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NATIONAL UTIL. SERV. v. QUEENS GROUP

April 22, 1994

NATIONAL UTILITY SERVICE, INC., Plaintiff,
v.
QUEENS GROUP, INC. and QUEENS GROUP-INDIANA, INC., Defendants.



The opinion of the court was delivered by: JOHN R. BARTELS

 MEMORANDUM-DECISION AND ORDER

 The defendants Queens Group, Inc. ("Queens Group") and Queens Group-Indiana, Inc. ("QGI") move this Court under 28 U.S.C. § 1404 (a) for an order transferring the above-captioned case to the United States District Court for the Southern District of Indiana. Defendants argue that the convenience of the parties and key non-party witnesses best will be served by transferring the action to that forum. For the reasons set forth below, the Court denies the defendants' motion.

 BACKGROUND

 Plaintiff National Utility Service, Inc. ("NUS") instituted this diversity action seeking to recover over $ 80,000 purportedly due and owing under a consulting contract entered into by plaintiff and defendant Queens Group. Plaintiff, a New Jersey corporation with its principal place of business in New Jersey, provides utility cost consulting services to various clients. Defendants Queens Group and QGI are related corporations engaged in the commercial printing business, producing various types of boxes, labels, and wraps. Queens Group is a New York corporation maintaining its principal place of business in Queens, New York, and QGI is an Indiana corporation with its principal place of business in Indianapolis, Indiana.

 As a utility cost consultant, NUS first conducts a detailed analysis of a customer's utility bills and energy consumption, and then makes recommendations as to how the client can maximize utility cost savings. On or about March 30, 1987, NUS and defendant Queens Group executed a contract (the "Agreement") whereby NUS agreed to review defendant's utility bills for the past twelve months and submit recommendations regarding potential cost-cutting measures. Queens Group executed the Agreement at its New York office. Defendant QGI was not a signatory to the Agreement.

 Under the terms of the Agreement, recommendations submitted by NUS remained subject to approval by Queens Group. The Agreement obligated Queens Group to pay to NUS a consulting fee (based on the amount of savings generated by a suggested improvement) only when Queens Group accepted and actually implemented the recommendation. Pursuant to paragraph three of the Agreement, any NUS recommendation "acted upon" by Queens Group was "deemed accepted."

 Defendant QGI maintains a production plant in Indiana (the "Indiana Facility"), which, because of the extensive machinery utilized there, consumes large amounts of electrical energy, Plaintiff alleges that after executing the Agreement, Queens Group forwarded to NUS for its review bills and other data reflecting energy consumption and utility costs at several locations, including the Indiana Facility. The subject dispute arises out of a recommendation report allegedly submitted to Queens Group by NUS in or around August 1987 (the "Report"), wherein NUS recommended raising power factor at the Indiana Facility in an effort to reduce utility costs. Plaintiff claims that it sent the Report to Queens Group's President, Leonard Verebay, in New York, who then allegedly forwarded it to QGI in Indiana. Plaintiff asserts that NUS employees prepared the Report at its New Jersey office.

 Defendants admit that they installed and replaced capacitors at the Indiana Facility in or around April 1988, after plaintiff sent the Report to Verebay in New York. Although installation of the capacitors had the effect of raising power factor, defendants urge that this improvement was wholly unrelated to any NUS recommendation. Rather, defendants assert that personnel at the Indiana Facility had no knowledge of the Report and undertook the improvement as part of a long-standing QGI energy cost control program. Indeed, defendants contend that QGI consulted a number of Indiana-based energy consultants, including Midwest Energy Management Company ("Midwest"), Brehob Electric ("Brehob"), and Fuller Engineering Sales Corp. ("Fuller"), with respect to installation of the capacitors. NUS subsequently instituted the present action seeking to recover the percentage of estimated utility cost savings it asserts flows from improvement of power factor at the Indiana Facility.

 In or around July 1993, defendants moved this Court for an order disqualifying plaintiff's counsel, transferring venue of this action to the Southern District of Indiana, and staying all depositions pending resolution of the disqualification and venue motions. In a decision dated August 2, 1993, this Court denied the motion to disqualify and the motion to transfer venue, but granted leave to renew after conclusion of court-annexed arbitration in this District. After arbitration failed to resolve the parties' dispute, defendants renewed the present motion to transfer venue to the Southern District of Indiana.

 DISCUSSION

 Section 1404(a) vests in the federal district courts discretion to transfer an action to a district in which the action might have been brought if the court determines that "the convenience of parties and witnesses" and "the interests of justice" warrant transfer. See 28 U.S.C. § 1404(a); Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S. Ct. 2239, 2243, 101 L. Ed. 2d 22 (1988). The undisputed goal of Section 1404(a) "is to prevent waste 'of time, energy and money'" and "to protect litigants, witnesses and the public against unnecessary inconvenience and expense." Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S. Ct. 805, 809, 11 L. Ed. 2d 945 (1964) (quoting Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 26-27, 80 S. Ct. 1470, 1474-75, 4 L. Ed. 2d 1540 [1960]). Section 1404 (a) directs the court to conduct an "individualized, case-by-case consideration of convenience and fairness." Id. at 622, 84 S. Ct. at 812.

 The threshold inquiry on a Section 1404(a) motion is whether the transferee district, in this case the Southern District of Indiana, is a district in which the action originally "might have been brought." Section 1391(a) of Title 28 sets forth the proper forum in which to bring a diversity action. That section provides:

 
A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred . . . or (3) a judicial district in which the defendants are subject to personal ...

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