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Coldwell Banker Real Estate LLC v. Executive Residential Consultants

May 14, 2010

COLDWELL BANKER REAL ESTATE LLC PLAINTIFF,
v.
EXECUTIVE RESIDENTIAL CONSULTANTS, ET AL. DEFENDANT.



The opinion of the court was delivered by: Hon. Claire C. Cecchi United States Magistrate Judge

REPORT AND RECOMMENDATION

This matter comes before the Court on the motions of Defendants Executive Residential Consultants, Inc. ("Executive Residential Consultants"), Leonides Damas and Pablo Damas (collectively, "Defendants") to dismiss and/or transfer this action pursuant to 28 U.S.C. §1404(a) and/or 28 U.S.C. §1406(a) to the United States District Court for the Southern District of Florida (CM/ECF Docket Entry Nos. 2 & 4). Plaintiff Coldwell Banker Real Estate LLC ("Plaintiff") opposed the motions. Pursuant to Federal Rule of Civil Procedure 78, the Court decides this matter without oral argument. This report and recommendation is issued pursuant to 28 U.S.C. § 636(b)(1)(B). For the reasons set forth herein, the Undersigned recommends that Defendants' motions be granted.

INTRODUCTION

On or about August 20, 2009, Plaintiff filed a Complaint against Defendants in the Superior Court of New Jersey, Law Division, Middlesex County, sounding in breach of contract. On or about October 29, 2009, Defendants removed the action to this Court based on diversity of citizenship. Plaintiff, a California limited liability company with its principal place of business in New Jersey, operates a real estate brokerage franchise system throughout the United States. (Cmp. at ¶ 1.) Defendant Executive Residential Consultants is a Florida corporation with its principal place of business in Florida. (Ntc. of Rem. at ¶ 7.) Defendants Leonides Damas and Pablo Damas are residents of the state of Florida and are the principals of Executive Residential Consultants. (Cmp. at ¶ 3-4; Ntc. of Rem. at ¶ 6-7.)

Plaintiff alleges that Defendants breached a franchise agreement pursuant to which Defendant Executive Residential Consultants was to operate a real estate brokerage office in Miami, Florida (the "Office"). The pertinent facts are as follows. On or about August 1, 2002, Plaintiff entered into a Franchise Agreement (the "Franchise Agreement") with Defendant Executive Residential Consultants. (Pl. Bf. at P. 6.) As stated, under the Franchise Agreement, Executive Residential Consultants was to operate a Coldwell Banker real estate brokerage office in Miami, Florida. (Id.) Defendants Leonides Damas and Pablo Damas signed the Franchise Agreement on behalf of Executive Residential Consultants. (Id.) At the same time, Defendants Leonides Damas and Pablo Damas executed a personal guaranty of Executive Residential Consultants' obligations under the Franchise Agreement. (Id. at P. 7.) In addition, on or about July 30, 2002, Defendants executed a Development Advance Promissory Note (the "Promissory Note") in the principal amount of $200,000. (Cmp. at ¶ 18.)

Plaintiff alleges that Defendants breached the Franchise Agreement by failing to report and pay on closed transactions. (Cmp. at ¶ 28.) Plaintiff claims that, when Defendants failed to cure these faults, the Franchise Agreement was terminated effective June 22, 2009. (Id. at ¶ 31.) Plaintiff also asserts that Defendants failed to pay the sums owed under the Promissory Note, in addition to certain franchise fees. (Id. at ¶ 43.)

As stated above, on January 18, 2008, Plaintiff commenced the instant action in the Superior Court of New Jersey, and on October 29, 2009, Defendants removed the case to this Court.

Defendants now move to transfer this matter to the United States District Court for the Southern District of Florida.*fn1 In so moving, Defendants argue that the case should be transferred to the District of Florida becausethe majority of the facts giving rise to Plaintiffs' Complaint occurred in Florida. Defendants emphasize that the Office, along with many relevant documents and witnesses, are located in Florida and assert that the records Plaintiff seeks to audit and the property Plaintiff seeks to replevin are also located in Florida. Defendants state that, given these factors, the interests of justice would be best served by the requested transfer.

In response, Plaintiff argues that the interests of justice would not be served by a transfer to the United States District Court for the Southern District of Florida because Defendants agreed in the Franchise Agreement to non-exclusive personal jurisdiction and venue in this District. Plaintiff also asserts, inter alia, that its choice of forum is entitled to deference and that several operative facts, including the approval and execution of the Franchise Agreement, Guaranty and Promissory Note, occurred in New Jersey. Accordingly, Plaintiff requests that Defendants' motion to transfer be denied.

DISCUSSION

Defendants request that this case be transferred to the United States District Court for the Southern District of Florida pursuant to 28 U.S.C. § 1404(a). Section 1404(a) states: "For 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." Thus, as a threshold matter, we must determine whether the instant matter "might have been brought" in the Southern District of Florida. This requirement is satisfied if, at the time the case was originally filed: (i) venue was proper in the proposed transferee district under 28 U.S.C. § 1391 and (ii) the proposed transferee district could have exercised jurisdiction over the defendants. Colon v. Pitney Bowes Corp., 2007 WL 496875, *2 (D.N.J. Feb. 8, 2007).

Under 28 U.S.C. § 1391(a)(1), venue in actions based only on diversity is appropriate in, inter alia, "a judicial district where any defendant resides, if all defendants reside in the same State." The facts of the instant matter satisfy both prongs of this inquiry. As an initial matter, it is apparent from Plaintiff's Complaint that the individual defendants are residents of Florida. In addition, the corporate defendant is also a resident of Florida. See 28 U.S.C. §1391(c) ("[f]or purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced."). Thus, venue in this matter would be proper in the Southern District of Florida.

In addition, the United States District Court for the Southern District of Florida could have exercised personal jurisdiction over Defendants had the action been filed before it because Plaintiff's causes of action arose out of Defendants' purposeful contacts in Florida. The Court is persuaded that these purposeful contacts are sufficient to confer specific jurisdiction over Defendants. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-76 (1985). Therefore, this matter meets the Section 1404(a) requirement that it "might have been brought" in the proposed transferee court, the United States District Court for the Southern District of Florida.

Turning to the remainder of the transfer analysis, the Court must consider three factors when determining whether to grant a Section 1404(a) transfer: (1) the convenience of the parties, (2) the convenience of the witnesses, and (3) the interests of justice. Liggett Group Inc. v. R.J. Reynolds Tobacco Co., 102 F. Supp. 2d 518, 526 (D.N.J. 2000). The analysis is not limited to these factors, but rather is a flexible analysis in which the Court must consider "all relevant factors to determine whether on balance the litigation [will] more conveniently proceed and the interests of justice be better served by transfer to a different forum." Id. (citations and internal quotations omitted). Indeed, the test applied in ...


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