West Bend Insurance Company v. United States of America Chess Federation

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

WEST BEND INSURANCE COMPANY,

f/ik/a WEST BEND MUTUAL INSURANCE

COMPANY,

Plaintiff,

Civil Action No. 24-11445 (MAS) (TJB)

° MEMORANDUM OPINION

UNITED STATES OF AMERICA CHESS

FEDERATION, ef al.,

Defendants.

SHIPP, District Judge

This matter comes before the Court on Defendants United States of America Chess

Federation (“US Chess”) and Randy Bauer’s (“Bauer”) (collectively the “Moving Defendants”)

Motion to Dismiss or, alternatively, to ‘Transfer Venue (“Motion”), (ECF No. 12.) Plaintiff West

Bend Insurance Company, f/k/a West Bend Mutual Insurance Company (“West Bend”) opposed

(ECF No. 13), Defendant Jennifer Shahade (“Shahade”) filed correspondence in support of the

opposition (ECF No. 14), and the Moving Defendants replied (ECF No. 15). The Court has

carefully considered the parties’ submissions and decides the matter without oral argument under

Local Civil Rule 78.1. For the reasons outlined below, the Court grants the Moving Defendants’

Motion to Transfer Venue to the United States District Court for the Eastern District of Missouri.

I. BACKGROUND

In May 2019, West Bend began to provide US Chess with employment practices liability

insurance policies, and in May 2020, began to provide US Chess with not-for-profit organization

directors, officers, and trustees liability insurance policies. (Defs.’ Moving Br. 1-2, ECF No. 12;

Policies, ECF Nos. 1-1 to 1-8.) West Bend continued to provide coverage to US Chess under the

two types of policies (collectively the “Policies”) through 2025. (Compl. 9, 17, ECF No. 1.)

In June 2022, US Chess received an e-mail message from Shahade, a US Chess employee

at the tume. (Compl. ff 27, 46; State Ct. Compl. {J 2, 78, ECF No. 1-9; Bartlett Decl. $9 9, 11-12,

ECF No, 12-4.) In the e-mail message, Shahade alleged that Alejandro Ramirez (“Ramirez”), a

chess competitor, physically and sexually assaulted her in 2011 and 2014. (State Ct. Compl. {J 2,

53, 75.) Thereafter, US Chess initiated an investigation against Ramirez and sanctioned him.

(Bartlett Decl. 13-14.)

From February into March 2024, during the policy period of January 1, 2024 to January 1,

2025,' Shahade’s counsel sent US Chess a “litigation hold letter’ along with additional

correspondence threatening legal action against both US Chess and Bauer, a “Member at Large”

of the US Chess’ Executive Board. (Bartlett Decl. 18, 19; Defs.’ Moving Br. 1.) US Chess

“immediately” forwarded such documentation and made a claim to West Bend. (Bartlett Decl.

16, 18, 19; Defs.” Moving Br. 4.) “Before February 2024, US Chess was not aware that

[Shahade] intended to assert legal claims against US Chess or [Bauer].” (Bartlett Decl. 17.)

' For the Policies during the January 1, 2024 to January 1, 2025 period, Charles L. Crane Agency

Company of Saint Louis, Missouri was the brokerage agency and the Policies were modified under

Missouri Law. (2024-2025 Employment Liability Pol’y, ECF No. 1-4; 2024-2025 D&O Pol’y,

ECF No, 1-8.)

After US Chess forwarded the documentation and made the claim to West Bend, in May

2024, West Bend filed a declaratory judgment action in the United States District Court for the

Middle District of Tennessee “seeking a determination that West Bend did not have a duty to

defend or indemnify US Chess or Bauer against a pre-suit ‘claim’ made by [Shahade].” (Cert. in

Support of Opp’n J 4, ECF No. 13-1; M.D. Tenn. Compl., ECF No. 13-1 Ex. B.) Thereafter, US

Chess filed a motion to dismiss the Middle District of Tennessee case based on improper venue,

or, alternatively, to transfer the case to the Eastern District of Missouri. (M.D. Tenn. Mot. to

Dismiss, ECF No, [3-1 Ex. C.)

In July 2024, Shahade filed a lawsuit in New Jersey state court (“Underlying Action”)

against: (1) Peter Tamburro, a journalist and the New Jersey Chess Federation President; (2) US

Chess; and (3) Bauer for retaliation, gender bias and discrimination, intentional and/or grossly

negligent infliction of emotional distress, defamation and business libel through a New Jersey

publication, false light/invasion of privacy, and conspiracy to violate the New Jersey Civil

Racketeer Influenced and Corrupt Organizations Act (“NJ RICO”)? based on the ways in which

the defendants handled reported assaults and other misconduct that took place primarily in New

Jersey. (See generally State Ct. Compl.; Defs.’ Moving Br. 1, 3; Compl. ff 34-44.)3

In November 2024, the Middle District of Tennessee transferred the case to the Eastern

District of Missouri. (M.D. Tenn. Ord., ECF No. 12-5 (stating that “[t]he Court agrees that the

Eastern District of Missouri has ‘some’ relevant connection to this lawsuit, [] which is certainly

more than the Middle District of Tennessee that has no connection to this lawsuit.”) (emphasis in

* This Court later dismissed the NJ RICO claim. (Op., Case 24-7909 ECF No. 38.)

3 US Chess and Bauer removed the Underlying Action to this Court. (See Compl. J 34; Notice of

Removal for Underlying Action, Case 24-7909 ECF No. 1.)

original).) Thereafter, in December 2024, West Bend voluntarily dismissed the Eastern District of

Missouri action without prejudice because “after having the benefit of seeing what was actually

alleged in the Underlying Action in New Jersey, West Bend realized that New Jersey was the only

venue that could afford complete relief.” (Pl.’s Opp’n Br. 5, ECF No. 13.) Further, “West Bend

dismissed the [Eastern District of Missouri action] with the intention of filing the current

declaratory action to include Tamburro, who is a citizen of New Jersey[,] and Shahade, whose

Underlying Action is pending in this venue.” (dd. at 6.)

Later in December 2024, West Bend filed the instant declaratory judgment action against:

(1) US Chess; (2) Bauer; (3) Tamburro; and (4) Shahade, the plaintiff in the Underlying Action,

seeking a judicial declaration that it does not have a duty to defend or indemnify US Chess, Bauer,

or Tamburro in connection with Shahade’s allegations of sexual harassment and abuse outlined in

her e-mail message. (See generally Compl.)* Specifically, West Bend seeks a declaration that there

is no insurance coverage available, under the Policies issued for the May 31, 2022 to August 30,

2022 period, based on Shahade’s e-mail message to US Chess notifying it of her allegations. (/d.

q 46.) In support of its position, West Bend outlines specific arguments all based on policy

interpretation. (See id. § 48.)

The Moving Defendants moved to dismiss the instant action pursuant to Federal Rule of

Civil Procedure 12(b)(3),° or in the alternative, to transfer the action to the Eastern District of

* Other than Tamburro (Compl. { 4), no party resides in New Jersey. US Chess is incorporated in

Illinois and moved its principal place of business from Tennessee to Missouri in July 2022 (id. § 2;

Bartlett Decl. {§ 6-7); Bauer is an lowa resident (Compl. { 3); Shahade is a Pennsylvania resident

(id. § 5); and West Bend is both organized and has its principal place of business in Wisconsin (éd.

{ 1).

> All references hereafter to “Rule” or “Rules” are in reference to the Federal Rules of Civil

Procedure.

Missouri. (See generally Defs.’ Moving Br.) West Bend opposed the Motion, and Shahade filed

correspondence in support of the opposition, both parties arguing that the District of New Jersey

_ is the proper venue. (PI.’s Opp’n Br.; Shahade Letter, ECF No. 14.) Moving Defendants replied to

the opposition. (ECF No. 15.) The Court now considers the instant Motion.

Il. LEGAL STANDARD

Under the federal venue statute, venue is proper in the following districts:

(1) a judicial district in which any defendant resides, if all

defendants are residents of the State in which the district is located;

(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

property that is the subject of the action ts situated; or

(3) if there is no district in which an action may otherwise be brought

as provided in this section, any judicial district in which any

defendant is subject to the court’s personal jurisdiction with respect

to such action.

28 U.S.C. § 1391(b).

Litigants unhappy with the venue can move to transfer venue. Under either 28 U.S.C.

§§ 1404(a) or 1406(a), a federal district court may transfer a civil action to a different venue, The

former provides that “a district court may transfer any civil action to any other district or division

where it might have been brought” considering “the convenience of parties and witnesses” and

“the interest of justice.” 28 U.S.C. § 1404(a). The latter provides that a district court with improper

venue “shall dismiss, or if it be in the interest of justice, transfer such case to any district or division

in which it could have been brought.” 28 U.S.C. § 1406(a). “Section 1404(a) provides for the

transfer of a case where both the original and the requested venue are proper. Section 1406, on the

other hand, applies where the original venue is improper and provides for either transfer or

dismissal of the case.” Jumara v. State Farm Ins. Co., 55 F.3d 873, 878 (3d Cir. 1995); see also

Lafferty v. St. Riel, 495 F.3d 72, 77 (3d Cir, 2007) (“Section 1406(a) comes into play where

plaintiffs file suit in an improper forum.”). The burden of establishing the need for transfer rests

with the party seeking the transfer. Jumara, 55 F.3d at 879 (citations omitted).

Ill. DISCUSSION

After careful review, this Court finds that the District of New Jersey is an improper venue,

and that the Eastern District of Missouri is a proper venue. Transfer, thus, is appropriate.

A. The District of New Jersey Is an Improper Venue

West Bend avers that “[vJenue is proper pursuant to 28 U.S.C. § 1391(b) because a

substantial part of the events or omissions giving rise to this claim occurred, or a substantial part

of the action is situated herein.” (Compl. 8; Pl.’s Opp’n Br. 7.) West Bend further contends that

the Moving Defendants cannot argue that a substantial part of the events did not take place in the

District of New Jersey when they removed the Underlying Action to this Court. (PI.’s Opp’n Br.

7-8.) The Court disagrees.

The Court first analyzes whether West Bend’s choice of venue is proper. To determine the

propriety of West Bend’s venue choice, the Court analyzes the three categories in the federal venue

statute, 28 U.S.C. § 1391(b). Under that analysis, “[i]f the case falls into at least one of the Section

1391(b) categories, then venue is proper... . If it does not, then venue is improper and the case

may be transferred.” Monello Landscape Indus., L.L.C. vy, Hatch Landscape & Design, Inc.,

No. 16-5803, 2018 WL 2134058, at *3 (D.N.J. May 9, 2018).

Here, none of the three categories points to the District of New Jersey. First, for venue to

be proper under Section 1391(b)(1), all the defendants would have to reside in New Jersey. Only

Tamburro, however, is a New Jersey resident. (See Compl. {{ 1-5.) As such, West Bend’s choice

of venue is improper under Section 1391(b)(1).

Second, under Section 1391(b)(2), the Court finds that a “substantial part of the events”

giving rise to West Bend’s claim occurred outside the District of New Jersey. See 28 U.S.C.

§ 1391(b)(2). To determine whether Section 1391(b)(2) applies, courts “look at the nature of the

dispute and ‘the location of those events .. . giving rise to the claim[,]’” as well as “the conduct

that allegedly caused the damages at issue.” Howmedica Osteonics Corp. v. DJO Glob., Inc.,

No, 16-2330, 2017 WL 1136671, at *4 (D.N.J. Mar. 27, 2017) (first quoting Bockman v, First Am.

Mktg. Corp., 459 F. App’x 157, 161 (3d Cir. 2012)). Here, the dispute at issue concerns

interpretation of the Policies. (See generally Compl.)

“T]he issue of interpretation of the insurance [Plolicies [in a coverage dispute] ‘arises

from the contacts relevant to the formation of the insurance agreement,’” including where the

Policies were executed, where the parties to the coverage dispute are located, where the policy

broker is located, where the Policies are negotiated, where the insured pays for the Policies, and

where the Policies are issued. Ohio Sec. Ins. Co. v. Premium Food Grp., Inc., No. 21-15690, 2022

WL 2358425, at *5 (D.N.J. June 30, 2022) (quoting Northland Ins. Co. v. Berkebile Oil Co.,

No. 03-11, 2003 WL 22995127, at *5 (W.D. Va. Dec. 12, 2003)) (analyzing facts that warranted

transfer in a New Jersey declaratory judgment action arising out of a coverage dispute in

connection with an underlying New Jersey state court action); Harleysville Ins. Co. of N.J. v. Clark,

No. 05-5566, 2006 WL 2135834, at *6 (D.N.J. July 27, 2006) (“Venue is proper here for this

declaratory judgment action because a substantial part of the events giving rise to the insurance

coverage dispute—including the negotiation, payment and issuance of the policy to the New Jersey

insured—occurred in New Jersey.”).

Courts look less to the nature of an underlying action to determine if venue is proper for a

coverage dispute, especially if the claims and parties between the two cases are not substantially

similar, See, e.g., Premium Food Grp., Inc,, 2022 WL 2358425, at *7 (demonstrating that the

existence of an underlying New Jersey state court action does not mean that New Jersey is a proper

venue when analyzing personal jurisdiction in a declaratory judgment action arising out of an

insurance policy dispute); Selective Ins. Co. of Se. v. Food Mktg. Merch., Inc., No. 13-193, 2013

WL 2149686, at *5 (D.N.J. May 16, 2013) (demonstrating that the existence of an underlying New

York federal action does not mean New Jersey is an improper venue in a declaratory judgment

action arising out of an insurance policy dispute); Kelly v. Maxum Specialty Ins. Grp., 868 F.3d

274, 285-87 (3d Cir. 2017) (articulating that the underlying state court action that seeks to

determine a defendant’s liability for an alleged harm and the federal action that seeks only a

declaratory judgment on an insurer’s obligation to defend and indemnify the defendant are not

parallel because the parties and the claims are not “substantially similar”).°

Here, West Bend brings this action “to determine the rights, obligations[,] and liability that

exist between [defendants] under the Policies[.]” (Compl. § 50.) This claim is distinct from the

Underlying Action, in which West Bend is not a party, involving retaliation, bias and

discrimination, negligent infliction of emotional distress, defamation and libel, and false

light/invasion of privacy. (/d. {J 46-48.) This Court finds that the events giving rise to West Bend’s

claim in this lawsuit, not the Underlying Action, occurred outside the District of New Jersey.

© West Bend cites only persuasive authority from Pennsylvania, Alabama, Illinois, and

Massachusetts, to the contrary. (See Pl.’s Opp’n Br. 9-11.) This Court, however, recognizes other

persuasive authority in support of the Court’s assessment. See, e.g., Res. Bank v. Progressive Cas.

Ins. Co., No. 06-1699, 2007 WL 136320, at *4 (E.D. Pa. Jan. 11, 2007) (“A number of courts have

expressed the view that ‘the pivotal issue in [a] declaratory judgment action is the interpretation

of an insurance policy between the [parties]’ and therefore the place of negotiation and execution

of the policy is the locus of operative facts for purposes of venue transfer.”) (citation omitted and

alterations in original),

To name a few: (1) West Bend did not execute the Policies in New Jersey (éd. J 1); (2) none

of the parties are from New Jersey except Tamburro (id. {f 1-5); (3) New Jersey-based agencies

did not procure the Policies (2024-2025 Employment Liability Pol’y; 2024-2025 D&O Pol’y);

(4) West Bend does not allege it negotiated the Policies in New Jersey; (5) West Bend does not

allege US Chess pays for the Policies in New Jersey; and (6) West Bend did not issue the Policies

in New Jersey. (Defs.’ Moving Br. 5; Defs.’ Reply Br. 2). Any events that involve New Jersey

relate to the Underlying Action—not this one.’ As such, West Bend’s venue choice under Section

1391(b)(2) is improper.

Finally, the Court need not consider the third prong of the venue statute because there is a

“district in which [this] action may otherwise be brought”: the Eastern District of Missouri. (M.D.

Tenn. Ord.); 28 U.S.C. § 1391(b)(3); Konica Minolta, Inc. v. ICR Co., No, 15-1446, 2015 WL

9308252, at *5 (D.N.J. Dec. 22, 2015) (“[Section] 1391(b)(3) is moot in this case, as the action

may be brought [elsewhere].”). In sum, West Bend’s choice of the District of New Jersey is

improper under any of the Section 1391(b) categories. This Court next turns to whether this case

should be transferred.

B. The Eastern District of Missouri Is a Proper Venue

The only remaining question is whether the Court should dismiss this case for want of

proper venue or transfer the case to the Eastern District of Missouri. Under 28 U.S.C. § 1406(a),

“(t]he district court of a district in which is filed a case laying venue in the wrong division or

district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division

7 As previously noted, West Bend contends that the Moving Defendants cannot argue that a

substantial part of the events did not take place in the District of New Jersey in this case because

they removed the Underlying Action to this Court. (PI.’s Opp’n Br. 7-8.) Because this action and

the Underlying Action are distinct, this Court does not find issues with the Moving Defendants’

removal of the Underlying Action.

in which it could have been brought.” 28 U.S.C. § 1406(a). District courts have broad discretion

to decide whether to dismiss or transfer. See Decker y. Dyson, 165 F. App’x 951, 954 n.3 (3d Cir.

2006) (citation omitted). Notably, though, courts have cautioned that dismissal is a “harsh remedy”

and that “transfer of venue to another district court in which the action could originally have been

brought, is the preferred remedy.” See NCR Credit Corp. v. Ye Seekers Horizon, Inc., \7 ¥. Supp.

2d 317, 319 (D.N.J. 1998) (citing Goldlawr, Inc. v. Heiman, 369 U.S, 463, 466 (1962)), “A Court

transferring venue under [Section] 1406 must simply determine a venue in which the action

originally could have been brought that serves the interest of justice.” de Rojas v. Trans States

Airlines, Inc., 204 F.R.D. 265, 269 (D.N.J. 2001).

Here, the Court sides with the “preferred remedy” and transfers this case to the Eastern

District of Missouri—the venue for this action before West Bend voluntarily dismissed the matter

without prejudice. (Pl.’s Opp’n Br. 5.) West Bend could have brought this action in the Eastern

District of Missouri given that a substantial part of the events took place there. First, the Policies’

named insured, US Chess, along with its records and most of its employees, is in Missouri.

(2024-2025 Employment Liability Pol’y; 2024-2025 D&O Pol’y; Compl. [ 2; Bartlett Decl. { 7;

Defs.’ Moving Br. 8); Premium Food Grp., Inc., 2022 WL 2358425, at *6 (referencing in part that

a New York corporation purchased the insurance policies when transferring the case to New York).

Second, Charles L. Crane Agency Company, the broker agency for the Policies covering US Chess’

claim to West Bend, is located in Missouri. (2024-2025 Employment Liability Pol’y; 2024-2025

D&O Pol’y); Premium Food Grp., Inc., 2022 WL 2358425, at *6 (referencing in part the use of a

New York insurance broker when transferring the case to New York), Third, West Bend issued the

Policies covering US Chess’ claim to US Chess in Missouri. (Defs.’ Moving Br. 5); Clark, 2006

WL 2135834, at *6 (referencing in part an insurer issued a policy in New Jersey in support of

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finding venue is proper in New Jersey). Moreover, the Policies indicate that they should be

interpreted under Missouri law. (2024-2025 Employment Liability Pol’y; 2024-2025 D&O Pol’y.)

In sum, the Eastern District of Missouri is a proper venue, while the District of New Jersey

is an improper venue. Transfer, thus, is appropriate.®

IV. CONCLUSION

For the reasons set forth above, the Court denies the Motion to Dismiss but exercises its

discretion to grant the Motion to Transfer the matter to the Eastern District of Missouri. The Court

will issue an Order consistent with this Memorandum Opinion.

Dated: September 15, 2025

MICHAEL A. di

UNITED STATES DISTRICT JUDGE

To the extent West Bend contends that the District of New Jersey is the only court with personal

jurisdiction over it (See PI.’s Opp’n Br. 6-7), the Court disagrees. “The basis for exercising personal

jurisdiction over a non-resident party in Missouri is Missouri’s long-arm statute.” Myers v. Casino

Queen, Inc., 689 F.3d 904, 910 (8th Cir. 2012). Missouri’s long-arm statute authorizes jurisdiction

over defendants as to any cause of action arising from “the making of any contract within

[Missouri]” or “the contracting to insure any person, property or risk located within [Missouri] at

the time of contracting.” Mo. Rev. Stat. § 506.500.1(2), (5) (2025), Here, the gravamen of the

Complaint is a dispute over all defendants’ rights under a contract—the Policies issued in Missouri.

(See Compl. § 49 (“An actual controversy exists between West Bend, US Chess, Bauer, Tamburro,

and Shahade concerning their respective rights under the Policies[.]”); Defs.’ Moving Br. 5.) As

such, the Court sees no reason to find that Missouri lacks personal jurisdiction over the defendants.

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