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Zurich Reinsurance Limited v. York International Corporation

October 28, 1998


The opinion of the court was delivered by: Irenas, District Judge



Presently before the Court is the motion of defendant York International Corporation ("York") for transfer of venue in this action to the Western District of Louisiana, the district in which the fire giving rise to plaintiff Zurich Insurance (UK) Limited's ("Zurich") action on behalf of its insured occurred. Because we find the Western District of Louisiana to be a better forum in which to litigate this matter, we will grant York's motion and transfer the case forthwith.


On February 4, 1998, Zurich filed this action in the Superior Court of New Jersey for Camden County. On February 27, 1998, York removed the case to this Court. Zurich seeks to recoup monies it paid under a homeowner's insurance policy as a result of a fire that occurred at real property located at 2708 Locust Street, Arcadia, Louisiana. Zurich, the subrogee of the property owner, contends that the fire was caused by an unsafe and dangerous HVAC furnace which York allegedly placed into the stream of commerce without acting in conformance with the relevant merchandising and/or manufacturing/design procedures.

Zurich is a foreign corporation that maintains its principal place of business in the United Kingdom. York is a Delaware Corporation that maintains its principal place of business in the Commonwealth of Pennsylvania. Zurich brought suit in New Jersey alleging that York regularly conducts business in New Jersey.


"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). Section 1404(a) vests "discretion in the district court to adjudicate motions to transfer according to individualized, case-by-case consideration of convenience and fairness." Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 27 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)).

The threshold question under Section 1404(a) is whether the action might have been brought in Louisiana. Van Dusen, 376 U.S. at 613. In a suit based on diversity, as is this one, venue is proper in: "(1) a judicial district where any defendant resides, if all defendants reside in the same State; (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred . . .; or (3) a judicial district in which the defendants are subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought." 28 U.S.C. § 1391(a). In the case at bar, venue is proper in Louisiana under 28 U.S.C. § 1391(a)(2) since the plaintiff's claims arise out of a nucleus of facts that, for the most part, took place in Louisiana.

In deciding motions to transfer venue, courts have not limited their consideration to the three factors, "the convenience of parties and witnesses, [and] in the interest of justice," enumerated in § 1404(a). Rather, courts have considered "`all relevant factors to determine whether on balance the litigation would more conveniently proceed and the interests of justice better served by transfer to a different forum.'" Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995) (quoting 15 Charles Alan Wright et al., Federal Practice and Procedure § 3847 (2d ed. 1986)) Although a plaintiff's choice of forum is entitled to deference, see Jumara, 55 F.3d at 879; Lony v. E.I. DuPont de Nemours & Co., 886 F.2d 628, 633 (3d Cir. 1989); National Property Investors VIII v. Shell Co., 886 F.2d 628, 633 (3d Cir. 1989), where the central facts of a lawsuit occurred outside of the forum state, a plaintiff's choice of forum is afforded less deference. National Micrographic Systems, Inc. v. Cannon U.S.A. Inc., 825 F. Supp. 671, 681 (D.N.J. 1993).

According to the Third Circuit, "in deciding a motion under §1404(a), the Court must consider both the public and private interests affected by the transfer." Jumara, 55 F.3d at 879. Those private interests include: the plaintiff's original choice of forum; the defendant's preference; the place where the claim arose; the relative physical and financial condition of the parties; whether witnesses will be unavailable in one forum; and the location of relevant books and records. Id. The public interests which the Court should consider include: the enforceability of the judgment; practical considerations that would make the trial "easy, expeditious, or inexpensive;" an interest in resolving local controversies in a local court; court congestion in each forum; the public policies of the fora; and in diversity cases, the judge's familiarity with the applicable state law. Id. at 879-80 (citations omitted). However, the appellate court noted "there is no definitive formula or list of the factors to consider." Id.

In the case at hand, the private interests, with the exception of the plaintiff's choice of forum, all weigh in favor of transferring this case to the Louisiana federal courts. Defendant has expressed its preference of litigating this action in Louisiana, where the fire took place and where the property owner resides. Obviously, Louisiana is where this claim arose, where the relevant witnesses will be available *fn1 and where the location of relevant records and reports regarding the fire are located. The relative physical and financial condition of the parties is not much affected since Zurich is a foreign corporation who may presumably just as easily come to Louisiana as to New Jersey and York has expressed its willingness to travel to Louisiana.

The public interests, on the whole, also weigh in favor of transferring venue to the Western District of Louisiana. The judgment will be as easily enforceable in either forum. Court congestion is relatively similar as well, although the Louisiana federal system is somewhat less congested then the New Jersey federal system. During the twelve-month period ending September 30, 1997, the number of weighted filings per federal judgeship in Louisiana was slightly lower than in New Jersey: 350 civil cases and 84 criminal cases compared to New Jersey's 353 civil cases and 90 criminal cases. Leonidas Ralph Mecham, Judicial Business of the United States Court, 1997 Annual Report of the Director (Administrative Office of the United States Courts, Washington, D.C.) March, 1997, at Table X-1A. However, the time to trial for cases in the Western District of Louisiana was much lower than the time to trial in the District of New Jersey: 15 months compared to New Jersey's 28 months. Id. at Table C-10. Practical considerations also dictate in favor of a transfer. Not only is the possibility of a jury view of the fire site obviously increased if trial is held in Louisiana, see Ricoh Co., Ltd. v. Honeywell, Inc., 817 F. Supp 473, 478 (D.N.J. 1993), but it is also more likely that the trial will be "easy, expeditious or inexpensive" where the fire took place, the homeowner resides, the investigation occurred, the parties who have installed or serviced the furnace and the majority of witnesses are located. Similarly, the interest in resolving local controversies in a local court is clearly best served by litigating in Louisiana.

There are only two public interests which must be analyzed further before determining whether a transfer to Louisiana is appropriate: the public policies of the fora and the judge's familiarity with state law. Zurich alleges that it will be prejudiced if we grant the transfer to the Western District of Louisiana because, unlike New Jersey, Louisiana does not have a favorable fictitious pleading rule and therefore any amendments replacing John Doe parties with actual parties would not relate back to the time of the filing of the original complaint for statute of limitations purposes. Federal Rule of Civil Procedure 15(c)(1) allows state relation back law to govern a state claim in federal court if state law "affords a more forgiving principle of relation back than the one provided by [Rule 15(c) ]." Fed. R. Civ. P. 15(c), Advisory Committee Notes, 1991 Amendment; see Bryan v. Assoc. Container Transp., 837 F. Supp. 633, 643 (D.N.J. 1993) (quoting same). Under Fed. R. Civ. P. 15(c)(1), if New Jersey law would permit relation back, the federal rules permit the amendment to relate back. See Bryan, 837 F. Supp. at 644; In re Sharps Run Associates, L.P., 157 B.R. 766, 799-800 (D.N.J. 1993); Jordan v. Tapper, D.O., 143 F.R.D. 567, 572 (D.N.J. 1992); Wilson v. City of Atlantic City, 142 F.R.D. 603, 605-06 (D.N.J. 1992). New Jersey law permits Zurich to amend its complaint with the John Doe defendants' true identity and enjoy relation back. See N.J. Civ. R. 4:26-4; *fn2 Jordan, 143 F.R.D. at 575; Viviano v. CBS, Inc., 101 N.J. 538, 548, 503 A.2d 296 (1986); Farrell v. Votator Div. of Chemetron Corp., 62 N.J. 111, 299 A.2d 394 (1973). *fn3 On the other hand, Louisiana law, while not totally clear on the issue, may prohibit relation back. See Hensgens v. Deere & Co., 869 F.2d 879, 882 (5th Cir.), reh'g denied, 875 F.2d 858, cert. denied, 493 U.S. 851 (1989) (describing confusion in Louisiana case law regarding the effect on the running of the statute of limitations of a petition containing a misdescription or misnomer of a defendant without addressing whether the old case law prohibiting relation-back does or does not apply to fictitious parties). Compare Payne v. Pedus Bldg. Serv. Inc., 671 So.2d 13, 14 (La. App. 1996) (the naming of fictitious parties in a petition does not interrupt running of statute of limitations as to parties later ...

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