United States District Court, W.D. Virginia, Roanoke Division
ELIZABETH K. DILLON, UNITED STATES DISTRICT JUDGE
case arises from a loan agreement between plaintiff Dickson
Properties and defendant Wells Fargo Bank. Dickson claims
that Wells Fargo violated the Bank Holding Company Act, 12
U.S.C. § 1841, et seq., by requiring Dickson to
enter into an unfavorable swap agreement in order to acquire
a loan and that Wells Fargo breached covenants of good faith
and fair dealing by inducing Dickson to default on its loan
obligations. Before the court is Wells Fargo's motion to
transfer venue to the Alexandria Division of the United
States District Court for the Eastern District of Virginia.
(Dkt. No. 17.) That motion has been fully briefed and was
argued on May 1, 2017. For the following reasons, the court
will deny Wells Fargo's motion.
and its parent company Providence Hall, as co-borrowers,
acquired a $2.5 million dollar loan and a $500, 000 line of
credit from Wachovia Bank, a national banking association to
which Wells Fargo is the successor in interest. Both loans
were evidenced by promissory notes. As a condition of the
loans, Wachovia required the co-borrowers to enter into an
interest rate swap, which was documented by a master
agreement and confirmation.Providence Hall and Dickson also
executed a number of security instruments to secure their
obligations to Wells Fargo, including one that encumbered a
property owned by Dickson in Dickson County, Tennessee (the
Dickson County property). Wachovia listed an address in
Roanoke, Virginia, on several of the loan documents.
$500, 000 promissory note matured on February 28, 2011.
Leading up to that date, Wells Fargo represented to the
co-borrowers that it would forbear collection on the note,
and, relying on that assurance, Dickson did not pay down the
principal balance, although it could have sold a property or
obtained financing to do so. However, when the note matured,
Wells Fargo declared it in default and demanded that the line
of credit be repaid immediately. That declaration of default
triggered a default on the $2.5 million note and a
termination fee on the swap agreement.
March 2011, Providence Hall filed for bankruptcy in the
Eastern District of Virginia. Shortly thereafter, Dickson
transferred the Dickson County property to Providence Hall
and then later filed for bankruptcy itself. The bankruptcy
court appointed Providence Hall's Chapter 11 Trustee as
Dickson's designated representative. During Providence
Hall's bankruptcy proceeding, the court approved the sale
of several of Providence Hall's properties, including the
Dickson County property, to satisfy debts owed to Wells
Fargo. After the Dickson County property was sold as part of
the administration of the Providence Hall case, the designee
moved to dismiss Dickson's bankruptcy case, noting that
its primary asset and sole source of income was the Dickson
County property, that with the transfer of that property it
had “no assets and no operations independent of
Providence Hall, ” and that all of its creditors were
identical to those of Providence Hall and would be paid
through the Providence Hall estate. (Def.'s Mot. Transfer
Venue Ex. V.) The court granted the motion and dismissed
February 28, 2014, Providence Hall filed a complaint against
Wells Fargo in the Circuit Court of Loudon County, Virginia,
asserting similar claims to those at issue in this case. Four
days later, Dickson, represented by the same counsel, filed
its complaint in the Circuit Court of Roanoke City. Wells
Fargo removed Providence Hall's case to the United States
District Court for the Eastern District of Virginia and moved
to dismiss. The court dismissed Providence Hall's
complaint on res judicata grounds, finding that the
bankruptcy court's sale orders precluded Providence
Hall's claims. That decision was affirmed by the Fourth
Circuit Court of Appeals in March 2016. See Providence
Hall Assocs. L.P. v. Wells Fargo Bank, N.A., 816 F.3d
273 (4th Cir. 2016). Dickson's complaint, however, was
not served until October 18, 2016, roughly six months after
the Fourth Circuit's decision and nearly two years after
it was filed. Wells Fargo removed the case to this court and
now seeks to transfer the case to the Eastern District.
28 U.S.C. § 1404(a), a district court may, “[f]or
the convenience of parties and witnesses, in the interest of
justice, . . . transfer any civil action to any other
district or division where it might have been brought or to
any district or division to which all parties have
consented.” Whether to transfer venue therefore turns
on two questions: (1) whether venue is proper in the proposed
transferee district, and (2) whether considerations of
justice and convenience justify the transfer. Koh v.
Microtek Int'l, Inc., 250 F.Supp.2d 627, 630 (E.D.
Va. 2003); 28 U.S.C. § 1404(a). Dickson does not dispute
that the Eastern District of Virginia is a district where its
suit “might have been brought, ” 28 U.S.C. §
1404(a)-that is, a district where Dickson had the right to
sue, “independently of the wishes of defendant.”
Pinpoint IT Servs., L.L.C. v. Atlas IT Exp. Corp.,
812 F.Supp.2d 710, 719-20 (E.D. Va. 2011) (quoting
Hoffman v. Blaski, 363 U.S. 335, 344 (1960)). Since
it appears to the court that the Eastern District of Virginia
could exercise personal jurisdiction over Wells Fargo and
would be a proper venue for this action, see Koh,
250 F.Supp.2d at 630, the dispositive question here is
whether interests of convenience and justice suggest that
transfer is appropriate.
1404(a) is intended to place discretion in the district court
to adjudicate motions for transfer according to an
‘individualized, case-by-case consideration of
convenience and fairness.'” Stewart Org., Inc.
v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van
Dusen v. Barrack, 376 U.S. 612, 622 (1964)). The Fourth
Circuit has distilled this case-by-case consideration into
four broad factors: (1) the weight accorded to
plaintiff's choice of venue; (2) witness convenience and
access; (3) convenience of the parties; and (4) the interest
of justice. Trs. Of the Plumbers & Pipefitters
Nat'l Pension Fund v. Plumbing Servs., 791 F.3d 436,
444 (4th Cir. 2015). Whether to transfer an action under
§ 1404(a) is committed to the sound discretion of the
district court, One Beacon Ins. Co. v. JNB Storage
Trailer Rental Corp., 312 F.Supp.2d 824, 828 (E.D. Va.
2004), and the party seeking transfer bears the burden of
showing that transfer is proper, Schrader-Bridgeport
Int'l, Inc. v. Cont'l Auto Sys. US, No.
6:11-cv-14, 2012 U.S. Dist. LEXIS 18607, at *8 (W.D. Va. Feb.
15, 2012); Pax, Inc. v. Veolia Water N. Am. Oprating
Servs., 347 F.Supp.2d 281, 283 (W.D. Va. 2004).
Dickson's Choice of Venue
“a plaintiff's ‘choice of venue is entitled
to substantial weight in determining whether transfer is
appropriate.'” Trs. of the Plumbers, 791
F.3d at 444 (quoting Bd. of Trs. v. Sullivant Ave.
Props., LLC, 508 F.Supp.2d 473, 477 (E.D. Va. 2007)).
However, the appropriate deference afforded to the
plaintiff's choice “varies with the significance of
the contacts between the venue chosen by plaintiff and the
underlying cause of action.” Pragmatus AV, LLC v.
Facebook, Inc., 769 F.Supp.2d 991, 995 (E.D. Va. 2011)
(quoting Bd. of Trs. v. Baylor Heating & Air
Conditioning, Inc., 702 F.Supp. 1253, 1256 (E.D. Va.
1988)). When the chosen forum is not the plaintiff's home
forum, the presumption in its favor generally “applies
with less force.” Schrader-Bridgeport, No.
6:11-cv-14, 2012 U.S. Dist. LEXIS 18607, at *8 (quoting
Sinochem Int'l Co. v. Malay. Int'l Shipping
Corp., 549 U.S. 422, 430 (2007)).
the Western District of Virginia is not Dickson's home
forum, Dickson's choice is entitled to some deference
here. To be sure, substantial parts of this case occurred
elsewhere: Dickson's corporate owner and co-borrower
operated in the Eastern District; Wells Fargo made its
alleged misleading representations to attorneys in the
Eastern District; Dickson declared bankruptcy in the Eastern
District; and many of Dickson's operations, including the
property that served as Dickson's primary source of
income, were located in Tennessee. But this is not a
situation where there is “no nexus between this
District and plaintiff's underlying claim.”
Glamorgan Coal Corp. v. Ratners Grp. PLC, 854
F.Supp. 436, 438 (W.D. Va. 1993). Wachovia, the counterparty
on the loan documents and the entity with whom Dickson
negotiated the terms of the loan agreement and swap agreement
that give rise to this case, listed a ...