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NCR CREDIT CORP. v. YE SEEKERS HORIZON

August 10, 1998

NCR CREDIT CORPORATION, Plaintiff,
v.
YE SEEKERS HORIZON, INC., Defendant.



The opinion of the court was delivered by: BASSLER

BASSLER, DISTRICT JUDGE:

 Defendant Ye Seekers Horizon, Inc. moves to transfer venue to Texas. This Court's jurisdiction is invoked pursuant to 28 U.S.C. § 1332 (diversity). For the reasons set forth below, the Court denies Defendant's motion to transfer venue.

 I. BACKGROUND

 Plaintiff is a Texas corporation, with its principal place of business in Houston, Texas. (See Affidavit of Richard C. Rolland ("Rolland Aff.") PP 2-3.) Defendant is a Delaware corporation, with its principal place of business in Parsippiny, New Jersey. (Complaint P 1; see Affidavit of Dondra Benjamin in Opposition to Defendant's Motion to Transfer Venue ("Benjamin Aff.") P 6.)

 Pursuant to 14 separate subleases, Plaintiff leased equipment from Defendant. (Complaint PP 5-18; Benjamin Aff. PP 2-3.) All negotiations of the subleases took place in Texas. (Roland Aff. P 5.) Defendant executed the subleases in Texas. (Id.) The equipment is in Defendant's stores, which are in Texas. (Id.)

 A Master Lease Agreement ("Master Lease") governs 11 of the subleases. (Benjamin Aff. P 2 & Ex. A, Master Lease.) The Master Lease does not contain a forum selection clause. (Id.) A Master Equipment Lease Agreement ("Master Equipment Lease") governs the final 3 subleases. (Id. P 3 & Ex. B, Master Equipment Lease.) The Master Equipment Lease contains a forum selection clause, which states:

 
Lessor and Lessee consent to the jurisdiction of any local, state or Federal court located within [New Jersey], and waive any objection relating to improper venue or forum non conveniens to the conduct of any proceeding in any such court.

 (Master Equipment Lease P 30.) The forum selection clause also states that the Master Equipment Lease "SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW JERSEY (STATE)." (Id. (emphasis in original).)

 On February 19, 1998, Plaintiff filed this action. The First Count is for breach of contract, alleging that Defendant is passed due on its monthly rent payments pursuant to the subleases. (Complaint, First Count.) The Second Count is for future rent payments that may become due. (Id., Second Count.) The Third Count is for the return of the leased equipment due to the defaults on the rent payments. (Id., Third Count.) Finally, in the Fourth Court, Plaintiff seeks to recover damages "in the amount of the Lessor's Return as defined in the Lease." (Id., Fourth Count.)

 In support of its motion to transfer venue, Defendant contends that all of its witnesses, including two former employees, reside in Texas. (Roland Aff. P 6.) Defendant's president also states:

 
If this matter were to proceed to trial in New Jersey, it would significantly interfere with the operation of our business. Additionally, the costs associated with transportation, lodging and travel expenses will be difficult to absorb by a company our size.

 (Id. P 7.)

 Plaintiff's affiant responds that "all of NCR Credit's original records concerning this matter are located in New Jersey, as are all of its witnesses that would be called to testify at trial." (Benjamin Aff. P 4.) Plaintiff's affiant also states that "no documents or witnesses pertinent to NCR Credit's claim against the defendant are located anywhere other than in New Jersey." (Id. P 5.)

 II. DISCUSSION

 A. Transfer for Improper Venue

 Defendant argues that venue is not proper because "all defendants reside in the State of Texas[,] all of the events involved, including the signing of the contracts occurred in Texas[,] [and] all of the property and equipment leased by the defendants [sic] from the plaintiffs [sic] is, and always has been, located in Texas." (Defendant's Memorandum of Law ("Moving Mem.") at 2.)

 Title 28 U.S.C. § 1406(a), entitled "Cure or Waiver of Defects," governs a motion to dismiss or transfer for improper venue. That statute reads, in relevant part:

 
The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district ...

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