Camelot Entertainment Inc et al v. Incentive Capital LLC et al
Filing
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ORDER GRANTING MOTION TO DISMISS by Judge Dean D. Pregerson: Presently before the court is Defendant's Motion to Dismiss 3 . This action is inextricably bound up with the Security Agreements. Under the terms of the Security Agreements' man datory forum selection clauses, "[a]ny legal action or proceeding with respect to" the SecurityAgreements, such as this action, must be brought in Utah. Defendant's Motion is GRANTED. (Please see order for details) ( MD JS-6. Case Terminated ) (kpa)
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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CAMELOT ENTERTAINMENT INC.;
CAMELOT FILM GROUP, INC.;
CAMELOT DISTRIBUTION GROUP
INC.; ROBERT P. ATWELL,
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Plaintiffs,
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v.
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INCENTIVE CAPITAL LLC;,
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Defendant.
___________________________
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Case No. CV 11-02323 DDP (JEMx)
ORDER GRANTING MOTION TO DISMISS
[Motion filed on 3/26/11]
Presently before the court is Defendant’s Motion to Dismiss.
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Having considered the submissions of the parties, the court grants
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the motion and adopts the following order.
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I.
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Background
Plaintiff Camelot Entertainment, Inc. is a Delaware
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corporation.
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and Camelot Distribution Group, Inc. are Nevada corporations.
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(Compl. ¶¶ 2-3.)
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distribute movies and television shows.
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a citizen of Utah, provides loan financing in the entertainment
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industry.
(Complaint ¶ 1.)
Plaintiffs Camelot Film Group, Inc.
Plaintiffs (collectively, “Camelot”) produce and
(Compl. ¶ 12; Motion at 4.)
(Compl. ¶ 11.)
Defendant,
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In April 2010, Camelot obtained a $650,000 loan from Defendant
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and entered into a series of related agreements.1
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Escrow Agreement, required Camelot to deposit $650,000 worth of
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stock into an escrow account.
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it shall terminate upon payoff of the loan or upon discharge of the
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stock to Defendant in case of default.
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Escrow Agreement also explicitly refers to “loan documents” between
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Camelot and Defendant.
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The first, an
The Escrow Agreement provides that
(Exhbit I at 1-2.)
The
(Exhibit I at 1.)
A separate Promissory Note (“Note”) states various obligations
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and payment terms.
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submit “to the non-exclusive jurisdiction of any Utah state or
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federal court sitting in Salt Lake City, Utah, over any action or
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proceeding arising out of or relating to this Note.”
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5.)
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jurisdiction provisions identical to those in the Escrow Agreement.
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(Exhibits E-G.)
The Note also states that Camelot agrees to
(Exhibit B at
Several other agreements contain choice of law and
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The parties also entered into a Security Agreement (“CDG
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Agreement”), under which Defendants were granted, as collateral for
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the loan, a security interest in a catalog of films owned and
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distributed by Camelot. (Exhibit C at 1; Schedule 1 to Exhibit C.)
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The CDG Agreement contains a Utah choice of law provision, and
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states that Camelot consents to the jurisdiction of Utah state and
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federal courts “with respect to disputes arising out of this
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Security Agreement.”
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states that “[a]ny legal action or proceeding with respect to this
(Exhibit C at 11.)
The CDG Agreement further
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Though the complaint lists the date of the agreement as
April 27, 2011, the relevant documents are all dated April 27,
2010. (Exhibits B-G to Motion.) All subsequent citations to
Exhibits refer to the Exhibits to Defendant’s Motion to Dismiss.
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Security Agreement must be brought before the federal or state
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courts located in the State of Utah,” and that “[Camelot]
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irrevocably waives any objection . . . to the laying of venue of
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any of the aforesaid actions arising out of or in connection with
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this Security Agreement brought in the aforesaid Utah Courts.”
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(Exhibit C at 11.)
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Agreement”) contains identical language.
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Camelot defaulted on the loan.
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A separate Security Agreement, the “CFG
(Exhibit D at 12-13.)
(Compl. ¶ 18; Exhibit J at 2.)
Camelot alleges that it attempted to tender more than $650,000 of
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stock to Defendant, in accordance with the Escrow agreement.
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(Compl. ¶ 19.)
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Foreclosure Sale on the film catalog, as set forth in the various
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Security Agreements.
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Defendant proceeded to notice and hold a
(Compl. ¶ 21.)
Camelot responded by filing suit against Defendant in Los
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Angeles County Superior Court.
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court.
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obligations to be performed by [Camelot].”
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complaint alleges six causes of action against Defendant based on
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Defendant’s breach of “the Note, Escrow Agreement and related
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documents.”
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ground that the CDG Agreement and CFG Agreement contain mandatory
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forum selection clauses requiring that this action be filed in
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Utah.
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II.
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Defendant then removed to this
The complaint alleges that Camelot performed “all the
(Compl. ¶ 22.)
(Compl. ¶ 21.)
The
Defendant now moves to dismiss on the
(Mot. at 11.)
Discussion
This court interprets forum selection clauses according to
Simonoff v. Expedia, Inc., 643 F.3d 1202, 1205 (9th
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federal law.
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Cir. 2011).
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language of the contract is considered first.
Unless circumstances dictate otherwise, the plain
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Id.
Here, there is
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no question that the CDG Agreement and CFG Agreement (hereinafter,
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the “Security Agreements”) contain a mandatory forum selection
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clause.
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proceeding with respect to this Security Agreement must be brought
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before the federal or state courts located in the State of Utah.”
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(Exhibit C at 11; Exhibit D at 13 (emphasis added)).
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is clear and unambiguous.
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The Security Agreements state “[a]ny legal action or
This language
Camelot does not contest the conclusion that the Security
Agreements contain mandatory forum selection language.
Instead,
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Camelot argues that the Security Agreements are irrelevant because
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the Complaint only seeks relief under the Note and the Escrow
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Agreement.
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selection, while the Note contains only non-mandatory, permissive
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language stating that Camelot agrees to submit “to the non-
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exclusive jurisdiction of any Utah state or federal court sitting
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in Salt Lake City, Utah, over any action or proceeding arising out
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of or relating to this Note.”
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The Escrow Agreement is silent on the issue of forum
(Exhibit B at 5.)
Though the Note and Escrow Agreement do not contain a
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mandatory forum selection clause, Camelot’s arguments nevertheless
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have no merit.
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Note reference other “loan documents.”
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H at 1).
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such “loan documents.”
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secured this Note with one or more security agreements of even date
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herewith.”).
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own complaint.
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the Escrow Agreement, Note, “and related documents.”
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22.)
As an initial matter, both the Escrow Agreement and
(Exhibit B at 1,3; Exhibit
There is no question that the Security Agreements are two
See, e.g. Exhibit B at 3 (“Borrower has
Furthermore, Camelot misstates the allegations of its
The Complaint alleges that Defendant has breached
(Compl. ¶
The Security Agreements, which do contain binding forum
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selection clauses, are clearly “related documents.”
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also seeks to resolve whether Defendant has any right to the film
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catalog.
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collateral stems from the Security Agreements.
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Complaint explicitly refers to the obligations set forth in the
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Security Agreements.
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bound up with the Security Agreements.
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Security Agreements’ mandatory forum selection clauses, “[a]ny
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legal action or proceeding with respect to” the Security
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Agreements, such as this action, must be brought in Utah.
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III. Conclusion
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(Compl. ¶¶ 25, 33.)
The Complaint
Defendant’s only right to that
(Compl. ¶ 25.)
Indeed, the
This action is inextricably
Under the terms of the
For the reasons stated above, Defendants’ Motion to Dismiss is
GRANTED.
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IT IS SO ORDERED.
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Dated: September 27, 2011
DEAN D. PREGERSON
United States District Judge
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