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PRG-SCHULTZ USA, INC. v. GOTTSCHALKS

October 17, 2005.

PRG-SCHULTZ USA, INC., a Georgia corporation, Plaintiff,
v.
GOTTSCHALKS, INC., a Delaware corporation, Defendant.



The opinion of the court was delivered by: MAXINE CHESNEY, District Judge

ORDER GRANTING DEFENDANT'S MOTION TO TRANSFER VENUE; VACATING HEARING
Before the Court is defendant Gottschalks, Inc.'s ("Gottschalks") motion, filed September 14, 2005, to transfer the above-titled action from the Northern District of California ("Northern District") to the Eastern District of California ("Eastern District"), pursuant to 28 U.S.C. § 1404(a). Plaintiff PRG-Schultz USA, Inc. ("PRG") has filed opposition to the motion, to which Gottschalks has replied. Having considered the papers submitted in support of and in opposition to the motion, the Court finds the motion appropriate for decision without oral argument, see Civil L.R. 7-1(b), and hereby VACATES the hearing scheduled for October 21, 2005. For the reasons set forth below, the motion is GRANTED.

BACKGROUND

  In the instant action, PRG seeks damages for breach of a written agreement, entered into June 24, 2003 ("Audit Agreement"), by which PRG agreed to perform an audit of Gottschalks' store real estate leases in exchange for thirty to thirty-five percent of all monies recovered, credits received, or savings recognized from the audit. (See Compl. ¶ 1.) PRG alleges that although Gottschalks has recovered payments from its landlords as a result of PRG's audit, Gottschalks has failed to pay PRG all of the fees owed to PRG pursuant to the parties' Audit Agreement. (See id.)

  PRG is a Georgia corporation with its principal place of business in Atlanta, Georgia. (See Pitts Decl. ¶ 2.) PRG alleges that it is in the business of recovery auditing, which, it states, is the process of reviewing disbursement transactions and related supporting data to identify and recover overpayments and under-deductions. (See Compl. ¶ 2.)

  Gottschalks is a Delaware corporation, with its corporate headquarters located in Fresno, California.*fn1 (See Bradshaw Decl. ¶ 2.) According to PRG, Gottschalks is a retail department store chain with approximately 74 department stores and 17 specialty stores located throughout California, Washington, Alaska, Idaho, Oregon and Nevada. (See Compl. ¶ 3.)

  PRG alleges that, pursuant to the Audit Agreement, PRG agreed to conduct an audit of Gottschalks' store real estate leases in order to determine whether Gottschalks had overpaid under any of the leases. (See id. ¶ 8.) PRG further alleges that the Audit Agreement entitled it to receive 30% of any recovery up to $200,000, and 35% of any recovery over $200,000. (See id. ¶ 11.)

  PRG alleges it commenced the audit through its contractor, Occupancy Cost Audit Group ("OAG"), in July 2003. (See id. ¶ 14.) PRG further alleges that as a result of the audit performed on the Lease Agreement for Manchester Center ("Manchester Center Lease"),*fn2 Gottschalks recovered $7,151,045, of which PRG's share, under the Audit Agreement, was $2,502,866. (See id. ¶ 23.) PRG also alleges that Gottschalks recovered $333,476 in miscellaneous overcharges relating to other leases,*fn3 of which PRG's share, under the Audit Agreement, was $116,717. (See id. ¶¶ 17, 21, 23.)

  On September 30, 2003, PRG alleges, Gottschalks's general counsel served PRG with a 60-day cancellation notice of the Audit Agreement. (See id. ¶ 19.) PRG further alleges that Gottschalks, in the cancellation notice, stated that it intended to honor the Audit Agreement and that it would compensate PRG when and if it ultimately received compensation for the overcharges identified by PRG. (See id.) PRG contends that although it has sent Gottschalks repeated demands for payment, Gottschalks has not paid PRG the amounts due PRG under the Audit Agreement. (See id. ¶ 22.)

  PRG asserts causes of action against Gottschalks for breach of contract, breach of the covenant of good faith and fair dealing, and an accounting.

  LEGAL STANDARD

  "For 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). "Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness." Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988) (internal quotation and citation omitted). In determining whether to transfer venue pursuant to § 1404(a), the court may consider factors such as "(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." See Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000).

  DISCUSSION

  Gottschalks seeks an order transferring the instant action to the Eastern District, arguing that the Eastern District is a more convenient forum than the Northern District.*fn4

  A. The Case Could Have Been Brought in the Eastern District

  As noted, a district "may transfer any civil action to any other district or division where it might have been brought." See 28 U.S.C. § 1404(a). It is undisputed that venue is appropriate in the Eastern District, pursuant to 28 U.S.C. § 1391(a) and (c), because a substantial portion of the events giving rise to the complaint occurred in Fresno, California, and Gottschalks's corporate headquarters are located ...


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