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COMMERCIAL SOLVENTS CORP. v. LIBERTY MUT. INS. CO.

February 26, 1974

COMMERCIAL SOLVENTS CORPORATION and the Home Insurance Company, Plaintiffs,
v.
LIBERTY MUTUAL INSURANCE COMPANY, Defendant


Stewart, District Judge.


The opinion of the court was delivered by: STEWART

STEWART, District Judge:

The present motion before this Court continues the search for the proper forum in which to finally reach the merits of this case. This action was commenced in the New York State Supreme Court on April 11, 1973. It was then removed to federal court on May 9, 1973. Presently before us is a motion brought on July 26, 1973 for an order pursuant to 28 U.S.C. § 1404(a) transferring this action to the United States District Court for the Northern District of Oklahoma.

 Background

 This action arises out of an alleged breach of two comprehensive general liability policies and a workmen's compensation and employers liability policy. Plaintiffs seek a declaratory judgment as well as damages. An oil well explosion precipitated the case. Plaintiff Commercial Solvents Corporation (CSC) was insured under a Workmen's Compensation Policy issued by Liberty, under a Comprehensive General Liability (CGL) Policy issued by Liberty and under an Excess Liability Policy issued by plaintiff The Home Insurance Company (Home). On November 11, 1970 at an oil well owned by Pan American Petroleum Corporation (Pan Am), near Owasso, Oklahoma an explosion occurred, taking the lives of nine persons and damaging the property of a third party.

 The central issue in this case relates to the coverage afforded CSC by the CGL Policy for claims against CSC arising out of the explosion. The coverage under the CGL Policy turns on the question of whether CSC and Pan Am were in a joint venture together relating to the oil well near Owasso, Oklahoma. The crucial language of the policy states:

 
"This insurance does not apply to bodily injuries or property damages arising out of the conduct of any . . . joint venture of which the insured is a partner or member and which is not designated in this policy as a named insured."

 When this case finally comes to rest in one forum, it appears that the issue to be decided is the following: What coverage is provided by Liberty's policies for claims against CSC arising out of the oil well explosion. This issue raises questions as to whether CSC and Pan Am were engaged in a joint venture at the time of the oil well explosion and did the explosion arise out of activities of the joint venture if one existed? Testimony as to the scope of the relationship between Pan Am and CSC is crucial to this question. Evidence as to the intended and actual joint activities of the two companies is also relevant.

 Plaintiffs also contend that Liberty is estopped from denying coverage based on the existence of a joint venture because it did not deny coverage until May 1, 1971 and because Liberty by exercising exclusive control in the settlement negotiations committed CSC to negotiations and settlement which it otherwise would not have condoned or approved. Evidence as to the roles taken in the investigations, negotiations and settlement is necessary for the disposition of this issue. In large measure such evidence will have to be oral testimony.

 Discussion

 The statute under which defendant seeks transferral of the case provides:

 
"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." 28 U.S.C. § 1404(a).

 Under this statute, the burden to be met by a defendant seeking transfer is something less than a showing of forum non conveniens, the old doctrine superseded by § 1404(a). *fn1" But even under § 1404(a) a plaintiff still has the right to select a proper forum of his choice and such "choice should not be disturbed unless the movant demonstrates that the balance of convenience and justice weights heavily in favor of transfer." Security National Bank v. Republic National Life Insurance Co., 364 F. Supp. 585 (S.D.N.Y. 1973).

 In deciding a motion to transfer under this section, a court must consider 1) the convenience of the parties; 2) the convenience of the witnesses; and 3) the interests of justice. Further, a case may only be transferred to a court in which the case "might have been brought."

 In considering the last requirement first we conclude that this case might have been brought in the Northern District of Oklahoma. Defendant Liberty is incorporated in the State of Massachusetts with its principal place of business there and has at all relevant times been authorized to do business and is doing business in the Northern District of Oklahoma. 28 U.S.C. § 1391(a) provides that venue in diversity actions such as this lies "in the judicial district where all plaintiffs or all defendants reside, or in which the claim arose." Corporate residence for purpose of venue is "any judicial district in which it is incorporated or licensed to do business or is doing ...


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