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Gentry Locke Rakes & Moore, LLP v. Energy Development Corp.

United States District Court, W.D. Virginia, Roanoke Division

April 25, 2017

GENTRY LOCKE RAKES & MOORE, LLP, Plaintiff,
v.
ENERGY DEVELOPMENT CORPORATION, et al., Defendants.

          MEMORANDUM OPINION

          MICHAEL F. URBANSKI JUDGE

         This matter comes before the court on defendants Energy Development Corporation ("EDC") and William D. Evans' motion to dismiss for improper venue, or in the alternative, transfer venue. ECF No. 5. The parties have briefed the issues and the court addressed the motion during a telephonic hearing held on April 17, 2017. For the reasons set forth below, the court will DENY the defendant's request to dismiss or transfer for improper venue, and GRANT the defendant's request to transfer this case in the interests of justice to the Abingdon Division of court.

         I.

         Plaintiff Gentry Locke Rakes & Moore, LLP ("Gentry Locke") filed this case in the City of Roanoke Circuit Court on December 9, 2016. Gentry Locke is a law firm based in Roanoke, Virginia and seeks to collect unpaid fees in the amount of $117, 573.92 from former clients EDC and William Evans. The complaint asserts one count for oral breach of contract and one count of quantum meruit under Virginia law. On March 18, 2017, the defendants removed this case to federal court pursuant to 28 U.S.C. 1441(a). The notice of removal asserted diversity jurisdiction, stating that both defendants are citizens of Florida while Gentry Locke is a citizen of Virginia. The amount in controversy exceeds $75, 000, and therefore, the court has proper jurisdiction over this case. 28 U.S.C. § 1332. On March 20, 2017, defendants filed the instant venue motion simultaneously with their answer to the complaint. ECF No. 5.

         Frank Flippin, a Gentry Locke partner, represented defendants William Evans and EDC over a period of twenty-plus years in various legal matters pursuant to oral contracts. Gentry Locke brings this lawsuit because William Evans, who is the president of EDC, and EDC have refused to pay for Flippin's legal work in two matters. The first involved a dispute between William Evans and his two brothers over ownership of their deceased parents' home in Tazewell County, Virginia. The dispute lead to litigation originating in Tazewell County Circuit Court, which was eventually resolved by the Virginia Supreme Court in Evans v. Evans. 290 Va. 176, 772 S.E.2d 576 (2015).

         The second matter for which Gentry Locke has not received payment involved another dispute between William Evans and his brother Wayne Evans. William Evans' company, EDC, was party to a joint venture agreement with Bandy Minerals Corporation, which held interests in certain gas wells located in Tazewell County. Bandy Minerals Corporation was owned by William and Wayne's father, Douglas Evans, who passed away in recent years. Wayne, as the executor of Douglas' estate, controls Bandy Minerals Corporation. Under the joint venture agreement, EDC had "buy-out" rights to purchase the gas wells, which EDC attempted to exercise. However, Wayne refused, resulting in litigation in Tazewell County that is currently pending.

         Defendants challenge venue in the Roanoke Division of the Western District of Virginia on the basis that "all of the operative legal services Were performed [by Gentry Locke] in and necessitated by problems arising and existing in Tazewell County for Tazewell County parties." ECF No. 14, at 5.[1] Defendants assert that this case should be resolved in the Abingdon Division of court, which includes Tazewell County, because the underlying legal disputes involve property located in that division. Defendants make two arguments. First, that venue in Roanoke is improper under 28 U.S.C. § 1391, and therefore, the court should either dismiss the case pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure or transfer the case to Abingdon pursuant to 28 U.S.C. 1406(a). Second, defendants argue that the court should transfer the case to Abingdon "[f]or the convenience of parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). Gentry Locke opposes transfer, arguing that this case should be resolved in Roanoke because the legal work giving rise to the unpaid bills was largely performed in Gentry Locke's Roanoke offices.

         II.

         Since the repeal of the divisional venue statute in 1988, federal litigants no longer have statutory rights to venue in a particular division within a district. See 28 U.S.C. § 1393 (repealed 1988); In re Gibson. 423 F.App'x 385, 388 (5th Cir. 2011). However, Western District of Virginia Local Rule 2(b) provides:

Civil actions for which venue is proper in this district must be brought in the proper division as well. The venue rules for United States district courts contained in the United States Code also apply in determining the proper division in which an action must be filed, so that such venue rules are construed as if the terms "judicial district" and "district" were replaced with the word "division."

         W.D. Va. R. 2(b). As such, the court treats statutes and case law governing inter-district venue as equally applicable to issues of divisional venue.[2]

         A.

         Defendants first argue that venue in Roanoke is improper under § 1391, which, in relevant part, defines proper venue as the division "in which a substantial part of the events or omissions giving rise to the claim occurred." 28 U.S.C. § 1391(b)(2). Defendants rely heavily on the Fourth Circuit's decision in Mitrano v. Hawes. 377 F.3d 402 (4th Cir. 2004), where there court addressed proper venue in a dispute over legal fees.

         Defendants, however, have missed the mark. Venue is proper in Roanoke because defendants removed this case from Roanoke City Circuit Court under § 1441(a). The general venue statute, § 1391, "has no application to this case because this is a removed action. The venue of removed actions is governed by [§ 1441], and under that section venue was property laid in" the district where the state court was located. Polizzi v. Cowles Magazines,Inc., 345 U.S. 663, 665 (1953).[3] "Section 1441(a) expressly provides that the proper venue of a removed action is 'the district court of the United States for the district and division embracing the place where such action is pending.'" Polizzi, 345 U.S. at 666. As such, neither § 1391 nor the Fourth Circuit's discussion of § 1391 in Mitrano. ...


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