement states that it “shall be governed by the law of the State of South Dakota, without regard to any conflicts of law principles, unless otherwise agreed [to] between the parties.” (Docket 1-1 at p. 19 ¶ 20.1). The Architectural Services Agreement provides that “[u]nless otherwise specified, this Agreement shall be governed by the law of the State of South Dakota.” Id. at p. 45 ¶ 6.1.

“There is an appropriateness . . . in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.” Gulf Oil Corp., 330 U.S. at 509. “[B]ecause the Agreement contains a South Dakota choice-of-law clause . . . [it] is preferable to have a South Dakota court apply South Dakota law.” Larson Manufacturing Co. of South Dakota v. Connecticut Greenstar, Inc., 929 F.Supp.2d 924, 938 (D.S.D. 2013) (referencing Gulf Oil Corp., 330 U.S. 501). “The forum-selection clause, which represents the parties’ agreement as to the most proper forum, should receive neither dispositive ...


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