UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION. Judgment Plaintiffs, Case Number v. Honorable David M.

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1 JAMES H. LIMBRIGHT and HENRY J. LIMBRIGHT, UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION Judgment Plaintiffs, Case Number v. Honorable David M. Lawson GEORGE HOFMEISTER, KAY RAMSAY HOFMEISTER, NELSON CLEMMENS, as Trustee of the GEORGE S. HOFMEISTER FAMILY TRUST f/b/o MEGAN G. HOFMEISTER, NELSON CLEMMENS, as Trustee of the GEORGE S. HOFMEISTER FAMILY TRUST f/b/o SCOTT R. HOFMEISTER, and NELSON CLEMMENS, as Trustee of the GEORGE S. HOFMEISTER FAMILY TRUST f/b/o JAMIE S. HOFMEISTER, -and- Judgment Defendants, MEGAN G. HOFMEISTER, SCOTT R. HOFMEISTER, JAMIE S. HOFMEISTER, JOHN DOE I, as Trustee of the MEGAN G. HOFMEISTER IRREVOCABLE TRUST, JOHN DOE II, as Trustee of the SCOTT R. HOFMEISTER IRREVOCABLE TRUST, and JOHN DOE III, as Trustee of the JAMIE S. HOFMEISTER IRREVOCABLE TRUST, Supplementary Defendants. / OPINION AND ORDER GRANTING DEFENDANTS MOTION TO DISMISS CERTAIN PARTIES FOR WANT OF PERSONAL JURISDICTION AND TRANSFERRING VENUE This lawsuit represents the latest attempt by the plaintiffs to collect a $1,200,000 judgment originally obtained against defendants George and Kay Hofmeister in the United States

2 District Court for the Eastern District of Kentucky in 2002, plus a second judgment entered in this Court for $1,000,000 in supplementary proceedings to collect the first one. The plaintiffs commenced those supplementary proceedings in this Court in 2004 against the trustee of three family trusts established by defendant George Hofmeister for the benefit of each of his three children. Those trusts together owned the sole interest in a manufacturing company located in this District, and the plaintiffs contended that the Hofmeisters had transferred their interest in that company to the family trusts as a fraud on the plaintiffs as judgment creditors. That litigation ended in a settlement, but when the defendants failed to make a final payment, the plaintiffs reopened the case and the Court entered the $1,000,000 judgment against the trustee for the three family trusts as called for by the settlement agreement s default provisions. Apparently, the plaintiffs have been unable to collect the latest judgment from the assets of the family trusts, and they are now before the Court with the present lawsuit seeking to collect against several new defendants to whom, they allege, the judgment debtors fraudulently transferred assets in an attempt to avoid paying the judgments. The new defendants include the three Hofmeister children and the respective irrevocable trusts that they established, on the theory that those trusts were alter egos of the original defendants. Although it is not quite clear from the pleadings, the plaintiffs also seem to allege that the children participated in a fraud on the Limbrights by assisting in the transfers of assets. The defendants have filed a motion requesting several alternative forms of relief, including dismissal for lack of personal jurisdiction or for failure to join an indispensable party; a dismissal due to improper venue or, alternatively, to transfer venue to the Eastern District of Kentucky; dismissal based on failure to plead fraud with particularity; or, alternatively, an order compelling particularized averments with respect to 2

3 the plaintiffs fraudulent conveyance claims. The Court heard oral argument on October 7, 2008, after which the parties have filed supplemental briefs, replies, and sur-replies. The Court now finds that it lacks personal jurisdiction over the Hofmeister children and their individual trusts, and venue of this action is properly laid in the Eastern District of Kentucky where George and Kay Hofmeister and the Hofmeister children reside. Therefore, the Court will grant the motion insofar as it requests dismissal against the Hofmeister children for want of personal jurisdiction, transfer the lawsuit to the United States District Court for the Eastern District of Kentucky, and deny the motion in all other respects. I. A summary of the litigation history is useful to understand the present matter. At one time, the Librights together owned all the stock of a Michigan company called Performance Plastics, Inc. In 2000, they sold their stock to Innovative Coating Technologies, Inc., a company owned by George Hofmeister. In addition to promissory notes signed on behalf of Innovative Coating, George and Kay Hofmeister personally guaranteed payment of the notes in the amount of $2 million. Thereafter, in September 2000, the Hofmeisters and Limbrights entered into a settlement agreement whereby the Hofmeisters were obliged to pay only $900,000 to James Limbright and $300,000 to Henry Limbright. The notes were not paid, however, and the Limbrights instituted an action against the Hofmeisters on March 6, 2001 in the United States District Court for the Eastern District of Kentucky. On March 29, 2002, the district court entered judgment in favor of James Limbright in the amount of $900,000 and Henry Limbright in the amount of $300,000. 3

4 In June 2004, the plaintiffs registered the Kentucky judgment in Michigan pursuant to 28 U.S.C. 1963, and brought an action for periodic garnishment through garnishees American Metals Industries, Inc. (a Delaware corporation of which George Hofmeister is president and sole director), and AMI Manchester, LLC (a limited liability company founded by George Hofmeister and managed by American Metals and owning, among other assets, a stamping plant in Manchester, Michigan). Limbright v. Hofmeister, No (E.D. Mich. Edmunds, J.); Limbright v. Hofmeister, No (E.D. Mich. Lawson, J.). Both garnishee defendants denied liability as to both defendants without explaining the reasons. The plaintiffs then brought another supplementary proceeding in this Court, this time involving the Hofmeister Family Trusts, alleging, among other things, that the Hofmeister Family Trusts should be jointly and severally liable to the Limbrights on the Kentucky judgment because the Hofmeisters had fraudulently conveyed certain asserts to the Hofmeister Family Trusts and that the Trusts were alter egos of the Hofmeisters. After contentious proceedings, the parties entered into a settlement agreement of that case on January 9, 2007, which called for the Hofmeister Family Trusts to pay $950,000 according to a payment schedule in exchange for the release and dismissal of the plaintiffs claims. But after making some of the payments, the trustee failed to make the last $650,000 installment payment due on December 31, Pursuant to the terms of the settlement agreement, the plaintiffs moved to reinstate the case and enter consent judgment in their favor, which the Court did on May 6, 2008 in the amount of $1,000,000 ($1,300,000 less $300,000 already paid) plus interest, costs and reasonable attorney s fees. 4

5 The plaintiffs allege that since the entry of the judgment, no payments have been made either by the Trusts or by the Hofmeisters. The plaintiffs now have filed the present action under Michigan Compiled Laws and Michigan Court Rule 2.621, which allows proceedings supplementary to judgment in this Court pursuant to Federal Rule of Civil Procedure 69. In addition to the defendants and supplementary defendants named in the earlier litigation, this lawsuit also includes as defendants the Hofmeister children themselves Megan, Scott and Jamie Hofmeister as well as the trustees of their respective trusts, designated as John Doe I, John Doe II, and John Doe III, trustees of the Megan, Scott and Jamie Hofmeister Irrevocable Trusts, respectively. As it turns out, the trustee of each of the children s trusts is their father, George Hofmeister. In the seven-count complaint, the plaintiffs allege that the family trusts have transferred assets to the Hofmeister children and their trusts to avoid paying the judgments, and the transfers are voidable under the Michigan Fraudulent Transfer act, Mich. Comp. Laws et seq., and the children and their trusts are alter egos of the Family Trusts. The plaintiffs seek a judgment for money against the new defendants, avoidance of all the conveyances, imposition of a lien against the family trust assets (including the transferred assets), an injunction, and dissolution of the Hofmeister children s trust. The plaintiffs identify the transferred assets as (a) a St. Lucie County, Florida condominium transferred from the Hofmeister Family Trusts to Megan, Scott and Jamie Hofmeister individually in 2006; (b) a controlling membership interest in AHD International, LLC, a Georgia limited liability company, transferred from the Hofmeister Family Trusts to, as the defendants put it, one, some, or all of the Supplementary Defendants ; (c) a controlling shareholder interests in MW Universal Inc., a Delaware corporation, transferred from the 5

6 Hofmeister Family Trusts to one, some, or all of the Supplementary Defendants ; and (d) the transfer of assets, rights, obligations, or other interests from George and Kay Hofmeister (Kentucky residents) to one, some or all of the children or their trusts (either Kentucky residents or Indiana trusts with Kentucky beneficiaries). Plaintiffs James and Henry Limbright are residents of Livingston and Wayne counties in Michigan, respectively, and the defendants, George and Kay Hofmeister, together with their children (Megan, Scott and Jamie Hofmeister) reside in Paris, Kentucky. The Hofmeister Family Trusts are irrevocable trusts organized under the laws of the State of Ohio, and defendant Nelson Clemmens, who succeeded Douglas Q. Holmes as a trustee of each of the Hofmeister Family Trusts, is a resident of Kentucky. Although the Hofmeister Trust was initially formed as a single entity, it was later divided into three trusts for certain tax purposes. The trusts of each of the Hofmeister children, whose trustees are George Hofmeister, are irrevocable trusts organized under the laws of the State of Indiana. In the pending motion, the defendants together advance three arguments. First, they contend the case should be dismissed under Rule 12(b)(2) for lack of personal jurisdiction or due to failure to join indispensable party under Rule 19(b). Second, they argue that the case should be dismissed due to improper venue or transferred to a proper venue under 28 U.S.C. 1406(a). Third, they ask the Court to dismiss the plaintiffs claims for failure to plead fraud with particularity within the meaning of Rule 9(b) or, in the alternative, to order a more definite statement under authority of Rule 12(e). The plaintiffs oppose the motion, contending that under Michigan s long-arm statute, jurisdiction existed by virtue of all defendants transacting 6

7 business within the State of Michigan. The plaintiffs also argue that the Court has jurisdiction over the defendants based on tort-consequences-in-the-state ground under the statute. II. In a motion to dismiss for want of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the plaintiff has the burden of proving the court s jurisdiction over the defendant. Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002). [I]n the face of a properly supported motion for dismissal, the plaintiff may not stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the court has jurisdiction. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). The court may then proceed in one of three ways: it may decide the motion upon the affidavits alone; it may permit discovery in aid of deciding the motion; or it may conduct an evidentiary hearing to resolve any apparent factual questions. Ibid. The Court finds that the first method is sufficient in this case. In a diversity case, personal jurisdiction must be appropriate both under the law of the state in which the district court sits and the Due Process Clause of the Fourteenth Amendment. Bagsby v. Gehres, 195 F. Supp. 2d 957, 961 (E.D. Mich. 2002) (citing Neogen Corp., 282 F.3d at 888). In Michigan, jurisdiction may be asserted over an individual on the basis of general personal jurisdiction, see Mich. Comp. Laws , or limited personal jurisdiction, see Mich. Comp. Laws General personal jurisdiction exists over any individual on the basis of his (1) [p]resence in the state at the time when process is served; (2) [d]omicile in the state at the time when process is served; [or] (3) [c]onsent, to the extent authorized by the 7

8 consent and subject to the limitations provided in section 745. Mich. Comp. Laws The plaintiffs have established none of those criteria. Limited personal jurisdiction may be exercised over a defendant who has certain minimum contacts with the forum, but only over claims which arise from or relate to those contacts. Theunissen, 935 F.2d at Michigan law authorizes limited personal jurisdiction over an individual if he has one of the following relationships with the state: (1) The transaction of any business within the state. (2) The doing or causing an act to be done, or consequences to occur, in the state resulting in an action for tort. (3) The ownership, use, or possession of real or tangible personal property situated within the state. (4) Contracting to insure a person, property, or risk located within this state at the time of contracting. (5) Entering into a contract for services to be rendered or for materials to be furnished in the state by the defendant. (6) Acting as a director, manager, trustee, or other officer of a corporation incorporated under the laws of, or having its principal place of business within this state. (7) Maintaining a domicile in this state while subject to a marital or family relationship which is the basis of the claim for divorce, alimony, separate maintenance, property settlement, child support, or child custody. Mich. Comp. Laws Even if the plaintiff has satisfied the demands of a statutory grant of jurisdiction, the statute is circumscribed by the Due Process Clause. Jurisdiction over a non-resident defendant is consistent with due process only if the facts of the case demonstrate that the non-resident defendant possesses such minimum contacts with the forum state that the exercise of jurisdiction would comport with traditional notions of fair play and substantial justice. Theunissen, 935 F.2d at 1459 (quoting Int l Shoe Co. v. State of Washington, 326 U.S. 310 (1945)). 8

9 General jurisdiction is consistent with due process when a person s relationship with the state is of a continuous and systematic nature. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 421 (1984) (internal quotations omitted). Sporadic or temporary contacts for a particular purpose are not sufficient to establish general jurisdiction. Nationwide Mut. Ins. Co. v. Tryg Int l Ins. Co., 91 F.3d 790, 794 (6th Cir. 1996); see also Landoil Res. Corp. v. Alexander & Alexander Servs., Inc., 918 F.2d 1039, 1046 (2d Cir. 1990) (holding that thirteen business trips made to a forum state by different employees of defendant over eighteen months was insufficient for general jurisdiction). Even if there are not sufficient continuous and systematic contacts to give rise to general jurisdiction, jurisdiction for a specific case may be consistent with the due process clause. The Sixth Circuit has identified three considerations to determine whether personal jurisdiction extends to the defendant in a particular case: First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing consequence in the forum state. Second, the cause of action must arise from the defendant s activities there. Finally, the acts of the defendant or consequences must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable. Theunissen, 935 F.2d at 1460 (internal quotations omitted). If the first two elements are met, an inference of reasonableness arises... [and] only the unusual case will not meet this third criterion. Id. at 1461 (internal quotations and citations omitted). Simply entering into a contract with a party in a state is not sufficient for jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985). Instead, prior negotiations and contemplated future consequences, along with the terms of the contract and the parties actual 9

10 course of dealing... must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum. Id. at 479. The plaintiffs rely on the first two sections of the limited personal jurisdiction statute, contending that the defendants conducted business in this state and engaged in tortious conduct whose consequence occurred in this state. With respect to the parties to the prior litigation, Georgia and Kay Hofmeister and the Family Trusts and their trustee, that issue is easily resolved. Their course of conduct in the prior action, in which personal jurisdiction was never raised as a defense, implicitly amounted to the legal submission of the judgment defendants to the jurisdiction of this Court. Days Inns Worldwide, Inc. v. Patel, 445 F.3d 899, 905 (6th Cir. 2006) ( The actions of the defendant may amount to a legal submission to the jurisdiction of the court, whether voluntary or not. ) (internal quotation marks omitted); Asmar v. Benchmark Literacy Group, Inc., No , 2005 WL (E.D. Mich. Oct. 11, 2005). Having submitted to this Court s jurisdiction in the first place, judgment defendants are subject to the Court s continued jurisdiction relating to the same issue, even if subsequent action is based on a modified complaint. Ewing v. Bolden, 194 Mich. App. 95, 99, 486 N.W.2d 96, (1992); Potomac Leasing Co. v. French Connection Shops, Inc., 172 Mich. App. 108, 112, 431 N.W.2d 214, 216 (1988). The result is different, however, for the Hofmeister children and their trusts. Although the Hofmeister children signed the 2004 settlement agreement, their signatures merely acknowledge[d] the effects of that agreement on the Hofmesiter Family Trusts, to which they were beneficiaries. However, the children were not listed as parties to the agreement, and nor did they litigate the case in this District. Their contact with the State of Michigan is limited to 10

11 their minor role in the settlement of the case. Settlement efforts alone, without more, are not sufficient to assert jurisdiction over an individual or entity. Nationwide Mutual Insurance Co., 91 F.3d at 796. The plaintiffs also argue that the Hofmeister children participated in the scheme of fraudulent transfers from the Hofmeisters and the Hofmeister Family Trusts, and therefore they conducted business in this state. Of the assets at issue a Florida condominium, a controlling interest in a Georgia limited liability company, and controlling interest in a Delaware corporation authorized to conduct business in Michigan only the latter potentially has some relation to Michigan. The record is not clear whether any of the children (as opposed to their respective trusts) in fact received any interest from the Delaware corporation (the plaintiffs simply pleaded the transfer to one, some or all supplementary defendants ). But in any event, transfer of stock in itself does not confer personal jurisdiction over the owner of that stock, Schwartz v. Elec. Data Sys., Inc., 913 F.2d 279, 283 (6th Cir. 1990), nor would the receipt of fraudulently transferred Michigan assets alone suffice to establish jurisdiction. FDIC v. British-Am. Ins. Co., 828 F.2d 1439, 1444 (9th Cir. 1987) (finding no personal jurisdiction over a Fiji bank in California where the bank became a recipient of a fraudulent conveyance from a California bank and where the defendant s agent picked up funds in California and used national bank located in California to wire funds to the defendant). Moreover, the plaintiffs have pointed to no act of business on the part of the Hofmeister children that actually occurred in Michigan. The plaintiffs also rely on the tortious-injury-in-the-state section of the long-arm statute as a ground for asserting jurisdiction over the Hofmeister children. Certainly, fraud is a tort within the meaning of the statute. Hadad v. Lewis, 382 F. Supp. 1365, 1369 (E.D. Mich. 1974). 11

12 However, when asserting personal jurisdiction stemming from a single act, the plaintiffs also must show that the defendants purposefully avail[ed themselves] of the privilege of acting in the forum state or causing a consequence in the forum state, the cause of action must arise from the defendant[s ] activities there, and the acts of the defendant[s] or consequences caused by the defendant[s] must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable. S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968). As to the first of these requirements, the plaintiffs cite Air Products & Controls, Inc. v. Safetech International, Inc., 503 F.3d 544 (6th Cir. 2007), where the court discussed the effects test set forth by the Supreme Court in Calder v. Jones, 465 U.S. 783 (1984). In Air Products, the court acknowledged that [t]he Sixth Circuit, as well as other circuits, have narrowed the application of the Calder effects test, such that the mere allegation of intentional tortious conduct which has injured a forum resident does not, by itself, always satisfy the purposeful availment prong. Air Products, 503 F.3d at 552 (citing Scotts Co. v. Aventis S.A., 145 F. App x 109, 113 n.1 (6th Cir. 2005) ( [W]e have applied Calder narrowly by evaluating whether a defendant s contacts with the forum may be enhanced if the defendant expressly aimed its tortious conduct at the forum and plaintiff's forum state was the focus of the activities of the defendant out of which the suit arises. ); Reynolds v. Int l Amateur Athletic Fed., 23 F.3d 1110, 1120 (6th Cir. 1994) (distinguishing Calder and making a particularized inquiry into the relations and dealings between the parties to find that an allegedly defamatory article did not establish sufficient minimum contacts); and Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1079 (10th Cir. 1995) ( Our review of these post-calder decisions indicates that the mere allegation 12

13 that an out-of-state defendant has tortiously interfered with contractual rights or has committed other business torts that have allegedly injured a forum resident does not necessarily establish that the defendant possesses the constitutionally required minimum contacts. )). Nonetheless, the court found personal jurisdiction over the defendant corporation and its owner, who had transferred assets from the corporation to avoid paying the plaintiff s judgment against those very defendants. The court reasoned that the defendants knew of the judgment the plaintiff had against them, the defendants systematically dealt with the plaintiff at its place of business in the forum state, and therefore they knew that the focal point of its actions and the brunt of the harm would be in the forum state. Id. at 553. Although that case supports the imposition of jurisdiction over the Hofmeisters and perhaps the Family Trusts, it does not support personal jurisdiction over the Hofmeister children in this case. To establish purposeful availment under the Calder effects test in this district, the plaintiffs must demonstrate that: (a) the brunt of the injury was felt in Michigan; (b) the defendants participation in the fraudulent conveyance scheme was intentional or deliberate; and (c) the defendants acts were expressly aimed at the State of Michigan. Ford Motor Co. v. Great Domains, Inc., 141 F. Supp. 2d 763, 774 (E.D. Mich. 2001) (noting the split of opinion about the degree of focus on the forum state that is necessary to satisfy the expressly aimed prong of the Calder analysis and stating that the majority of courts... noting that a plaintiff always feels the effects of a legal injury in his home forum, have concluded that Calder should be applied with caution). Although the Hofmeister children plainly acknowledged the settlement in the last supplementary proceeding, the plaintiffs fail to allege in this case, and it does not otherwise follow from the facts, that the Hofmeister children knowingly and 13

14 deliberately participated in any fraudulent conveyances, or that their actions in accepting the transfers were expressly aimed at the State of Michigan. The complaint is silent as to the children s intent in accepting any conveyances and as to the extent of their knowledge about their parents dealings on the subject of the consent judgment. The only allegations of intentional misdeeds are directed toward George and Kay Hofmeister and the Hofmeister Family Trusts. The absence of allegations of actual fraud by the Hofmeister children does not suggest a defect in the plaintiffs cause of action, since intent to defraud is sometimes not an element of a fraudulent transaction claim. Hudson v. Maher, 55 Mich. App. 90, 92, 222 N.W. 2d 47, 48 (1974) ( The actual intent of one who transfers assets to others without a fair consideration is unimportant where it leaves the transferor insolvent. ); Mich. Comp. Laws (defining a fraudulent transfer either with respect to intent to defraud or with respect to leaving the entity insolvent). Indeed, the plaintiffs appear to focus their allegations on the claim of constructive rather than actual fraud, emphasizing that the transfers left the entities insolvent. Nonetheless, the absence of that allegation undermines the plaintiff s argument that the non-resident Hofmeister children who have not been to Michigan or owned property here should be haled into a jurisdiction solely as a result of random, fortuitous' or attenuated contacts. LAK, Inc. v. Deer Creek Enters., 885 F.2d 1293, 1300 (6th Cir. 1989) (quoting Burger King, Inc., 471 U.S. at 474). The Court concludes, therefore, that the plaintiffs have not established personal jurisdiction over defendants Megan G. Hofmeister, Scott R. Hofmeister, or Jamie S. Hofmeister. III. 14

15 The defendants also move to dismiss on the basis of the failure to join indispensable parties, referring to the Hofmeister children, who are beyond the personal jurisdiction of the Court. The defendants also request in the alternative that the case be dismissed for improper venue or that venue be transferred. The Court believes the latter request to be a better option. Venue in this district as to the remaining defendants is proper because a substantial part of the events giving rise to the claim arose. 28 U.S.C. 1391(a)(2). Since Defendant is not a Michigan citizen or resident, Defendant must show the following to establish that venue is improper in the Eastern District of Michigan: (1) no substantial part of the events giving rise to this claim occurred in this district and (2) no substantial part of the property that is the subject of the action is located in the district. IFL Group Inc. v. World Wide Flight Servs., Inc., 306 F. Supp. 2d 709, 711 (E.D. Mich. 2004). That the defendants cannot do. Like the previous action in the District, the present case represents a continuation of the Limbrights efforts to collect on their Kentucky (and now Michigan) judgment. The event that gave rise to the present claim is, among other things, the entry of the consent judgment in this District, which in turn entitled the plaintiffs to collection. Because the triggering event for collection efforts occurred here, venue in this District is proper at least as to George and Kay Hofmeister. Bay County Democratic Party v. Land, 340 F. Supp. 2d 802, (E.D. Mich. 2004) ( To establish a substantial connection to the claim, it is generally sufficient to demonstrate that injury or loss alleged in the lawsuit occurred in the chosen venue. ). And since venue was proper as to some of the defendants, it was proper as to all of them. 28 U.S.C. 1406(d) ( If a civil action has been brought in a judicial district that is a proper venue with respect to at least one claim asserted against each defendant, that district is a proper venue for the entire civil action, subject to the 15

16 discretion of the district court, in the interest of justice, upon timely and sufficient objection, to dismiss or to sever and transfer any claim as to which venue would be improper if sued upon alone. ). Nonetheless, under 28 U.S.C. 1404, the Court may transfer venue to another district where it might have been brought if it is necessary for the convenience of the parties and witnesses or the interests of justice. 28 U.S.C. 1404(a). The burden is on the moving party to establish the need for a change of forum. Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215 (2d Cir. 1978), abrogated on other grounds by Pirone v. MacMillan, Inc., 894 F.2d 579 (2d Cir. 1990). Unless the balance is strongly in favor of the defendants, the plaintiff's choice of forum should rarely be disturbed. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). Courts have broad discretion to transfer an action pursuant to section 1404 to avoid unnecessary delay and to protect parties, witnesses, and the public from undue expenses and inconvenience. See generally Van Dusen v. Barrack, 376 U.S. 612 (1964); Norwood v. Kirkpatrick, 349 U.S. 29 (1955). The Supreme Court instructs that Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen, 376 U.S. at 622). Courts consider the following factors when ruling on a motion to transfer under 1404(a): (1) the convenience of the parties; (2) the convenience of the witnesses; (3) the relative ease of access to sources of proof; (4) the availability of process to compel attendance of unwilling witnesses; (5) the cost of obtaining unwilling witnesses; (6) the practical problems associated with trying the case most expeditiously and inexpensively; and (7) the interest of justice. 16

17 Grand Kensington, LLC v. Burger King Corp., 81 F. Supp. 2d 834, 836 (E.D. Mich. 2000); Helder v. Hitachi Power Tools, USA Ltd., 764 F. Supp. 93, 96 (E.D. Mich. 1991); accord Moses v. Bus. Card Express, Inc., 929 F.2d 1131, 1137 (6th Cir. 1991) (holding that a court should consider the private interests of the parties, including their convenience and the convenience of potential witnesses, as well as other public-interest concerns, such as systemic integrity and fairness, which come under the rubric of interests of justice. ) (quoting Stewart Organization, Inc., 487 U.S. at 30). After considering the relevant factors, the Court believes that the proper exercise of discretion calls for a transfer of the action to the United States District Court for the Eastern District of Kentucky. The thrust of the present lawsuit is directed at the Hofmeister children and the trust instruments they have used to protect the assets that formerly were held by the Family Trusts. The Family Trusts are necessary parties to the case, but so are the children; otherwise, the plaintiffs would not be able to obtain complete relief. The defendants, who are the main witnesses, all are amenable to process in Kentucky, which also appears to be the location of the main sources of proof. It certainly is more expeditious to adjudicate the present matter in a forum where all defendants can be joined, and, the Court believes, the interests of justice are best served when all the proper parties are before the Court. IV. The Court finds that defendants Megan G. Hofmeister, Scott R. Hofmeister, or Jamie S. Hofmeister do not have sufficient contacts with this District to permit the Court to exercise personal jurisdiction over them. The Court also finds that although venue is proper in this 17

18 District as to the remaining defendants, the interests of justice require transfer of the action to the Eastern District of Kentucky. Accordingly, it is ORDERED that the defendants motion to dismiss for lack of personal jurisdiction or for failure to join an indispensable party, improper venue, or failure to plead fraud with particularity, or alternatively to transfer venue to the Eastern District of Kentucky or for an order compelling particularized averments with respect to the plaintiffs fraudulent conveyance claims [dkt #12] is GRANTED IN PART AND DENIED IN PART. It is further ORDERED that the complaint is DISMISSED WITHOUT PREJUDICE as to defendants Megan G. Hofmeister, Scott R. Hofmeister, or Jamie S. Hofmeister only. It is further ORDERED that the Clerk of the Court shall TRANSFER this case to the Northern Division of the United States District Court for the Eastern District of Kentucky. It is further ORDERED that the defendants motion to dismiss is DENIED in all other respects. Dated: March 31, 2009 s/david M. Lawson DAVID M. LAWSON United States District Judge 18