National Credit Union Administration Board v. Nadlan Corteen Place Apartments, LLC et al

Filing 56

ORDER denying 49 Motion to dismiss for lack of jurisdiction. Defendants shall answer the Complaint by June 28, 2013. Signed by Judge Gregory A. Presnell on 6/13/2013. (NWH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
NATIONAL CREDIT UNION
ADMINISTRATION BOARD, acting in
its capacity as Liquidating Agent for
TELESIS COMMUNITY CREDIT
UNION, a California state chartered
credit union,
Plaintiff,
v.

Case No: 6:13-cv-00673-GAP-GJK

NADLAN CORTEEN PLACE
APARTMENTS, LLC, a California
limited liability company, GERSHON
SCHUSTERMAN, an individual and
BARRY KOHN, an individual, PERKINS
& MARIE CALLENDERS, LLC, a
Delaware limited liability company, S&A
PROPERTIES, CORP., a dissolved
Delaware corporation, STEAK & ALE
OF FLORIDA, INC., a dissolved Florida
corporation, and S&A RESTAURANT
CORP, a dissolved Delaware
Corporation.
Defendants.

ORDER
This cause comes before the Court on a renewed motion to dismiss (Doc. 49) filed by
Defendants Nadlan Corteen Place Apartments, LLC, Gershon Schusterman, and Barry Kohn, and
an opposition (Doc. 51) filed by Plaintiff, the National Credit Union Administration Board, as
liquidating agent for Telesis Community Credit Union.
I.

Background
On or before May 30, 2012, Telesis Community Credit Union (“TCCU”) was placed into

involuntary liquidation, and the National Credit Union Administration Board (“NCUA”) was
appointed liquidating agent of TCCU. On February 1, 2013, NCUA filed an Amended
Complaint (Doc. 23) (the “Amended Complaint”) seeking collection on two promissory notes
(the “Notes”) executed by Defendant Nadlan Corteen Place Apartments, LLC (“Nadlan”) in
favor of TCCU, and the personal guarantees of notes executed by Defendants Gershon
Schusterman (“Schusterman”) and Barry Kohn (“Kohn”), as well as foreclosure of the associated
mortgages (the “Mortgages”). Nadlan executed the Notes and Mortgages to obtain purchase
money for two properties: one located in Orange County, Florida and one located in Escambia
County, Florida. On or about December 2, 2011, Nadlan defaulted on both of the Notes and
Mortgages, and NCUA subsequently filed a lawsuit.
II.

Standard
In ruling on a motion to dismiss, the Court must view the complaint in the light most

favorable to the Plaintiff, see, e.g., Jackson v. Okaloosa County, Fla., 21 F.3d 1531, 1534 (11th
Cir. 1994), and must limit its consideration to the pleadings and any exhibits attached thereto.
Fed. R. Civ. P. 10(c); see also GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir.
1993). The Court will liberally construe the complaint’s allegations in the Plaintiff’s favor.
Jenkins v. McKeithen, 395 U.S. 411,421 (1969). However, “conclusory allegations, unwarranted
factual deductions or legal conclusions masquerading as facts will not prevent dismissal.”
Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003).
In reviewing a complaint on a motion to dismiss under Federal Rule of Civil Procedure
12(b)(6), “courts must be mindful that the Federal Rules require only that the complaint contain
‘a short and plain statement of the claim showing that the pleader is entitled to relief.’” U.S. v.
Baxter Intern., Inc., 345 F.3d 866, 880 (11th Cir. 2003) (citing Fed. R. Civ. P. 8(a)). This is a

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liberal pleading requirement, one that does not require a plaintiff to plead with particularity every
element of a cause of action. Roe v. Aware Woman Ctr.for Choice, Inc., 253 F.3d 678, 683 (11th
Cir. 2001). However, a plaintiff’s obligation to provide the grounds for his or her entitlement to
relief requires more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-555 (2007). The
complaint’s factual allegations “must be enough to raise a right to relief above the speculative
level,” Id. at 555, and cross “the line from conceivable to plausible.” Ashcroft v. Iqbal, 556 U.S.
662, 129 S. Ct. 1937, 1950-1951 (2009).
III.

Analysis

Defendants make three arguments in support of dismissal: (1) this Court lacks subject
matter jurisdiction; (2) NCUA lacks standing; (3) the Amended Complaint lacks verification and
attachment of required documents; and (4) NCUA failed to fulfill a condition precedent of the
Mortgages and Notes.
Clearly this Court has subject matter jurisdiction, pursuant to 12 U.S.C.A. § 1789(a)(2):
[a]ll suits of a civil nature at common law or in equity to which the [NCUA
Board] shall be a party shall be deemed to arise under the laws of the United
States, and the United States district courts shall have original jurisdiction thereof,
without regard to the amount in controversy.
12 U.S.C.A. § 1789. Defendants argue that the forum selection clause in the Notes
disrupts this Court’s subject matter jurisdiction. However, no action of parties can confer subject
matter jurisdiction upon a federal court, consent of the parties is irrelevant. Ins. Corp. of Ireland,
Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). Even if the forum
selection clause was somehow controlling, it clearly states federal courts have jurisdiction:
Consent to Jurisdiction and Venue: Borrower agrees that any controversy arising
under or in relation to the note shall be litigated exclusively in the jurisdiction in
which the land is located (the “Property Jurisdiction”). The State and Federal
Courts and authorities with jurisdiction in the Property Jurisdiction shall have

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exclusive jurisdiction over all controversies which shall arise under or in relation
to this Note.
(emphasis added). Regardless, motions to dismiss based upon choice of forum and governing
law provisions are not properly brought as motions to dismiss for lack of subject matter
jurisdiction, but rather motions to dismiss for improper venue. Lipcon v. Underwriters at
Lloyd’s, London, 148 F.3d 1285, 1289 (11th Cir. 1998).
Defendants claim that the Middle District of Florida does not have jurisdiction over a
property that is located in the jurisdiction of the Northern District of Florida. Defendants cite
Local Rule 3.1(A)(1) of the United States District Court for the Northern District of Florida,
which is clearly inapplicable.1 The Middle District of Florida is the proper venue in this matter.
Under 28 U.S.C. § 1391(b)(2), civil actions brought in the federal district courts may be brought
in “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 is situated[.]” 28
U.S.C.A. § 1391 (emphasis added). A substantial part of the real property that is the subject of
this suit is the Orange County Property located at 2001 Consulate Drive, Orlando, Florida.
Therefore, venue in the Middle District of Florida is proper.
Defendants make several other arguments which are without merit. For example,
Defendants argue that Florida circuit courts have subject matter jurisdiction over adjudication of
mortgage foreclosures, pursuant to Florida Statutes § 702.01. However, Florida Statutes §
702.01 does not even address subject matter jurisdiction, and is inapplicable.2
1

Northern District of Florida Local Rule 3.1(A)(1) states: “Pensacola Division shall be
composed of the following counties: Escambia, Santa Rosa, Okaloosa and Walton.”
2

Florida Statute § 702.01 states: “all mortgages shall be foreclosed in equity. In a mortgage
foreclosure action, the court shall sever for separate trial all counterclaims against the foreclosing
mortgagee. The foreclosure claim shall, if tried, be tried to the court without a jury.” Fla. Stat.
Ann. § 702.01.

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Defendants claim that the Amended Complaint is deficient because NCUA did not attach
documents reflecting it has standing to bring this suit. Pursuant to 12 U.S.C.A. § 1787(1)(A), the
NCUA shall, “upon its finding that a Federal credit union insured under this subchapter is
bankrupt or insolvent . . . close such credit union for liquidation and appoint itself liquidating
agent[.]” As liquidating agent, NCUA succeeded to “all rights, titles, powers and privileges of
the credit union, and of any member, accountholder, officer, or director of such credit union with
respect to the credit union and the assets of the credit union.” 12 U.S.C.A. § 1787(2)(A)(i).
Therefore, NCUA has standing by operation of statute. In addition, NCUA attached
documentation to the Amended Complaint (as Exhibit “C”) appointing NCUA the liquidator of
TCCU.
Defendants’ claim that the amended complaint needed to be verified is incorrect.3
Verified pleadings are not necessary in federal practice unless specifically required by rule or
statute. Fed. R. Civ. P. 11(a).
Defendants claim that Plaintiff failed to provide notice to Defendants prior to debt
acceleration, which was a condition precedent of the Mortgages and Notes. Satisfaction of
conditions precedent is not a matter that is adjudicated on a motion to dismiss. Buckley Towers
Condo., Inc. v. QBE Ins. Corp., 2008 WL 2490450, *4-5 (S.D. Fla. June 18, 2008). In the
pleading stage, it is sufficient to allege generally that all conditions precedent have been
performed. Fed. R. Civ. P. 9(c). The Amended Complaint alleges “Plaintiff has complied with
all conditions precedent to the institution of this action, or such conditions have been waived,
excused or prevented.” This Court must take Plaintiff’s general declaration of compliance with
conditions precedent as true at this stage. See Thompson v. Kindred Nursing Centers E., LLC,

3

Defendants cite Florida Rule of Civil Procedure 1.110(b) for this proposition.

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211 F. Supp. 2d 1345, 1356 (M.D. Fla. 2002). Even if the timing of this argument was
appropriate, notice of debt acceleration was not stated as a condition precedent in the Notes or
Mortgages, nor is it required by Florida law. See David v. Sun Fed. Sav. & Loan Ass’n, 461 So.
2d 93, 96 (Fla. 1984) (holding “the law does not require a mortgagee to notify a mortgagor of his
intent to exercise his option to accelerate prior to instituting a foreclosure suit, but requires only
that the option be exercised prior to tender of amounts due from the mortgagor”).
In light of the foregoing, it is therefore,
ORDERED that Defendants’ Motion to dismiss (Doc. 49) is DENIED. Defendants shall
answer the Complaint by June 28, 2013.
DONE and ORDERED in Orlando, Florida on June 13, 2013.

Copies furnished to:
Counsel of Record
Unrepresented Parties

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