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CERASOLI v. XOMED

January 15, 1997

DON A. CERASOLI, Plaintiff,
v.
XOMED, INC., a subsidiary of Xomed Surgical Products, Defendant.



The opinion of the court was delivered by: LARIMER

 Plaintiff, Don A. Cerasoli, commenced this action in New York State Supreme Court, Monroe County, on July 1, 1996. The complaint asserted causes of action for breach of contract, negligent misrepresentation, and intentional misrepresentation by defendants Xomed, Inc., Xomed Surgical Products, and Merocel/Xomed Holding, Inc. (collectively "Xomed") in connection with plaintiff's long-term disability benefits pursuant to his employment contract with Xomed.

 Xomed removed the action to this court on July 29, 1996. The grounds for removal were diversity of citizenship under 28 U.S.C. § 1332, and federal question jurisdiction under 28 U.S.C. § 1331. The basis for the latter ground was that the action falls within the scope of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq.

 Defendants have moved to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and (presumably in the alternative) to transfer venue of this action to the United States District Court for the Middle District of Florida. Plaintiff has moved for leave to amend the complaint to add a claim under ERISA.

 BACKGROUND

 The complaint alleges that defendants are corporations engaged in the business of manufacturing and selling medical and pharmaceutical products. Defendants are incorporated under the laws of Delaware and have their principal place of business in Florida. *fn1" Plaintiff is a citizen of New York residing in Webster, New York.

 The complaint alleges that during the course of, and in connection with, his employment, he was seriously and permanently injured in an accident while using exercise equipment at a Philadelphia hotel on May 12, 1995, about 53 days after he commenced employment. His physicians advised him that his injuries would prevent him from resuming his work as a sales representative.

 Plaintiff then filed a claim with Xomed for long-term disability benefits. Subsequently, however, Xomed informed him that the insurance carrier, the Paul Revere Life Insurance Company, was disclaiming coverage because the policy provided for an initial waiting period of ninety days which had not elapsed at the time of plaintiff's accident. Plaintiff alleges that he then called Xomed's Human Resources Department and was told that they had always been aware that plaintiff's long-term disability coverage did not take effect until ninety days after his employment began. Either in that same call or in another telephone call, plaintiff alleges that Xomed personnel told him that they had made a mistake when they advised him on March 20, 1995 that his benefits package became effective immediately. Plaintiff further alleges that representatives of the Human Resources Department later claimed that they had always advised him of the ninety-day waiting period, and denied having made or admitted to any error or mistake.

 Based on these allegations, plaintiff asserts three causes of action. The first alleges that Xomed breached plaintiff's employment contract. The second alleges that the contract created a "special relationship" between plaintiff and Xomed that obligated Xomed to provide him with accurate information about his benefits, and that Xomed negligently misrepresented to him that his long-term disability benefits became effective on March 20, 1995. The third cause of action alleges that Xomed intentionally misrepresented those matters to him. Based on these claims, plaintiff seeks $ 2.2 million in actual damages, and $ 10 million in incidental, consequential, and punitive damages.

 DISCUSSION

 I. Defendants' Motion to Change Venue

 Defendant moves pursuant to 28 U.S.C. § 1404(a) to transfer this action to the Middle District of Florida. Section 1404(a) provides that "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 decision whether to grant a transfer under this section is committed to the sound discretion of the District Court. See Filmline (Cross Country) Productions, Inc. v. United Artists, Inc., 865 F.2d 513, 520 (2d Cir. 1989). The Court must weigh a number of competing factors, including: the plaintiff's choice of forum; the place where the operative facts underlying the action occurred; the convenience and relative means of the parties; the convenience of material witnesses; the availability of process to compel the attendance of unwilling witnesses; the relative ease of access to sources of proof; the forum's familiarity with the governing law; trial efficiency; and the interests of justice. See Don King Productions, Inc. v. Douglas, 735 F. Supp. 522, 533 (S.D.N.Y. 1990); see also Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947).

 Applying these factors to the case at bar, I find that defendants have failed to carry their burden of making out a strong case for a transfer. Some factors point toward a transfer, some point against it, and some are neutral.

 As to the locus of the operative facts, the most significant event--the alleged representation by Schroeder on March 20, 1995 that plaintiff's benefits had taken effect that day--occurred in Schroeder's office in Lawrenceville, Pennsylvania, and thus does not weigh in favor of either a New York or Florida forum. Most of the other relevant events consisted of telephone conversations or correspondence between plaintiff in New York and defendants in Florida, so this factor is generally neutral. *fn2"

 Consideration of the relative convenience and means of the parties clearly weighs against a transfer. For one thing, defendants have not disputed plaintiff's contention that he is still suffering from the effects of his injury. It could therefore be difficult for him to travel to Florida if his presence were necessary there for trial or some other proceeding. In addition, Xomed, a corporation, likely has greater financial means to litigate the action in New York than plaintiff does to litigate it in Florida.

 The convenience of material witnesses weighs in favor of a Florida venue, but not to a great extent. From the parties' papers, it does not appear that there would be a great many witnesses in this case. In addition, while defendants have identified several likely witnesses currently living in Florida, Schroeder--certainly a key witness--lives in Pennsylvania, and plaintiff's treating physicians reside in New York. Although defendants are correct that the physicians would only have to testify in the event that liability is found, I do not believe that that is a reason to discount the convenience to them entirely. In addition, defendant's statement that the convenience of expert witnesses is entitled to little weight is inapposite. The case cited by defendants in support of that proposition, Cent Group, S.p.A. V. OroAmerica, Inc., 822 F. Supp. 1058 (S.D.N.Y. 1993), involved the availability of expert witnesses on jewelry design, who, the court observed, ...


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