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Calamos Asset Management, Inc. v. Travelers Casualty and Surety Company of America

United States District Court, D. Delaware

May 15, 2019

CALAMOS ASSET MANAGEMENT, INC., Plaintiff,
v.
TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, Defendant.

          Jennifer C. Wasson, Carla M. Jones, Potter Anderson & Corroon LLP, Wilmington, DE; Matthew J. Schlesinger, Colin P. Watson, Robert W. Jacques, Covington & Burling LLP, Washington, District of Columbia - Attorneys for Plaintiff

          Francis G.X. Pileggi, Eckert Seamans Cherin & Mellot, LLC, Wilmington, DE; Ronald P. Schiller, Daniel J. Layden, Hangley Aronchick Segal Pudlin & Schiller, Philadelphia, PA - Attorneys for Defendant

          MEMORANDUM OPINION

          NOREIKA, U.S. DISTRICT JUDGE

         Before the Court is Defendant Travelers Casualty and Surety Company of America's (“Defendant” or “Travelers”) Motion to Transfer Venue. (D.I. 11). Defendant moves pursuant to 28 U.S.C. § 1404(a) to transfer this action to the Northern District of Illinois. (Id.). Plaintiff Calamos Asset Management, Inc. (“Plaintiff or “CAM”) opposes transfer. (D.I. 38). For the reasons set forth below, Defendant's motion to transfer will be denied.

         I. BACKGROUND AND PROCEDURAL HISTORY

         Plaintiff originally filed this insurance coverage action in Delaware Superior Court on September 7, 2018, seeking coverage for losses incurred as a result of shareholder proceedings in the Delaware Court of Chancery. (See D.I. 1-1 ¶ 3). In 2016, Plaintiff purchased three Directors & Officers (“D&O”) insurance policies. (Id. ¶¶ 8-10). Plaintiff purchased a primary D&O policy from XL Specialty Insurance Company (“XL”) and a first-layer excess D&O policy from Continental Casualty Company (“Continental”). (Id. ¶¶ 8-9). Plaintiff also purchased a second-layer excess Directors & Officers (“D&O”) policy (“the Travelers Policy”) from Defendant. (Id. at ¶ 10). All three policies were for the period of October 27, 2016 to October 27, 2017 (id. ¶¶ 8-10), with the Travelers Policy having an “extended discovery period from February 21, 2017 through February 21, 2023 (D.I. 13 at 3). The Travelers Policy “afford[ed] up to $10 million in coverage, excess of [the] $20 million” provided by the primary policy issued by XL Specialty Insurance Company and the first-layer excess policy issued by Continental. (Id.; see also D.I. 19 at 2).

         On December 19, 2016, Plaintiff “announced that it had reached an agreement in principle to be taken private through a transaction by which an affiliated entity would commence a tender offer to acquire all of the outstanding shares of CAM's Class A common stock” (“the Merger”).

         (D.I. 1-1 ¶ 37). Following its announcement, various shareholders of Plaintiff brought suits in Delaware's Court of Chancery, alleging breaches of fiduciary duty in connection to the Merger and seeking appraisal under Section 262 of the General Corporation Law of the State of Delaware (“the Underlying Proceedings”). (Id. ¶¶ 38, 40). Plaintiff seeks coverage from Defendant from losses resulting from these Underlying Proceedings. (Id. ¶ 3).

         Following the institution of this action in Superior Court, Defendant filed a parallel action on September 13, 2018 in the United States District Court for the Northern District of Illinois, seeking declaratory judgment that coverage is not available under the Travelers Policy. (D.I. 13 at 8). On September 28, 2018, Defendant filed a Notice of Removal, removing this action from Superior Court to this Court. (D.I. 1). Shortly thereafter, on November 5, 2018, Defendant filed the instant motion to transfer this case to the Northern District of Illinois. (D.I. 11). On the same day, Plaintiff filed a motion to enjoin Defendant from prosecuting the Northern District of Illinois litigation. (D.I. 12). Since the completion of the parties' briefing on both motions, the parallel proceeding in the Northern District of Illinois has been dismissed in favor of this action.[1] See Travelers Cas. & Sur. Co. of Am. v. Calamos Mgmt., Inc., No. 18-C-6280, D.I. 45 at 3-4 (N.D. Ill. Apr. 5, 2019).

         II. LEGAL STANDARD

         District courts have the authority to transfer venue “[f]or the convenience of parties and witnesses, in the interests of justice, . . . to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). However, “[a] plaintiff, as the injured party, generally ha[s] been ‘accorded [the] privilege of bringing an action where he chooses, ” Helicos Biosciences Corp. v. Illumina, Inc., 858 F.Supp.2d 367, 371 (D. Del. 2012) (quoting Norwood v. Kirkpatrick, 349 U.S. 29, 31 (1955)), and this choice “should not be lightly disturbed, ” Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995).

         The Third Circuit has recognized that:

“[i]n ruling on § 1404(a) motions, courts have not limited their consideration to the three enumerated factors in § 1404(a) (convenience of parties, convenience of witnesses, or interests of justice), and, indeed, commentators have called on the courts to ‘consider all relevant factors to determine whether on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum.'”

Jumara, 55 F.3d at 879 (citation omitted). The Jumara court went on to describe twelve (12) “private and public interests protected by the language of § 1404(a).” Id. The private interests include:

“plaintiff's forum preference as manifested in the original choice; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses - but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).”

Id. at 879 (citations omitted). The public interests include:

“the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the ...

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