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Selfhelpworks.Com, Inc., A California Corporation v. 1021018 Alberta Ltd.

December 22, 2010

SELFHELPWORKS.COM, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
1021018 ALBERTA LTD., A CANADIAN LIMITTED LIABILITY COMPANY, DOING BUSINESS AS WU YI SOURCE,ET. AL., DEFENDANTS.



The opinion of the court was delivered by: John A. Houston United States District Judge

ORDER DENYING THE WORKS PARTIES' MOTION TO TRANSFER VENUE [Doc. No. 48] ) AND GRANTING ALBERTA'S MOTION FOR LEAVE TO FILE A FIRST AMENDED CROSS-CLAIM AND THIRD PARTY CLAIM[Doc. No. 50] AND RELATED CROSS-CLAIMS.

INTRODUCTION

Plaintiff Selfhelpworks.com ("SHW"), a California corporation, originally filed an action on November 19, 2009, against WuYi Source, Inc., a Canadian Corporation, and Does 1through 25, in the Superior Court of the State of California, County of San Diego. On January 14, 2010, Plaintiff filed a First Amended Complaint seeking an order compelling arbitration, declaratory relief and relief for breach of contract, constructive trust, unjust enrichment, and intentional interference with prospective business advantage and contract. Plaintiff named 1021018 Alberta Ltd, doing business as WuYi Source ("Alberta"), iWorks, Jeremy Johnson ("the iWorks Parties") and Does 1 through 25 as defendants. Plaintiff alleges it entered into a Marketing Agreement with Defendant Alberta for the up-sell of SHW's Living Lean Program and Alberta breached the agreement by entering into a competing agreement with Defendant iWorks. Defendant Alberta removed the action to federal court on January 21,2010.

On February 11, 2010, Alberta filed an answer and a cross-claim against Jeremy Johnson, doing business as iWorks and Roes 1 through 25 asserting claims for fraud in the inducement of contract, indemnity and contribution, breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, conversion, unjust enrichment and imposition of constructive trust, money had and received and for accounting. Alberta alleges it entered into a Marketing Agreement with SHW but the parties abandoned the contract because SHW could not handle various technical tasks required. Alberta Cross-claim ¶ 8. Thereafter, Alberta entered into a Marketing Agreement with iWorks upon iWorks representation that it was authorized to resell the Living Lean Program and capable of processing the transactions. Id.

On June 18, 2010, the iWorks Parties filed an answer to the First Amendment Complaint, an answer to Alberta's cross-claim and filed a cross-claim against Alberta. iWorks and Johnson seek relief for breach of contract and breach of the covenant of good faith and fair dealing. The iWorks Parties filed a motion for change of venue on June 24, 2010 and Alberta filed a motion for leave to file a first amended cross-claim and third party complaint. The cross-claimants filed separate responses to the motions and replies in support of their respective motions. Both motions were set for hearing on August 23, 2010, but were taken under submission pursuant to Local Rule 7.1.

DISCUSSION

I. Motion for Change of Venue

Cross-defendants/Cross-claimants iWorks and Johnson move to sever Alberta's cross-claim against the iWorks Parties' and their cross-claim against Alberta and transfer venue of the two cross-claims to the District of Utah pursuant to 28 U.S.C. § 1404(a). Movants argue the dispute between Alberta, a Canadian corporation and iWorks, a Utah corporation involves three contracts, two of which select Utah law as the governing law and identify Utah as a proper forum for litigation. They further maintain the evidence and witnesses are located in Utah and Canada.

A. Legal Standard

A district court may transfer a pending case "to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The court has broad discretion to "adjudicate motions for transfer according to an 'individualized, case-by-case consideration of convenience and fairness.'" Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000)(quoting Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). The moving party has the burden of demonstrating transfer would be more convenient and better serve the interests of justice. Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (1979).

In the Ninth Circuit, courts must weigh multiple factors to determine whether transfer is appropriate. Jones, 211 F.3d at 498. Factors the Court may consider, include:

(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. Jones, 211 F.3d at 498-99.

B. Analysis

The iWorks Parties contend the cross-claims could have been brought in the District of Utah because the District of Utah has subject matter jurisdiction over both cross-claims under 28 U.S.C. section 1332. They further contend Alberta is subject to personal jurisdiction in the District of Utah based on its consent to the jurisdiction of Utah courts in the marketing agreement and traffic generation agreements at issue in the actions, and the dispute is directly related to Alberta's contacts with Utah through its agreements with a Utah company and Utah citizen, and its contacts with the state during negotiation and performance of the ...


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