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DURHAM PRODUCTIONS v. STERLING FILM PORTFOLIO

May 6, 1982

DURHAM PRODUCTIONS, INC., Plaintiff,
v.
STERLING FILM PORTFOLIO, LTD., SERIES A, Defendant



The opinion of the court was delivered by: POLLACK

The defendant moves for an order dismissing the complaint for insufficient service of process pursuant to Fed.R.Civ.P. 12(b)(4) and for failure to state a claim upon which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(6). Alternatively, defendant moves for an order transferring this action to the United States District Court for the Northern District of Ohio, pursuant to 28 U.S.C. § 1404(a), based primarily on the pendency of an earlier commenced action there by this defendant and another party against this plaintiff and another party which action, defendant claims, subsumes the instant litigation. For the reasons stated hereafter the motion to dismiss is denied and the motion for a transfer is granted.

The underlying action is a suit by plaintiff, Durham Productions, Inc. ("Durham"), for sums allegedly advanced to defendant, Sterling Film Portfolio, Ltd., Series A ("Sterling"), in connection with the release of a motion picture named "The Inheritance". The action was originally filed in the Supreme Court of the State of New York but was removed to the federal court on the basis of diversity. Defendant Sterling is a limited partnership formed under the Ohio Limited Partnership Act with its principal place of business in Cleveland, Ohio. The plaintiff is a New York corporation.

 The Instant Litigation

 Plaintiff initiated an action in the Supreme Court of the State of New York on December 4, 1981, by delivering a copy of the summons and verified complaint to the available occupant at the time, the 12 year old son of William Derrick, Jr., the remaining general partner of defendant Sterling, at Derrick's home in Ohio. The complaint alleged that during the year 1977 the plaintiff had advanced sums of money totalling $ 98,668.70 to the defendant for the production of a motion picture called "The Inheritance". Plaintiff further alleged that the advances had been pursuant to a loan agreement and were to have been repaid by the defendant to plaintiff after the picture was produced and distributed. The picture was produced and distributed.

 The defendant Sterling removed that action to this court on January 4, 1982. *fn1"

 The Earlier Filed Action

 On October 23, 1981, the defendant Sterling along with its remaining general partner William Derrick, filed a complaint in the Northern District of Ohio against the plaintiff herein, Durham, as well as against Raymond Homer, who at one time was the other general partner of Sterling but was expelled April 4, 1981; Homer is the owner and/or controlling shareholder of Durham. The complaint alleged breaches by Durham and Homer of their fiduciary duties and asked for an accounting of funds collected by Durham and Homer on behalf of Sterling.

 The Ohio complaint alleged that Sterling owned a film entitled "The Inheritance", that the distributor of the film was one S.J. International Pictures, Inc., ("S.J."), and that Sterling eventually instituted suit against S.J. for breach of the distribution agreement by the failure to provide periodic accountings, expense computations, revenue reports and so forth. That suit ended in a settlement agreement negotiated by Homer under which certain monies were to be paid by S.J. to Sterling and certain promissory notes assigned to Sterling. Homer appointed Durham the collection agent for these payments.

 The Ohio complaint went on to allege that the settlement agreement was breached by S.J.; that Homer and Durham were negligent in pursuing relief for that breach; that they wrongfully commingled funds payable out of the settlement agreement; and that they refused to make an accounting for those monies. Other fiduciary breaches were also alleged: that Homer had an interest over and above the general partner interest in the income stream of "The Inheritance" that he did not disclose to Sterling; and that Homer and Durham failed to prepare the financial statements for Sterling from 1977-1980 and the income taxes for Sterling in 1979 and 1980, even though defendants controlled the books and records of the plaintiff.

 The Applicable Law

 28 U.S.C. § 1404(a) provides:

 
For the convenience of the 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.

 Factors to be considered in determining whether to transfer an action include the convenience of the parties, access to the sources of proof, the governing law and plaintiff's choice of forum. The burden is on the party asking for a transfer "to make a clear showing that on balance these factors favor transfer." National Super Spuds, Inc. v. New York Mercantile Exchange, 425 F. Supp. 665, 667 (S.D.N.Y.1977). Pendency of related actions in the transferee forum is also an important factor as "(litigation) of related claims in the same tribunal is strongly favored because it facilitates efficient, economical and expeditious pre-trial proceedings and discovery and avoids duplicitous (sic) litigation and inconsistent results." Id. ...


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