CITIBANK, N.A. v. NOVAK et al

Filing 17

MEMORANDUM OPINION AND ORDER denying Defendants' 13 Motion to Dismiss for Improper Venue And/Or to Transfer Venue under 28 U.S.C. 1404, and denying as moot Plaintiff's 15 Motion for Hearing. The hearing previously scheduled for February 6, 2018, at 2 p.m., is hereby vacated. See the attached Order for details. Signed by Judge Amit P. Mehta on 2/1/2018. (lcapm2) Modified even title on 2/2/2018 (znmw).

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
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CITIBANK, N.A.,
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Plaintiff,
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v.
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Case No. 17-cv-01593 (APM)
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GREGORY NOVAK, et al.,
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Defendants.
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_________________________________________ )
MEMORANDUM OPINION AND ORDER
Before the court is Defendants Gregory V. Novak and Tracy W. Druce’s Motion to Dismiss
for Improper Venue And/Or to Transfer Venue Under 28 U.S.C. § 1404 (“Motion”), in which
Defendants assert that: (1) this court is not the proper venue to hear Plaintiff Citibank, N.A.’s
claims against them; and, in the alternative, (2) transfer to the Southern District of Texas is
warranted under 28 U.S.C. § 1404 because it is a more convenient forum than this one. See Defs.’
Mem. of Law in Support of Defs.’ Mot. to Dismiss for Improper Venue And/Or to Transfer Venue
under 28 U.S.C. § 1404, ECF No. 13 [hereinafter Defs.’ Mem.], at 3–8. For the reasons explained
below, Defendants’ Motion, which borders on being frivolous, is denied.
I.
Defendants do not dispute that the two loan guaranty agreements that are the subject of
this breach-of-contract action contain identical forum-selection clauses that permit Plaintiff to
bring suit against them in this District Court. See Defs.’ Mem. at 2 (noting that the guaranty
agreements “includ[ed] . . . forum selection clauses” similar to that in a Loan Modification and
Forbearance agreement dated July 21, 2015); id. at 4 (arguing that a “post-execution venue

selection clause cannot save venue in the District of Columbia”). Nor could they. The loan
guaranty agreements state:
[Defendants] hereby irrevocably submit[ ] to the jurisdiction of any
District of Columbia or Federal court sitting in Washington, D.C.,
and [Defendants] hereby irrevocably agree[ ] that any Action may
be heard and determined in such District of Columbia court or such
Federal court.
Compl., ECF No. 1, Ex. C, ECF No. 1-3 [hereinafter Pl.’s Ex. C], at 5; Compl., Ex. D, ECF No. 1-4
[hereinafter Pl.’s Ex. D], at 5. In light of this unambiguous text, there can be little doubt that
Defendants, both of whom are sophisticated and experienced lawyers, see Pl.’s Mem. in Opp’n.,
ECF No. 14, Ex. 2, ECF. No. 14-2, at 1–3, agreed to subject themselves to suit in this District
Court. Venue therefore is appropriate in this forum. See Atl. Marine Constr. Co., Inc. v. U.S. Dist.
Ct. for W. Dist. of Tex., 134 S. Ct. 568, 582–83 (2016).
Defendants’ contention that the Supreme Court’s decision in Atlantic Marine compels
dismissal for improper venue wholly misreads that precedent. Atlantic Marine does not, as
Defendants contend, require that “venue must still be proper under [the federal venue statute, 28
U.S.C.] § 1391(b), irrespective of a forum selection clause.” Defs.’ Mem. at 3–4. To read Atlantic
Marine in that way is flatly inconsistent with the Court’s admonition that, “[w]hen parties have
contracted in advance to litigate disputes in a particular forum, courts should not disrupt the parties’
settled expectations.” Atl. Marine, 134 S. Ct. at 583. Defendants’ interpretation is also contrary
to decades-old Supreme Court precedent holding that courts should “enforce the forum clause
specifically unless [the movant] could clearly show that enforcement would be unreasonable and
unjust, or that the clause was invalid for such reasons as fraud or overreaching.” See M/S Bremen
v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). And it conflicts with District of Columbia law—
selected by the parties to govern the loan agreements—which provides that forum selection clauses

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“are [now] prima facie valid and [will] be enforced unless enforcement is shown by the resisting
party to be ‘unreasonable’ under the circumstances.’” Yazdani v. Access ATM, 941 A.2d 429, 431
(D.C. 2008) (alterations in original and citation omitted). Here, the parties mutually agreed that
venue would be appropriate in this forum for resolving their disputes. The federal venue statute
cannot reasonably be construed, as Defendants argue, to compel a result that directly conflicts with
the parties’ clear intent.
II.
Nor is a change in venue warranted under the federal venue-transfer statute, 28 U.S.C.
§ 1404(a). For starters, Defendants have forfeited their right to move for transfer on the ground of
inconvenience. The loan guaranty agreements clearly state: “The undersigned hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of any Action in any jurisdiction.” Pl.’s Ex. C at 5; Pl.’s Ex. D at 5. Thus, Defendants
expressly agreed that they would not assert, as they do now, that that this District Court is an
inconvenient forum.
Second, because the forum selection clause itself is valid, the only factors that would
warrant transfer to the Southern District of Texas relate to the public interest, which the Supreme
Court has said may justify transfer only in “unusual cases.” Atl. Marine, 134 S. Ct. at 582. Nothing
about this case makes it unusual. It is a garden-variety breach-of-contract suit. And Defendants
have not identified the kind of “rare[]” circumstance, see id., that would warrant overriding the
settled terms of the loan guaranty agreements, cf. Defs.’ Mem. at 8 (asserting that it is in both
parties’ interests to transfer because it purportedly takes twice as long to go from filing to trial in
this District as compared to the Southern District of Texas).

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III.
Accordingly, for the foregoing reasons, Defendants’ Motion to Dismiss for Improper
Venue And/Or to Transfer Venue Under 28 U.S.C. § 1404, ECF No. 13, is denied. The hearing
on Defendants’ Motion scheduled for February 6, 2018, is hereby vacated, and Plaintiff’s Motion
for Hearing, ECF No. 15, is denied as moot.

Dated: February 1, 2018

Amit P Mehta
United States District Judge

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