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Keymark Enterprises, LLC v. Eagle Metal Products

October 30, 2008

KEYMARK ENTERPRISES, LLC, A DELAWARE LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
EAGLE METAL PRODUCTS, A TEXAS CORPORATION DEFENDANT.



The opinion of the court was delivered by: Judge Robert E. Blackburn

ORDER GRANTING MOTION TO TRANSFER

This matter is before me on the following motions: (1) Defendant's Motion To Dismiss or Transfer To the Northern District of Texas, Dallas Division, and Brief in Support [#37], filed June 4, 2008; and (2) Defendant V.P.T, Inc.'s Unopposed Motion for Expedited Ruling on Defendant's Motion To Transfer Venue (Docket Entry # 38) [#107], filed October 9, 2008. The plaintiff filed a response to the motion to transfer venue, and the defendant filed a reply in support of that motion. I grant the motion to transfer, and I deny the motion for expedited ruling as moot.

I. JURISDICTION

I have jurisdiction over this matter under 28 U.S.C. §§ 1331 (federal question) and 1332 (diversity of citizenship).

II. FACTS

In August, 2004, the parties entered into a written agreement concerning the development and licensing of specialized engineering software. Plaintiff, Keymark Enterprises, LLC (Keymark), was to develop the software under the terms of the agreement. The software relates to the engineering of steel connector plates that are manufactured by defendant, V.P.T., Inc., d/b/a/ Eagle Metal Products (Eagle). The connector plates are used in the construction of wood trusses. The agreement also provides terms on which Eagle agreed to sell and ship steel connector plates to Keymark. Keymark is located in Colorado and performed the software development work in Colorado. Eagle is located in Texas and manufactures the steel connector plates in Texas.

Eagle claims that Keymark failed to complete the software development project by the promised completion date of February, 2006. Eagle says efforts have been made to accommodate Keymark's needs and to facilitate the completion of the software, even though the completion date specified in the agreement has passed. To date, according to Eagle, the software project remains incomplete. Eagle says the software currently is functional, but it does not include all of the components that are required under the agreement. Currently, Keymark provides Eagle access to the allegedly incomplete software on a server computer hosted by Keymark.

In the summer of 2007, according to Keymark, Keymark complained to Eagle that Eagle was overcharging Keymark for connector plates purchased by Keymark. Keymark says Eagle then refunded some money to Keymark. Keymark claims that in early 2008, Eagle continued to deliver orders of connector plates to Keymark that were substantially short.

On March 25, 2007, Keymark's president, Keith Dietzen, sent an e-mail to Eagle's president, Tom Whatley. Dietzen, speaking for Keymark, noted that Eagle had expressed frustration "about joint software development efforts and direction." Motion To Transfer [#37], filed June 4, 2008, Exhibit 5. Dietzen suggested that Keymark and Eagle review the current contract and development process and "throw it all on the table for discussion." Id. On March 31, 2007, Keymark sent a letter to Eagle asserting that Eagle had breached the agreement between Keymark and Eagle. Id., Exhibit 6. Keymark offered to negotiate a settlement, but said it would terminate the agreement if a settlement could not be reached. Id. On April 1, 2008, Keymark filed the present lawsuit against Eagle, but did not notify Eagle of the filing. In this case, the Colorado case, Keymark seeks a declaratory judgment declaring, inter alia, that it is excused from further performance under the agreement. Keymark asserts also a claim for breach of contract.

On Thursday, April 3, 2008, Dietzen, Keymark's president, sent an e-mail to Whatley, Eagle's president. Id., Exhibit 7. Dietzen said:

I know you have been trying to each me but I have been tied up and am now walking out the door for a church meeting.

Let's plan on meeting Monday [April 7, 2008]. I will compose an email late this evening with my thoughts. I hope to find time to talk tomorrow, but I think my email will say it all in preparation for a Monday meeting.

Whatley traveled from Texas to Boulder, Colorado, for the Monday meeting on April 7, 2008. At the meeting, Dietzen presented Whatley with a sheet of proposed terms to settle the dispute. Id., Exhibit 13. Among the terms proposed by Dietzen was a term providing that "Keymark will agree to take no legal action towards Eagle." Id. Dietzen did not inform Whatley that the present lawsuit had been filed. The meeting was short, although the parties disagree about which of the parties cut the meeting short.

On the same day, April 7, 2008, Eagle filed suit against Keymark in Texas state court. Eagle alleged multiple breaches of contract and obtained an ex parte restraining order which prevented Keymark from terminating Eagle's access to the software that had been developed by Keymark. The following day, April 8, 2008, Eagle served process on Keymark in the Texas case. Six days later, on April 14, 2008, Keymark served process on Eagle in the Colorado case. Keymark removed the Texas case from state court to the United States District Court for the Northern District of Texas, Dallas Division on April 15, 2008. Eagle asks that this case, the Colorado case, be transferred to the United States District Court for the Northern District of Texas, Dallas Division.

III. STANDARD OF REVIEW

Section 1404(a) contemplates that "[f]or 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 district court is vested with considerable discretion in determining whether transfer is appropriate. Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991). Factors that bear on the analysis include: the plaintiff's choice of forum; the accessibility of witnesses and other sources of proof, including the availability of compulsory process to insure attendance of witnesses; the cost of making the necessary proof; questions as to the enforceability of a judgment if one is obtained; relative advantages and obstacles to a fair trial; difficulties that may arise from congested dockets; the possibility of the existence of questions arising in the area of conflict of laws; the advantage of having a local court determine questions of local law; and, all other considerations of a practical nature that make a trial easy, expeditious and economical.

Id. at 1516 (quoting Texas Gulf Sulphur Co. v. Ritter, 371 F.2d 145, 147 (10th Cir. 1967)). The movant bears the burden of establishing that the existing forum is inconvenient. Id. at 1515. This is a heavy burden, Texas Gulf Sulphur Co., 371 F.2d at 148, "'and unless the balance is strongly in favor of the movant the plaintiff's choice of forum should rarely be disturbed,'" Scheidt v. Klein, 956 F.2d 963, 965 (10th ...


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