United States District Court, D. New Jersey
June 28, 2005.
UNITED STATES FIRE INSURANCE COMPANY and THE NORTH RIVER INSURANCE COMPANY, Plaintiffs,
ALDWORTH COMPANY, INC., Defendant.
The opinion of the court was delivered by: JEROME SIMANDLE, District Judge
Plaintiffs United States Fire Insurance Company ("U.S. Fire")
and The North River Insurance Company ("North River") brought
this declaratory judgment action pursuant to 28 U.S.C. § 2201 and
Fed.R.Civ.P. 57, seeking a declaration by the Court that
Plaintiffs have no duty to defend or indemnify Defendant Aldworth
Company, Inc. ("Aldworth") for liability arising out of the
underlying personal injury action, England v. Barron, No.
01SV541 (Coweta County, Georgia). Defendant seeks to dismiss the complaint pursuant to Rules
12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure for
lack of personal jurisdiction and improper venue.*fn1
Alternatively, Defendant seeks to have this matter transferred
either to the Northern District of Georgia, the jurisdiction
encompassing the forum in which the underlying action is pending,
or to the District of Massachusetts, the place of the insurance
contract. For the reasons now stated, the motion will be denied
in its entirety.
Defendant Aldworth is a corporation organized under the laws of
Massachusetts with its principal place of business in Lynnfield,
Massachusetts. (Compl. ¶ 3.) Aldworth is in the business of
leasing drivers, warehouse workers, and other relevant employees
to firms whose business involves transporting goods. Duncan v.
Aldworth, 124 F.Supp.2d 268, 275 (D.N.J. 1999). Plaintiffs are
New Jersey corporations with their principal places of business
in Morristown, New Jersey.
On August 14, 2001, Aldworth was sued on a respondeat superior
theory of liability by Sandra and Andrew England in state court
in Coweta County, Georgia, claiming that on August 30, 1999,
Sandra England was punched in the face by Ricky Barron, a truck
driver employed by Aldworth and/or Keystone Freight Company. (Id. at ¶¶ 6-8.) According to Plaintiffs,
service of process on Aldworth was properly effectuated. (Id.
at ¶ 10.)
Upon receipt of process, Aldworth's Director of Operations at
that time, Wayne Kundrat, failed to forward copies of the
underlying action to North River. (Id. at ¶¶ 11, 12.) North
River, upon its own inquiries, first received notice of the
underlying lawsuit on October 22, 2001. (Id. at ¶ 13.) That
same day, North River sent a reservation of rights letter to
Aldworth requesting an explanation as to why North River had not
been notified of the underlying litigation. (Id.) On October
29, 2001, Kevin Roy, an Executive Vice President at Aldworth,
responded by telephone to North River's letter and informed North
River Claims Specialist Ritchie Royston that Wayne Kundrat had
been instructed to forward a copy of the underlying action to
North River but simply had failed to do so. (Id. at ¶ 14.) The
next day, North River sent a letter to Aldworth declining
coverage for liability arising from the underlying lawsuit on the
grounds that Aldworth had breached its contractual duties to
North River. (Id. at ¶ 15.) In the underlying tort action, default judgment was entered
against Aldworth as to liability and the amount of damages was
tried to a jury. A judgment was subsequently entered against
Aldworth for $750,000 in compensatory damages and $1 million in
punitive damages. (Id. at 16.)
Transfer here may be appropriate regardless of whether venue is
proper or whether this Court has personal jurisdiction over
Defendant. See Gehling v. St. George's School of Medicine,
Ltd., 773 F.2d 539, 544 (3d Cir. 1985) (citing Reyno v. Piper
Aircraft Co., 630 F.2d 149, 164-65 (3d Cir. 1980), rev'd on
other grounds 454 U.S. 235 (1981), reh'g denied
455 U.S. 928 (1928)); Goldlawr v. Heiman, 369 U.S. 463, 466 (1962); 15
Charles Alan Wright, R. Miller & Edward H. Cooper, Federal
Practice and Procedure § 3827 (2d ed. 1986) (explaining that if
"transfer can be ordered [under 28 U.S.C. § 1406(a)] of a case
from a district where both venue and personal jurisdiction are
lacking, it should follow a fortiori that there can be transfer
[under § 1404(a)] if venue is proper and only personal
jurisdiction is lacking"). Nonetheless, insofar as the Court's
determination as to personal jurisdiction will govern which
provision either 28 U.S.C. §§ 1404(a) or 1406(a) controls the
transfer analysis, that issue must be discussed at the outset.
See Jumara v. Evangelina, 55 F.3d 873, 878 (3d Cir. 1995). A. This Court Has Personal Jurisdiction Over Defendant
Defendant is subject to the personal jurisdiction of this
Court. The issue of personal jurisdiction is approached as
[T]o exercise personal jurisdiction over a defendant,
a federal court sitting in diversity must undertake a
two-step inquiry. First, the court must apply the
relevant state long-arm statute to see if it permits
the exercise of personal jurisdiction; then, the
court must apply the precepts of the Due Process
Clause of the Constitution. In New Jersey, this
inquiry is collapsed into a single step because the
New Jersey long-arm statute permits the exercise of
personal jurisdiction to the fullest limits of due
process. . . .
Personal jurisdiction under the Due Process Clause
depends upon the relationship among the defendant,
the forum, and the litigation. Physical presence
within the forum is not required to establish
personal jurisdiction over a nonresident defendant.
Instead, the plaintiff must show that the defendant
has purposefully directed its activities toward the
residents of the forum state, or otherwise
purposefully availed itself of the privilege of
conducting activities within the forum State, thus
invoking the benefits and protections of its laws.
IMO Industries, Inc. v. Kiekert AG, 155 F.3d 254
, 258-59 (3d
Cir. 1998) (internal citations omitted).
This Court has had the occasion to discuss Aldworth's
relationship to the State of New Jersey once before. See
Duncan v. Aldworth, 124 F.Supp.2d 268 (D.N.J. 1999). There, the
Regional Director of the National Labor Relations Board ("NLRB")
petitioned the Court for a temporary injunction pursuant to
section 10(j) of the National Labor Relations Act (the "Act"), as
amended, 29 U.S.C. § 160(j), following the issuance of an unfair
labor practice complaint under section 10(b) of the Act alleging
that Aldworth and Dunkin' Donuts Mid-Atlantic Distribution
Facility ("Dunkin' Donuts") engaged in unfair labor practices. In
reaching the conclusion that Aldworth and Dunkin' Donuts were
"joint employers" for purposes of the Act, the Court noted that
Aldworth employed about 1,500 employees in roughly 24 states,
including New Jersey; Aldworth provided services to about 25
businesses, including Dunkin' Donuts, which maintained a
distribution facility in Swedesboro, New Jersey; at that
facility, Aldworth employed about 130-140 employees, consisting
of about 63 drivers, 40-45 warehouse employees, 30-40 driver
helpers and a number of supervisors. Id. at 276. The Court further noted that "Aldworth pays the [Dunkin'
Donuts] employees wages and benefits, maintains workers'
compensation insurance, withholds taxes, and keeps records."
Moreover, another of Aldworth's customers, Commodity Specialist
Company ("Commodity"), currently maintains an office in Newark,
New Jersey. (12/15/04 Dunn Aff. at ¶ 5.) Aldworth leases drivers
to Commodity who report to work at the Newark office. (Id.) As
with its Dunkin' Donuts customers, Aldworth has purchased New
Jersey workers' compensation insurance for Commodity employees.
(Def. Reply Br. at 7.) In addition, it is undisputed that
Aldworth obtained an employers' liability insurance policy from
U.S. Fire for its employment activities in New Jersey and that it
maintains a New Jersey Taxpayer identification number. (Pls. Br.
at 8; Pls. Sur-Reply Br. at 2.) These facts support the Court's
conclusion that Aldworth "has purposefully directed its
activities toward the residents of [New Jersey], or otherwise
purposefully availed itself of the privilege of conducting
activities within the forum State, thus invoking the benefits and
protections of its laws." Kiekert AG, 155 F.3d at 258-59. The
Court thus has general jurisdiction over Defendant.*fn2
In any event, the Court finds that there is specific
In order for specific jurisdiction to be properly
exercised under the Due Process Clause, the plaintiff
must satisfy a two-part test. First, the plaintiff
must show that the defendant has constitutionally
sufficient "minimum contacts" with the forum. Second,
for jurisdiction to be exercised the court must
determine, in its discretion, that to do so would
comport with "traditional notions of fair play and
IMO Industries, 155 F.3d at 259 (internal citations omitted).
Both prongs are satisfied here. Specifically, the subject matter
of the complaint in part was the U.S. Fire Insurance policy which
Aldworth sought in order to cover its employment activities in
the District of New Jersey. As such, it does not offend "traditional notions of fair play and substantial justice" that
Defendant would be hailed into a New Jersey court in a matter
relating to that very agreement. B. Transfer Under § 1404(a)
Because this Court has personal jurisdiction over Defendant
Aldworth, Defendant "resides" in this judicial district within
the meaning of 28 U.S.C. § 1391(a) and (c).*fn3 For that
reason, venue here is proper. Even though venue is proper, however, the Court has discretion to
transfer the matter to another district pursuant to
28 U.S.C. § 1404(a). That section provides that "[f]or the convenience of the
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."*fn4
28 U.S.C. § 1404(a); see Shutte v. ARMCO Steel Corp., 431 F.2d 22, 25 (3d
Cir. 1970). First, the events giving rise to this action took place in
Georgia and, thus, this action could have been originally filed
there.*fn5 (Compl. at ¶ 7; Def. Br. at 2.) However, the
transferee venue is not more convenient to the parties and
witnesses. To be sure, courts are not limited to considerations
of convenience alone. Instead, "commentators have called on the
courts to `consider all relevant factors to determine whether on
balance the litigation would more conveniently proceed and the
interests of justice be better served by transfer to a different
forum.'" Jumara, 55 F.3d at 879. Thus, "while there is no
definitive formula or list of factors to consider, courts have
considered many variants of the private and public interests
protected by the language of § 1404(a)." Id.
The private interests have included: plaintiff's
forum preference as manifested in the original
choice; the defendant's preference; whether the claim
arose elsewhere; the convenience of the parties as
indicated by their relative physical and financial
condition; the convenience of the witnesses but
only to the extent that witnesses may actually be
unavailable for trial in one of the fora; and the
location of books and records (similarly limited to
the extent that the files could not be produced in
the alternative forum).
The public interests have included: 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 interests 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
Id. at 879-80 (internal citations omitted). The Court has
carefully considered each of these factors and now holds that
Defendant has not satisfied its burden of establishing the need
to transfer. Id. at 879. For the following reasons, Plaintiffs'
choice of venue will not be disturbed. 1. The Northern District of Georgia Is Not More Convenient
Than the District of New Jersey for the Parties and Witnesses
"Section 1404(a) provides for transfer to a more convenient
forum, not to a forum likely to prove equally convenient or
inconvenient." Van Dusen v. Barrack, 376 U.S. 612, 646 (1964).
It is well settled that a court will not order transfer of a case
if doing so merely shifts the burden from one party to another.
Barrack, 376 U.S. at 646. For the following reasons, it is
clear that New Jersey is at least as convenient as the Northern
District of Georgia for the parties and witnesses in this case.
Defendant argues that "most of the witnesses and relevant
documents are located in the Northern District of Georgia. In
fact, the adjuster who handled the claim on behalf of Plaintiffs
lives and works in Georgia. Highly relevant witnesses will be the
claimants and the attorneys, all of whom are located in Georgia."
(Def. Br. at 11.) The Court is not persuaded by this argument.
First, Aldworth is a Massachusetts company with its principal
place of business in Lynnfield, Massachusetts. Like Plaintiffs,
then, Defendant likely maintains its books and records outside of
Georgia.*fn6 Second, the convenience of the insurance
adjuster should not weigh in favor of transfer when Plaintiffs
themselves are not troubled by the potential inconvenience of
bringing their adjuster to New Jersey in the event of trial.
Similarly, the convenience of the tort claimants in the
underlying dispute in Georgia is irrelevant as they are not
parties to this litigation nor will they likely be called as
witnesses.*fn7 Finally, Defendant would have the Court believe that the
relative wealth of the parties counsels in favor of transfer.
Specifically, Defendant maintains that as "a small family owned
company that is being stretched with all of the litigation in
Georgia," it is entitled to transfer to the situs of the
underlying tort action. (Def. Reply Br. at 10.) That
characterization stretches the truth. In the first instance, the
single underlying dispute has been resolved. In any event,
Aldworth, despite its representations to the Court, is hardly a
"small family owned company." Indeed, on its own company website
Aldworth boasts that it provides "nationwide logistics support"
by "employ[ing] over two thousand logistics personnel and supply chain professionals nationwide." See
http://www.aldworthcompany.com/content.gif. The Court is not
sympathetic to the financial strain that this litigation may
impose on Aldworth any more than it would be to any other
national company defending against a litigation outside of its
2. The Public Interest Is Well Served By Keeping the Action In
One factor that is frequently considered by courts in
determining whether transfer is in the interest of justice is
"the desire to avoid multiplicity of litigation from a single
transaction." 15 Wright & Miller § 3854. First, as already noted,
the underlying state action has been resolved. In any event, even
if the state action were pending, this is not "a situation in
which two cases involving precisely the same issues are
simultaneously pending in different District Courts."
Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 26 (1960).
To be sure, "[t]he pendency of related litigation in another
forum is a proper factor to be considered in resolving choice of
venue questions . . . and may have been decisive in a number of
cases where the convenience factors were inconclusive. . . .
However, we have found no case where it has carried the day
against factors pointing in the other direction." Codex Corp. v.
Milgo Electronic Corp., 553 F.2d 735, 739 (1st Cir. 1977). In
fact, the pendency of another related litigation need not be
given any weight if there is no realistic possibility of
consolidating the two cases. 15 Wright & Miller § 3854. Here, the
Court can not envision that possibility here, especially because
the law to be applied in each action would be different. Popkin
v. Eastern Air Lines, Inc., 253 F.Supp. 244, 249 (E.D.Pa. 1966)
(recognizing consolidation was unlikely where the law of
different states would govern the two actions).
Furthermore, Defendant is incorrect that the Northern District
of Georgia has a local interest in deciding this "local
controversy." The contractual issues involved arise from
insurance contracts entered into outside of Georgia and which were secured in order to cover
Aldworth's employment activities in, among other places, the
District of New Jersey.*fn8
Finally, the Court has considered which law will apply to the
facts of this case. As a federal court sitting in diversity
jurisdiction, the Court must apply the law of this state,
including its choice of law rules. Aetna Surety and Casualty Co
v. Sacchetti, 956 F.Supp. 1163, 1168 (D.N.J. 1996) (citing
Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)).
Generally, in interpreting insurance contracts New Jersey courts
will apply "the law of the place of the contract . . . unless the
dominant and significant relationship of another state to the
parties and the underlying issue dictates that this basic rule
should yield." Sacchetti, 956 F.Supp. at 1168 (quoting State
Farm Mutual Automobile Insur. Co. v. Simmons Estate,
417 A.2d 488, 493 (N.J. 1980)).
Here, the place of the contract is Massachusetts. Defendant
acknowledges that the law of Massachusetts should, thus, apply.
This Court and the District Court in Georgia would be equally
well-equipped to apply Massachusetts law to the facts of this
case. To be sure, Defendant alternatively seeks transfer to the
District of Massachusetts. For the same reasons as discussed,
infra, however, transfer to that district is likewise not warranted. The choice of law
question by itself does not change that conclusion.
In light of the above, the Court will not transfer this matter. III. CONCLUSION
For the reasons explained supra, jurisdiction and venue are
proper in this Court. Accordingly, the motion to dismiss by
Defendant Aldworth will be denied. Moreover, because the
convenience of the parties and witnesses would not best be served
by transferring this case, and because the interests of justice
do not so require, this Court will deny Aldworth's motion to
The accompanying Order is entered. ORDER
This matter is before the Court upon the motion by Defendant
Aldworth to dismiss the Complaint for lack of jurisdiction
pursuant to Rules 12(b)(2) and 12(b)(3) of the Federal Rules of
Civil Procedure or, in the alternative, to transfer venue [Docket
Item 4]; and
The Court having considered the written submissions of the
For the reasons explained in the Opinion of today's date;
IT IS this 28th day of June 2005 hereby
ORDERED that the motion by Defendant Aldworth to dismiss or, in
the alternative, to transfer venue [Docket Item 4] shall be, and
it hereby is, DENIED.