United States District Court, S.D. Georgia, Savannah Division
BW ORCHARDS, LLC, C&D, FUEHRING FARMS, INC., GOLDEN HART FRUIT FARMS, LLC, GREEN VENTURES, LLC, HERRYGERS FARMS, LLC, JAMES JENSEN d/b/a JENSEN FARMS, LAKESHORE FARMS, INC., LK VANSICKLE FARMS, LLC, MALBURG ACRES, LLC, RANDY A. FEDO d/b/a RAN-MARK CO., PAUL OOMEN d/b/a PAUL OOMEN & SONS, SLOCUM FARMS, LLC, VILLADSEN TREE FARMS, INC., and PRODUCE PAY, INC., Plaintiffs,
SPIECH FARMS GEORGIA, LLC, and TIMOTHY M. SPIECH, BRADLEY A. SPIECH, ROBIN L. SPIECH, STEVEN M. SPIECH, and EVA M. STONE, individually, Defendants.
LISA GODBEY WOOD, JUDGE
the Court are Defendants Robin L. Spiech's and Steven M.
Spiech's Motion to Dismiss for Improper Venue, and, in
the Alternative, Motion to Transfer Venue, dkt. no. 25, and
Defendants Timothy M. Spiech's, Bradley A. Spiech's,
and Eva M. Stone's Motion to Dismiss for Improper Venue,
and, in the Alternative, Motion to Transfer Venue, dkt. no.
28. These motions have been fully briefed and are ripe for
review. For the reasons stated below, Defendant's Motions
to Dismiss are DENIED and Defendant's
Motions to Transfer Venue are GRANTED.
case involves Plaintiffs' BW Orchards, LLC, Fuehring
Farms, Inc., Golden Hart Fruit Farms, LLC, Green Ventures,
LLC, Herrygers Farms, LLC, James Jensen d/b/a Jensen Farms,
Lakeshore Farms, Inc., LK Vansickle Farms, LLC, Malburg
Acres, LCC, Randy A. Fedo d/b/a Ran-Mark Co., Paul Oomen
d/b/a Paul Oomen & Sons, Slocum Farms, LLC, Villadsen
Tree Farms, Inc., (collectively "Growers") and
Produce Pay, Inc. ("Produce Pay") (all together
"Plaintiffs") claims against Defendants Spiech
Farms Georgia, LLC ("Spiech Georgia"), Timothy M.
Spiech, Bradley A. Spiech, Robin L. Spiech, Steven M. Spiech,
and Eva M. Stone stemming from Defendants' alleged
failure to pay under agreements to sell or buy produce.
Specifically, Plaintiffs allege in their First Amended
Complaint (hereinafter "the Complaint"), dkt. no.
11, that Growers had . entered into various agreements with
non-party Spiech Farms, LLC ("Spiech Michigan")-a
Michigan Limited Liability Company with its principal place
of business in Paw Paw, Michigan-under which Spiech Michigan
would purchase produce, namely asparagus, from Growers. Dkt.
No. 11 ¶¶ 21, 44-69. Additionally, Plaintiffs
allege that Produce Pay entered into a "Distribution
Agreement," under which Spiech Michigan agreed to sell
and Produce Pay agreed to purchase certain produce,
specifically grapes and blueberries, for the express purpose
of Spiech Michigan selling such Produce to purchasers on
commission on behalf of Produce Pay. Id.
¶¶ 106-122. At all relevant times, Spiech Michigan
was the parent company of Spiech Georgia, and Timothy,
Bradley, Robin, and Steven Spiech, as well as Eva Stone, were
members of both Spiech Michigan and Spiech Georgia.
Id. ¶¶ 21-22. Spiech Georgia is a Georgia
limited liability company with its principal place of
business in Baxley and Brunswick, Georgia, where it grew
certain produce, specifically blueberries. Id.
gravamen of Plaintiffs' ninety-one-page Complaint is that
Spiech Michigan failed to pay Growers under their respective
agreements to sell produce and failed to pay Produce Pay for
the produce sold to third-parties under the distribution
agreement. Id. ¶¶ 32-43. The Complaint
avers that Spiech Michigan, through the individual member
Defendants, instead funneled money, including money earned
from selling produce under the distribution agreement with
Produce Pay, to Spiech Georgia to hide and shield that money
from Plaintiffs and from Spiech Michigan's bankruptcy.
Id. ¶¶ 40-43. The Complaint alleges that
Defendants then used that money to fund blueberry farming
operations in Georgia. Id. ¶ 41. Based on these
facts Plaintiffs allege claims against Defendants for Failure
to Pay Promptly (Count I), Making False or Misleading
Statements (Count II), Unfair Trade Practice for Breach of
Good Faith and Fair Dealing (Count III), and Unfair Trade
Practice for Breach of Express or Implied Duties (Count IV)
all under the Perishable Agricultural Commodities Act
(``PACA"), 7 U.S.C. §§ 499, and state law
claims of Conspiracy to Defraud (Count V), Fraud (Count VI),
Breach of Duty to Corporate Creditors (Count VII),
Intentional Interference With a Contract (Count VIII),
Conversion (Count IX), Unjust Enrichment (Count X),
Negligence (Count XI), Common Enterprise Liability (Count
XII), and Piercing the Corporate Veil: Alter-Ego Liability
(Counts XIII-XVII). Id. ¶¶ 126-547.
filed their initial Complaint on January 14, 2019, in the
Southern District of Georgia. Dkt. No. 1. But, prior to that
filing, on November 22, 2017, Spiech Michigan filed for
bankruptcy in the Bankruptcy Court for the Western District
of Michigan. See In re Spiech Farms, LLC, No.
17-05398 (Bankr. W.D. Mich. November 11, 2017), Dkt. No. 1.
Those proceedings are still ongoing, and Plaintiffs are
involved in that bankruptcy litigation. Id. After
Plaintiffs filed their Complaint in this Court, Spiech
Michigan filed a Motion for Contempt against Plaintiffs in
the Bankruptcy Court for the Western District of Michigan on
March 11, 2019, arguing that Plaintiffs' Complaint in
this case violates the Bankruptcy Court's automatic stay
under 11 U.S.C. § 362(a) (3) and that it seeks improper
collateral review of the orders of the Bankruptcy Court.
Id. at Dkt. No. 611. That motion is still pending
before the Bankruptcy Court. On that same day, March 11,
2019, Defendants filed their respective Motions to Dismiss
for Improper Venue or in the Alternative, Motions to Transfer
Venue, dkt. nos. 25, 28, presently before this Court.
move this Court pursuant to Federal Rule of Civil Procedure
12(b)(3) for an order dismissing Plaintiffs' Amended
Complaint for improper venue. Dkt. Nos. 25, 28.
Alternatively, if the Court determines that venue in this
District is proper, Defendants request that the Court
nevertheless transfer this case to the United States District
Court for the Western District of Michigan under 28 U.S.C.
Motion to Dismiss for Improper Venue
Rule 12 (b)(3), a party may assert improper venue as a
defense to a claim for relief. Fed.R.Civ.P. 12(b)(3). When a
defendant objects to venue, ``[t]he plaintiff has the burden
of showing that venue in the forum is proper."
Pinson v. Rumsfeld, 192 Fed.Appx. 811, 817 (11th
Cir. 2006). In considering a motion filed pursuant to Rule 12
(b)(3), a court accepts the facts in the plaintiff's
complaint as true. Simbaqueba v. U.S. Dep't of
Def., No. CV 309-066, 2010 WL 2990042, at *2 (S.D. Ga.
May 28, 2010) . "However, when a Rule 12(b) (3)'
motion is predicated upon key issues of fact, the court may
consider matters outside the pleadings." Id.
(citing Curry v. Gonzales, No. 105-2710, 2006 WL
3191178, at *2 (N.D.Ga. Oct. 31, 2006)). Where conflicts
exist between the allegations in the complaint and the
evidence outside of the pleadings, the court ``must draw all
reasonable inferences and resolve all factual conflicts in
favor of the plaintiff." Wai v. Rainbow
Holdings, 315 F.Supp.2d 1261, 1268 (S.D. Fla. 2004);
see also Simbaqueba, 2010 WL 2990042, at *2.
diversity cases such as this one, venue is determined in
accordance with the requirements of 28 U.S.C. § 1391(b),
which provides that a civil action may be brought in:
(1) a judicial district in which any defendant resides, if
all defendants are residents of the State in which the
district is located;
(2) a judicial district in which a substantial part of the
events or omissions giving rise to the claim occurred, or a
substantial part of the property that is the subject of the
action is situated; or
(3) if there is no district in which an action may otherwise
be brought as provided in this section, any judicial district
in which any defendant is subject to the court's personal
jurisdiction with respect to such action.
presiding over a case ``laying venue in the wrong division or
district shall dismiss, or if it be in the interest of
justice, transfer such case to any district or division in
which it could have been brought." 28 U.S.C. §
case, Plaintiffs have met their burden to show that venue is
proper in the Southern District of Georgia under §
1391(b)(2). Looking to the sections of § 1391(b),
subsection (b) (1) is inapplicable because it is undisputed
that not all of the Defendants are residents of Georgia in
this case. Moreover, subsection (b) (3) is inapplicable
because the Court finds that venue is also proper in the
Western District of Michigan. Although Plaintiffs attempt to
argue that the Western District of Michigan would not have
jurisdiction over all of the parties or claims in this case,
Plaintiffs fail to support that argument with any substantive
reasons. Because the individual member Defendants conducted
business as part of Spiech Michigan and Spiech Georgia in
Michigan (let alone a few of them being residents of
Michigan), the Court sees no reason why the Western District
of Michigan would not have personal jurisdiction under a
minimum contacts theory. The same is true for Spiech Georgia
that, according to the facts alleged in the Complaint, did
business in Michigan through working with, or as a part of,
Spiech Michigan and sent produce to Michigan. As for subject
matter jurisdiction, federal question jurisdiction exists for
the PACA claims and supplemental jurisdiction covers the
state law claims. Thus, the Court sees no basis for
concluding that a federal court in the Western District of
Michigan would not have jurisdiction over all of the parties
or claims in Plaintiff's Complaint.
Plaintiffs are left with relying on § 1391(b)(2), and
they meet their burden under that section by showing that a
substantial part of the events giving rise to the claims in
their Complaint occurred in the Southern District of Georgia.
It is important to note that Plaintiffs are not required to
show that a majority of the events occurred in the Southern
District of Georgia; rather, they only need to show that a
substantial part of the events occurred here. Morgan v.
N. MS Med. Ctr., Inc., 403 F.Supp.2d 1115, 1123 (S.D.
Ala. 2005), aff'd sub nom. Morgan v. N. Mississippi
Med. Ctr., Inc., 225 Fed.Appx. 828 (11th Cir. 2007).
(``[T]he question confronting the undersigned is not whether
the lion's share of the events at issue occurred in the
Southern District of Alabama, nor is it the relative
magnitude and significance of the events occurring in this
judicial district as compared to those in the Northern
District of Mississippi. Instead, the question is simply
whether `a substantial part' of the events transpired
here."). Here, Plaintiffs' Complaint alleges that
Defendants, instead of paying Plaintiffs money owed to them
under the various agreements that the parties had, funneled
money to Spiech Georgia-which is located in the Southern
District of Georgia-to hide that money from Plaintiffs. See
Dkt. No. 11 ¶¶ 41-43. Plaintiffs further allege
that Defendants did this while fraudulently misleading the
Plaintiffs and reassuring them that Defendants would pay,
when really Defendants were just trying to buy time before
filing bankruptcy and hiding the money from that bankruptcy
by funneling it to Spiech Georgia. See id.
¶¶ 41-43, 312-313. Plaintiffs allege that instead
of paying them, Defendants used the money sent to Spiech
Georgia to fund Spiech Georgia's operations, including
purchasing equipment, funding labor operations, and
conducting other activities. See id. ¶¶
minimum, these facts form a substantial part of the events
that are the basis for certain counts in the Complaint, such
as Count IX for conversion and Count X for unjust enrichment,
in that by Defendants funneling money to Spiech Georgia,
Spiech Georgia unlawfully converted funds that were owed to
Plaintiffs and were unjustly enriched by receiving those
funds. Moreover, the basis for many of Plaintiffs' other
claims is that instead of paying Plaintiffs for the money
that they were owed, Defendants sent that money to Spiech
Georgia to hide it, and Spiech Georgia used that money to
fund its operations. Thus, at least for some counts in the
Complaint, a "substantial part of the events . . .
giving rise" to those counts occurred in the Southern
District of Georgia. Although a majority of the facts that
make up this case may not have occurred here, for the
purposes of Defendant's Motion to Dismiss for Improper
Venue, Plaintiffs have met their burden to show that at least
a substantial part of those facts occurred in this District.
As such, Defendant's Motion to Dismiss is DENIED.
Motion to Transfer Venue
to the second issue of transferring venue, 28 U.S.C. §
1404(a) provides that a district court may transfer a civil
action ``to any other district or division where it might
have been brought," when it is ``for the convenience of
parties and witnesses" and ``in the interest of
justice." District courts are vested with broad
discretion in weighing conflicting arguments regarding a
venue transfer. See England v. ITT Thompson Indus.
Inc., 856 F.2d 1518, 1520 (11th Cir. 1988) . Courts
traditionally afford considerable deference to a
plaintiff's choice of forum, disturbing it only where it
is ``clearly outweighed by other considerations."
Robinson v. Giamarco & Bill, P.C., 74 F.3d 253,
260 (11th Cir. 1996) (quoting Howell v. Tanner, 650
F.2d 610, 616 (5th Cir. 1981)). Thus, a party who moves to
transfer venue pursuant to Section 1404(a) bears the burden
of establishing ``that the balance of convenience and justice
`weighs heavily in favor of the transfer.'"
Duckworth v. Med. Electro-Therapeutics, Inc., 768
F.Supp. 822, 831 (S.D. Ga. 1991) (quoting Elec.
Transaction Network v. Katz, 734 F.Supp. 492, 501
question of whether a transfer is appropriate depends upon
two inquires: (1) whether the action might have been brought
in the proposed transferee court, and (2) whether [certain]
convenience factors are present to justify the
transfer." Greely v. Lazer Spot, Inc., No. CV
411-096, 2012 WL 170154, at *2 (S.D. Ga. Jan. 19, 2012)
(citing Mason v. Smithkline Beecham ...