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Ashmore v. Allied Energy, Inc.

United States District Court, D. South Carolina, Anderson/Greenwood Division

January 9, 2015

Beattie B. Ashmore, In His Capacity as Court-Appointed Receiver for Ronnie Gene Wilson and Atlantic Bullion and Coin, Inc., Plaintiff(s),
v.
Allied Energy, Inc., Defendant.

ORDER AND OPINION

J. MICHELLE CHILDS, District Judge.

Plaintiff Beattie B. Ashmore ("Plaintiff"), In His Capacity as Court-Appointed Receiver for Ronnie Gene Wilson ("Wilson") and Atlantic Bullion and Coin, Inc. ("AB&C"), filed the instant action against Defendant Allied Energy, Inc. ("Allied"), to recover money used to purchase an investment interest in two (2) wells that were to be drilled in Grimes County, Texas. (See ECF No. 1.)

This matter is before the court pursuant to Allied's Motion to Transfer Venue to the United States District Court for the Western District of Kentucky ("Western District of Kentucky") pursuant to 28 U.S.C. § 1404(a).[1] (ECF No. 11.) Plaintiff opposes Allied's Motion to Transfer Venue in its entirety. (ECF No. 17.) For the reasons set forth below, the court DENIES Allied's Motion to Transfer Venue.

I. RELEVANT BACKGROUND TO PENDING MOTION

Allied develops oil and gas wells in Oklahoma and Texas. (ECF No. 12 at 1.) In 2011, Wilson's wife, Cassie Wilson, signed two (2) subscription agreements and purchased an investment interest in two (2) well projects identified as 2011 Allied Grimes #3 PUD JV and Grimes County #4. (See ECF No. 12-1.) Each subscription agreement contained a forum selection clause stating that the subscriber "understand[s] and accept[s] that all provisions of this Agreement are made in Warren County, Kentucky, and that venue and jurisdiction for all matters in dispute shall also be in Warren County, Kentucky, Commonwealth of Kentucky, and USA." (Id. at 5, 13.)

On April 11, 2012, Wilson[2] and AB&C were charged in an Information with two (2) counts of mail fraud stemming from their involvement in a criminal Ponzi scheme involving hundreds of victims and millions of dollars. (ECF No. 11 (Crim. No. 8:12-cr-320-JMC).) On April 17, 2012, the United States of America (the "Government") filed a Consent Motion for Appointment of a Federal Receiver. (ECF No. 17 (Crim. No. 8:12-cr-320-JMC).) On May 24, 2012, the court granted the Government's Consent Motion for Appointment of a Federal Receiver and on June 13, 2012 appointed Plaintiff as Receiver of all "assets, properties, books and records, and other items" of Wilson and AB&C and their alter egos (collectively "AB&C Receivership Entities").[3] (ECF Nos. 30, 31 (Crim. No. 8:12-cr-320-JMC).) Pursuant to instructions received from the court, the Receiver was tasked with locating and managing assets previously acquired by and/or in the name/possession of the AB&C Receivership Entities, and taking actions necessary for the protection of investors, including, but not limited to, initiating actions against individuals or companies to whom monies or assets were transferred that are directly traceable to the unlawful Ponzi scheme run by Wilson and AB&C. (ECF No. 43 at 2-5 (C/A No. 8:12-cv-2078-JMC).)

On January 27, 2014, Plaintiff filed a Complaint against Allied seeking to rescind the securities investment in the two (2) aforementioned wells and recover approximately $232, 876.00 in damages. (ECF No. 1.) In response to Plaintiff's Complaint, Allied filed an Answer and the Motion to Transfer Venue on April 4, 2014. (ECF Nos. 9, 11.) Plaintiff filed opposition to the Motion to Transfer Venue on May 1, 2014, to which Allied filed a Reply to Plaintiff's Response on May 12, 2014. (ECF Nos. 17, 18.)

II. LEGAL STANDARD

A. Motions to Transfer Venue pursuant to 28 U.S.C. § 1404(a)

28 U.S.C. § 1404(a) provides that "[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...." Id . "Whether a case should be transferred to an alternative venue rests within the sound discretion of the district court." Sw. Equip., Inc. v. Stoner & Co., Inc., C/A No. 6:10-1765-HMH, 2010 WL 4484012, at *2 (D.S.C. Nov. 1, 2010) (citing In re Ralston Purina Co., 726 F.2d 1002, 1005 (4th Cir. 1984)). A district court must "engage in an individualized case-by-case consideration of convenience and fairness [ ]'" when considering a motion to transfer. Id . (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)); see also Avant v. Travelers Ins. Co., 668 F.Supp. 509, 510 (D.S.C. 1987) ("Generally, the test of whether an action should be transferred to another jurisdiction is one of balancing convenience"). When undertaking this individualized analysis, courts weigh the following factors: (1) the ease of access to the sources of proof; (2) the convenience of the parties and witnesses; (3) the cost of obtaining the attendance of the witnesses; (4) the availability of compulsory process; (5) the possibility of a view [of the premises] by the jury; (6) the interest in having local controversies decided at home; and (7) the interests of justice. Id . (citing Landers v. Dawson Constr. Plant, Ltd., Nos. 98-2709, 98-2763, 1999 WL 991419, at *2 (4th Cir. Nov. 2, 1999)).

The movant has the burden to demonstrate that a transfer of venue is appropriate. Gerber v. Canfield, 315 F.Supp. 1175, 1177 (D.S.C. 1970).

B. Forum Selection Clauses in the Context of § 1404(a) Motion to Transfer Venue

"[F]ederal law, specifically 28 U.S.C. § 1404(a), governs the District Court's decision whether to give effect to the parties' forum-selection clause and transfer this case...." Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 32 (1988). In Stewart, the United States Supreme Court addressed how a motion to transfer under § 1404 interplays with a contractual forum selection clause. The Court in Stewart explained:

Section 1404(a) directs a district court to take account of factors other than those that bear solely on the parties' private ordering of their affairs. The district court also must weigh in the balance the convenience of the witnesses and those publicinterest factors of systemic integrity and fairness that, in addition to private concerns, come under the heading of the interest of justice. It is conceivable in a particular case, for example, that because of these factors a district court acting under § 1404(a) would refuse to transfer a case notwithstanding the counterweight of a forum-selection clause.... The forum-selection clause, which represents the parties' agreement as ...

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