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Scottsdale Insurance Co. v. PMG Industrial, LLC

United States District Court, S.D. Indiana, Hammond Division

December 14, 2016

SCOTTSDALE INSURANCE COMPANY, Plaintiff,
v.
PMG INDUSTRIAL, LLC, WALSH CONSTRUCTION COMPANY, and CHICAGO EXPLOSIVE SERVICES, LLC, Defendants.

          OPINION AND ORDER

          PAUL R. CHERRY MAGISTRATE JUDGE.

         This matter is before the Court on Defendant PMG Industrial, LLC's Motion for Transfer of Venue [DE 28], filed on November 16, 2016. Plaintiff Scottsdale Insurance Company filed a response on November 30, 2016, and Defendant PMG Industrial, LLC filed a reply on December 7, 2016. This matter is also before the Court on Defendant PMG Industrial, LLC's Motion to Substitute Affidavit of Rick Flores [DE 32], filed on December 7, 2016. Defendant PMG Industrial, LLC asks for a transfer of venue to the Southern District of Indiana, Evansville Division, pursuant to 28 U.S.C. § 1404(a). For the reasons set forth below, the Court grants the Motion for Transfer of Venue.

         BACKGROUND

         Plaintiff Scottsdale Insurance Company (“Scottsdale”) filed its Complaint for Declaratory Judgment in this District to obtain a declaration that it has no duty to defend or indemnify Defendant PMG Industrial, LLC (“PMG”) in connection with a separate lawsuit pending in this District brought by Walsh Construction Company (“Walsh”) against Chicago Explosive Services, LLC (“CES”) and PMG (Walsh Constr. Co. v. Chi. Explosive Servs., LLC and PMG Indus., LLC, No. 14-CV-84-RL-PRC).

         Plaintiff Scottsdale is a corporation organized under the laws of Ohio, with its principal place of business in Scottsdale, Arizona. Defendant PMG is a limited liability company organized under the laws of Indiana, with its principal place of business in Evansville, Indiana, and with its members citizens of Indiana. Defendant Walsh is a corporation organized under the laws of Illinois, with its principal place of business in the State of Illinois. Defendant CES is a limited liability company organized under the laws of Indiana, with its principal place of business in Evansville, Indiana, with two of its members citizens of Indiana and a third member a citizen of either Illinois or Florida.[1]Scottsdale represents that the amount in controversy, including the potential costs of defending and indemnifying PMG with regard to the underlying lawsuit exceeds $75, 000.00. Jurisdiction in this matter is premised upon diversity of citizenship. See 28 U.S.C. § 1332(a).

         In the Complaint in this case, Scottsdale notes that the complaint in the related litigation brought by Walsh alleges that, on October 11, 2012, Walsh and CES entered into a Subcontract Agreement for certain bridge demolition services, including demolition of two spans of the Cline Avenue Bridge, in East Chicago, Indiana. The related complaint alleges that CES performed blasting work through the use of explosives and that PMG assisted CES in the completion of the blasting. Scottsdale further notes that the complaint in the related case alleges that the blasting caused severe property damage that Walsh was contractually obligated to repair at a cost totaling approximately $2, 127, 250.19. Finally, the related complaint alleges that “the blasting work performed by PMG was an ultra-hazardous activity” and that, as a result, PMG is strictly liable for proximately causing the damage. (Compl. ¶¶ 26, 27 (quoting Ex. B, Count VII, ¶¶ 29, 30)).

         In this case, Scottsdale alleges that it issued to PMG a commercial general liability insurance policy effective August 16, 2012, through August 16, 2013. The policy includes a Demolition Exclusion endorsement that provides, in part, that the insurance does not apply to “‘property damage' arising out of any blasting operations” and does not apply to “‘property damage' arising out of the demolition of any building or structure that has a height in excess of three stories or fifty (50) feet from the ground surface on the exterior of any building or structure.” (Compl. ¶ 12). The Complaint further alleges that, although Scottsdale initially agreed to defend PMG in the related case brought by Walsh under a reservation of rights, through the course of discovery, Scottsdale learned that the bridge at issue has a height in excess of fifty feet from the ground surface and that the work PMG allegedly performed included drilling holes in the bridge for the placement of explosives. On information and belief, Scottsdale alleges that a portion of PMG's work on the bridge was performed at a height in excess of fifty feet from the ground surface.

         Thus, Scottsdale asks for a declaratory judgment in this case that there is no coverage under the Policy because the Demolition Exclusion endorsement precludes coverage entirely.

         ANALYSIS

         As an initial matter, the Court grants the Motion to Substitute Affidavit of Rick Flores to allow the substitution of his signed Affidavit for the unsigned Affidavit filed with PMG's opening motion.

         Defendant PMG seeks transfer of venue under 28 U.S.C. § 1404(a) from the Northern District of Indiana, Hammond Division to the Southern District of Indiana, Evansville Division. PMG argues that the convenience of the parties, the witnesses, and the interest of justice will be better served by the transfer of venue. Plaintiff Scottsdale opposes the transfer of venue.

         Pursuant to § 1404(a), “[f]or 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 . . . .” 28 U.S.C. § 1404(a). Therefore, (1) venue must be proper in the transferor court; (2) venue must be proper in the transferee court; and (3) the transfer must serve the convenience of the parties and witnesses and must be in the interests of justice. See Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986); Law Bulletin Publ'g, Co. v. LRP Publ'ns, Inc., 992 F.Supp. 1014, 1017 (N.D. Ill. 1998). Although specifically set forth in § 1404(a), “these factors are best viewed as placeholders for a broader set of considerations, the contours of which turn upon the particular facts of each case.” Travel Supreme, Inc. v. NVER Enters., Inc., No. 3:07CV194PPS, 2007 WL 2962641, at *8 (N.D. Ind. Oct. 5, 2007) (quoting Coffey, 796 F.2d at 219 n.3); see also Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d 973, 977 (7th Cir. 2010) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). The party seeking transfer has the “burden of showing that ‘the transferee forum is clearly more convenient.'” Heller v. Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1293 (7th Cir. 1989). “[W]hen the inconvenience of the alternative venues is comparable there is no basis for a change of venue[.]” In re Nat'l Presto Indus., 347 F.3d 662, 665 (7th Cir. 2003).

         First, venue is proper in this court under 28 U.S.C. § 1391(b)(2) as a substantial part of the events or omissions giving rise to the related litigation occurred in this District and a substantial part of the property that is the subject of the related litigation is situated in this District. East Chicago, Indiana, where the blasting work occurred, is in this District.

         Second, venue is proper in the Southern District of Indiana. In its opening motion, PMG does not analyze any of the requirements of § 1391(b) as to venue in the Southern District of Indiana, and Scottsdale comments only in a footnote that the parties do not dispute that venue is proper in the transferee district but also offers no analysis of § 1391(b). ...


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