Tao Grp. Holdings v. Emp’rs Ins. Co. of Wausau

TAO GROUP HOLDINGS, LLC, Plaintiff, v. EMPLOYERS INSURANCE COMPANY OF WAUSAU, Defendant.

No. 2:21-cv-00382-GMN-NJK

United States District Court, D. Nevada

March 9, 2022

ORDER

Glori M. Navarro, District Judge

Pending before the Court is the Motion to Dismiss, (ECF No. 22) filed by Defendant Employers Insurance Company of Wausau (“Defendant” or “Wausau”). Plaintiff Tao Group Holdings, LLC (“Plaintiff” or “Tao”) filed a Response, (ECF No. 24), and Wausau filed a Reply, (ECF No. 35).

Also pending before the Court is the Motion to Change Venue, (ECF No. 21), filed by Wausau. Tao filed a Response, (ECF No. 25) and Wausau filed a Reply, (ECF No. 34).

Further pending before the Court is the Motion for Leave to File Supplemental Authority, (ECF No. 48), filed by Wausau. Tao filed a Response, (ECF No. 49), and Wausau filed a Reply 50).

Similarly pending before the Court is the Motion for Leave to File Second Notice of Supplemental Authority, (ECF No. 53), filed by Wausau. Tao filed a Response, (ECF No. 54), and Wausau filed a Reply, 55).

Also pending before the Court is the Motion for Leave to File Third Notice of Supplemental Authority, (ECF No. 56), filed by Wausau. Tao filed a Response, (ECF No. 57), and Wausau filed a Reply, 58).^[1]

Further pending before the Court is the Request for Judicial Notice (ECF No. 23), filed by Wausau and the Request for Judicial Notice, (ECF No. 28), filed by Tao.^[2]

For the reasons discussed below, the Court GRANTS Defendant's Motion to Dismiss, Motion for Leave to File Supplemental Authority, Motion for Leave to File Second Notice of Supplemental Authority, Motion for Leave to File Third Notice of Supplemental Authority, the Request for Judicial Notice, and Plaintiff's Request for Judicial Notice. Finally, the Court DENIES Defendant's Motion to Change Venue.

I.BACKGROUND

The case arises from the alleged breach of a property insurance policy contract Plaintiff entered with Defendant. (Compl ¶¶ 3-6). Tao, a “global hospitality company, ” purchased a multi-state “all risk” property insurance policy (the “Policy”) from Wausau, which insured Tao's interests in real and personal properties identified under the Policy's covered locations and other locations “owned, leased or rented by” Tao not listed under the Policy's covered locations. (Id. ¶¶ 1, 39, 42, 44-45); (see also Policy Contract at Cover Page at 63, Ex. 3 to Compl., ECF No. 1-1). The Policy insured against physical loss or damage to covered property and against resulting economic and financial losses. (Compl. ¶ 46); (see also Policy Contract at 7, 19, 60, Ex. 3 to Compl.). In addition, the Policy provided a $250, 000, 000 per occurrence policy limit, with a “Time Element” sublimit of $122, 372, 531. (Compl. ¶ 46); (see also Policy Contract at 8-9, Ex. 3 to Compl.).

Tao notified Wausau that it suffered direct physical loss or damage at 25 different insured locations in California, Illinois, Nevada, and New York because of the COVID-19 pandemic. (See Compl. ¶¶ 76-97, 102-111); (see also Policy Contract at 63, Ex. 3 to Compl.). Wausau denied coverage, (See Compl. ¶ 99), and Tao filed suit for breach of contract, (Id. ¶¶ 119-127), violation of NRS 686A.310 for unfair claims practice, (Id. ¶¶ 128-134), violation of the implied covenant of good faith and fair dealing, (Id. 30:17-33:16), and a claim for declaratory judgment, (Id. 33:17-34:5). Tao seeks compensatory, consequential, extra-contractual, and punitive damages, as well as declaratory relief, requesting the Court to declare that Wausau must pay Tao up to the limits of the Policy. (Id. 34:6-24). In response, Defendant moves this Court to dismiss Plaintiff's Complaint for failure to state a claim for which relief may be granted. (See Mot. Dismiss (“MTD”) 1:18-4:12, ECF No. 22). Wausau also moves this Court to transfer the case to the Southern District of New York. (See generally Mot. Change Venue (“MCV”), ECF No. 21).

II.LEGAL STANDARD

a. Motion to Change Venue

Under 28 U.S.C. § 1404(a), “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” A motion to transfer lies within the broad discretion of the district court, and is determined on an “individualized, case-by-case consideration of convenience and fairness.” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (citing Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). “The statute has two requirements on its face: (1) that the district to which defendants seek to have the action transferred is one in which the action might have been brought, and (2) that the transfer be for the convenience of parties and witnesses, and in the interest of justice.” Operation: £Heroes, Ltd. v. Procter & Gamble Prods., Inc., 903 F.Supp.2d 1106, 1111 (D. Nev. 2012) (citing Amazon.com v. Cendant Corp., 404 F.Supp.2d 1256, 1259 (W.D. Wash. 2005) (citation and quotation marks omitted)).

The case-by-case approach has led courts to balance several factors in determining if transfer is appropriate. Although the relevant factors vary with facts of specific cases, see Williams v. Bowman, 157 F.Supp.2d 1103, 1106 (N. D. Cal. 2001), the following factors are generally considered in a transfer motion:

(1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff's choice of forum, (4) the respective parties' contacts with the forum, (5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof.

Jones v. GNC Franchising Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). The movant bears the burden of showing that transfer is appropriate. Operation: Heroes, Ltd., 903 F.Supp.2d at 1111.

b. Motion to Dismiss

Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as factual allegations are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id.

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

“Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). “However, material which is properly submitted as part of the complaint may be considered.” Id. Similarly, “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss.” Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). On a motion to dismiss, a court may also take judicial notice of “matters of public record.” Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if a court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. Fed.R.Civ.P. 12(d).

III.DISCUSSION

a. Motion to Change Venue

Defendant argues the Court should transfer this matter to the Southern District of New York (“SDNY”) “for the convenience of the parties and witnesses and in the interest of justice.” (MCV 1:24-2:13). Tao disagrees, arguing that its Las Vegas properties “generate a significant share of [its] annual revenue” and that much of the “the witnesses, parties, and discovery” will be centered in Las Vegas. (Resp. MCV 3:6-16).

First, the Court considers whether S.D.N.Y. is a jurisdiction in which the action “might have been brought.” The parties do not dispute that S.D.N.Y. has personal jurisdiction over them. (MCV 5:12-8:9); (Resp. MCV 7:14-16). Tao, however, disputes venue. (Resp. MCV 7:14- 20). Venue is proper in “a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated[.]” 28 U.S.C. § 1391(b)(2). Here, twenty-seven of Tao's properties are listed as covered locations within the Policy, thirteen of which are in New York.^[3] (Policy Contract at Cover Page at 63, Ex. 3 to Compl.). Because nearly half of Tao's properties for which it seeks coverage under the Policy for are based in New York, “a substantial part of the property that is the subject of the action” is in New York. (See id.). As such, this action “might have been brought” in SDNY.

Next the Court considers whether the transfer is being made for “the convenience of parties and witnesses, and in the interest of justice” by turning to the eight factors when considering transfer of venue. First, the location where the Policy was negotiated and executed...