UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

SCOTTSDALE INSURANCE )

COMPANY, )

Plaintiff, )

) CAUSE NO.: 2:16-CV-373-RLM-PRC

v. )

)

PMG INDUSTRIAL, LLC, WALSH )

CONSTRUCTION COMPANY, and )

CHICAGO EXPLOSIVE SERVICES, LLC, )

Defendants. )

OPINION AND ORDER

This matter is before the Court on Defendant PMG Industrial, LLC’s Motion for Transfer

of Venue [DE 28], filed on November 16, 2016. Plaintiff Scottsdale Insurance Company filed a

response on November 30, 2016, and Defendant PMG Industrial, LLC filed a reply on December

7, 2016. This matter is also before the Court on Defendant PMG Industrial, LLC’s Motion to

Substitute Affidavit of Rick Flores [DE 32], filed on December 7, 2016. Defendant PMG Industrial,

LLC asks for a transfer of venue to the Southern District of Indiana, Evansville Division, pursuant

to 28 U.S.C. § 1404(a). For the reasons set forth below, the Court grants the Motion for Transfer of

Venue.

BACKGROUND

Plaintiff Scottsdale Insurance Company (“Scottsdale”) filed its Complaint for Declaratory

Judgment in this District to obtain a declaration that it has no duty to defend or indemnify Defendant

PMG Industrial, LLC (“PMG”) in connection with a separate lawsuit pending in this District

brought by Walsh Construction Company (“Walsh”) against Chicago Explosive Services, LLC

(“CES”) and PMG (Walsh Constr. Co. v. Chi. Explosive Servs., LLC and PMG Indus., LLC, No. 14-

CV-84-RL-PRC).
Plaintiff Scottsdale is a corporation organized under the laws of Ohio, with its principal place

of business in Scottsdale, Arizona. Defendant PMG is a limited liability company organized under

the laws of Indiana, with its principal place of business in Evansville, Indiana, and with its members

citizens of Indiana. Defendant Walsh is a corporation organized under the laws of Illinois, with its

principal place of business in the State of Illinois. Defendant CES is a limited liability company

organized under the laws of Indiana, with its principal place of business in Evansville, Indiana, with

two of its members citizens of Indiana and a third member a citizen of either Illinois or Florida.1

Scottsdale represents that the amount in controversy, including the potential costs of defending and

indemnifying PMG with regard to the underlying lawsuit exceeds $75,000.00. Jurisdiction in this

matter is premised upon diversity of citizenship. See 28 U.S.C. § 1332(a).

In the Complaint in this case, Scottsdale notes that the complaint in the related litigation

brought by Walsh alleges that, on October 11, 2012, Walsh and CES entered into a Subcontract

Agreement for certain bridge demolition services, including demolition of two spans of the Cline

Avenue Bridge, in East Chicago, Indiana. The related complaint alleges that CES performed blasting

work through the use of explosives and that PMG assisted CES in the completion of the blasting.

Scottsdale further notes that the complaint in the related case alleges that the blasting caused severe

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 In the Complaint, Scottsdale alleges that Scottsdale is organized under the laws of Ohio with its principal place

of business in Scottsdale, Arizona; that Walsh Construction Company is an Illinois corporation with its principal place

of business in Illinois; and that the members of PMG Industrial LLC are citizens of Indiana. However, as for Defendant

Chicago Explosive Services, LLC, Scottsdale alleges only that Chicago Explosive Services, LLC is a limited liability

company organized under the laws of Indiana with its principal place of business in Evansville, Indiana, and does not

allege the citizenship of its members. 

However, in the course of briefing the instant motion, the parties notified the Court that, in the related litigation

(Walsh Constr. Co. v. Chi. Explosive Servs., LLC and PMG Indus., LLC, No. 14-CV-84), a motion to dismiss has been

filed challenging the court’s subject matter jurisdiction on the basis that there is not complete diversity of citizenship

between the plaintiff Walsh Construction Company, a citizen of Illinois, and Defendant Chicago Explosive Services,

LLC, of which two members are citizens of Indiana and one member is a citizen of either Illinois or Florida. The motion

to dismiss has not yet been ruled on.

Based on that information, it appears that there is complete diversity in this case and the Court has subject

matter jurisdiction pursuant to 28 U.S.C. § 1332(a).

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property damage that Walsh was contractually obligated to repair at a cost totaling approximately

$2,127,250.19. Finally, the related complaint alleges that “the blasting work performed by PMG was

an ultra-hazardous activity” and that, as a result, PMG is strictly liable for proximately causing the

damage. (Compl. ¶¶ 26, 27 (quoting Ex. B, Count VII, ¶¶ 29, 30)).

In this case, Scottsdale alleges that it issued to PMG a commercial general liability insurance

policy effective August 16, 2012, through August 16, 2013. The policy includes a Demolition

Exclusion endorsement that provides, in part, that the insurance does not apply to “‘property

damage’ arising out of any blasting operations” and does not apply to “‘property damage’ arising

out of the demolition of any building or structure that has a height in excess of three stories or fifty

(50) feet from the ground surface on the exterior of any building or structure.” (Compl. ¶ 12). The

Complaint further alleges that, although Scottsdale initially agreed to defend PMG in the related

case brought by Walsh under a reservation of rights, through the course of discovery, Scottsdale

learned that the bridge at issue has a height in excess of fifty feet from the ground surface and that

the work PMG allegedly performed included drilling holes in the bridge for the placement of

explosives. On information and belief, Scottsdale alleges that a portion of PMG’s work on the bridge

was performed at a height in excess of fifty feet from the ground surface.

Thus, Scottsdale asks for a declaratory judgment in this case that there is no coverage under

the Policy because the Demolition Exclusion endorsement precludes coverage entirely.

ANALYSIS

As an initial matter, the Court grants the Motion to Substitute Affidavit of Rick Flores to

allow the substitution of his signed Affidavit for the unsigned Affidavit filed with PMG’s opening

motion.

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Defendant PMG seeks transfer of venue under 28 U.S.C. § 1404(a) from the Northern

District of Indiana, Hammond Division to the Southern District of Indiana, Evansville Division.

PMG argues that the convenience of the parties, the witnesses, and the interest of justice will be

better served by the transfer of venue. Plaintiff Scottsdale opposes the transfer of venue.

Pursuant to § 1404(a), “[f]or the convenience of 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 . . . .” 28 U.S.C. § 1404(a). Therefore, (1) venue must be proper in the transferor

court; (2) venue must be proper in the transferee court; and (3) the transfer must serve the

convenience of the parties and witnesses and must be in the interests of justice. See Coffey v. Van

Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986); Law Bulletin Publ’g, Co. v. LRP Publ’ns,

Inc., 992 F. Supp. 1014, 1017 (N.D. Ill. 1998). Although specifically set forth in § 1404(a), “these

factors are best viewed as placeholders for a broader set of considerations, the contours of which

turn upon the particular facts of each case.” Travel Supreme, Inc. v. NVER Enters., Inc., No.

3:07CV194PPS, 2007 WL 2962641, at *8 (N.D. Ind. Oct. 5, 2007) (quoting Coffey, 796 F.2d at 219

n.3); see also Research Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d 973, 977 (7th

Cir. 2010) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). The party seeking

transfer has the “burden of showing that ‘the transferee forum is clearly more convenient.’” Heller

v. Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1293 (7th Cir. 1989). “[W]hen the

inconvenience of the alternative venues is comparable there is no basis for a change of venue[.]” In

re Nat’l Presto Indus., 347 F.3d 662, 665 (7th Cir. 2003).

First, venue is proper in this court under 28 U.S.C. § 1391(b)(2) as a substantial part of the

events or omissions giving rise to the related litigation occurred in this District and a substantial part

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of the property that is the subject of the related litigation is situated in this District. East Chicago,

Indiana, where the blasting work occurred, is in this District.

Second, venue is proper in the Southern District of Indiana. In its opening motion, PMG does

not analyze any of the requirements of § 1391(b) as to venue in the Southern District of Indiana, and

Scottsdale comments only in a footnote that the parties do not dispute that venue is proper in the

transferee district but also offers no analysis of § 1391(b). The Court may only transfer venue under

§ 1404(a) if venue is proper in the transferee court.

Section 1391(b) provides.

(b) Venue in general.--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

subject of the action is situated; or

(3) if there is no district in which an action may otherwise be brought as

provided in this section, any judicial district in which any defendant is

subject to the court’s personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b).

Venue is not proper under § 1391(b)(1). Defendant PMG is a resident of the Southern

District of Indiana as is Defendant CES. However, Defendant Walsh Construction Company is a

resident of Illinois, as a corporation organized under the laws of Illinois with its principal place of

business in Illinois. Because all Defendants are not residents of the State of Indiana, venue is not

proper in the Southern District of Indiana under § 1391(b)(1). Section 1391(b)(3) is not applicable

because there is a district in which venue is proper—the Northern District of Indiana.

However, venue is proper under § 1391(b)(2) because a substantial part of the events giving

rise to the claim in this case occurred in the Southern District of Indiana where the insurance policy

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that is the subject of this declaratory action was negotiated, drafted, and entered into. See State Farm

Mut. Auto. Ins. Co. v. Estate of Bussell, 939 F. Supp. 646, 650 (S.D. Ind. 1996).

Thus, the Court turns to the question of whether the transfer would serve the convenience

of the parties and witnesses and would be in the interests of justice. The Court balances the

following “private interests” in the convenience analysis: “(1) the plaintiff’s choice of forum; (2)

the situs of the material events; (3) the relative ease and access to sources of proof; (4) the

convenience of the witnesses; and (5) the convenience of the parties of litigating in the respective

forums.” Schumacher v. Principal Life Ins. Co., 665 F. Supp. 2d 970, 977 (N.D. Ind. 2009) (citing

Law Bulletin, 992 F. Supp. at 1017); see also Research Automation, Inc., 626 F.3d at 978. In

addition, the Court considers the “interest of justice” or the “public interest,” which relates to the

efficient functioning of the courts. Coffey, 796 F.2d at 219-20. These “[p]ublic interest factors

include the court’s familiarity with the applicable law, the speed at which the case will proceed to

trial, and the desirability of resolving controversies in their locale.” Valbruna Stainless, Inc. v. ADT

Sec. Servs., Inc., 1:10-CV-77, 2010 WL 2772324, at *2 (N.D. Ind. July 12, 2010) (quoting

Omnisource Corp. v. Sims Bros., Inc., No. 1:08-CV-89, 2008 WL 2756345, at *4 (N.D. Ind. July

14, 2008)).

First, this District is the plaintiff’s choice of forum. Ordinarily, courts give substantial weight

to the plaintiff’s choice of form, particularly when it is the plaintiff’s home forum. See In re Nat’l

Presto Indus., 347 F.3d at 664. However, this District is not Scottsdale’s home forum. Thus,

Scottsdale’s choice of forum is entitled to less deference. Notably, it is not the home forum of any

party.

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Second, the situs of the material events relevant to the instant lawsuit is the Southern District

of Indiana. Although the underlying lawsuit based on breach of contract and negligence brought by

Walsh against PMG and CES is pending in this District and the blasting that led to that lawsuit

occurred in this District, the instant cause of action is one of indemnity under the insurance contract

between Scottsdale and PMG. The insurance contract was sold in Evansville, Indiana, in the

Southern District of Indiana where PMG resides. This factor strongly favors transfer.

Next, the relative ease and access to sources of proof as well as the convenience of the

witnesses favors transfer. The relevant parties and witnesses are those involved with the insurance

policy as well as those involved with the blasting and construction work that is the topic of the

insurance coverage at issue. Regarding the insurance policy, none of the witnesses are located in this

District; PMG’s president and other officers are residents of Evansville, Indiana, and all of the

business records of PMG are located in Evansville, Indiana. Scottsdale’s witnesses and records are

in Arizona. As for the witnesses involved with the work that is the topic of the insurance coverage,

the PMG supervisor of the employees who performed the work is a resident of Evansville, Indiana.

The Court notes that the parties have already obtained certain discovery regarding the related

complaint in the course of that litigation. In its reply brief, PMG represents that “[t]he events giving

rise to the Underlying Lawsuit were demolished and there is nothing to see.” (PMG Reply 2).

Scottsdale argues that transfer will impermissibly shift the inconvenience of travel from

PMG employees to Scottsdale employees. However, the burden is not shifted from PMG to

Scottsdale. Rather PMG’s inconvenience is alleviated, while Scottsdale’s already existing

inconvenience is relatively the same. Although Scottsdale represents that it can take a direct flight

from Arizona to Chicago, Illinois, the airports in Chicago are approximately an hour drive from the

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courthouse in Hammond, Indiana. Although Scottsdale would have to take a connecting flight to get

from Arizona to the airport in Evansville, Indiana, PMG represents that the airport in Evansville is

approximately eight miles from the courthouse in the Southern District. In contrast, if transfer is not

granted, PMG would have to fly to Chicago, Illinois, and then drive to Hammond, Indiana, or drive

the approximately 550 miles round trip from Evansville, Indiana, to Hammond, Indiana. This favors

transfer.

As for the burden on the remaining two defendants, who are not parties to the insurance

contract, the inconvenience is shifted from one to the other. Walsh will have to travel from Illinois,

which it can do by flying directly from Chicago, Illinois, to Evansville, Indiana, or by driving. And,

CES, like PMG, is located in Evansville, Indiana, so the same inconvenience that PMG would

sustain with traveling to the Northern District of Indiana, Hammond Division, is alleviated. The

inconvenience to these parties is neutral.

Finally, the convenience of the parties litigating in the respective forums weighs in favor of

transfer. The Northern District of Indiana is inconvenient for both Scottsdale and PMG, whereas the

Southern District of Indiana is only relatively equally inconvenient for Scottsdale. The Court finds

that, having considered all the factors, PMG has met its burden of showing that transferring the case

to the Southern District of Indiana would be “clearly more convenient.” Coffey, 796 F.2d at 219-20;

see also U.S. ex rel Reuille v. Comm. Health Sys. Prof’l Servs. Corp., No.: 1:09-CV-07, 2011 WL

5238826, at *2 (N.D. Ind. Nov. 1, 2011).

As for the interests of justice, the court in both Districts is equally able to apply federal and

Indiana law (which the parties agree applies) and there is no evidence that one forum will allow the

case to proceed to trial any faster than the other. Although Scottsdale argues that the citizens of the

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Northern District of Indiana have a strong interest in resolving this dispute involving its residents,

the insurance dispute in this case is whether the insurer Scottsdale, a resident of Arizona, must

defend and indemnify the insured PMG, a resident of the Southern District of Indiana, Evansville

Division. Therefore, the residents of the Southern District of Indiana have a stronger connection to

the events of this litigation than those of this District.

CONCLUSION

Based on the foregoing, the Court hereby GRANTS Defendant PMG Industrial, LLC’s

Motion to Substitute Affidavit of Rick Flores [DE 32] and GRANTS Defendant PMG Industrial,

LLC’s Motion for Transfer of Venue [DE 28]. The Clerk of this Court is DIRECTED to transfer

this case to the Southern District of Indiana, Evansville Division for all further proceedings.

SO ORDERED this 14th day of December, 2016.

 s/ Paul R. Cherry 

MAGISTRATE JUDGE PAUL R. CHERRY

UNITED STATES DISTRICT COURT

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