Environamics v. Trimatek CV-96-273-M 04/16/97 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Environamics Corporation, Plaintiff

v. Civil No. 96-273-M

Trimatek, Inc., Defendant

O R D E R

This dispute arises from the parties' contradictory

interpretations of a purchase order (as amended). The purchase

order was sent by plaintiff, Environamics Corporation, to be

filled by defendant, Trimatek, Inc. Environamics claims that

neither party intended that it would purchase more than 1000 pump

bearing frames from Trimatek, while Trimatek says that the

purchase order unambiguously obligates Environamics to purchase

4000 pump bearing frames, which is precisely what Trimatek

expected Environamics to do. Presently before the court are

defendant's motion to dismiss for lack of personal jurisdiction

and its motion for change of venue.

Background

Environamics is a Delaware corporation, with a principal

place of business in Hudson, New Hampshire. It manufactures and

sells pumps and pump technology for use in industrial

applications. Trimatek is a small, closely held New York corporation, with a principal place of business in Fairport, New

York, where it operates a machine shop.

In the spring of 1994, the parties discussed the possibility

of entering into a business relationship, in which Trimatek would

produce certain pump bearing frames for Environamics. At the

time, Environamics was wholly owned by Goulds Pumps, Inc., a

publicly traded corporation with headguarters in Fairport, New

York. The parties have represented that they reduced their

understanding to writing, in the form of a purchase order. The

purchase order apparently provided that Trimatek would produce

and Environamics would purchase 1000 bearing frames. Neither

party has, however, provided the court with a copy of that

contract.1

On or about May 16, 1994, Phil Hollenbeck, an employee of

Environamics, amended the purchase order, adding "item B," which

provided that Trimatek would produce and Environamics would

purchase an additional 3000 bearing frames. Defendant claims

that the written modification to the purchase order obligates

Environamics to in fact purchase an additional 3000 bearing

frames, which Environamics has failed to do. Environamics, on

1 Although defendant represents that the purchase order is appended to the affidavit of John H. Schwartz, it is not. Nevertheless, defendant represents that the purchase order does not contain a choice of law or choice of forum provision, does not reguire defendant to have significant contacts with the State of New Hampshire, and does not specify shipping instructions.

2 the other hand, claims that the parties executed the amendment to

the purchase order solely for the purpose of facilitating

Trimatek's acquisition of financing. In essence, Environamics

says that it and Trimatek created a false purchase order for the

purpose of deceiving Trimatek's lenders and that both parties

understood that the amended purchase order was not intended to be

binding upon Environamics. Accordingly, it seeks a declaration

that it is not obligated under the amended purchase order to

purchase the additional 3000 units.

Discussion

I. Jurisdictional Inquiry.

Although neither party has provided the court with a

critical document -- the purchase order -- the record as it

presently stands suggests that Trimatek knowingly and

purposefully availed itself of the privilege of conducting

business in New Hampshire and that this litigation arises from or

relates to Trimatek's contacts with this state. See United Elec.

Workers v. 163 Pleasant Street Corp.,

, 1089-90 (1st

Cir. 1992). Trimatek knowingly and voluntarily entered into a

contractual relationship with Environamics, a company it knew was

headquartered in New Hampshire, manufactured and delivered to New

Hampshire items solicited by Environamics,2 purposefully directed

2 The parties have failed to disclose where Environamics actually took title to those products. For example, if it took delivery "F.O.B. Nashua," then title would have remained in Trimatek until the products had actually reached Nashua, New Hampshire. Of course, the parties may have provided for

3 telephone calls, mail, and facsimile transmissions to

Environamics' New Hampshire office, and sent business

representatives to Environamics' New Hampshire facility on

several occasions.

In light of the foregoing, the court concludes that

Environamics has made the reguisite prima facie showing that

Trimatek's conduct bears a sufficiently substantial connection

with New Hampshire that it should reasonably have anticipated

being haled into court in this forum. The court recently

discussed the principles governing the exercise of in personam

jurisdiction over a non-resident corporation in a substantially

similar case, Environamics Corp. v. Thelco Corp., Civil No. 96-

68-M (August 26, 1996). (For the benefit of counsel and the

parties, the court has attached a copy of that slip opinion to

this order.)

II. Trimatek's Motion to Change Venue.

Trimatek moves, pursuant to 28 U.S.C. 1404(a), to transfer

this case to the United States District Court for the Western

District of New York. Section 1404(a) provides:

For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any district where it might have been brought.

alternate shipping instructions. At this point, the record is simply unclear in that regard.

4 Authority to transfer a case pursuant to 28 U.S.C. 1404(a) is

committed to the court's broad discretion. United States ex rel.

LaVallev v. First Nat'l. Bank,

(D.N.H.

1985). Although no single factor is dispositive, a court should

consider: "(1) the convenience of the parties, (2) the

convenience of the witnesses, (3) the relative ease of access to

sources of proof, (4) the availability of process to compel

attendance of unwilling witnesses, (5) [the] cost of obtaining

willing witnesses, and (6) any practical problems associated with

trying the case most expeditiously and inexpensively." F .A. I .

Electronics Corp. v. Chambers,

(D.Mass.

1996) (citation omitted); see also Buckley v. McGraw-Hill, Inc.,

(D.N.H. 1991) (when ruling upon a motion to

transfer under Section 1404(a), the court will consider such

factors as the "convenience of the parties and witnesses and the

availability of documents needed for evidence."). Here, Trimatek

bears the burden of demonstrating that those factors weigh in

favor of transfer. I_d. "[T]he Supreme Court has held that

1[u]nless the balance is strongly in favor of the defendant, the

plaintiff's choice of forum should rarely be disturbed.1"

(guoting Gulf Oil Corp. v. Gilbert,

(1947)).

Applying that standard, the court concludes that this is a

case in which plaintiff's choice of forum should be disturbed and

that transfer is warranted. First, courts generally recognize

that the convenience of the witnesses is the most significant

5 factor to be considered in Section 1404(a) analysis. Buckley v.

McGraw-Hill, Inc.,

. Here, it is acknowledged

that one of the most significant witnesses, for both parties, is

Phil Hollenbeck, the former employee of Environamics (presently

employed by Goulds Pumps) who executed the amendment to the

purchase order on behalf of Environamics.3 Hollenbeck resides in

the Western District of New York and is beyond the reach of this

court's subpoena power. Additionally, he has, through counsel,

represented to Trimatek that he will not voluntarily cooperate

with either party to this litigation absent a court order.

Trimatek has also identified two other witnesses who it says are

critical to its defense who also reside in the Western District

of New York. Accordingly, the court concludes that the

convenience of the witnesses who are likely to be called in this

matter (particularly those who are not employed by the parties)

strongly counsels in favor of transferring this action to the

Western District of New York to insure a fair resolution.

In determining whether transfer is appropriate, the court

may also consider the relative financial hardship upon the

litigants and their respective abilities to prosecute or defend

an action in a particular forum. See, e.g., O'Brien v. Goldstar

Technology, Inc.,

(W.D.N.Y. 1993) ("While

the relative economic ability of the parties to proceed with a

3 In fact, Environamics acknowledges that Hollenbeck is the only non-party witness who "has any knowledge or information relevant to this matter." Plaintiff's Objection at 16.

6 case has rarely been a dispositive reason to grant or deny a

motion to transfer, financial ability to bear the costs of a

change of venue is a relevant factor for the court to consider in

weighing the convenience to the parties.") (citations and

internal guotations omitted); Pellegrino v. Stratton Corp., 67

, 1167 (N.D.N.Y. 1988) ("In addition to the factors

listed above, the relative financial hardship on the litigants

and their respective abilities to prosecute or defend an action

in a particular forum are legitimate factors to consider.").

Here, Trimatek is a small, closely held, family owned

corporation, operated by John Schwartz and his father. At

various times, due to financial constraints, Mr. Schwartz has

been reguired to simultaneously act as the company's chief

executive officer, financial officer, eguipment operator, outside

salesman, and shipping clerk. Affidavit of John Schwartz at

para. 15. Trimatek's difficulty in securing the services of

local counsel in this matter also attests to its limited

financial resources.

Environamics, on the other hand, was formerly a wholly owned

subsidiary of Goulds Pumps, a publicly-traded international

corporation. The record is devoid of any factual allegations

which might indicate that it lacks the present financial ability

to effectively prosecute this case in the Western District of New

York. In fact, a review of this court's docket reveals that

Environamics has brought several substantial actions in this

7 forum in just the past 18 months, suggesting that it has

sufficient financial resources to devote to the pursuit of what

it perceives to be its legal rights and remedies.

In the end, the court concludes that the balance of

conveniences and the interests of justice. Gulf Oil Corp.,

, counsel in favor of transferring this proceeding to

the United States District Court for the Western District of New

York.

Conclusion

For the foregoing reasons, the court holds that it may,

consistent with constitutional reguirements of due process and

fundamental notions of justice and fairness, exercise j_n personam

jurisdiction over Trimatek. Nevertheless, the court concludes

that the transfer of this matter to the Western District of New

York is both just and appropriate. Accordingly, Trimatek's

motion to dismiss (document no. 19) is denied. Its motion for

change of venue (document no. 20) is, however, granted. The

Clerk of the Court is instructed to transfer this proceeding to

the United States District Court for the Western District of New

York.

8 SO ORDERED.

Steven J. McAuliffe United States District Judge

April 16, 1997

cc: Michael C. Harvell, Esq. Wayne F. DeHond, Esq. Warren C. Nighswander, Esq.

9