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Gbforefront, L.P v. Forefront Management Group LLC

September 12, 2012


The opinion of the court was delivered by: Goldberg, J.

Memorandum Opinion

Plaintiff, GBForefront, L.P. ("GBForefront"), has brought suit against Defendant, Forefront Management Group LLC ("Forefront"), alleging three causes of action arising out of an investment agreement between the parties. Specifically, Plaintiff's complaint alleges breach of contract (Count I), unjust enrichment (Count II) and fraud (Count III).

Presently before the Court is Defendant's Motion to Dismiss or Transfer Venue. For reasons set forth below, Defendant's motion will be granted in part and denied in part.

I. Factual Background

Based upon the averments in the complaint, the pertinent facts, viewed in the light most favorable to Plaintiff, are as follows:

Plaintiff is a Pennsylvania limited partnership located in Conshohocken, Pennsylvania. Plaintiff was formed for the purpose of making an investment with Defendant, a Delaware limited liability company located in New York City. At all times relevant to the present suit, Warren Weiner was Plaintiff's principal.*fn1 (Compl. ¶¶ 5-6, 11.)

On May 12, 2010, Plaintiff purchased a $2,500,000 note from Defendant pursuant to a Convertible Note Purchase Agreement (hereinafter, "Purchase Agreement"). The agreement, among other things, obligated Defendant to follow certain warranties and covenants, the breach of which would render it in default on the note. (Compl. ¶¶ 2, 17-18.)

Beginning in May, 2011, Plaintiff allegedly discovered that Defendant had violated the note and agreement. In response, Plaintiff demanded immediate repayment of the unpaid principal on each note, the interest accrued and unpaid and all other amounts payable. On December 20, 2011, after unsuccessful attempts to negotiate a resolution to this dispute, Plaintiff initiated the instant suit. (Compl. ¶¶ 20-21, 23, 27, 29-31.)

II. Discussion

Defendant raises several arguments in its motion. We will address each in turn.*fn2

A. Motion to Transfer Venue Under 28 U.S.C. § 1404(a)

Defendant first moves to transfer venue to the Southern District of New York. Pursuant to 28 U.S.C. § 1404(a), "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." At the outset, the party moving to transfer must demonstrate that venue, personal jurisdiction and subject matter jurisdiction would have been proper in the proposed transferee district.*fn3 Shutte v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir. 1970). A court must then weigh "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 v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). Factors to consider include: (1) the plaintiff's choice of forum; (2) the defendant's forum preference; (3) where the claims arose; (4) the convenience of the parties and witnesses; (5) the location of the relevant books and records (collectively, the "private interests"); (6) the enforceability of the judgment; (7) "practical considerations that could make the trial easy, expeditious, or inexpensive;" (8) relative court congestion in the two fora; (9) the local interest in deciding local controversies at home; (10) the public policies of the fora; and (11) in a diversity case, the familiarity of the trial judge with applicable state law (collectively, the "public interests"). Id. at 879-80.

While the district court maintains discretion to transfer venue, a transfer should not be liberally granted. Shutte, 431 F.2d at 25. Unless the balance of convenience to the parties strongly favors the defendant, the choice of forum should prevail. Id. The burden of showing the need for transfer rests with the moving party. Jumara, 55 F.3d at 879.

The crux of Defendant's argument is that Plaintiff filed its complaint in Pennsylvania to hinder Defendant's ability to have all claims related to this dispute-which Defendant claims are governed by New York law-litigated in one action. (Def.'s Reply Br. 1.) Defendant contends that a balancing of interests "tips" in favor of transfer in that: (1) with the passing of Weiner, there are no witnesses located in Pennsylvania, and thusthe costs and inconvenience to the witnesses is increased anddiscovery may bemore difficult; (2) all of Defendant's applicable documents are located in New York; (3) the notes and Purchase Agreement are governed by New York law,*fn4 and many of the claims at issue arose in New York, which gives New York a local interest in deciding the case; and (4) transfer will promote ...

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