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Philadelphia Indemnity Insurance Co. v. Lacey

United States District Court, W.D. Kentucky, Paducah Division

January 29, 2018

PHILADELPHIA INDEMNITY INSURANCE COMPANY, et. al., PLAINTIFFS
v.
CHERYN LARK LACEY, DEFENDANT

          MEMORANDUM OPINION AND ORDER

          Thomas B. Russell, Senior Judge United States District Court.

         This matter is before the Court on two pending motions. Defendant Cheryn Lark Lacey filed a motion to dismiss for lack of personal jurisdiction, [DN 5.] Plaintiffs Philadelphia Indemnity Insurance Company and Rush Fitness Corp. d/b/a The Rush Fitness Complex responded and filed a cross-motion to transfer venue to the Eastern District of Tennessee, [DN 8; DN 9.] Defendant responded to that motion, [DN 10, ] and Plaintiffs replied, [DN 11.] For the reasons discussed fully below, Defendant's motion to dismiss, [DN 5], is DENIED and Plaintiffs' motion to transfer venue, [DN 9], is GRANTED.

         BACKGROUND

         Plaintiff Rush Fitness Complex (“Rush Fitness”) was a health and fitness club located in Knoxville, Tennessee. [DN 1 at 3 (Complaint).] On July 15, 2009, Defendant Cheryn Lacey signed a Membership Agreement with Rush Fitness, and on August 28, 2009, she signed a second Membership Agreement to work with one of Rush Fitness's physical trainers. [Id. (citing DN 1-1 (Membership Agreement); DN 1-2 (Personal Training Membership Agreement).] Lacey alleges that she fell and was injured during a personal training session at Rush Fitness on October 17, 2009 as a result of a wet spot on the floor of the gym. [DN 1 at 3.] Lacey brought a tort action against Rush Fitness in Knox County, Tennessee Circuit Court, which was ultimately resolved in Rush Fitness's favor. [Id. at 4] Pursuant to Rush Fitness's insurance policy with Plaintiff Philadelphia Indemnity Insurance Company (“PIIC”), PIIC payed to defend Rush Fitness against Lacey's suit in Tennessee state court. [Id.]

         In June of 2017, Plaintiffs brought suit against Lacey in the Western District of Kentucky for breach of contract. [DN 1.] According to Plaintiffs, the Membership Agreements that Lacey executed include a section titled “Release of Liability and Assumption of Risk” which provide, in part, that

If there is any claim by anyone based on any injury, loss, or damage described in this section which involves you or your guest, you agree to (1) defend CLUB against such claims and (2) indemnify CLUB for all liabilities to you, your spouse, guests, relatives, or anyone else resulting from such claims.

[Id.] Plaintiffs contend that, because “Lacey refused Plaintiffs' demands for her to defend Rush Fitness or indemnify it from the costs of defending the suit against Rush Fitness for injuries she alleged she sustained at Rush Fitness' facility, ” she breached the terms of the Membership Agreements. [Id. at 5.] In this suit, Plaintiff PIIC seeks to recover “attorneys' fees, costs, and other charges, for which PIIC provided payment and indemnification” pursuant to Rush Fitness's insurance policy with it. [Id.] Lacey responded with a motion to dismiss for lack of personal jurisdiction, [DN 5.] In turn, Plaintiffs filed a cross-motion to transfer venue to the Eastern District of Tennessee. [DN 9.]

         DISCUSSION

         In Lacey's memorandum in support of her motion to dismiss for lack of personal jurisdiction, she argues that both of the Membership Agreements at issue in this breach of contract action “were negotiated, signed, and performed in Knoxville, Tennessee.” [DN 6 at 1 (citing DN 6-1 (Lacey Affidavit)).] Further, Lacey's tort suit against Rush Fitness was filed in Tennessee state court. [Id. (citing DN 6-1 (Lacey Affidavit)).] Moreover, “Lacey was a resident of Tennessee at all time[s] relevant to the contract and the underlying tort claim.” [Id. (citing DN 6-1 (Lacey Affidavit)).] Finally,

currently and at the time the present action was filed, Ms. Lacey resides at 4350 Horizon Homes Street, Las Vegas, Nevada 89129. Ms. Lacey was served with the Plaintiffs' Complaint by certified mail addressed to her former Kentucky address. This mail was eventually forwarded to her residence in Nevada. Ms. Lacey was again served with the Plaintiffs' Complaint by certified mail addressed to her Nevada residence.

[Id. at 2 (citing DN 6-1 (Lacey Affidavit) (internal citations omitted)).] According to Lacey's Affidavit, she only resided in Paducah, Kentucky from June 2016 until February 2017, but since that time has lived at her current Nevada address. [DN 6-1 at 1.] Based on the foregoing allegations, including the facts that Lacey was not a Kentucky resident during the events giving rise to this lawsuit or at the time this lawsuit was filed, Lacey argues that this Court cannot exercise personal jurisdiction over her. [DN 6 at 2.]

         In their response, Plaintiffs “do not contest Defendant's argument that since she [wa]s no longer a resident of Kentucky at the time suit was filed that this Court lacks personal jurisdiction over her in this matter.” [DN 8-1 at 3.] Accordingly, the parties are now in agreement that the Court lacks personal jurisdiction over Lacey, and therefore the Court need not engage in a personal jurisdiction analysis. However, Plaintiffs go on to make a cross-motion for the Court to transfer venue to the Eastern District of Tennessee pursuant to 28 U.S.C. §§ 1631 and 1406(a). Lacey opposes this motion and urges the Court to instead grant her motion to dismiss for lack of personal jurisdiction.

         A. Plaintiffs' Motion to Transfer Venue

         Under 28 U.S.C. § 1406(a), “[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a). Similarly, 28 U.S.C. § 1631 provides that, when a “court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action . . . to any other such court in which the action . . . could have been brought at the time it was filed or noticed.” 28 U.S.C. § 1631. The Sixth Circuit has explained that “sections 1406(a) and 1631 are ‘similar provision[s]' that ‘confer broad discretion in ruling on a motion to transfer.'” Jackson v. L & F MartinLandscape, 421 Fed.Appx. 482, 483-84 (6th Cir. 2009) (quoting Stanifer v. Brannan,564 F.3d 455, 456-57 (6th Cir. 2009)). Importantly, because ‚Äúsection 1406 applies to actions that are ...


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