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Sinclair Cattle Co., Inc. v. Ward

United States District Court, M.D. Pennsylvania

January 21, 2015

SINCLAIR CATTLE COMPANY, INC., Plaintiff
v.
JEFFREY WARD and REBECCA WARD, Defendants

For Sinclair Cattle Company, Inc., Plaintiff: Darryl J. Liguori, David William Park, LEAD ATTORNEYS, Smigel, Anderson & Sacks, LLP, Harrisburg, PA; Francis R. Laws, Margaret Argent, LEAD ATTORNEYS, Thomas & Libowitz, P.A., Baltimore, MD.

For Jeffrey Ward Individually and doing business as Buck Valley Angus, doing business as Buck Valley, doing business as Angus Farm, doing business as Buck Valley Angus Farms, doing business as Buck Valley Angus Farms 2, Rebecca Ward Individually and doing business as Buck Valley Angus, doing business as Buck Valley Angus Farms, doing business as Buck Valley Angus Farms 2, doing business as Buck Valley Angus Farm, Defendants: Daniel J. Donovan, LEAD ATTORNEY, Donovan & Rainie, LLC, Baltimore, MD; Mark D. Bradshaw, Stevens & Lee, P.C., Harrisburg, PA.

MEMORANDUM

Christopher C. Conner, Chief United States District Judge.

Presently before the court is a motion (Doc. 10) to dismiss for improper venue or, in the alternative, to transfer or stay filed by defendants Jeffrey G. Ward and Rebecca L. Ward on July 3, 2014. For the reasons that follow, the court will deny the motion.

I. Factual Background and Procedural History

Plaintiff Sinclair Cattle Company, Inc. (" SCC" ) runs a Black Angus cattle farming business and conducts operations in Pennsylvania, Wyoming, Virginia, West Virginia, Montana, and Nebraska. (Doc. 1 ¶ ¶ 10-11). Its operations include breeding cattle; purchasing and selling cattle; collection, storage, implantation, and sale of cattle embryos; and related duties. (Id. ¶ 12). Defendant Jeffrey Ward (" Ward" ) was an employee of SCC fro its establishment in 1996 until 2013 and served as its president, treasurer, and acting chief executive officer. (Id. ¶ ¶ 15, 19). Between 1996 and 2013, Ward managed the day-to-day cattle farming operations of SCC, which included authorizing the payment of salaries and company expenses; overseeing the breeding, sale, and purchase of cattle; and managing SCC's Pennsylvania farm. (Id. ¶ ¶ 18, 20; see also Doc. 12 at 2). Ward's wife, Rebecca Ward (" Mrs. Ward" ), also worked at SCC and performed office management duties between 1998 and 2013. (Doc. 1 ¶ 23). J. Duncan Smith (" Smith" ), currently the sole shareholder of SCC, retained ultimate control over the finances of the company. (Id. ¶ ¶ 13, 18; see also Doc. 12 at 2).

In September 2013, as a result of an investigation by a financial consultant, Smith purportedly discovered misappropriation of SCC's funds and property by the Wards and consequently terminated their employment. (Doc. 1 ¶ ¶ 100-129). SCC avers that defendants abused their control over the operations of the company for years by, inter alia, misappropriating company funds for personal use, transferring company property without full payment to SCC, obtaining fraudulent reimbursements from SCC, and causing funds due to SCC to be paid to accounts under defendants' control. (Id. ¶ ¶ 26-27).

In March 2014, counsel for SCC and the Wards conferred regarding a possible financial settlement. (Doc. 14 at 5; Doc. 12 at 4). The Wards submitted formal settlement offers on March 20 and March 25, 2014. (Doc. 14 at 5).[1] On March 26, 2014, the Wards' counsel contacted SCC's counsel and inquired whether SCC had responded to the Wards' offer. (Doc. 14-10, Ex. A-6). SCC's counsel replied in an email that same day, stating that " [t]he client is evaluating a counterproposal, which is going to take a few days. I will give you an update no later than Friday, and we will not be taking any legal action before getting back to you with that counterproposal." (Id.) Defendants did not receive a response by the stated deadline and, between May 12 and May 14, 2014, tried unsuccessfully to contact SCC's counsel. (Doc. 14 at 5; Doc. 12 at 6). On June 13, 2014, SCC filed the instant action, alleging, inter alia, breach of fiduciary duty and claims sounding in fraud. (Doc. 1). The Wards filed a complaint in the United States District Court for the District of Wyoming on July 3, 2014. (Doc. 12 at 6; Doc. 14 at 9). Defendants state a number of claims arising out of the contractual and fiduciary relationships between the parties, as well as various tort claims. (Doc. 14-22, Ex. D-1).

On July 3, 2014, defendants also filed before this court a motion to dismiss or, alternatively, a motion to transfer or stay the action. (Doc. 10). The Wards argue that SCC's complaint should be dismissed for improper venue. (Id.) They contend that, that although SCC filed its complaint in the instant action before defendants filed their related complaint in the District of Wyoming, the court should depart from the " first-filed" rule because SCC acted in bad faith by filing an anticipatory complaint in light of SCC's March 26, 2014 email indicating that it would refrain from taking legal action to a certain extent. (Doc. 12 at 2). Defendants argue in the alternative that the court should stay the action or transfer it to the District of Wyoming pursuant to 28 U.S.C. § 1404(a). (Id. at 2, 10-11). The motion has been fully briefed and is ripe for disposition.

II. Legal Standard

Rule 12(b)(3) of the Federal Rules of Civil Procedure allows a defendant to move to dismiss for improper venue. Fed.R.Civ.P. 12(b)(3). When venue is improper, a district court must dismiss the action or, if in the interest of justice, transfer the action to a district in which it could have been brought. 28 U.S.C. § 1406(a). The party moving for dismissal based on improper venue " has the burden of proving the affirmative defense." Myers v. Am. Dental Ass'n, 695 F.2d 716, 724, 19 V.I. 642 (3d Cir. 1982). When considering a motion to dismiss for improper venue, the court must generally accept as true the allegations in the pleadings and must view the facts in the light most favorable to the nonmoving party. Heft v. AAI Corp., 355 F.Supp.2d 757, 762 (M.D. Pa. 2005) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002)).

Section 1404(a) of the United States Code governs the transfer of an action to a more convenient forum. 28 U.S.C. § 1404(a). A court has the discretion to transfer a civil action to another federal district court " for the convenience of parties and witnesses, in the interest of justice." Id. In evaluating a motion to transfer, the court must first determine whether the action could have been brought in the proposed transferee forum, and, if so, must balance a series of public and private interest factors weighing in favor of or against transfer. See Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995); High River Ltd. P'ship v. Mylan Labs., Inc., 353 F.Supp.2d 487, 492 (M.D. Pa. 2005). The court must " consider all relevant factors" to assess " 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 (citation omitted). The moving party bears the burden of showing that " all relevant things considered, the case would be better off transferred to another district." In re United States, 273 F.3d 380, 388 (3d Cir. 2001) (citation omitted).

III. Discussion

A. Motion to Dismiss for Improper ...


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