American Empire Surplus Lines Insurance Company v. J.R. Contracting &…

Background

American Empire Surplus Lines Insurance Company alleged that J.R. Contracting & Environmental Consulting, Inc. failed to pay an additional insurance premium under a commercial excess liability policy. American Empire sought $487,386. The policy required an advance premium based on estimated gross receipts and allowed adjustment after an audit. American Empire alleged that an audit showed that J.R. Contracting owed the additional amount.

J.R. Contracting moved under 28 U.S.C. § 1404(a) to transfer the case to the District of New Jersey, arguing that the Southern District of New York was an inconvenient forum. The parties did not dispute that the case could have been brought in New Jersey because J.R. Contracting was domiciled there.

Legal Standard

Under Section 1404(a), a federal district court may transfer a civil case to another federal district where it could have been brought when transfer would serve the convenience of the parties and witnesses and the interests of justice. The party seeking transfer must establish by clear and convincing evidence that transfer is appropriate. The court considered the location of the operative facts, witness convenience, access to documents and other evidence, the parties’ convenience, the ability to compel witnesses, the parties’ relative financial resources, familiarity with the governing law, the plaintiff’s choice of forum, and trial efficiency and the interests of justice.

Analysis

The court found that the location of the operative facts was divided between New Jersey and New York. The policy was issued in New Jersey, but the dispute over the additional premium was partly connected to eleven construction projects J.R. Contracting performed in New York. This factor therefore leaned slightly toward transfer.

The court treated witness convenience as neutral. J.R. Contracting did not explain why traveling to the Southern District of New York would materially inconvenience its New Jersey-based witnesses or identify witnesses who would refuse to appear in New York. The Southern District was also only 5.7 miles farther from J.R. Contracting’s headquarters than the District of New Jersey’s Newark courthouse. The court likewise treated access to documents and other evidence as neutral because electronic documents could be copied and shipped easily.

The court gave some weight to American Empire’s choice of New York as the forum because some operative facts occurred there, even though American Empire was not based in New York. The parties’ relative financial resources were neutral because both were corporate entities and J.R. Contracting provided no evidence of a significant disparity. The court also treated familiarity with New Jersey law as neutral because federal courts commonly apply the substantive law of another state.

Finally, the court found that trial efficiency and the interests of justice leaned slightly against transfer. The parties had already agreed on an initial discovery schedule, exchanged required disclosures, served discovery requests, and participated in two pre-mediation conference calls with a Southern District mediator. Because discovery was underway, transfer could delay the case’s resolution.

Disposition

After weighing the factors, the court concluded that J.R. Contracting had not shown by clear and convincing evidence that American Empire’s choice of forum should not stand. On December 14, 2023, Judge Analisa Torres denied J.R. Contracting’s motion to transfer venue and directed the Clerk of Court to terminate the motion at ECF No. 27.