Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02504/USCOURTS-casd-3_13-cv-02504-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition For Removal--Other Contract

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LYCURGAN, INC., dba ARES

ARMOR,

Plaintiff,

CASE NO. 13cv2504 JM(NLS)

ORDER DENYING MOTION TO

DISMISS FOR IMPROPER VENUE;

DENYING MOTION TO TRANSFER

FOR IMPROPER VENUE;

GRANTING MOTION FOR

CONVENIENCE TRANSFER

vs.

RICHARD R. ROOD, JR., aka

BRINK ROOD; BLOOD BROTHERS

ARMORY, LLC; VISION ARMORY;

and VISION ARMORY, LLC;,

Defendants.

Defendants RichardR. Rood, Jr., aka Brink Rood, Blood Brothers Armory, LLC

(“BB Armory”), Vision Armory, and Vision Armory LLC (“VA) move to dismiss the

complaint for improper venue, to transfer for improper venue to the United States

DistrictCourt for the Northern District ofIndiana, and for a convenience venue transfer

to the Northern District of Indiana. Plaintiff Lycurgan, Inc., dba Ares Armor (“Ares”),

opposes the motion. Pursuant to Local Rule 7.1(d)(1), the court finds this matter

appropriate for decision without oral argument. For the reasons set forth below, the

court denies the motion to dismiss for improper venue, denies the motion to transfer

for improper venue, and grants the motion for a convenience transfer. The Clerk of

Court is instructed to transfer this matter to the United States District Court for the

Northern District of Indiana.

- 1 - 13cv2504

Case 3:13-cv-02504-JM-NLS Document 10 Filed 12/02/13 Page 1 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

BACKGROUND

On August 26, 2013, Plaintiff commenced this action in the Superior Court of

California, County of San Diego, seeking damages in excess of $75,000. Plaintiff, a

citizen of the State of California, alleges five state law causes of action against

Defendants, citizens of the State of Indiana, for breach of contract, fraud - intentional

representation, fraud - false promise, avoidance of intentionally fraudulent transfers,

and avoidance of constructively fraudulent transfers. On October 17, 2013, Defendants

removed this action based upon diversity of citizenship.

Ares commenced operations in Oceanside, California in 2010, manufacturing

backpacks, slings and other textile-based equipment used by Marines and soldiers. 

(Compl. ¶12). In 2011 Plaintiff provided milled or cast aluminum metal parts to

customers who desired to fabricate their own sport-utility firearms. 

On February 7, 2013, Defendant Rood telephonically contacted Ares regarding

the supply of various types of lower receivers. (Compl. ¶21). On February 13, 2013,

Defendants provided Plaintiff with a sample receiver ofthe proposed “AR15 Cast 80%,

7075, anodized, +/- .002".” (Compl. ¶23). The sample receiver allegedly conformed

to Plaintiff’s specification. Id. In order to take advantage of an increasing demand for

firearms and products, on February 21, 2013, Plaintiff placed a purchase order for some

20,000 AR15, 10,000 AR10, and 10,000 AR15 upper receivers. (Comp. ¶24). The

purchased products were to be manufactured with 7075 aluminum, and tolerances of

.002", and an eight-week delivery schedule. Plaintiff received a partial delivery after

12 weeks and found that the lower receivers allegedly were manufactured with inferior

quality aluminum and did not comply with specified tolerances. (Compl. ¶¶27, 28).

Upon receipt of the initial delivery, Plaintiff provided notice of non-conformity

to Defendants. On June 11, 2013, Dimitri Karras, the founder of Ares Armor, went to

Indiana to meet with Defendant Rood, an alleged owner or manager of BB Armory and

Vison Armory, to discuss the discrepancies with the ordered products. (Compl. ¶29). 

Defendant Rood represented that the discrepancies would be cured. Between May 31,

- 2 - 13cv2504

Case 3:13-cv-02504-JM-NLS Document 10 Filed 12/02/13 Page 2 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2013, and August 17, 2013, Plaintiff received an additional 12,800 allegedly nonconforming units. (Compl. ¶33). On August 15, 2013, dimensional testing allegedly

confirmed that the products shipped were non-conforming. (Compl. ¶34). While

Plaintiff filed the state court complaint on August 26, 2013, it was not served on

Defendants until September 17, 2013.

On September 5, 2013, Defendant BB Armory commenced an action against

Ares in the Northern District of Indiana alleging six counts for breach of contract, one

count for defamation, and a single count for false advertising (the “Indiana

Complaint”). The Indiana Complaint sets forth a different version of the allegations

than Ares. BB Armory alleges that Ares refused to honor its contractual obligations

including the payment, exclusivity, and minimum annual purchase provisions. (Def’s

Exh. A, ¶4). The Indiana Complaint alleges that the products provided to Ares

possessed identical specifications to the sample accepted by Ares. With respect to the

June 11, 2013 meeting with Mr. Karras in Indiana, BB Armory represents that Ares’

concern about the product centered on whether the AR15 uppers would line up with

the AR15 lowers. When shown that the uppers lined up with the lowers, Mr. Karras

allegedly accepted the products and instructed BB Armory “to send them even if they

were out of specification.” (Id. ¶¶46, 47). 

On July 30, 2013, when Ares allegedly asserted that the products were out of

specification, BB Armory requested that Ares provide them a copy of the report

indicating that “the Spec Samples were out of [Ares’] Specifications and that they may

pose a potential safety hazard, but none were ever provided.” (Id. ¶56). BB Armory

then had an independent third-party conduct tests to ensure the safety of the products.

No safety problems were revealed by the testing that included firing 2,000 rounds in

two and a half minutes. (Id. ¶58). BB Armory further alleges that Ares, on or about

May 30, 2013, began selling AR15 lowers made by other manufacturers in violation

of the parties’ exclusivity agreement. (Id. ¶66). The defamation claim allegedly arises

from statements on Ares’ website to the effect that BB Armory’s AR15 lowers “were

- 3 - 13cv2504

Case 3:13-cv-02504-JM-NLS Document 10 Filed 12/02/13 Page 3 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

out of specification and were not safe to be turned into and used as a firearm.” (Id.

¶¶67, 68).

DISCUSSION

The Motion to Dismiss or, Alternatively, to Transfer for Improper Venue 

Defendants move to dismiss the complaint for improper venue or, alternatively,

to transfer venue to the Northern District of Indiana pursuant to Federal Rule of Civil

Procedure 12(b)(3). Defendants argue that venue, pursuant to the general venue

statute, 28 U.S.C. §1391(b), is not appropriate in this district because all Defendants

reside in Indiana, 28 U.S.C. §1391(b)(1), and a substantial part ofthe events giving rise

to Plaintiff’s claim occurred in California. These arguments are not persuasive.

In removal cases, 28 U.S.C. §1441(a) controls venue. Polizzi v. Cowles

Magazines, Inc., 345 U.S. 663, 665 (1953). Under this general removal statute, venue

is proper in the district court “embracing the place where such action is pending.” 28

U.S.C. §1441(a). As the San Diego Superior Court is located in the Southern District

of California, venue is proper in this court.

Convenience Transfer 28 U.S.C. §1404(a)

Under 28 U.S.C. §1404(a), the court may transfer an action to any other district

or division where it might have been brought “[f]or the convenience of the parties and

witnesses and in the interest of justice.” Goodyear Tire & Rubber Co. v. McDonnell

Douglas Corp, 820 F.Supp. 503, 506 (C.D. Cal. 1992). A convenience transfer under

§1404(a) requires the court to assess a variety of factors and “involves subtle

considerations and is best left to the discretion of the trial judge." Sparling v. Hoffman

Construction, 864 F.2d 635, 639 (9th Cir. 1988). The court may consider the

convenience of the parties and witnesses, and the promotion of judicial efficiency and

economy in determining whether to transfer an action. Id. Private factors to be

considered include the location where the operative events occurred, the convenience

of the parties and non-party witnesses, the location of relevant evidence, the

availability of compulsory process, and other practical considerations for the efficient

- 4 - 13cv2504

Case 3:13-cv-02504-JM-NLS Document 10 Filed 12/02/13 Page 4 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

and cost-effective resolution of claims. Decker Coal Co. v. Commonwealth Edison

Co., 805 F.2d 834, 843 (9 Cir. 1986). Courts also look to the so-called public factors

th

such as relative docket congestion, the local public and jury pool’s interest in the

controversy, and issues relative to judicial economy. Id. at 508-09. Defendant has the

burden of demonstrating that transfer is appropriate, see Commodity Futures Trading

Comm’n v. Savage, 611 F.2d 270, 279 (9th Cir. 1981), and the court accords

substantial weight to a plaintiff resident’s choice of venue. Securities Investor

Protection Corp. v. Vigman, 764 F.2d 1309, 1317 (9 Cir. 1985). However, “[i]f the

th

operative facts have not occurred within the forum and the forum has no interest in the

parties orsubject matter,” plaintiff’s choice “is entitled to only minimal consideration.”

Lou v. Belzerg, 834 F.2d 730, 739 (9 Cir. 1987). th

The Ninth Circuit has also enumerated relevant factors, in a non-exclusive list,

to be considered on a case-by-case basis:

(1) the location where the relevant agreements were negotiated and

executed, (2) the state that is most familiar with the governing law, (3) the

plaintiff's choice of forum, (4) the respective parties' contacts with the

forum, (5) the contacts relating to the plaintiff's cause of action in the

chosen forum, (6) the differences in the costs of litigation in the two

forums, (7) the availability of compulsory process to compel attendance

of unwilling non-party witnesses, and (8) the ease of access to sources of

proof. Additionally, the presence of a forum selection clause is a

“significant factor” in the court's § 1404(a) analysis. We also conclude

that the relevant public policy of the forum state, if any, is at least as

significant a factor in the § 1404(a) balancing.

Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). The court

discusses the considerations enumerated in Jones and then discusses relevant

miscellaneous considerations.

1

Negotiation and Execution of Agreements

The court concludes that this factor weighs in favor of Indiana as the most

convenient forum. While the parties negotiated and executed the underlying

agreements from their respective states of residency, a representative of Ares,

There is no dispute that this action could have been commenced in the Northern 1

District of Indiana because all Defendants reside in that district. See 28 U.S.C.

§1391(b)(1).

- 5 - 13cv2504

Case 3:13-cv-02504-JM-NLS Document 10 Filed 12/02/13 Page 5 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Mr. Karras, traveled to Indiana to discuss the products’ specifications. (Compl. ¶29,

Indiana Complaint ¶46). Further, while present in Indiana, not only did Mr. Karras and

Mr. Rood discuss the products’ specifications but they also conducted a test to ensure

compatibility of the AR15 uppers to the lowers. Mr. Karras was allegedly satisfied

with the test, and agreed to accept the products. 

Governing Law

The court concludes that this factor neither favors one party nor the other. The

agreements between the parties did not contain either a choice or law or forum

selection provision. Thus, the governing law requires a choice of law analysis which

neither party discusses; and the court declinesto engage in such an analysis sua sponte. 

Further, it appears that the Uniform Commercial Code (“UCC”) would provide the

legal framework for resolving the issues raised by the parties as the dispute involves

the sale of goods between merchants. The UCC applies in both jurisdictions.

Plaintiff’s Choice of Forum

The court concludes that this factor favors Ares because a plaintiff’s choice of

forum is accorded substantial weight. Securities Investor Protection Corp., 764 F.2d

at 1317. Cir. 1985).

The Parties’ Contacts with the Forum and Plaintiff’s Contacts with Its Claims

The court concludes that this consideration weighs in favor of Indiana as the

most convenient location. While the agreements were negotiated and executed while

the parties were in their respective states, Plaintiff’s contacts with Indiana appear

stronger than Defendants’ contacts with California. Mr. Karras traveled from

California to Indiana to discuss the products’ specifications and negotiated with BB

Armory concerning specifications of the goods and future delivery schedules.

Plaintiff also argues that this court has personal jurisdiction over all Defendants

despite the limited, if non-existing, contacts with the State of California by Vision

Armory and VA. While personal jurisdiction falls outside the scope of the present

motion, Plaintiff’s bare allegation that Vision Armory is the alter ego of BB Armory

- 6 - 13cv2504

Case 3:13-cv-02504-JM-NLS Document 10 Filed 12/02/13 Page 6 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

appears to run afoul of pleading requirements set forth in Bell Atlantic Corp v.

Twombly, 550 U.S. 544, 555 (2007) (the complaint’s allegations must “plausibly

suggest[]” that the pleader is entitled to relief). Under these circumstances the court

notes that it may not possess the authority to exercise personal jurisdiction over all the

Defendants. However, personal jurisdiction in Indiana appears proper as to all

Defendants.

The Costs of Litigation in the Two Forums

The court concludes that this factor is neutral at best as neither party identifies

the comparative costs of litigating in the respective forums.

Availability of Compulsory Process

The court concludes that this factor is neutral at best as both parties identify

potential witnesses within their respective State. The court notes that the FederalRules

of Civil Procedure and the Federal Rules of Evidence provide the procedural

mechanism to introduce such testimony at the time of trial. Further, the parties are

capable of coordinating discovery in such a manner to achieve an efficient and costeffective result whether this action proceeds in this court or in Indiana.

Plaintiff also argues that the individuals and companies that performed the

analysis of the goods are located in California. This argument is entitled to little

weight. The residence of potential experts is not determinative. See Williams v.

Bowman, 157 F.Supp.2d 1103, 1108 (N.D. Cal.2001) (the convenience of expert

witnesses is given little weight).

Miscellaneous Considerations

The court concludes that the most important consideration, the convenience of

non-party witnesses and experts, favors transfer to Indiana. The declaration of Mr.

Rood identifies two potential witnesses - Josh Mulhern of Bristol, Indiana, who is

anticipated to testify about the setup of the machining for BB Armory, and Justin

Howard of Atlanta, Georgia, who is anticipated to testify about his own role in

providing a quote for the manufacture of BB Armory’s parts. Quick Parts 3-D was the

- 7 - 13cv2504

Case 3:13-cv-02504-JM-NLS Document 10 Filed 12/02/13 Page 7 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

original manufacturer of BB Armory’s parts. (Rood Decl. ¶22). Further, virtually all

of the parts manufactured for Ares have been returned to BB Armory and are located

in Indiana. (Id. ¶23). The goods were also shipped FOB from BB Armory’s Indiana

facility, thus indicating that the risk of loss for the goods transferred to Plaintiff at that

time while the goods were still located in Indiana. (Id. ¶24). Plaintiff, on the other

hand, does not identify any percipient witness other that its employees and experts. See

Williams, 157 F.Supp.2d at 1108 (the convenience of expert witnesses is given little

weight).

Finally, the court notes that Ares filed the complaint on August 26, 2013 and

served Defendants on September 17, 2013. In this interim period, on September 5,

Defendants commenced the Indiana action and promptly served Ares. The mere fact

that Ares raced to the courthouse to file a complaint, but delayed service of the

complaint until after Ares was served with process in the Indiana action, does not

outweigh the other factors favoring a convenience transfer. Lastly, the transfer of this

action will facilitate coordination or consolidation with the Indiana Action to the extent

necessary for efficient administration of the cases and promote the fair and efficient

resolution of parties’ claims. 

In sum, the court denies the motion to dismiss for improper venue, denies the

motion to transfer for improper venue, and grants the motion for a convenience

transfer. The Clerk of Court is instructed to transfer this matter to the United States

District Court for the Northern District of Indiana.

IT IS SO ORDERED.

DATED: December 2, 2013

 Hon. Jeffrey T. Miller

 United States District Judge

cc: All parties

- 8 - 13cv2504

Case 3:13-cv-02504-JM-NLS Document 10 Filed 12/02/13 Page 8 of 8