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Guideone Elite Insurance Co. v. Mount Carmel Ministries

United States District Court, S.D. Mississippi, Eastern Division

January 11, 2018

GUIDEONE ELITE INSURANCE COMPANY PLAINTIFF
v.
MOUNT CARMEL MINISTRIES, et al. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          KEITH STARRETT, UNITED STATES DISTRICT JUDGE

         For the reasons below, the Court denies the Motion to Transfer Venue [47] filed by Mount Carmel Ministries and Alpha Christian School.

         I. Background

         This is an interpleader action concerning the proceeds of a judgment previously entered by this Court. GuideOne Elite Insurance Company filed a declaratory judgment action concerning its obligations to Mount Carmel Ministries, Alpha Christian School, and Seaway Bank and Trust Company - their mortgagee - after a tornado caused heavy damage to insured property in Hattiesburg, Mississippi.[1] On December 3, 2015, the Court entered a Final Judgment in favor of Mount Carmel, Alpha Christian School, and Seaway in the amount of $1, 693, 035.31. Final Judgment, Guideone Elite Ins. Co. v. Mount Carmel Ministries, No. 2:13-CV-134-KS-MTP (S.D.Miss. Dec. 3, 2015), ECF No. 204. After the Court's judgment was affirmed on appeal, GuideOne filed a Complaint for Interpleader [1], and the Court granted [13] its request to deposit the proceeds of the judgment into the registry of the Court.

         Three parties claim an interest in the insurance proceeds. First, Mount Carmel[2]claims that it is entitled to direct payment of the insurance proceeds. Second, State Bank of Texas, successor-in-interest to Seaway, claims that it is entitled to the insurance proceeds in partial satisfaction of the deed of trust which secured the mortgage on the damaged buildings. Finally, Jernigan Copeland Attorneys, PLLC, and The May Law Firm, PLLC - counsel for Mount Carmel in the insurance dispute - claim that their contingency fee must be deducted from the insurance proceeds before any funds are remitted to Mount Carmel or State Bank. Mount Carmel filed a Motion to Transfer Venue [47], which the Court now addresses.

         II. Discussion

         Mount Carmel argues that the Court should enforce the forum-selection clauses in the Seaway loan documents, and that a transfer is appropriate under 28 U.S.C. § 1404(a).

         A. Timeliness

         First, State Bank argues that Mount Carmel's motion is untimely, citing Rule 12(b). The rule provides that a “motion asserting” the defense of improper venue “must be made before pleading if a responsive pleading is allowed.” Fed.R.Civ.P. 12(b). However, Mount Carmel did not file a motion to dismiss for improper venue under Rule 12(b)(3). Instead, it filed a motion to transfer under 28 U.S.C. § 1404(a). “[A] party may seek a § 1404(a) transfer of venue after filing its first responsive pleading.” Allen v. U.S. Dep't of Homeland Sec., 514 F. App'x 421, 422 (5th Cir. 2013) (citing 14 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3829 (2012)); see also Smith v. Kyphon, Inc., 578 F.Supp.2d 954, 957 (M.D. Tenn. 2008) (defendants did not waive ability to bring a motion under § 1404(a) by failing to assert defense of improper venue in a Rule 12(b) motion). Mount Carmel's motion was timely.

         B. Section 1404(a) Analysis

         District courts “have broad discretion in deciding whether to order a transfer” pursuant to 28 U.S.C. § 1404(a). In re Volkswagen of Am., 545 F.3d 304, 311 (5th Cir. 2008). The statute provides: “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 or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a).[3]

         The first question under Section 1404(a) is whether the case “might have been brought in the destination venue.” In re Volkswagen of Am., 545 F.3d at 312. Interpleader cases under Rule 22 must meet the normal venue requirements of 28 U.S.C. § 1391. Lummis v. White, 629 F.2d 397, 400-01 (5th Cir. 1980), rev'd on other grounds, 457 U.S. 85, 102 S.Ct. 2325, 72 L.Ed.2d 694 (1982). A civil action may be brought in:

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the ...

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