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ESSEX CRANE RENTAL CORP. v. VIC KIRSCH CONSTR. CO.

February 21, 1980

ESSEX CRANE RENTAL CORPORATION, Plaintiff, against VIC KIRSCH CONSTRUCTION COMPANY, INC., BETHLEHEM STEEL CORP., and THE HUNTER CORP., Defendants.


The opinion of the court was delivered by: HAIGHT

MEMORANDUM OPINION AND ORDER

This is an action for breach of contract, fraud, failure to account and negligence arising under an equipment rental agreement. Jurisdiction in this Court is based on diversity of citizenship. Defendants move pursuant to 28 U.S.C. § 1404(a) for an order transferring the action to the United States District Court for the Northern District of Indiana on the ground of forum non conveniens, or, alternatively, pursuant to F.R.Civ.P. 12(b)(2) for an order dismissing the action in respect of two of the defendants for lack of personal jurisdiction. Plaintiff opposes the motion in both respects and concurrently moves pursuant to F.R.Civ.P. 26(c) for a protective order in respect of defendants' interrogatories and request for production. Defendants oppose this application. For the reasons stated herein, defendants' motion is granted and the action is transferred to the Northern District of Indiana. In these circumstances, plaintiff's motion is denied without prejudice to its reinstitution in that district.

I.

 Plaintiff Essex Crane Rental Corporation ("Essex") is a New York corporation with its principal place of business in New York City. Defendants Vic Kirsch Construction Co., Inc. ("Kirsch") and The Hunter Corporation ("Hunter") are Indiana corporations with their principal places of business in Hammond, Indiana. Defendant Bethlehem Steel Corporation ("Bethlehem") is a Delaware corporation with its principal place of business outside New York State.

 Essex is in the business of leasing heavy industrial cranes and attendant equipment throughout the United States. In December, 1974, Essex and Kirsch entered into a rental agreement *fn1" for the use of a 200 ton Manitowac Vicon Liftcrane equipped with 220 foot boom and a 150 ton block, ball and hook. Complaint, PP 6-7. Essex alleges that the rental period commenced on December 16, 1974 and continued up to and including April 6, 1977 and that under the terms of the agreement Kirsch was obligated to pay Essex the sum of $ 8,500 per month based upon a single shift operation of eight hours per day and forty hours per week. Id. at PP 8-9.

 The complaint sets forth five claims. As against Kirsch, Essex alleges (1) breach of the rental agreement arising out of Kirsch's failure to remit rental payments in the amount of $ 23,233.36 for the period January 14, 1977 to April 6, 1977, id. at P 10; (2) a claim for an indeterminate amount above the stipulated rent arising from use of the crane in excess of the single shift operation, id. at PP 12-16; (3) fraud arising from Kirsch's misrepresentations and failure to make disclosures relating to such alleged excess use, id. at PP 17-21; and (4) the existence of an account stated between Essex and Kirsch in the amount of $ 23,233.36, and Kirsch's failure to pay same, id. at PP 22-24.

 As a fifth claim against all three defendants, Essex alleges that the subject crane was "operated and/or controlled and/or supervised . . . in a negligent, improper and reckless manner, causing physical and property damage to same requiring necessary repairs thereto prior to succeeding use thereof." Id. at P 27. More specifically, Essex alleges at P 28:

 
"That the defendants, or either (sic) of them, their servants, agents and/or employees were negligent in the use and operation of said crane, rig and equipment; in causing, allowing and permitting and failing to prevent its use and operation contrary to agreement, specifications, standards, and proper accepted usage; in using same beyond and other than normal lift work in excess of rated capacities and usages; in failing to properly and adequately maintain, lubricate, repair, trasnport (sic), inspect, operate and supervise said crane, rig and equipment; in failing to properly protect and/or supervise said crane from its misuse and damage resulting therefrom."

 Defendants have answered and Kirsch has counterclaimed for incidental damages in the sum of $ 9,122 suffered in connection with repairs, storage and painting of the crane. Specifically, Kirsch alleges that Kirsch and Essex entered into a twelve month lease of the crane at $ 8,000 per month for the purpose of enabling Kirsch to re-rent it, with the knowledge of Essex, to Bethlehem at its Burns Harbor, Indiana mills. Counterclaim, P 9. Kirsch alleges that on delivery the crane was not in proper working order, requiring repair work by Kirsch to the crane house and heat exchanger in the amount of $ 835. Id. at P 11.

 In December 1975, Kirsch alleges, Bethlehem requested an additional twelve months' use of the crane, whereupon Kirsch and Essex agreed to an additional year's lease with an increased rental in the amount of $ 8,500 per month. Id. at P 12. Both the sublease between Bethlehem and Kirsch and, pursuant to its terms, the original rental agreement terminated on January 17, 1977. Id. at P 13. Kirsch claims it expended $ 3,271 for parts and labor over the lease term to correct problems of normal wear and tear, for which repairs Essex was responsible but which were not performed, entitling Kirsch to damages of $ 2,341, representing a percentage of the parts expense which are said to have placed the crane in substantially better condition than when received. Id. at PP 14-15. Further, Kirsch alleges that on instructions of Essex, it assisted an independent painting contractor and was required to repeat the process of loading the crane on trucks as requested by Essex in order to comply with state maximum weight requirements for which Kirsch demands reimbursement of $ 685 and $ 490, respectively. Lastly, Kirsch claims it was forced to store the crane in its yard due to Essex's failure to forward shipping and loading instructions until some 21/2 months after termination of the lease. Kirsch demands $ 1,500 in damages in this regard. Id. at P 18.

 As noted, there are two motions pending before the Court. Defendants Kirsch, Hunter and Bethlehem move pursuant to 28 U.S.C. § 1404(a) for an order transferring the action to the United States District for the Northern District of Indiana, or, in the alternative, Kirsch and Hunter move pursuant to F.R.Civ.P. 12(b)(2) to dismiss the complaint as against them for lack of personal jurisdiction. Plaintiff moves pursuant to F.R.Civ.P. 26(c) for a protective order in respect of interrogatories and a request for production propounded by defendants. Given the view I take of the case, it is unnecessary to reach defendants' Rule 12(b)(2) motion and plaintiff's Rule 26(c) motion is denied without prejudice. I therefore turn to consideration of defendants' motion for a change of venue.

 II.

 Defendants' motion for a change of venue is controlled by Section 1404(a) which 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).

 Defendants' application is premised largely upon the expense and inconvenience in transporting necessary witnesses to this district if the matter is to be tried here. Plaintiff's opposition turns largely on the timing of defendants' motion. After considering the detailed submissions of the parties, I conclude that defendants have established that the balance of competing conveniences clearly favors the requested transfer. *fn2"

 A.

 Defendants contend that none of the events which underlie the complaint occurred in the State of New York. Rather, defendants claim that the operative events which gave rise to the contract, to each alleged breach thereof and to each alleged tort committed in connection therewith all occurred in Indiana or, to a lesser extent, New Jersey. The only relation this suit has with this district, it is said, is that plaintiff maintains one of its four national offices in New York City, which office is staffed by one executive and one secretary.

 More particularly, defendants maintain that the oral rental agreement was negotiated by telephone between Kirsch's office in Hammond, Indiana and the Fort Lee, New Jersey office of plaintiff. Further, defendants contend that all correspondence concerning the agreement was directed to or received from plaintiff's New Jersey office and, similarly, that all billings for rent due were sent from that office and all payments were mailed to and accepted by that office. This view is largely undisputed by plaintiff, which states that billings and payments were made "locally." Affidavit of Morton Grossman, sworn to on June 5, 1979 (the "Grossman Affidavit"), at p. 3.

 In addition, defendants submit that as a result of deposition testimony, its counsel has learned that the sole witnesses who can testify on behalf of plaintiff regarding the contract are plaintiff's president and vice-president, Vincent A. Morano and Joseph A. Morano, respectively, who both reside in New Jersey. Affidavit of Richard P. Komyatte, sworn to on May 9, 1979 (the "Komyatte Affidavit"), at PP 6-7. These contentions remain undisputed by plaintiff.

 Moreover, defendants contend that an extended investigation reveals that "all servicemen, laborers, oilers, operators, contractors and inspectors who came into contact with the subject crane reside in or near the State of Indiana" and therefore are not subject to this Court's compulsory process. Id. at P 8. See F.R.Civ.P. 45(e). More particularly, defendants have set forth the names and residences of thirteen Kirsch employees who "have first-hand knowledge of either the oral rental contract, or the condition, treatment, use and repair of the crane in question and, hence, will be necessary witnesses in the defense of the plaintiff's ...


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