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Corval Constructors, Inc. v. Tesoro Refining & Marketing Co. LLC

United States District Court, D. Minnesota

October 17, 2019

Corval Constructors, Inc., Plaintiff,
Tesoro Refining & Marketing Company, LLC, Defendant.

          Ernest F. Peake, Paul M. Shapiro, James M. Jorissen, Patrick J. Lindmark, and Stacey L. Drentlaw, Briggs and Morgan, P.A., Minneapolis, MN, for Plaintiff Corval Constructors, Inc.

          Shawn M. Raiter, John A. Markert, and Monica Detert, Larson King, LLP, St. Paul, MN for Defendant Tesoro Refining & Marketing Company, LLC.


          Eric C. Tostrud United States District Judge

         Plaintiff Corval Constructors, a Minnesota-based engineering and construction firm, contracted to provide services at a North Dakota oil refinery owned and operated by Defendant Tesoro Refining and Marketing Company. In this case, Corval asserts claims for breach of contract, declaratory judgment, promissory estoppel, and fraud, all stemming from the deterioration of its commercial relationship with Tesoro at the North Dakota refinery. Pursuant to 28 U.S.C. § 1404(a), Tesoro has moved to transfer the case to the United States District Court for the District of North Dakota. Should that motion be denied, Tesoro has moved to dismiss Corval's claims for a declaratory judgment, promissory estoppel, and fraud pursuant to Federal Rule of Civil Procedure 12(b)(6). Tesoro's transfer motion will be denied because Corval's choice of forum is given presumptive weight and the factors considered under § 1404(a) have not been shown to favor transfer. Tesoro's Rule 12(b)(6) motion to dismiss Corval's declaratory-judgment, promissory-estoppel, and fraud claims will be denied because Corval properly pleads these claims.

         I [1]

         Corval and Tesoro have diverse citizenship and that, combined with Corval's demands for “damages in excess of $75, 000, ” Am. Compl. at 26, ¶¶ 1, 3-4, and 5 [ECF No. 11], means there is subject-matter jurisdiction over this case. 28 U.S.C. § 1332(a). Corval is incorporated under Minnesota law, see Notice of Removal ¶ 6 [ECF No. 1], [2] and maintains its principal place of business in St. Paul, Am. Compl. ¶ 1. Tesoro is a Delaware limited liability company. Notice of Removal ¶ 7. Tesoro's sole member is Western Refining Southwest, Inc., an Arizona corporation with its principal place of business in Findlay, Ohio. Id. Tesoro owns and operates the Mandan Refinery in Mandan, North Dakota. Am. Compl. ¶ 2.

         Tesoro and Corval entered into a Master Services Agreement (“MSA”) in February 2013 and a Supplemental Agreement (“SA”) in February 2018 (collectively, the “Agreements”). Id. ¶¶ 11, 18; MSA [ECF No. 19]; SA [ECF No. 36]. Pursuant to the Agreements, Tesoro would issue purchase orders, service orders, and work orders describing the work to be performed by Corval at the refinery and the price to be paid by Tesoro. Am. Compl. ¶ 15. The Agreements provided that, upon written notice by Tesoro and request by Corval, Tesoro could change any previously-issued order. MSA ¶ 3.3. Corval's requests were referred to as “Field Change Requests, ” and Tesoro's changes to previously-issued orders were called “Field Change Orders.” Id. ¶ 2.0. A Field Change Order would amend the original order to account for the changed work request and changed costs. Id. ¶ 3.3.

         From 2013 to early 2018, Corval and Tesoro worked together in apparent harmony. Tesoro would issue orders, Corval would perform the work, and Tesoro would pay Corval the agreed amount. Am. Compl. ¶¶ 16-17. During this period, Tesoro “routinely approved and paid for change order requests issued by Corval before and after Corval performed work.” Id. ¶ 17. “Tesoro also routinely paid for work it orally requested Corval provide.” Id. Beginning in January 2018, however, the relationship began to deteriorate. Throughout that year, and in relation to seventeen different projects, Tesoro either failed to pay Corval at all or withheld some portion of the payments due. See generally Id. ¶¶ 19-145. Despite this, Corval continued working at Tesoro's refineries, including the Mandan Refinery, into 2019. Id. ¶ 146.

         Corval alleges that on or around January 16, 2019, Tesoro decided internally to stop paying or processing all Corval invoices for labor and materials provided at Tesoro's request. Id. ¶ 146. Tesoro did not communicate this decision to Corval. Id. Even after this internal decision, Tesoro continued to make statements “encouraging Corval to continue working at various refinery locations in accordance with earlier issued Purchase Orders knowing it would never pay Corval for the work provided.” Id. ¶ 147. As a result of Tesoro's encouragement, Corval continued working at the Mandan Refinery from January to March 2019. Id. ¶¶ 149-150. When Corval learned of Tesoro's decision not to pay for work performed by Corval, Corval demanded payment. Id. ¶ 151. Tesoro did not pay, and instead “retaliated by suspending Corval from completing future work on all of its projects within the Mandan Refinery.” Id. ¶ 152. This suspension caused delays to the projects on which Corval was working. Id. ¶ 153. Corval again demanded payment for the work it had performed, and Tesoro terminated Corval from working on all Mandan Refinery projects. Id. ¶ 155.


         “For 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[.]” 28 U.S.C. § 1404(a). “Section 1404(a) reflects an increased desire to have federal civil suits tried in the federal system at the place called for in the particular case by considerations of convenience and justice.” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). Despite this desire, “[c]hange of venue, although within the discretion of the district court, should not be freely granted.” In re Nine Mile Ltd., 692 F.2d 56, 61 (8th Cir. 1982) (per curiam), abrogated on other grounds by Mo. Hous. Dev. Comm'n v. Brice, 919 F.2d 1306 (8th Cir. 1990). “Fairly summarized, in a motion to transfer under 28 U.S.C. § 1404, precedent requires this Court to defer to the Plaintiffs' choice of Minnesota unless the factors . . . strongly weigh in favor of transfer . . . but the weight to be afforded the Plaintiffs' choice is not insurmountable[.]” Brockman v. Sun Valley Resorts, Inc., 923 F.Supp. 1176, 1179 (D. Minn. 1996); see also Promove, Inc. v. Siepman, 355 F.Supp.3d 816, 824 (D. Minn. 2019) (recognizing that the “federal courts give considerable deference to a plaintiff's choice of forum” (quotation omitted)). “To prevail on a motion to transfer, the movant must show that his inconvenience substantially outweighs the inconvenience that plaintiff would suffer if venue were transferred.” Nelson v. Soo Line R.R. Co., 58 F.Supp.2d 1023, 1026 (D. Minn. 1999).[3]

         “The statutory language reveals three general categories of factors that courts must consider when deciding a motion to transfer: (1) the convenience of the parties, (2) the convenience of the witnesses, and (3) the interests of justice.” Terra Int'l, Inc. v. Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997). A court's evaluation of a motion to transfer is not limited to these three factors, and “require[s] a case-by-case evaluation of the particular circumstances at hand[.]” Id. When balancing the convenience of the parties and witnesses, courts often consider “the willingness of witnesses to appear, the ability to subpoena witnesses, and the adequacy of deposition testimony, . . . the accessibility to records and documents, . . . the location where the conduct complained of occurred, and . . . the applicability of each forum state's substantive law.” Id. at 696. In evaluating the interests of justice, courts traditionally weigh a variety of factors, including “(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 issues, and (7) the advantages of having a local court determine questions of local law.” Id.

         The convenience of the parties does not favor transfer. Corval's ties to Minnesota make Minnesota a very (if not the most) convenient forum for Corval. Apart from maintaining a registered address and agent in Minnesota, it is true that Tesoro has no ties to Minnesota. But, as a Delaware limited liability company whose sole member is an Arizona corporation with a principal place of business in Ohio, Tesoro would be a foreign litigant in North Dakota just as it is in Minnesota. It also is true that the work that is the subject of this suit occurred at the Mandan Refinery in North Dakota. However, other important parts of the case-business decisions and communications, for example-almost certainly occurred or originated in other places. It has not been shown, therefore, that North Dakota would provide substantially greater convenience even to Tesoro or that the convenience a North Dakota forum might afford Tesoro substantially outweighs the convenience of a Minnesota forum to Corval.

         The convenience of the witnesses has not been shown to favor transfer. Tesoro identifies 39 potential witnesses, Aff. of John A. Markert, Exs. 1-7 [ECF No. 27], and asserts that “there can be no real dispute that the vast majority of witnesses with first-hand knowledge of the work Corval performed live and reside in North Dakota, ” Mem. in Supp. of Transfer at 6 [ECF No. 25]. However, Tesoro does not differentiate witnesses who are more (or less) important to its defense, and it appears that many of the listed witnesses are cumulative. No doubt North Dakota likely would be a more convenient venue for the “majority of [Tesoro's] witnesses with first-hand knowledge of the work Corval performed[.]” Id. This does not account for witnesses who might testify for Tesoro regarding other subjects. Nor does this account for Corval's potential witnesses, and Corval asserts that those witnesses are almost all from Minnesota. Mem. in Opp'n to Transfer at 14 [ECF No. 29]. Here, just as in another case from this District addressing a § 1404(a) transfer motion, it may be said that “[t]he sheer number of witnesses offered by Defendants will not decide which way the convenience factor tips. Furthermore, because most of the above-mentioned [North Dakota] witnesses are Defendant's employees, the Court can assume that they will appear voluntarily in a foreign forum.” Luckey v. Alside, Inc., Civil No. 15-2512 (JRT/JSM), 2016 WL 1559569 at *5 (D. Minn. Apr. 18, 2016) (citation and internal quotation marks omitted). ÔÇťAside from costs associated with bringing employee-witnesses to the District of Minnesota for hearings and trial, it is unclear what extra costs Defendants would incur. Depositions of those witnesses, for example, ...

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