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MANUFACTURERS HANOVER TRUST CO. v. PALMER CORP.

July 13, 1992

MANUFACTURERS HANOVER TRUST COMPANY, Plaintiff, against PALMER CORPORATION and PALMER VIDEO CORPORATION, Defendants.

HAIGHT, JR.


The opinion of the court was delivered by: CHARLES S. HAIGHT, JR.

HAIGHT, District Judge:

 This case is before the Court on defendants' motion to transfer this action to the District of New Jersey at Newark. Defendants move, in the alternative, to stay this action pending determination of a related action in that court.

 For the reasons stated below, the motion to transfer is granted.

 BACKGROUND

 Plaintiff Manufacturers Hanover Trust Company ("MHT") is a New York banking corporation with headquarters in Ned York. Plaintiff's Amended Complaint ("Amended Complaint") at P 1. Defendants Palmer Corporation and Palmer Video Corporation ("Palmer") ("the Palmer Corporations") are New Jersey corporations engaged in the sale, rental and distribution of video cassettes. Id. at PP 2-3; Civil Action Complaint No. 91-5964, Superior Court of New Jersey ("New Jersey Complaint") at 1, Reply Affidavit of Paul M. Grassi ("Grassi Reply Aff."), Exh. A.

 On August 6, 1991, MHT filed this diversity action against Palmer for defaulting on three promissory notes dated December 17, 1990; January 2, 1991; and March 15, 1991. MHT seeks the amount of the loans, $ 600,000, plus interest. See Amended Complaint.

 On August 9, 1991, MHT served Palmer with the Complaint and filed and served an Amended Complaint on August 29, 1991. The defendants, however, failed to answer within the obligatory 20 days. MHT sought a default judgment and, on October 21, 1991, the Clerk of the Court, James M. Parkison, noted defendants' default.

 Defendants then moved for an order enlarging their time to answer. In a Memorandum Opinion and Order dated November 27, 1991, this Court granted the motion. *fn1" Palmer answered the Amended Complaint on December 19, 1991. On January 24, 1992, Palmer moved to transfer this action to the District of New Jersey at Newark pursuant to 28 U.S.C. § 1404(a).

 While this case has been progressing in the Southern District, the parties have been engaged in another lawsuit in New Jersey. On July 31, 1991, six days before MHT brought this suit, Palmer Corporation commenced a lender liability action in New Jersey Superior Court against MHT, alleging breach of a $ 6.8 million loan commitment agreement. *fn2" Palmer's complaint states that MHT contracted--in a loan commitment agreement dated September 28, 1990 and signed by both parties--to lend $ 1.8 million to Palmer to refinance one of Palmer's debts, and $ 5 million to fund new video stores (at $ 200,000 per store). New Jersey Complaint at 2. In return for this commitment, Palmer paid $ 10,000 to MHT. Id.

 MHT allegedly reneged on this agreement. While acknowledging receipt of $ 600,000 from MHT to fund three new stores, Palmer asserts that this was an advance on the $ 6.8 million loan package that the parties never closed but that MHT promised in the September 28, 1990 agreement and in other oral statements. Id. at 4; Answer to Amended Complaint at P 44.

 On August 2, 1991, MHT received Palmer's complaint by facsimile transmission. Grassi Reply Aff., Exh. B at P 12. On August 22, 1991, sixteen days after MHT filed suit in the Southern District, MHT removed Palmer's action to the District of Ned Jersey at Newark. Defendant's Memorandum in Opposition to Transfer ("MHT Brief") at 4 n.1; Grassi Reply Aff., Exh. B.

 DISCUSSION

 Palmer moves to transfer this action to the District of New Jersey at Newark, pursuant to 28 U.S.C. § 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.

 A motion to transfer rests in the sound discretion of the Court, Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S. Ct. 2239, 101 L. Ed. 2d 22 (1988), and "the moving party bears the burden of showing that a change of venue is appropriate. . . ." Generale Bank, New York Branch v. Wassel, 779 F. Supp. 310, 313 (S.D.N.Y. 1991) (citing Filmline (Cross-Country) Productions, Inc. V. United Artists Corp., 865 F.2d 513, 521 (2d Cir. 1989)). This burden is an onerous one: "the rule in this Circuit is that plaintiff's choice of forum will not be disturbed unless the movant shows that the balance of convenience and justice weighs heavily in favor of transfer." Somerville v. Major Exploration, Inc., 576 F. Supp. 902, 908 (S.D.N.Y. 1983) (citations omitted). See also Don King Productions, Inc. v. Douglas, 735 F. Supp. 522, 533 (S.D.N.Y. 1990) ("The moving party must make a clear showing to justify a change of venue.") (citations omitted); Arrow Electronics, Inc. v. Ducommun Inc., 724 F. Supp. 264, 265 (S.D.N.Y. 1989) ("The party requesting transfer 'bears the burden of establishing, by a clear and convincing showing, the propriety of transfer.'") (citations omitted); U.S. Barite Corp. v. ...


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