Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

IBJ SCHRODER BANK & TRUST CO. v. MELLON BANK

February 21, 1990

IBJ SCHRODER BANK & TRUST COMPANY, AS SUCCESSOR INDENTURE TRUSTEE, PLAINTIFF
v.
MELLON BANK, N.A., DEFENDANT. IBJ SCHRODER BANK & TRUST COMPANY, AS SUCCESSOR INDENTURE TRUSTEE, PLAINTIFF V. KIRKPATRICK & LOCKHART, DEFENDANT.



The opinion of the court was delivered by: Cedarbaum, District Judge.

OPINION AND ORDER

Defendants have moved under 28 U.S.C. § 1404(a) to transfer these two related cases to the Western District of Pennsylvania on the ground that that is a more convenient forum. All parties agree that these two cases should be prepared and tried in the same forum. Discovery has been coordinated, and justice and judicial economy require that the two cases either remain together or be transferred together. Indeed, plaintiff has moved to consolidate the two.

At the initial pretrial stages of the first case, I gave great weight to plaintiff's choice of forum, and denied a motion for transfer without prejudice to its renewal after the parties had acquired more information about the location of the witnesses. Plaintiff has recently filed the second case, asserting claims, including a RICO claim, against the Pittsburgh law firm that advised the defendant in connection with the conduct complained of in the first case. Until the second case was filed, the Pittsburgh law firm represented the defendant in the first case.

After careful consideration, I have concluded that the addition of the claims against the Pittsburgh law firm tips the balance of convenience. For the reasons discussed below, these two actions are transferred to the United States District Court for the Western District of Pennsylvania.

BACKGROUND

Prior to 1979, Mellon Bank, N.A. ("Mellon"), a national bank headquartered in Pittsburgh, loaned money to Sharon Steel Corporation ("Sharon"). In 1979 and 1980, respectively, Mellon became the indenture trustee for two series of subordinated debentures issued by Sharon. Thus, after 1979, Mellon was both a creditor and an indenture trustee of Sharon.

In March an~i April of 1985, Sharon failed to pay the interest due on the debentures, and Sharon has remained in default to date. At the time of Sharon's default, Mellon attempted to resign as indenture trustee, effective on the appointment of a successor trustee. After Sharon filed a petition for reorganization in the Bankruptcy Court for the Western District of Pennsylvania in August of 1987, plaintiff IBJ Schroder Bank & Trust Company ("Schroder") was appointed successor trustee.

At the time of Sharon's default, Mellon, pursuant to the indentures, established a special account into which it deposited all money and property it collected in repayment of Sharon's indebtedness to Mellon. The funds in this account total approximately $32,000,000, plus interest.

When Schroder was appointed successor trustee, Mellon and Schroder were unable to agree about the proper distribution of the funds in the special account. On October 13, 1987, Mellon filed a declaratory judgment action in the Western District of Pennsylvania seeking a determination that it, as creditor, was entitled to the funds in the special account. On the following day, Schroder filed the first case in this court seeking a declaratory judgment to the contrary and damages for Mellon's alleged breach of its contractual, statutory and fiduciary obligations as indenture trustee. The district court in Pittsburgh determined that it had jurisdiction over the action and the parties, but dismissed Mellon's declaratory judgment action because its resolution would "not resolve the entire controversy between the parties." Mellon Bank, NA. v. IBJ Schroder Bank & Trust Co., No. 87-2169, slip op. at 8-9, 1989 WL 200443 (W.D.Pa. August 17, 1989).

On June 13, 1989, Schroder filed the second case in this court, a complaint against Kirkpatrick & Lockhart ("K & L"), the Pennsylvania law firm which had advised Mellon with respect to its roles both as creditor and as indenture trustee of Sharon. The complaint alleges that K & L had a conflict of interest when it advised Mellon in both capacities and, that K & L actively participated in Mellon's allegedly improper decisions and conduct. The complaint also alleges that K & L mishandled lawsuits brought by Mellon in Pennsylvania state court to recover from Sharon unpaid interest due on the debentures, and drafted and approved allegedly misleading press releases, notices of meetings to debenture holders and trustee reports. When the second case was filed, K & L withdrew as Mellon's counsel in the first case.

DISCUSSION

28 U.S.C. § 1404(a) 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.

The threshold requirement for transfer under 28 U.S.C. ยง 1404(a) is that the action "might have been brought" in the transferee court. It is undisputed that this statutory requirement is met in these two civil actions. There is jurisdiction and proper venue in the Western District of Pennsylvania for Schroder's suit against ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.