DAVID S. DOTY, District Judge.
This matter is before the court upon the motion to dismiss or to transfer venue by defendant Certain Underwriters at Lloyd's London Subscribing to Policies PGIARK04292-11 and PGIXS00178-00 (Underwriters). Based on a review of the file, record, and proceedings herein, and for the following reasons, the court grants the motion in part and transfers the case to the United States District Court for the Northern District of New York.
This insurance coverage dispute arises out of plaintiff ProSource Technologies, LLC's settlement with non-party Housing Trust Fund Corporation (HTFC). ProSource is a Minnesota consulting firm which specializes in disaster and emergency management services. Compl. ¶¶ 10, 15. In April 2013, HTFC, a governmental unit of the State of New York, hired ProSource to manage certain recovery programs designed to assist New York citizens who were victims of SuperStorm Sandy.
At the time of the Underlying Litigation, ProSouce was insured by Underwriters under two relevant policies. The professional liability policy (Primary Policy), in effect from November 1, 2014, to November 1, 2015, covers "DAMAGES that [ProSource is] legally obligated to pay as a result of CLAIMS."
On October 30, 2015, ProSource notified Underwriters of HTFC's counterclaim and requested coverage under the policies. Compl. ¶ 25. Underwriters agreed to defend ProSource and reserved its rights with respect to coverage.
On December 6, 2016, ProSource commenced this case against Underwriters in Anoka County District Court alleging breach of the duties to defend and indemnify and breach of the implied duty of good faith and fair dealing. ProSource seeks damages and declaratory relief. Underwriters timely removed and now moves to dismiss or to transfer the case to the Northern District of New York.
I. Standard of Review
The court will first consider Underwriters' motion to transfer.
I. Convenience of the Parties and Witnesses
The merits of the case — coverage relating to ProSource's settlement with HTFC — turn on the nature and circumstances of the claims and counterclaims in the Underlying Litigation and the structure of the settlement. ProSource commenced the Underlying Litigation, which involved events that took place in and near Albany New York in the wake of SuperStorm Sandy. Specifically, HTFC hired ProSource to administer federal relief funds on behalf of HTFC. Compl. ¶¶ 15-17; Broman Decl. Ex. 2 ¶¶ 13-21. ProSource did so by hiring and training over 400 employees, most of whom were New York residents, and by hiring and overseeing New York subcontractors.
II. Interests of Justice
The interests of justice typically involve considerations of "(1) judicial economy, (2) the plaintiff's choice of forum, (3) the comparative costs to the parties of litigating in each forum, (4) each party's ability to enforce a judgment, (5) obstacles to a fair trial, (6) conflict of law[s] issues, and (7) the advantages of having a local court determine questions of local law."
ProSource first argues the interests of justice weigh in its favor because Underwriters agreed to abide by its choice of forum in the policies' service of suit clause:
Broman Decl. Ex. 1, at 86. But the clause also expressly states that Underwriters did not waive the right "to seek a transfer of a case to another Court as permitted by the laws of the United States or of any State in the United States."
The court is also unpersuaded by ProSource's argument that transfer is inappropriate because the negotiation of the policies and Underwriters' denial of coverage may have occurred outside the proposed transferee district. As already discussed, coverage turns on the events involved in the Underlying Litigation, much of which appears to have occurred in New York, including the Northern District. The fact that some of the conduct at issue took place in New York but outside the Northern District does not render the proposed transferee district improper or inconvenient.
The court further notes that the parties agreed that New York law would apply to disputes "over the meaning, interpretation or operation of any term, condition, definition or provision of this policy." Broman Decl. Ex. 1, at 80-81. This case involves interpretation of the policies and duties that arise directly from the insurance contract. Therefore, New York law will likely apply to the entirety of this case.
As a result, the relevant factors favor transfer to the Northern District of New York. The court will deny Underwriters' motion to dismiss without prejudice so that it may be considered by the transferee court.
Accordingly, based on the above,
1. Defendant's motion to dismiss or transfer venue [ECF No. 10] is granted in part;
2. The case is transferred to the United States District Court for the Northern District of New York; and
3. The motion to dismiss is denied without prejudice.