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FAMILY REALTY & CONSTR. CO. v. MANUFACTURERS & TRA

July 13, 1996

FAMILY REALTY & CONSTRUCTION CO., LTD., Plaintiff, against MANUFACTURERS AND TRADERS TRUST COMPANY, Defendant AND FEDERAL DEPOSIT INSURANCE CORPORATION, as RECEIVER for GOLDOME, Intervening Defendant.


The opinion of the court was delivered by: MCAVOY

 I. BACKGROUND

 Plaintiff, Family Realty & Construction Co., Ltd. ("Family"), commenced this action by filing a Complaint, dated February 15, 1995, against Manufacturers and Traders Trust Company ("M&T") in New York State Supreme Court Albany County seeking payment of the principal and accrued interest on certain Capital Notes. The Capital Notes had been unsecured subordinated liabilities of Goldome, a bank that had been closed by the New York State Banking Department on May 31, 1991. The Federal Deposit Insurance Corporation ("FDIC") was appointed Goldome's receiver. Although certain assets and liabilities of Goldome were transferred to Key Bank of Western New York ("Key") and, immediately thereafter, to M&T, the Capital Notes were not specified in either of the purchase and assumption agreements. Therefore, the Capital Notes remained an obligation of the receiver.

 Nevertheless, there was an inadvertent transfer of the Capital Notes to M&T for a brief period, and M&T made one interest payment to the note holders. Plaintiffs Memorandum of Law May 24, 1996 at 2. The FDIC intervened in this action, arguing that the error was promptly reversed and that plaintiff has no rights through Key or M&T. FDIC Memorandum of Law April 30, 1996 at 6. The FDIC removed the case to this Court on February 20, 1996. Before the Court at this time is the FDIC's May 6, 1996 Motion for Transfer pursuant to 12 U.S.C. § 1821(d)(6)(A) of the Federal Deposit Insurance Act ("FDI Act"), and 28 U.S.C. § 1404(a) and § 1406. The defendant M&T does not oppose transfer.

 In the instant motion, the FDIC seeks to have this action transferred to the Western District of New York. The FDIC claims that the Western District is the proper venue because of the convenience to the defendants, the convenience of witnesses, the ease of access to sources of proof, the location of the principle place of business of the failed bank, Goldome, in the Western District of New York, and 12 U.S.C. § 1821(d)(6)(A) which allegedly mandates a transfer. The plaintiff, of course, opposes transfer. The plaintiff argues that the FDIC waived its objection to venue under Fed. R. Civ. Proc. 12(h) by filing an Answer in state court prior to removal that did not raise the objection, that the Northern District of New York is the proper district for removal, that 12 U.S.C. § 1821(d)(6)(A) is not applicable because the claim was not asserted against the FDIC or the failed institution, and that the FDIC has not made a clear and convincing showing that transfer is appropriate in terms of convenience or the interests of justice.

 II. DISCUSSION

 A. Change Of Venue Standard

 The instant motion is made pursuant to 28 U.S.C. § 1404, which provides that "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." 28 U.S.C. § 1404(a). A motion for transfer under this statute rests within the sound discretion of the Court. Golconda Mining Corp. v. Herlands, 365 F.2d 856, 857 (2d Cir. 1966). Among the factors that the Court should consider when making such a determination are:

 
The convenience of the parties; the convenience of the witnesses; the relative ease of access to the sources of proof, the availability of the process to compel attendance of unwilling witnesses; the cost of obtaining willing witnesses; practical problems that make trial of a case easy, expeditious, and inexpensive; and the interest of justice.

 Aquatic Amusement Assocs. Ltd. v. Walt Disney World Co., 734 F. Supp. 54, 56 (N.D.N.Y. 1990).

 Defendants, as the parties moving for transfer, bear "'the substantial burden of establishing that transfer [of the] case is in the interest of justice.'" Lappe v. American Honda Motor Co., 857 F. Supp. 222, 229 (N.D.N.Y.1994), aff'd sub nom., Lappe v. Honda Motor Co. of Japan, 1996 WL 170209 (2d Cir. Apr. 11, 1996) (quoting, Nieves v. American Airlines, 700 F. Supp. 769, 772 (S.D.N.Y.1987)). Furthermore, a discretionary transfer under Section 1404(a) "will not be granted 'absent a clear-cut and convincing showing that the balance of convenience weighs strongly in favor of the transferee court.'" Lappe, 857 F. Supp. at 229 (quoting, Pellegrino v. Stratton Corp., 679 F. Supp. 1164, 1166 (N.D.N.Y. 1988)). Finally, courts consistently have given "some deference" to the plaintiffs choice of forum, with the caveat that "any presumption favoring the choice is weakened where the action has little relationship to the chosen forum." Lappe, 857 F. Supp. at 229. One measure of the relationship, not surprisingly, is the connection between the forum and the case's operative facts. Morales v. Navieras de Puerto Rico, 713 F. Supp. 711, 712 (S.D.N.Y.1989).

 In the instant motion, the relevant factors under consideration are: the convenience of parties and witnesses, access to sources of proof, providing a forum for the most expeditious and inexpensive trial, and the interest of justice, i.e., the applicability of 12 U.S.C § 1821(d)(6)(A). The Court, of course, must give due consideration of the plaintiff's original choice of forum. The Court now turns to the arguments of counsel.

 B. Convenience Of Parties And Witnesses

 The first factor stressed by the FDIC in favor of transfer is that the Western District of New York is more convenient to the parties and witnesses. Aquatic Amusement, 734 F. Supp. at 56. The FDIC argues that M&T and Goldome, the failed institution, have their principle places of business and books and records located in the Western District. The FDIC also claims that any necessary witnesses are located in the Western District of New York. FDIC's Memorandum ...


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