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Veys v. Fischer

November 17, 2010

ALAN J. VEYS, ET AL., PLAINTIFFS,
v.
JEROME FISCHER, ET AL., DEFENDANTS.
JEROME FISCHER, ET AL., THIRD-PARTY PLAINTIFFS,
v.
P. MICHAEL LONG, ET AL., THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: John W. Sedwick United States District Judge

ORDER AND OPINION

[Re: Motion at Docket 20]

I. MOTION PRESENTED

At docket 20, defendants Jerome Fischer, Stewart L. Hayes, and Fischer Hayes & Associates, P.C., move to transfer this matter from the District of Alaska to the District of Oregon pursuant to 28 U.S.C. § 1391(a) and 28 U.S.C. § 1404(a). At docket 33, plaintiffs Alan J. Veys and Alan J. Veys Properties, LLC, oppose the motion. Defendants reply at docket 42. Oral argument was not requested, and it would not assist the court.

II. BACKGROUND

Alan Veys resides on Admiralty Island, Alaska, and is the sole member of Alan J. Veys Properties, LLC ("Veys Properties"), a Washington corporation. Mr. Veys and Veys Properties owned a fishing lodge on Admiralty Island called the Pybus Point Lodge ("the Lodge"). Lone Eagle Resorts, Inc., a company owned by Mr. Veys, operated the Lodge's resort and fishing business.

Jerome Fischer and Stewart Hayes, who reside in Oregon, and Fischer Hayes and Associates, P.C. ("FH&A"), an Oregon corporation, provided accounting and business consulting services including bookkeeping, tax preparation, and payroll services, to Veys and Veys Properties for almost 20 years. FH&A sometimes accrued up to $12,500 per year in professional fees for services provided to Mr. Veys and his companies. Mr. Veys frequently paid for those services by providing Mr. Fischer trips to the Lodge. During Mr. Fischer's trips to the Lodge, Mr. Veys and Mr. Fischer discussed Mr. Veys' business problems. FH&A provided consulting services to Mr. Veys concerning the sale of the Lodge.

In May 2010, Mr. Veys and Veys Properties filed a complaint against Fischer, Hayes, and FH&A, alleging claims of negligence, breach of fiduciary duty, negligent misrepresentation, intentional misrepresentation, and breach of contract. The complaint alleges that defendants failed to use reasonable care in delivering accounting services to Veys and his companies. Most of the claims specifically concern an income tax plan called "The Method," which defendants sold to Veys for approximately $50,000. The Method was designed to minimize taxes on the gain from the sale of the Lodge. The complaint alleges that "The Method" was improper, ineffective, and possibly illegal. The complaint further alleges that defendants failed to competently advise plaintiffs in negotiating the purchase and sale agreement for the Lodge. Plaintiffs allege that defendants failed to provide financial information required by the purchase and sale agreement, which resulted in a law suit filed by the purchasers of the Lodge against Mr. Veys in Wyoming. The complaint also alleges that defendants failed to provide discovery requested in that lawsuit.

On August 13, 2010, defendants filed a third-party complaint against P. Michael Long, Pybus Point Lodge, LLC, Lone Eagle Resorts, Inc., Don W. Riske, Salisbury & Kelly, P.C. f/k/a Riske & Salisbury, P.C.*fn1 Defendants subsequently filed a motion to transfer venue to Oregon.*fn2 J. Michel Long, an attorney who practices in Washington, filed an answer to the third-party complaint and joined defendant's motion to transfer venue to Oregon.*fn3 None of the other third-party defendants have appeared in this action.

III. DISCUSSION

Defendants first contend that Alaska is an improper venue for this action. Because subject matter jurisdiction is founded solely on diversity of citizenship, venue in this matter is governed by 28 U.S.C. § 1391(a). Pursuant to § 1391(a), a civil action in which jurisdiction is founded on diversity may be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (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) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

"The overriding purpose of § 1391(a) is to further the convenience of the parties."*fn4

Under clause (1), venue is improper in Alaska because none of the defendants or third-party defendants who have appeared in this action reside in Alaska. All of the defendants reside in Oregon, and third-party defendant Long purportedly resides in Washington. Subsection (3) does not apply because this action could be brought in Oregon.

Defendants argue that venue in Alaska is also improper under subsection (2) because "the majority of the acts or events leading to the claims herein come from work performed in Oregon, or allegedly not performed from Oregon."*fn5 "The place where the 'claim arose' for venue purposes is governed by federal law."*fn6 Under federal law, "venue is proper 'in any district in which a ...


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