Sandy Spring Bank v. Advanced Systems Services, Inc. et al, No. 1:2009cv00023 - Document 16 (E.D. Va. 2009)
Court Description: MEMORANDUM ORDER denying 5 Motion to Dismiss. Signed by District Judge Gerald Bruce Lee on 3/30/2009. (rban, )
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Sandy Spring Bank v. Advanced Systems Services, Inc. et al Doc. 16 IN THE UNITED STATES EASTERN DISTRICT COURT DISTRICT ALEXANDRIA SANDY SPRING FOR THE OF VIRGINIA DIVISION BANK, Plaintiff, ADVANCED SYSTEM SERVICES, CORP., ) FUTURE BUSINESS CORP., ) and, Case ) v. SERVICES, JEAN AGBEY No. l:09CV23 (GBL) ) Defendants. ) MEMORANDUM ORDER THIS MATTER is System Services, ("FBS"), before Inc. and Jean Agbey's, venue. for This lack of case concerns and Business before in a is to Defendants Dismiss of Civil District the 12(b)(l) in a Promissory Note parties. The and whether this Court has claim and whether venue subject is issue forum selection clause and permissive improper of Virginia based between was or mandatory, matter proper in Eastern in the Plaintiff if permissive, jurisdiction the and over Promissory Note and Business Loan Agreement Defendants Corp. Plaintiff's dispute forum selection clause whether the Services, Procedure the parties' between Advanced jurisdiction and in the Eastern Loan Agreement the Court Motion Rules on Future Business subject matter jurisdiction and venue on the language Court ("ASSI"), Complaint under Federal 12(b)(3) the over the District of Dockets.Justia.com Virginia. The Court denies Defendants' Motion to because the Consent to Jurisdiction clause does exclusive in Maryland and jurisdiction permissive in forum selection the Eastern Maryland, the District three the defendants business, in reside, Eastern banking Maryland. Defendants, with their principal Virginia, Fairfax provided Note, a with and County, a its ASSI $200,000 Business loan Borrower any state On, Maryland of out of or regarding law any objection in an place of business ASSI The in corporations Fairfax County, June 5, executed and a Commercial submits court to to that of Maryland individual or around, Bank. suit[,] irrevocably waives and all who 2007, a the Security and to to the sitting action this the or the State proceeding Note. fullest Jurisdiction of in of arising Borrower extent Borrower may have permitted by now or in Bank Promissory Promissory Note Consent lives stating: federal any a are Virginia is to ASSI. irrevocably or FBS, is place contain identical Jurisdiction provisions citizen of principal ("Bank"), principal Loan Agreement, Loan Agreement a of Virginia, their of business Agreement with Sandy Spring Business is is proper of Virginia. Jean Agbey Virginia. Plaintiff citizens have Bank and places Defendant as venue a BACKGROUND Sandy Spring corporation or District I. Plaintiff, are not provide instead contains Therefore, of Virginia defendants either the clause. Dismiss hereafter have to the suit[,] or proceeding brought and action any claim that laying of venue any such proceeding brought in in an inconvenient forum. suit[,] shall any suit[,] such Final conclusive in and binding upon enforced to jurisdiction by suit upon any court service of process is in Additionally, action such such court or has been brought in any such in any such court Borrower and may Borrower is judgment subject that Borrower as otherwise permitted by law. the Promissory Note and Business Loan Agreement contain Governing Law provisions are such effected upon provided in this Note or as applicable which any judgment action or proceeding brought be be agreement court of in any stating that governed by Maryland not preempted by federal law. law to the The Commercial the loan and extent that it is Security Agreement states: With respect to procedural matters related to the perfection and enforcement of Lender's rights against the Collateral this Agreement will be governed by federal law applicable to Lender and to the extent not preempted by federal law the laws of the Commonwealth of Virginia. In all other respects this Agreement will be governed by federal law applicable to Lender and to the extent not preempted by federal law the laws of the State of Maryland without regard to its conflicts of law provisions. However if there ever is a question about whether any provision of this Agreement is valid or enforceable the provision that is questioned will be governed by whichever state or federal law would find this provision to be valid and enforceable. by the Note The loan transaction that and this Agreement is evidenced has been applied for considered approved and made and all necessary loan documents have been accepted by Lender in the State of Maryland. Furthermore, Commercial on June Guaranties 5, 2007, FBS and Agbey each under which executed they agreed to guarantee the "full and punctual payment and satisfaction of [ASSI] to [Sandy Spring Bank] discharge of all [ASSI's] default obligations under the on subsequently brought the On December 11, Promissory Note. this action against The lack of 2008, the Bank Defendants subject matter II. Bank Defendants, pursuant to the default provisions Note and Guaranties. alleging [Promissory] Defendants to inform them that ASSI was in on payment and Agbey, Indebtedness and the performance and Note and the Related Documents." sent a letter to of the ASSI, of the filed a Motion to FBS, Promissory Dismiss jurisdiction and improper venue. DISCUSSION A. Standard of Review Federal to move Rule of Civil for dismissal subject matter of considering a the 189 (1936)); A 12(b)(l) matter e.g., v. that lacks court Fed. R. Civ. federal v. v. motion to jurisdiction Bain, P. 515 F.2d dismiss may over the burden U.S. CMA Constr. Co., 1213, apart Inc., defendant is Corp., 743 298 on the U.S. of F.Supp. 231, 178, 1982). subject from the pleadings. 947 is (1995) (4th Cir. existence the In jurisdiction 737, 1219 attack the the case a 12(b)(1). subject matter Hays, 697 allows jurisdiction over General Motors Acceptance Adams White v. the motion to dismiss, See United States (citing McNutt 12(b)(l) action. 12(b)(1) plaintiff to prove proper. when Procedure 233 See (E.D.Va.1996); F.2d 884, 891 States, 50 F.2d at 891). Mortensen In 304 such a hear the case" is district court is then the existence of at issue. R. Civ. trial 12(b)(3). trial court of Adams, 12(b)(3), is 612 F.2d Ratino v. When the See 812, Med. court plaintiff needs Serv. does Procedure to 697 F.2d at 12(b)(3) a claim based on to dismiss Astellas a 1219. "No facts to will Va. Cir.1979), 718 dismiss Inc., overruled on 1260 a prima facie Fed. forum-selection 471 objects hold an evidentiary only make a defendant under 12(b)(3). F.3d to venue Chiropractors F.2d 891. improper venue. based on Pharma, defendant allows the burden of establishing of D.C., not evidence to determine F.2d at After (4th The 549 Bartholomew v. 816 891. claims." Mortensen, a plaintiff bears proper. at itself the Pharm., 2006). F.2d for Sucampo (4th Cir. 549 549 "very power to of disputed material should be treated as motions 550 (citing Mortensen, to the plaintiff's clauses v. 549 United from evaluating Motions Inc., and Loan Ass'n, court's Mortensen, attaches Rule of Civil for dismissal 1995) free to weigh the jurisdictional P. the and the existence Federal to move (4th Cir. jurisdiction. not preclude the Sav. see also Williams v. case, presumptive truthfulness merits of First Fed. (3d Cir.1977); F.3d 299, allegations, v. 544, under the venue Ass'n, Inc., other grounds by (4th Cir.1983). hearing, showing the of venue. Mitrano v. district Hawes, court proper in the 377 is F.3d then court 402, free 405 (4th to dismiss Cir.2004). the in which the case was The case if venue filed. Fed. is not R. Civ. P. 12(b) (3). B. Analysis i. The Forum Selection Clauses are Permissive because they lack The Court holds obligatory language. that the forum selection clause is permissive because it does not contain any language mandating jurisdiction in Maryland. Since the clause does not have any specific language excluding jurisdiction outside of Maryland, merely confers exclusive. Cir. one 2007) jurisdictions forum will not be elsewhere unless (quoting Imp. it and Distrib., v. contains & Inc., Several circuit courts require that whereas "permissive 492 F.3d 285, 290 (4th conferring jurisdiction in excluding jurisdiction specific Son, Wines 22 F.3d 51, language of & Spirits, 53 exclusion.") S.A. (2d Cir. v. Attiki 1994)). have analyzed the scope of mandatory and forum selection clauses, clauses Bajaj, interpreted as John Boutari permissive in Maryland without making it See IntraComm Inc., ("[A]n agreement holding that mandatory litigation be in a designated forum, forum selection jurisdiction in a designated forum, litigation elsewhere." it K & clauses authorize but do not prohibit V Scientific Co. v. BMW, 314 F.3d 494, 498 (10th Cir. Boiler & Mech., Inc., Orlando Holdings 1379, 1381 Consent to the to (11th Cir. are not or 314 is excluded F.3d obligatory In clause, any the clause will specified, enforced unless there parties' intent to make venue Express, Ltd. 1992)); 378, 386 is the some further see also Phillips mandatory because 2007) it (finding in See K & the contain non-Maryland be courts V Scientific enforced; GmbH, where indicating (quoting Paper 972 753, forum be only generally not be language to in the submits not F.2d Audio Active Ltd., the F.3d sitting does Ocwen specified with mandatory exclusive") v. 526 language court that clause will Pfankuch Maschinen (2d Cir. is 1997)); irrevocably federal venue Sterling LLC, the jurisdiction. jurisdiction is Cir. Trust, "[b]orrower or v. (10th Cir. case, suggesting ("[W]here language, v. Inc. not mandatory because thereby 499 321 this state from having at 318, Harvard Prop. 2008). Jurisdiction language, F.3d v. Jurisdiction of obligatory (quoting Excell, 106 Corp. State of Maryland" Co., 2002) the 757 494 (7th F.3d selection clause its language "are brought" the language "irrevocably is obligatory). Furthermore, jurisdiction" Defendants litigation, does intended and not for clearly indicate Maryland therefore the to clause be submits that the the to Bank and only forum should be the for construed as a permissive forum clause. In S&D Coffee Inc., Autowrappers, the court concluded that parties shall submit the jurisdiction did not indicate because, that to that although the there (M.D.N.C. term "shall" jurisdiction was 1997). does provides Additionally, the for permissive the jurisdiction language 995 the court in the clause F. Supp. jurisdiction in Maryland, is Defendants a in Orange County, it and if they are sued 526 F.3d at hybrid, the first portion of the clause was permissive because the suit was brought there, 610 upon both parties, forum selection clause was suit 607, forum selection clause See Ocwen Orlando Holdings Corp., did not need to bring a found a hybrid clause because while jurisdiction becomes mandatory upon (finding that the "both English courts" mandatory, not place mandatory limitations in Maryland. of exclusive. most appropriately categorized as it is GEI language England had exclusive needed to be more explicit stating that the v. Florida, in 1381 that a party but if the defendant had to submit to the jurisdiction). Finally, the Governing Law provision has little impact determining whether jurisdiction is because, generally, choice parties' intentions with Scientific Co., 314 of law clauses regard to F.3d at obligatory 501 in Maryland do not indicate jurisdiction. See K & ("[T]he parties' 8 in V choice of law provision (even plaintiff's assuming claims) that appears determining whether federal determine whether a Phillips, 4 94 selection clause that the that is lacks litigate under 28 this 1332(a). there district, places venue 1391(a)(l). Hence, Dismiss because and explicit the this this language since law forum clauses law provisions, finds that are should the phrase, language, the forum "borrower thereby in Maryland & and this Court § 1391 (a) (1) in controversy exceeds citizenship. is proper and to stating in have 9 § judicial their principal 28 U.S.C. Defendants' Jurisdiction that U.S.C. in this district. denies 28 $75,000, the Eastern District resides FBS judicial Court Consent in subject matter jurisdiction over Defendant Agbey in of exclusive § 1332(a) and Defendants ASSI of business choice and Venue are Proper in has weight of claim in Virginia. diversity of Furthermore, of Virginia because their the amount is not any, Moreover, The Court is if all mandatory or permissive. obligatory U.S.C. court action because and because is permissive because Jurisdiction The district and controls selection clause was choice of 384-85. jurisdiction Bank may ii. not forum clause irrevocably submits," indicating forum issues and little, permissive."). law, F.3d at binding to carry involve procedural substantive, is the parties' intended as mandatory or clauses it clause jurisdiction is Motion lacks § to clear exclusive in Maryland, and therefore, matter and venue pursuant to 28 is this proper U.S.C. § 1332(a) Motion selection clauses Agreement do jurisdiction not in subject matter diversity venue is because principal place District in this as defendants is denied because and the permissive. over the Business in pursuant either 28 This Court U.S.C. § to 28 U.S.C. reside, or have in the Eastern forum Loan rendering the matter pursuant delineated of business, of Virginia CONCLUSION court Court the 1391(a)(l). Promissory Note jurisdiction the and § Dismiss a Maryland proper jurisdiction over contain mandatory language, jurisdiction all to in the has in the Eastern III. Defendants' Court has to 1332(a), § 1391(a)(1) their District of Virginia. For the foregoing reasons, ORDERED that ("ASSI"), Agbey's, Future Business Motion to of is Defendants Advanced The Clerk is counsel it Services, hereby System Services, Corp. Dismiss is DENIED. directed to forward a ("FBS"), copy of and this Inc. Jean Order to record. Entered this is 5^ day d of March, 2009. Alexandria, 01/o /09 ,.. VS/ Virginia Gerald Bruce Lee f' United States District Judge 10 and
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