1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 HUMAN RESOURCE ADVANTAGE, Case No.: 1:21-cv-01610-JLT-BAM LLC, and DEBBIE BROWNLEE, 12 ORDER DENYING DEFENDANT’S Plaintiffs, MOTION TO TRANSFER VENUE 13 v. (Doc. 7) 14

15 THE HANOVER INSURANCE COMPANY, and Does 1 through 25, 16 inclusive, 17 Defendants. 18

19 Human Resource Advantage, LLC and Debbie Brownlee assert that The Hanover Insurance 20 Company breached the parties’ contract. (Doc. 1-2.) Hanover seeks transfer of the action to the United 21 States District Court for the District of Oregon pursuant to 28 U.S.C. § 1404(a). (Doc. 7.) Plaintiffs 22 oppose the motion, asserting Hanover failed to meet its burden of demonstrating transfer is proper. 23 (See Doc. 17.) The Court finds the matter suitable for decision without oral argument pursuant to 24 Local Rule 230(g) and General Order 618. For the reasons set forth below, Hanover’s motion to 25 transfer venue to the District of Oregon is DENIED. 26 I. Background 27 HRA is an Oregon limited liability corporation with its principal place of business in Oregon. 28 (Doc. 1-2 at ¶ 1.) Brownlee is an individual residing in Oregon. (Id.) Hanover asserts it is a New 1 Hampshire corporation with its principal place of business in Worcester, Massachusetts. (Doc. 7 at 6.) 2 Plaintiffs allege Hanover issued Plaintiffs a professional liability policy, which was in effect at 3 all material times. (Doc. 1-2 at ¶ 6.) Plaintiffs assert that under the policy, Hanover was required to 4 provide a defense to Plaintiffs for any claims asserted against Plaintiffs for “…any actual or alleged 5 negligent act, error, omission, or misstatement committed in…” the course of Plaintiffs providing 6 “pre-employment background screening” services. (Id. at ¶ 7.) Plaintiffs allege that despite repeated 7 requests, Hanover refused to defend Plaintiffs in a cause of action for negligence arising out of 8 Plaintiffs allegedly providing improper pre-employment background screening services to a client and 9 therefore that Hanover failed to provide Plaintiffs the insurance benefits they were entitled to under 10 the policy. (See Doc. 1-2 at ¶¶ 8-17, 19-20.) Based on these allegations, Plaintiffs assert claims against 11 Hanover for breach of written contract and breach of the implied covenant of good faith and fair 12 dealing. (Id. at ¶¶ 18-32.) On January 20, 2022, Hanover filed a motion to transfer venue to the 13 District of Oregon pursuant to 28 U.S.C. § 1404(a). (Doc. 7.) Plaintiffs filed an opposition on February 14 14, 2022. (Doc. 17.) On February 22, 2022, Hanover filed a reply. (Doc. 19.) 15 II. Legal Standard 16 “For the convenience of parties and witnesses, in the interest of justice, a district court may 17 transfer any civil matter to any other district or division where it might have been brought.” 28 U.S.C. 18 § 1404(a). The Supreme Court explained the § 1404(a) analysis should be an “individualized, case-by- 19 case consideration of convenience and fairness.” Van Dusen v. Barrack, 376 U.S. 612, 622 (1964). 20 Accordingly, courts may consider several factors, including: 21 (1) plaintiff’s choice of forum, (2) convenience of the parties, (3) convenience of the witnesses, (4) ease of access to the evidence, (5) familiarity of each forum with the 22 applicable law, (6) feasibility of consolidation with other claims, (7) any local interest in the controversy, and (8) the relative court congestion and time of trial in each forum. 23

24 Royal Queentex Enters. v. Sara Lee Corp., 2000 WL 246599, at *2 (N.D. Cal. 2000) (citing Decker 25 Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986)); see also Jones v. GNC 26 Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). Further, the Court may consider “the location 27 where the relevant agreements were negotiated and executed.” Jones, 211 F.3d at 498. 28 The party seeking a transfer of venue has the burden of demonstrating that the action could 1 have been brought in the transferee venue, Park v. Dole Fresh Vegetables, Inc., 964 F. Supp. 2d 1088, 2 1093 (N.D. Cal. 2013), and that transfer is appropriate. Texas Gulf Sulphur Co. v. Ritter, 371 F.2d 145, 3 147 (10th Cir. 1967). Whether to grant a change of venue is within the discretion of a district 4 court. See Ventress v. Japan Airlines, 486 F.3d 1111, 1118 (9th Cir. 2007) (explaining the 5 determination of venue “involves subtle considerations and is best left to the discretion of the trial 6 judge”). Finally, “[s]ection 1404(a) provides for transfer to a more convenient forum, not to a forum 7 likely to prove equally convenient or inconvenient.” Van Dusen, 376 U.S. at 645-46; Pizana v. 8 SanMedica Int’l LLC, WL 4747947, at *3 (E.D. Cal. 2019). 9 III. Discussion and Analysis 10 A. Whether the case could have been brought in Oregon 11 Transfer of venue under § 1404(a) is only appropriate if the action could have been brought in 12 the transferee venue. 28 U.S.C. § 1404(a). Because diversity of citizenship under 28 U.S.C. § 1332 13 provides the sole basis for jurisdiction in this matter and the parties would remain diverse in the 14 District of Oregon, 28 U.S.C. § 1391(b) applies. See Shanze Enters., Inc. v. Am. Cas. Co. of Reading, 15 PA, 2015 WL 1014167, at *3 (E.D. Cal. 2015) (applying section 1391(b) to action based on diversity 16 jurisdiction). Section 1391(b) provides, in part: “A civil action may be brought in…a judicial district 17 in which any defendant resides, if all defendants are residents of the State in which the district is 18 located…” 28 U.S.C. § 1391(b)(1). For venue purposes, a corporate defendant, such as Hanover, is 19 considered to reside in “any judicial district in which such defendant is subject to the court’s personal 20 jurisdiction with respect to the civil action in question…” Id. § 1391(c)(2). A plaintiff entity, whether 21 incorporated or not, resides in the district where its principal place of business is located. Id. 22 The parties do not appear to dispute that Plaintiffs could have brought this case in the District 23 of Oregon. For venue purposes, Plaintiffs are residents of Oregon. (See Doc. 1-2 at 2.) Hanover 24 concedes it conducts business throughout Oregon and is subject to personal jurisdiction in the District 25 of Oregon. (Doc. 7 at 9.) Thus, this matter could have been brought in the District of Oregon under 28 26 U.S.C. §§ 1391(b), (c). The Court will therefore proceed to weigh the factors relevant to the 27 convenience of the parties, convenience of the witnesses, and the interest of justice in determining 28 whether transfer is proper. 1 B. Convenience of the parties 2 In evaluating the parties’ convenience, the Court considers Plaintiffs’ choice of forum, the 3 parties’ contacts with the forum, and the contacts relating to Plaintiffs’ claims in the chosen 4 forum. Jones, 211 F.3d at 498-99; see also Burke v. USF Reddaway, Inc., 2013 WL 85428, at *2 (E.D. 5 Cal. 2013). 6 As an initial matter, the Parties disagree over the weight to be given to Plaintiffs’ choice of 7 forum—California. The Ninth Circuit explained the Court “must balance the preference accorded 8 plaintiff’s choice of forum with the burden of litigating in an inconvenient forum.” Decker Coal, 805 9 F.2d at 843. In general, a plaintiff’s choice of forum is given substantial weight, because courts attach 10 a “strong presumption in favor of the plaintiff’s choice of forum.” Piper Aircraft v. Reyno 454 U.S. 11 235, 255 (1981). The Court’s deference to Plaintiffs’ choice of forum is diminished if the chosen 12 forum is not connected to Plaintiffs, either by residency or because the claims are not connected to the 13 forum. See Fabus Corp. v. Asiana Exp. Corp., 2001 WL 253185, at *1 (N.D. Cal. 2001); see also 14 Chrysler Capital Corp. v. Woehling, 663 F. Supp. 478, 482 (D. Del. 1987) (“[W]hen the plaintiff 15 chooses a forum which has no connection to himself or the subject matter of the suit, and is thus not 16 his ‘home turf,’ the burden on the defendant is reduced and it is easier for the defendant to show that 17 the balance of convenience favors transfer.”) (cited with approval in Fabus, 2001 WL 253185 at *1). 18 Hanover contends that because Plaintiffs are residents of Oregon and the subject policy was 19 issued in Oregon, Plaintiffs’ choice of forum is “entitled to little weight” and “California has no 20 interest in this action.” (Doc. 7 at 9-10.) The Court recognizes that Plaintiffs are not residents of 21 California. HRA is an Oregon limited liability company and Brownlee is a resident of Oregon. (Doc. 22 1-2 at ¶ 1.) It is less clear whether Hanover is correct to assert that “California has no interest in this 23 action.” (Doc. 7 at 10.) 24 In deciding the weight to be given to a plaintiff’s choice of forum, the Court must consider the 25 parties’ contacts with the forum, including those related to the plaintiff’s cause of action. Lou v. 26 Belzberg, 834 F.2d 730, 739 (9th Cir. 1987) (citing Pacific Car & Foundry Co. v. Pence, 403 F.2d 27 949, 954 (9th Cir. 1968)). If a plaintiff’s chosen forum lacks a significant connection to the events that 28 gave rise to the complaint, the deference given to the plaintiff is slight. Burke, 2013 WL 85428, at *4 1 (citing Morris v. Safeco Ins. Co., 2008 WL 5273719, at *4 (N.D. Cal. 2008)). 2 1. Hanover’s contacts with California 3 Hanover asserts it is a “major insurer conducting business throughout Oregon,” and the only 4 connection California has to this action is that the underlying suit against Plaintiffs was brought in 5 California. (Doc. 7 at 9-10.) Yet considering Hanover has not challenged this Court’s authority to 6 assert personal jurisdiction over it, the Court will assume Hanover has sufficient minimum contacts 7 with the forum in considering the amount of deference to grant Plaintiffs’ choice of forum. 8 2. Plaintiffs’ contacts with California 9 Plaintiffs contend their choice of forum is “significant” and should not be disturbed. (Doc. 17 10 at 2.) Plaintiffs assert that more than 90% of their business is in California and that based on their ties 11 to California, they engaged DiBuduo and DeFendis Insurance Brokers, LLC to “negotiate and 12 purchase” the policy in Fresno, California. (Doc. 17-1 at 1-2.) Plaintiffs further argue that the 13 underlying suit giving rise to this action was made by a company with its principal place of business in 14 Clovis, California, and Hanover had a duty to defend any claim, which is defined as a “written demand 15 or suit you receive.” (See Doc. 17 at 6-7.) 16 Hanover argues that Plaintiffs paid their policy premiums in Oregon and the policy was 17 delivered to Plaintiffs in Oregon. (Doc. 19 at 2-3.) Hanover further asserts that the underlying facts 18 giving rise to the suit did not occur in California because the demand letter from the plaintiffs in the 19 underlying suit was sent to in Oregon, as was Hanover’s denial letter, which is where the alleged 20 breach occurred. (Id. at 3-4.) 21 As discussed infra Section D.2, the policy was made in Oregon, which includes a consideration 22 of where the policy premiums were paid (Oregon) and where the policy was delivered (Oregon). The 23 demand and denial letters were sent to Plaintiffs in Oregon, Plaintiff HRA’s principal place of 24 business is in Oregon, and the alleged breach did not occur in California. 25 On the other hand, Plaintiffs utilized a California company to negotiate and purchase the policy 26 at issue, Plaintiffs maintained a large majority of their business presence in California, and Hanover’s 27 refusal to defend Plaintiffs in contravention of the Parties’ insurance policy gave rise to suit in 28 California—by a California company with which Plaintiffs did business. Specifically, the underlying 1 complaint against Plaintiffs alleged that Plaintiffs performed services in Fresno County, California, 2 based upon a contract entered in California. (Doc. 1-5 at 39-40.) 3 On balance, this is not an action where the forum lacks a significant connection to Plaintiffs or 4 the subject matter of the suit. Consequently, Plaintiffs’ choice of forum is not substantially reduced in 5 a manner that weighs in favor of transfer. See Burke, 2013 WL 85428, at *4; Chrysler, 663 F. Supp. at 6 482. 7 C. Convenience of the witnesses 8 “The relative convenience to the witnesses is often recognized as the most important factor to 9 be considered in ruling on a motion under § 1404(a).” Saleh v. Titan Corp., 361 F. Supp. 2d 1152 10 (S.D. Cal. 2005) (quoting State Capital Corp. v. Dente, 855 F. Supp. 192, 197 (S.D. Tex. 1994)). 11 Notably, “[w]hile the convenience of party witnesses is a factor to be considered, the convenience of 12 non-party witnesses is the more important factor.” Id. (quoting Aquatic Amusement Assoc., Ltd. v. 13 Walt Disney World Co., 734 F. Supp. 54, 57 (N.D. N.Y. 1990)). A transfer of venue “may be denied 14 when witnesses either live in the forum district or are within the 100–mile reach of the subpoena 15 power” because individuals cannot be compelled to testify when they reside beyond the boundaries of 16 the Court’s subpoena power. Los Angeles Mem'l Coliseum Comm'n v. Nat'l Football League, 89 17 F.R.D. 497, 501 (C.D. Cal. 1981); U.S. Indus., Inc. v. Procter & Gamble Co., 348 F. Supp. 1265 (S.D. 18 N.Y. 1972). Consequently, to show inconvenience for witnesses, “the moving party should state the 19 witnesses’ identities, locations, and content and relevance of their testimony.” Meyer Mfg. Co. v. 20 Telebrands Corp., 2012 WL 1189765, at *6 (E.D. Cal. 2012) (citing Florens Container v. Cho Yang 21 Shipping, 245 F. Supp. 2d 1086, 1092-93 (N.D. Cal. 2002)). 22 1. Employee and non-party witnesses 23 Hanover argues that Oregon is a more convenient venue for out-of-state witnesses. (See Doc. 7 24 at 6.) Hanover’s potential witnesses include Brownlee and Mary Gertsmeier, a Hanover claims- 25 handler who Hanover asserts would be required to fly from the “Chicagoland area” to Fresno, a 26 destination which provides no direct commercial flights, unlike Portland. (See id. at 15; Doc. 19 at 6.) 27 As such, Hanover asserts the District of Oregon is a more convenient forum “for out-of-state 28 travelers.” (Id.) 1 Plaintiffs contend that the “convenience of the witnesses” analysis does not include employee 2 witnesses. (Doc. 17 at 7-8.) Plaintiffs further assert, “H[anover] identifies only two witnesses, both 3 belonging to parties or are themselves, a party to the action. The location of these individuals should 4 be disregarded because compulsory process is not necessary to require their attendance at trial.” (Id. at 5 8.) As Plaintiffs impliedly argue, Hanover’s employee is not a third-party witness, and Hanover would 6 be able to compel their testimony. (See id.) 7 Hanover relies on two cases in asserting that courts consider the convenience to parties and 8 party witnesses in deciding whether to transfer venue. The Court does not find these cases instructive. 9 In Lexington Insurance Co. v. Maxum Casualty Insurance Co., 2017 WL 2654836 at *4 (E.D. Cal. 10 2017) and E. & J. Gallo Winery v. F. & P. S.p.A., 899 F. Supp. 465, 467 (E.D. Cal. 1994), the 11 witnesses were not parties. Hanover also argues there are no third-party witnesses to consider. (Doc. 12 19 at 6.) Plaintiffs contend that Jon Bettencourt is an agent with DiBuduo and DeFendis and lives in 13 the Eastern District of California and is anticipated to testify. (Id. at 8.) Plaintiffs argue: “Were the 14 matter transferred to the District of Oregon, as the only non[-]party witness identified, Mr. 15 Bettencourt’s attendance could not be compelled, never mind the increased inconvenience.” (Id. at 9.) 16 Though the Court recognizes that courts consider the conveniences of the parties and 17 witnesses, courts accord more weight to non-party witnesses than to employee witnesses. Metz v. U.S. 18 Life Ins. Co. in City of New York, 674 F. Supp. 2d 1141, 1147 (C.D. Cal. 2009) (“convenience of 19 employees is less important than the convenience of non-party witnesses”) (quoting Catch Curve, Inc. 20 v. Venali, Inc., 2006 WL 4568799, at *3 (C.D. Cal. 2006)). Because Hanover lists an employee 21 witness and Plaintiffs list a non-party witness, the inconvenience of Plaintiffs’ witness is accorded 22 greater weight. See Metz, 674 F. Supp. at 1147. 23 2. Relevance of testimony 24 Hanover contends that Gertsmeier is anticipated to “testify regarding Hanover’s decision to 25 deny coverage for the [underlying] claim.” (Doc. 19 at 6.) Plaintiffs contend Jon Bettencourt is 26 anticipated to testify “as to the negotiations and purchase of the Policy, and the expectations of the 27 parties as to the location(s) where the agreement was to be performed at the time the Policy was 28 entered.” (Doc. 17 at 8.) 1 Hanover argues that “[t]he Court should decline to consider any convenience to Mr. 2 Bettencourt as he is not a potential witness with respect to the merits of this case.” (Doc. 19 at 5.) 3 Hanover continues: 4 While Mr. Bettencourt’s anticipated testimony regarding the purchase of the Policy and the purported expectations of the parties as to the locations where the Policy was to be 5 performed may relate to the choice of law issue that is currently before the Court, it is wholly immaterial to whether Hanover had a duty to defend Plaintiffs and/or breached 6 the Policy or the implied covenant of good faith and fair dealing. 7 8 (Id.) However, Hanover’s argument assumes the Court will agree with Hanover on several merits- 9 related issues. If the Court does not, Hanover seems to concede that Bettencourt’s testimony is 10 relevant to choice-of-law questions. (See id.) Thus, the testimony of both anticipated witnesses appears 11 to be relevant. 12 3. Balance 13 As a third-party witness, Bettencourt could not be compelled to testify if the matter were 14 transferred to Oregon, and his inconvenience is accorded more weight than Gertsmeier’s. See Metz, 15 674 F. Supp. at 1147. Also, regardless of whether the matter is transferred to Oregon, Gertsmeier 16 would be required to travel to the West Coast from Chicago. Thus, in light of the status of each 17 witness and in comparing the witnesses’ relative inconvenience, Hanover has not met its burden of 18 demonstrating its witness would suffer inconvenience, and this factor does not support a transfer of 19 venue. 20 D. Interest of justice 21 “Consideration of the interest of justice, which includes judicial economy, may be 22 determinative to a particular transfer motion, even if the convenience of the parties and witnesses 23 might call for a different result.” Regents of the Univ. of Cal. v. Eli Lilly and Co., 119 F.3d 1559, 1565 24 (Fed. Cir. 1997) (citation omitted). The remaining factors for evaluating whether transfer is 25 appropriate are the ease of access to the evidence, familiarity of each forum with the applicable law, 26 any local interest in the controversy, and the relative court congestion and time of trial in each forum. 27 Royal Queentex, 2000 WL 246599, at *2. 28 /// 1 1. Ease of access to the evidence 2 Hanover contends that the dispute should be decided upon the face of the policy, but “to the 3 extent there is any other documentary evidence, it would involve documents/files that are available 4 electronically and will thus be equally accessible in either forum.” (Doc. 7 at 15.) Plaintiffs assert this 5 factor weighs against transfer because the “negotiations and subsequent sale and delivery of 6 insurance…occurred in California” and the underlying action was “filed and proceeded to default 7 judgment in the Eastern District of California.” (Doc. 17 at 14.) Nevertheless, Hanover does not claim 8 that this factor weighs in favor of transfer. 9 2. Familiarity of each forum with applicable law 10 Federal diversity cases should be litigated “in a forum that is at home with the law that must 11 govern the action[.]” Decker Coal, 805 F.2d at 843. If another forum is more “at home” with the law, 12 this favors transfer. Shanze, 2015 WL 1014167, at *3. “To determine which state’s substantive law 13 applies, we look to California choice-of-law rules.” Arrow Elecs., Inc. v. Liberty Mut. Ins. Co., 775 F. 14 App’x 305, 306 (9th Cir. 2019) (citing Narayan v. EGL, Inc., 616 F.3d 895, 898 (9th Cir. 2010)); see 15 also Bridge Fund Cap. Corp. v. Fastbucks Franchise Corp., 622 F.3d 996, 1002 (9th Cir. 2010) (“[a] 16 federal court sitting in diversity applies the forum state’s choice of law rules”). California courts have 17 used both the statutory choice-of-law rule and the “governmental interest” test in determining the 18 substantive law that applies. Shanze, 2015 WL 1014167, at *3. 19 a. Breach of contract claim 20 California’s choice-of-law statute, Civil Code section 1646, determines the applicable law in 21 governing the interpretation of a contract. Frontier Oil Corp. v. RLI Ins. Co., 153 Cal. App. 4th 1436, 22 1443 (2007), as modified (Sept. 5, 2007). Section 1646 states that “[a] contract is to be interpreted 23 according to the law and usage of the place where it is to be performed; or, if it does not indicate a 24 place of performance, according to the law and usage of the place where it is made.” Cal. Civ. 25 Code § 1646. “[A] contract indicate[s] a place of performance within the meaning of section 1646 if 26 the intended place of performance can be gleaned from the nature of the contract and its surrounding 27 circumstances.” Frontier, 153 Cal. App. 4th at 1450 (internal quotations omitted). “When the contract 28 does not expressly specify a place of performance…the place of performance is the jurisdiction in 1 which the circumstances indicate the parties expected or intended the contract to be 2 performed.” Welles v. Turner Ent. Co., 503 F.3d 728, 738 (9th Cir. 2007) (citing Burr v. W. States Life 3 Ins. Co., 211 Cal. 568, 574 (1931)). The relevant intent of the parties is interpreted at the time they 4 entered into the contract. Frontier, 153 Cal. App. 4th at 1449. 5 i. Intended place of performance 6 The parties appear to concede that the policy does not contain a choice-of-law provision nor 7 does it explicitly indicate a place of performance. (See generally Doc. 7; Doc. 17.) However, Hanover 8 argues that Oregon law should apply because the policy was issued to Plaintiffs in Oregon, the address 9 listed in the policy is in Oregon, and the policy contains an Oregon endorsement. (See Doc. 7 at 10- 10 11.)1 As such, Hanover asserts that “either Oregon was the intended place of performance or the policy 11 does not indicate a place of performance to the extent the insureds could be sued nationwide.” (Id. at 12 11.) 13 The only state-specific endorsement in the policy relates to Oregon.2 Both federal and state 14 courts have analyzed the existence of endorsements to glean the parties’ intended place of 15 performance. For example, in Global Decor, Inc. v. Cincinnati Ins. Co., 2011 WL 2437236 (C.D. Cal. 16 2011), the policy at issue included Illinois endorsements modifying both commercial general liability 17 and the umbrella coverage. Id. at *3. Thus, the court found the endorsements “clearly demonstrate that 18 the parties intended the policy to provide coverage for [p]laintiff[’]s operations in Illinois.” Id. 19 (quoting Frontier, 153 Cal. App. 4th at 1461 (internal quotation marks omitted)). In Frontier, the 20 policy specifically referred to claims arising from oil and gas operations at a particular drill site in 21

22 1 Hanover’s arguments regarding the listed address and where the policy was issued go to where the policy was made. Hanover’s argument regarding the Oregon endorsement, on the other hand, reflects the Parties’ intended place of 23 performance and will be addressed in this section. 2 The endorsement, titled “Oregon Miscellaneous Professional Liability Amendatory Endorsement”, replaces “Section H – 24 Conditions, Paragraph 1. Cancellation and Non Renewal” to read: “a) We may not cancel this policy except for failure to pay premium when due. Cancellation will not be effective until at least 10 business days after the Named Insured receives 25 our notice.” (Doc. 1-5 at 27.) The original language read: “We may not cancel this policy except for failure to pay premium when due, in which case we will give 10 days written notice to the named insured before such cancellation is effective.” 26 (Id. at 20.) The endorsement also added: “d) Notices of cancellation or nonrenewal will be sent by first class mail to the Named Insured and the producer of record at the last addresses known to us; stating the effective date of cancellation or 27 nonrenewal and the specific reasons for cancellation or nonrenewal. A post office certificate of mailing will constitute proof that the named insured received notice on the third calendar day after the date of the certificate of mailing. e) If we 28 decide to offer renewal terms, notice will be mailed to the Named Insured and the producer of record by first class mail, at 1 Beverly Hills, California. Frontier, 153 Cal. App. 4th at 1461. Additionally, two of the policy 2 endorsements named the City of Beverly Hills and the Department of Transportation of the City of 3 Los Angeles as additional insureds for claims arising out of operations in Beverly Hills. Id. Another 4 endorsement waived the right of recovery against Beverly Hills for certain payments made under the 5 policy. Id. As a result, the court concluded that “the parties anticipated that a suit arising from those 6 operations in Beverly Hills could be prosecuted in California…” Id. at 1462. 7 The policy endorsement appears to relate only to cancellation and nonrenewal provisions and 8 specifically, the notice owed to the named insured at their address, which happens to be in Oregon. 9 Except for its title, the endorsement does not refer to Oregon-specific sites or additional insureds, and 10 it does not otherwise mention Oregon. To this extent, the endorsement does not materially alter the 11 policy terms, nor does it demonstrate the policy’s intended place of performance. 12 Plaintiffs contend that the background check giving rise to the underlying action in California 13 was completed prior to inception of the policy and that Hanover was notified by a claim letter of 14 Plaintiffs’ allegedly deficient professional services. (Doc. 17 at 11-12.) Thus, Plaintiffs argue that the 15 parties would have anticipated that any defense obligation that might arise would be in California. (Id. 16 at 12.) 17 Plaintiffs rely on James River Ins. Co. v. Medolac Laboratories, 290 F. Supp. 3d 956 (C.D. 18 Cal. 2018), in furthering this argument. (Doc. 17 at 11-12.) However, the Court does not find James 19 River to be particularly compelling. In James River, the insured was sued for breaching a Termination 20 Agreement with a competitor. James River, 290 F. Supp. at 960. A subsequent suit arose between the 21 insurance company and the insured, wherein the court analyzed the intended place of performance of 22 the policy. Id. at 961, 964-66. The court reasoned that because the Agreement was signed prior to the 23 inception of the policy and the Agreement contained choice of law and forum selection provisions 24 requiring the Agreement to be governed by California law, “the surrounding circumstances indicated 25 the parties expected and intended that [the insurer] would perform its duty to defend in California.” Id. 26 at 965-66. 27 Plaintiffs attempt to analogize the Agreement in James River with the background check 28 performed by Plaintiffs and the claim letter Plaintiffs received prior to the underlying suit. (See Doc. 1 17 at 11-12.) However, the Agreement contained choice of law and forum selection provisions, and 2 the court found that because the Agreement contained these provisions and was signed prior to the 3 inception of the policy, the parties intended and expected California to be the place of performance. 4 See James River, 290 F. Supp. at 965. Here, the claim letter that Plaintiffs tendered to Hanover 5 mentioned that the underlying damage due to Plaintiffs’ alleged actions occurred in California, and 6 was sent to Plaintiffs from California, (see Doc. 1-5 at 31-32,) but the claim letter lacks any language 7 demonstrating the Parties’ expectation that California would be the place of performance of the 8 separate insurance policy between Hanover and Plaintiffs.3 9 Plaintiff also argues that the policy’s coverage territory includes the United States4 and the 10 policy’s definition of “damages”5 demonstrates the Parties’ “intent that it be construed differently in 11 different jurisdictions.” (Doc. 17 at 10.) Thus, Plaintiffs argue Hanover “contemplated suit being 12 brought anywhere in the United States, which would include California…, and that its language would 13 receive different application depending on where the claim was brought.” (Id.) Plaintiffs appear to be 14 suggesting, therefore, that the intended place of performance should be determined retroactively based 15 upon where a suit is eventually filed. The Court finds this argument unconvincing because it would 16 render section 1646 ineffectual any time a contract contained generic “catch-all” jurisdictional 17 language. A court in this district has previously rejected a similar argument. See Shanze, 2015 WL 18 1014167, at *4 (“[I]f the contract contemplates performance ‘everywhere,’ then the default rule would 19 20 3 There is no obvious reason why a claim letter would contain a choice of law provision or a forum selection clause. 21 Nonetheless, the present situation is distinguishable from James River because the claim letter here contains no indication as to the Parties’ intended place of performance. Though the letter mentions that the allegedly substandard background 22 check was performed on an employee working in Clovis, California, the claim letter was mailed to Plaintiffs in Oregon and does not indicate that claimant intended to file suit in California. 23 4 “Section H – Conditions, Paragraph 8. Coverage Territory and Valuation” reads, in relevant part: “a) This policy applies 24 to a wrongful act committed anywhere in the world provided that the claim is made and suit is brought against the insured within the United States, its territories or possessions or Canada.” (Doc. 1-5 at 21.) 25 5 “Section D – Definitions” states, in relevant part: “Damages also means punitive or exemplary damages or the multiple portions thereof, if insurable under the applicable law of the jurisdiction most favorable to the insurability of such damages 26 provided such jurisdiction is where: 1. Those damages were awarded or imposed; or 27 2. Any wrongful act occurred for which such damages were awarded or imposed; 3. The named insured resides, is incorporated or has its principal place of business; or 28 4. We are incorporated or have our principal place of business. 1 allow a party seeking contractual remedies to select any law it likes, rendering section 2 1646 meaningless.”); see also Global Décor, 2011 WL 2437236, at *3 (“Under Plaintiffs’ broad 3 theory, i.e., that the intended place of performance is wherever the underlying lawsuit actually arises, a 4 specifically intended place of performance would not exist.”). In sum, Plaintiffs are not correct that the 5 generic language of the damages provision indicates that the place of performance is California. 6 At the same time, as mentioned, the Court is not persuaded by Hanover’s arguments that the 7 place of performance is Oregon based upon the listed address, where the policy was delivered, and a 8 single Oregon endorsement that appears only to alter the provisions of cancellation or nonrenewal 9 notice being effectuated. Given the lack of a choice of law provision or forum selection clause, there is 10 no indication the policy had an intended place of performance. Accordingly, pursuant to section 1646, 11 if a policy does not indicate a place of performance, the applicable law is “where [the policy] is 12 made.” Cal. Civ. Code § 1646. 13 ii. Where the policy was made 14 “Under California law, a contract is made in the place of acceptance.” Store Kraft Mfg. v. 15 Wausau Bus. Ins. Co., 2014 WL 12561603, at *6 (C.D. Cal. 2014) (citing ABF Cap. Corp. v. Grove 16 Properties Co., 126 Cal. App. 4th 204, 222 (2005)); see also Arno v. Club Med Inc., 22 F.3d 1464, 17 1469 n.6 (9th Cir. 1994) (holding that because the contract did not specify a place of performance, 18 section 1646 requires courts to apply the law “where the contract was made, i.e., where [plaintiff] 19 accepted”). Plaintiffs argue the policy was negotiated and purchased by DiBuduo and DeFendis, a 20 California company, which received the policy from Hanover and then forwarded it to Plaintiffs in 21 Oregon. (See Doc. 17-1 at 2.) Hanover contends the policy was delivered and accepted in Oregon, 22 irrespective of where Plaintiffs’ agent is located. (Doc. 19 at 8.) Hanover also argues that the address 23 listed in the policy is in Oregon, and the policy contains an Oregon endorsement. (See Doc. 7 at 10- 24 11.) 25 Hanover relies upon Mesa Underwriters Specialty Ins. Co. v. HYDS, Inc., 2020 WL 2608148 26 (C.D. Cal. 2020). In Mesa, the policy did not indicate a place of performance, but the Court explained 27 that because the insured was a California corporation headquartered in California, the policy was 28 issued to the insured in California through its agent located in California, the scheduled locations were 1 in California, and the only state-specific endorsements in the policy related to California, California 2 law applied. Mesa, 2020 WL 2608148, at *3. 3 Under California law, “a contract is made in the state in which ‘the last act necessary to the 4 contract, the acceptance, was performed.’” Ameron Int’l Corp. v. Am. Home Assur. Co., 2011 WL 5 2261195, at *5 (C.D. Cal. 2011) (quoting Ury v. Jewelers Acceptance Corp., 227 Cal. App. 2d 11, 16 6 (1964)). It is not clear in this case, however, whether acceptance was accomplished by Plaintiffs’ agent 7 or upon delivery of the policy to Plaintiffs in Oregon. Mesa does not help clarify that issue because 8 there the agent and the insured were both located in California. Here, however, Plaintiffs’ agent was in 9 a different state from the insured and the insurer. The parties have not directed the Court to any 10 directly analogous caselaw. Nonetheless, whether to transfer venue involves “subtle considerations” 11 for the Court to use its discretion in making. See Ventress, 486 F.3d at 1118. Plaintiffs are Oregon 12 residents (28 U.S.C. § 1391(c)) with a principal place of business in Oregon and the policy was 13 delivered to Plaintiffs in Oregon through their agent in California. Furthermore, as discussed above, 14 the only state-specific endorsement in the policy relates to Oregon. See Mesa, 2020 WL 2608148, at 15 *3 (finding existence of only California endorsements a factor in concluding the policy was made in 16 California). Thus, on balance, the Court concludes the policy was made in Oregon and this factor 17 weighs in favor of transfer as the District Court of Oregon will be more familiar with the applicable 18 law than this Court. 19 b. Breach of implied covenant of good faith and fair dealing 20 Under Plaintiffs’ claim for breach of implied covenant of good faith and fair dealing, Plaintiffs 21 specifically allege violations of California Insurance Code § 790.83(h)6 and California Code of 22 Regulations § 2695.1 et seq. (Doc. 1-2 at ¶ 27(g).) A California district court is more familiar with 23 California law than a district court in another state. Nevertheless, federal courts in all states are fully 24 capable of applying another state’s substantive law. Strigliabotti v. Franklin Res., Inc., 2004 WL 25 2254556 (N.D. Cal. 2004). The Court finds the existence of Plaintiffs’ California claims weigh slightly 26 against transfer. Thus, though the section 1646 analysis above favors transfer, because the burden rests 27

28 6 The applicable section for insurance bad faith claims is section 790.03. Cal. Ins. Code § 790.03; Ruiz v. Gen. Ins. Co. of 1 with Hanover in demonstrating transfer is proper, on balance this factor weighs against transfer to the 2 District of Oregon. 3 3. Local interest in the controversy 4 Hanover asserts, “Oregon has an interest in having a localized controversy decided at home as 5 this suit involved Oregon insureds and an insurance policy executed in Oregon.” (Doc. 7 at 15.) 6 Plaintiffs contend that the operative facts—negotiations, subsequent sale, and delivery of the policy— 7 occurred in California. (See Doc. 17 at 13.) Plaintiffs continue, “California has an interest in applying 8 its laws because California has an interest in…regulating the conduct of insurers operating within the 9 state.” (Id. at 14) (quoting Jones v. St. Paul Travelers, 496 F. Supp. 2d 1079, 1084 (N.D. Cal. 2007)). 10 Both Oregon and California have interests in the controversy. Oregon’s interest lies in its 11 citizens—Plaintiff HRA’s principal place of business is in Oregon and Plaintiff Brownlee resides in 12 Oregon. See Rogers v. Wilmington Tr. Co., 2018 WL 489168, at *9 (E.D. Cal. 2018). Thus, Oregon 13 has an interest in protecting the rights of its citizens. With respect to California, Plaintiffs’ business is 14 predominantly conducted in California. See Royal Queentex, 2000 WL 246599, at *8. Additionally, 15 the only named non-party witness located in either forum is Mr. Bettencourt, who resides in 16 California. On balance, this factor is neutral. 17 4. Court congestion 18 The Court must consider “the administrative difficulties flowing from court congestion” when 19 considering the interest of justice. Decker Coal, 805 F.2d at 843 (citing Piper Aircraft, 454 U.S. at 20 255). Hanover argues that the “Eastern District of California has long-labored under one of the 21 heaviest case[]-loads in the nation and has enacted an Amended Standing Order in Light of Ongoing 22 Judicial Emergency in the Eastern District of California.” (Doc. 7 at 14.) Citing the Comparison of 23 Districts Within the Ninth Circuit – 12-Month Period Ending September 30, 2021, Hanover notes that 24 as of September 30, 2021, the Eastern District of California had 7,929 cases pending, while the 25 District of Oregon had 3,603. (See Docs. 19 at 10; 19-2 at 2.) 26 The statistics reflect more court congestion in this district. On its own, however, the inundated 27 state of the Eastern District’s case load is not adequate to warrant transfer. See Trevino v. Golden State 28 FC, LLC, 2019 WL 6790763, at *6 (E.D. Cal. 2019) (“[t]his district’s backlog is by itself an 1 || insufficient basis upon which to grant a motion to transfer”). Although civil cases move through the 2 || Court in a timely manner, recognizing the Court’s congestion, this factor weighs in favor of transfer t 3 || the District of Oregon. 4 ||IV.__ Conclusion and Order 5 Taken as a whole, the convenience of the witnesses and the parties, as well as the ease of 6 || access to the evidence, weigh against transfer to the District of Oregon. Moreover, with respect to eac 7 || forum’s familiarity with the applicable law, the breach of contract claim weighs slightly in favor of 8 || transfer, but the breach of the implied covenant of good faith and fair dealing claim weighs against 9 || transfer, which leads the Court to conclude that Hanover has not met its ultimate burden of showing 10 || that transfer is appropriate under this factor. Finally, though court congestion weighs slightly in favor 11 || of transfer, this is insufficient on its own. The remaining factor, local interest in the controversy, is 12 || neutral. 13 In sum, though a close call, Hanover has failed to meet its burden of establishing that transfer 14 || of this action to the District of Oregon would be warranted for the convenience of the parties and 15 || witnesses, and in the interest of justice. See Texas Gulf, 371 F.2d at 147. Based upon the foregoing, tl 16 || Court ORDERS: 17 1. Defendant Hanover’s motion for transfer of venue (Doc. 7) is DENIED. 18 19 IT IS SO ORDERED. 20 || Dated: _ April 25, 2022 ( LAW pA buy In

TED STATES DISTRICT JUDGE

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