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SHERATON OPERATING CORP. v. JUST CORPORATE TRAVEL

November 4, 1997

SHERATON OPERATING CORP., as agent for WOODLEY ROAD ASSOCIATES, INC., Plaintiff,
v.
JUST CORPORATE TRAVEL and CYNTHIA GRIM d/b/a JUST CORPORATE TRAVEL, Defendant.



The opinion of the court was delivered by: ATTRIDGE

 This matter is before the Court on defendant's, Just Corporate Travel's, motion to dismiss for lack of diversity jurisdiction or, in the alternative, transfer of venue to the Northern District of California [# 16]. Pursuant to 28 U.S.C. § 636(C), the parties consented to proceed before a United States Magistrate Judge for all purposes. Upon consideration of the motion, opposition, reply *fn1" and the applicable law, and for the reasons explained below, the Court concludes that jurisdiction as well a proper venue is found in the District Court for the District of Columbia.

 Diversity Jurisdiction - 12 U.S.C. § 1332

 Pursuant to 12 U.S.C. § 1332, this Court has original jurisdiction of civil matters where the controversy exists among "citizens of different states" and the amount in controversy exceeds $ 75,000. For purposes of this statute, a corporation is a citizen of any state in which it is incorporated and of the State where it has its principal place of business. 12 U.S.C. § 1332(c)(1). In its motion to dismiss, Just Corporate argues that there is not complete diversity of citizenship pursuant to 12 U.S.C. § 1332. Specifically, it argues that the Woodley Road Associates' relationship to this action is manufactured for the purpose of creating diversity, and that the 31 properties the Sheraton Operating Corporation [Sheraton] owns in California, the state of citizenship of the defendant, destroys diversity.

 The Sheraton, in opposing the motion, explained the relationship between the Sheraton Operating Corporation (acting as an agent for) and Woodley Road Associates (which has been assigned the rights of the owner [pl's opp., exh. C]. It further identified the corporate headquarters or "nerve center" for the Sheraton, a Delaware Corporation, as Boston, Massachusetts; thus, the Sheraton is not a citizen of California for the purposes of this action. *fn2" Further, the Sheraton points to the forum selection clause, as well as the business conducted by Just Corporate in Washington, D.C., as the basis for which this action was brought in the District Court for the District of Columbia.

 In reply to the Sheraton's opposition, Just Corporate no longer disputes the plaintiff's showing of diversity of citizenship. Instead, the defendant resorts to an entirely new argument -- that diversity jurisdiction is defeated by the amount in controversy.

 The plaintiff's complaint alleges a loss in hotel income of $ 133,355.00 -- well over the $ 75,000 jurisdictional minimum. Just Corporate disputes this amount by asserting the plaintiff failed to mitigate its damages, that the contract is ambiguous and unconscionable, and that the liquidated damages provision will fail. A plaintiff, however, "does not have to prove exact damages when confronted at the outset with the defendant's motion to dismiss for want of amount in controversy; it is sufficient if the plaintiff can show that the case can go for more than the monetary minimum." 28 U.S.C. § 1332, Commentary on 1988 Revision (emphasis in original). In order for this Court to dismiss this action based on the amount in controversy, it "must be able to say, after crediting all of the plaintiff's factual allegations under the so-called well-pleaded complaint rule, that a verdict in excess of the jurisdictional minimum (now [$ 75,000] would have to be set aside as a matter of law." Id. The Court cannot make such a finding, and to allow the defendant's arguments to prevail at this stage would in essence be a premature judgment on the merits, which the Court declines to make.

 In sum, the plaintiff has satisfied section 1332(a) and (c), thus original jurisdiction properly lies in this Court.

 Forum Non Conveniens - 28 U.S.C. § 1404(a)

 Since diversity and subject matter jurisdiction exist in both the proposed transferor and transferee courts, the Court must consider whether transfer would serve "the convenience of the parties and witnesses" and be "in the interest of justice." 28 U.S.C. § 1404(a).

 "The moving party has the burden of showing that the convenience of the parties and witnesses favors transfer...Ordinarily, the 'plaintiff's choice of a proper forum is a paramount consideration in any determination of a transfer request.'" Kirschner Brothers Oil, Inc. v. Pannill, 697 F. Supp. 804, 806 (D. Del. 1988)(citing Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970)); accord Armco Steel Co. v. CSX Corp., 790 F. Supp. 311, 323 (D.D.C. 1991) (citing Harris v. Republic Airlines, Inc., 699 F. Supp. 961, 963 (D.D.C. 1988)). District courts retain broad discretion in balancing the asserted conveniences and fairness to the parties. Norwood v. Kirkpatrick, 349 U.S. 29, 32, 99 L. Ed. 789, 75 S. Ct. 544 (1955); Carr v. Bio-Medical Applications of Washington, Inc., 366 A.2d 1089, 1091 (D.C. 1976).

 Opposing transfer of venue, Sheraton referred the Court to the forum selection clause in the disputed contract by which Just Corporate consented to proceed in "any court of the competent jurisdiction" in the District of Columbia, the situs of the hotel. The contract clause provides in pertinent part:

 
Any controversy, claim or dispute arising out of or relating to this Contract shall, at the option of the Hotel, be settled in the City in which the Hotel is located... through an action brought in any court of the competent jurisdiction in the State in which the Hotel is located for trial and determination by such court sitting without a jury. In connection with any such litigation, including appellate proceedings, the prevailing party shall be entitled to recover reasonable attorneys fees and costs. By your execution of this Contract you hereby consent to the jurisdiction of a court of competent jurisdiction in the State in which the Hotel in located and to service of process outside the ...

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