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Marc Frato v. Swing Staging

August 17, 2011


The opinion of the court was delivered by: Esther Salas, United States District Judge



Pending before the Court is Defendants Swing Staging, Inc. ("Defendant Swing Staging"), John Pantanelli ("Defendant Pantanelli"), Twin and Swing Scaffolding, Inc. ("Defendant Twin and Swing"), and J.P. Holdings, LLC's (collectively "Defendants") motion to transfer venue to the Eastern District of New York pursuant to 28 U.S.C. § 1404(a). (Docket Entry No. 11, the "Motion" dated February 18, 2011). The Court has reviewed the submissions in support of and in opposition to the Motion, and for the reasons set forth below, the Motion is hereby GRANTED.


On October 8, 2010, Plaintiff Marc Frato ("Plaintiff") commenced this diversity action against Defendant Swing Staging, its subsidiary, Defendant Twin and Swing (collectively the "Corporate Defendants"), the Corporate Defendants's president, Defendant Pantanelli, and Defendant J.P. Holdings.*fn1 (Docket Entry No. 1, the "Complaint"). Defendant Pantanelli is a resident of White Plains, New York, and the Corporate Defendants are both incorporated in New York and are in the business of selling, leasing, and servicing scaffolding and like equipment. (Docket Entry No. 11-2, affidavit of Defendant Pantanelli filed February 18, 2011 (the "Pantanelli Affidavit") at ¶¶ 1, 3-4). Together, the Corporate Defendants employee about 100 people, and conduct two percent of its business in New Jersey. (Id. at ¶ 3; Docket Entry No. 14, Reply Affidavit of Defendant Pantanelli dated March 17, 2011("Pantanelli Reply Aff.") at ¶ 5).

Although the parties dispute the specific circumstances that precipitated Plaintiff's dealings with Defendant Swing Staging and its President, Defendant Pantanelli, the parties agree that they met while Plaintiff's former company, Markey Swing and Scaffolding ("Plaintiff's Former Company"), conducted business with Defendant Swing Staging. (Docket Entry No. 13-3, Certification of Marc Frato in Opposition to the Defendants' Motion, dated March 6, 2011 ("Frato Cert.") at ¶ 5). Thereafter, in 1999, Plaintiff Frato entered into three contracts with Defendant Swing Staging. (See generally Frato Cert.). First, under the "Asset Purchase Agreement" (the "APA"), Defendant Swing Staging purchased Plaintiff's Former Company's assets. (Complaint at ¶ 17; Docket Entry No. 11-6, Exhibit D attached to the Pantanelli Affidavit, APA). Second, at or around the same time as the parties entered into the APA, on November 3, 2009, Plaintiff entered into an employment contract whereby he would work for Defendant Swing Staging at its Queens, New York office (the "Employment Agreement"). (Complaint at ¶ ¶ 19, 21-23, 25; Frato Cert. at ¶ 9). Finally, also on November 3, 1999, Plaintiff and Defendant Swing Staging entered into a "Stock Redemption Agreement" (the "SRA"), whereby Plaintiff obtained a 1/32 share of the total outstanding capital stock of Defendant Swing Staging (the "Ownership Interest"). (Complaint at ¶ 20; Frato Cert. at ¶ 9). On May 26, 2008, Plaintiff ceased his employment with Defendant Swing Staging. (Complaint at ¶¶ 25, 38; Frato Cert. at ¶ 15). Thereafter, Plaintiff sought to enforce his rights under the SRA and obtain cash payouts of his Ownership Interest in Defendant Swing Staging; the parties then had a dispute about the valuation of Defendant Swing Staging, which was calculated by Defendant Swing Staging's accountant, Frank Bianculli. (See generally Complaint at ¶¶ 32-68).

Plaintiff's complaint alleges that: (1) Defendant Swing Staging breached the terms of the SRA by both diverting assets from Defendant Swing Staging to Defendant Twin and Swing, thereby undervaluing and/or improperly valuing Defendant Swing Staging, and nonpayment to Plaintiff under the SRA (See Complaint at First, Second and Ninth Counts (the "Contract Claim")); (2) Defendants breached various duties owed to Plaintiff in connection with the SRA and its corresponding valuation of Defendant Swing Staging (Complaint at Third, Fifth, and Seventh Counts (the "Breach of Duty Claims")); (3) Defendant Pantanelli misrepresented the value of Defendant Swing Staging, and diverted assets from Defendant Swing Staging to Defendant Twin and Swing (Complaint at Sixth Count (the "Fraud/Misrepresentation Claims")); (4) under the theory of quantum meruit, Plaintiff sold his Former Company to Defendant in exchange for employment and with the expectation that he would be compensated in accordance with the SRA (Complaint at Fourth Count, (the "Quantum Meruit Claim")); (5) Plaintiff, under the SRA, is entitled to an accounting of Defendant Swing Staging to determine the value of his Ownership Interest (Complaint at Eighth Count (the "Accounting Claim")); and (6) Defendant Swing Staging converted Plaintiff's Ownership Interest for its own benefit (Complaint at Tenth Count (the "Conversion Claim")). Defendants have not filed an answer in this action, and instead, on February 18, 2011, filed the instant Motion to transfer venue to the Eastern District of New York. On March 7, 2011, Plaintiff filed an opposition to the Motion, and on March 17, 2011, Defendants submitted reply affidavits of its counsel, and Defendant Pantanelli, in further support of the Motion.*fn2


A court "may transfer any civil action to any other district where it might have been brought" if transfer serves the "the convenience of the parties and witnesses" and "the interest of justice." 28 U.S.C. § 1404(a). "The moving party bears the burden of establishing that the transfer is appropriate and must establish that the alternative forum is more convenient than the present forum." Santi v. National Business Records Management, LLC, 722 F.Supp.2d 602, 606 (D.N.J. 2010). Accordingly, in a Section 1404(a) motion to transfer, a court must determine: (1) whether the proposed forum is one in which Plaintiff could have originally brought suit, and (2) whether transfer would be in the interest of justice and for the convenience of parties and witnesses." Id. (citing Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995).

In the Third Circuit, courts do not limit "their consideration to . . . convenience of parties, convenience of witnesses, or interests of justice," but rather are instructed to employ an analysis of all "relevant public and private interests." Santi, 722 F.Supp.2d at 606 (citing Jumara, 55 F.3d at 879). The private interests may include: (1) plaintiff's forum preference; (2) the defendant's preference; (3) whether the claim arose elsewhere; (4) the convenience of the parties; (5) the convenience of the witnesses; and (6) the location of books and records. Jumara, 55 F.3d at 879 (citations omitted). The public interests may include: (1) the enforceability of the judgment; (2) practical considerations that could make the trial easy, expeditious or inexpensive; (3) the relative administrative difficulty in the two fora from court congestion; (4) the local interest in deciding controversies at home; (5) the public policies of the fora; and (6) the familiarity of the trial judge with the applicable state law in diversity cases. See id. at 879-80 (citations omitted). Courts have broad discretion in determining a Section 1404(a) motion to transfer, and are directed to consider "convenience and fairness on a case-by-case basis." Santi, 722. F.Supp. 2d at 606.


A. Whether This Action Could Have Been Filed in the Proposed Forum

As stated above, "[t]he first step in a court's analysis of a motion to transfer is to determine whether venue would be proper in the proposed transferee district." Church & Dwight v. Mayer Laboratories, Inc., Civ. Action No. 08-5473, 2010 WL 3907038 (D.N.J. Sept. 28, 2010). In cases where jurisdiction is based upon diversity among the parties, a civil action may be brought in "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." 28 U.S.C. § 1391(a)(2).

Here, the Court finds that venue would be proper in Defendants's proposed forum, the Eastern District of New York. Plaintiff's claims revolve around Defendants's alleged failure to compensate Plaintiff for his Ownership Interest in Defendant Swing Staging, which is a New York corporation. Moreover, Plaintiff's claim that Defendant Pantanelli diverted assets from Defendant Swing Staging to Defendant Twin and Swing also leads this Court to find that this action could have been filed in New York because such allegedly tortious activity likely took place in New York. See Sam Graphics, Inc. v. Costa, Civ. Action No. 09-3355, 2009 WL 3230888 at * 2 (D.N.J. Oct. 1, 2009). Accordingly, this action could have been filed in the Eastern District of New York because the Corporate Defendants transact ...

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