Langston et al v. Texas Capital Bank National Association
ORDER: Defendant Texas Capital Bank National Association's Motion to Transfer Venue (Doc. # 8) is DENIED. Signed by Judge Virginia M. Hernandez Covington on 2/18/2021. (DMD)
Case 8:20-cv-02954-VMC-AAS Document 50 Filed 02/18/21 Page 1 of 10 PageID 3267
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
SHIRLEY LANGSTON and
Case No. 8:20-cv-2954-VMC-AAS
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION, as Administrative
Agent, Swing Line Lender,
and L/C issuer,
This matter comes before the Court upon consideration of
Defendant Texas Capital Bank National Association’s (“TCB”)
Motion to Transfer Venue (Doc. # 8), filed on December 15,
2020. Plaintiffs Shirley Langston and John Langston responded
on January 12, 2021. (Doc. # 34). At the Court’s direction,
TCB replied (Doc. # 45), and the Langstons filed a sur-reply.
(Doc. # 48). For the reasons that follow, the Motion is
The Langstons initiated this action in state court on
November 15, 2020. (Doc. # 1-1). TCB removed the case to this
Court on the basis of diversity jurisdiction on December 11,
Case 8:20-cv-02954-VMC-AAS Document 50 Filed 02/18/21 Page 2 of 10 PageID 3268
2020. (Doc. # 1). In the amended complaint, the Langstons
assert claims against TCB for aiding and abetting fraud,
fiduciary duty, and negligence. (Doc. # 33).
procedural history of this case and the related state court
proceedings in its Order declining to abstain. (Doc. # 38).
The Langstons are involved in malpractice litigation against
Laser Spine Institute, LLC (“LSI”) — a medical practice that
is in the process of being liquidated through Assignment for
Benefit of Creditors proceedings in Florida state court.
(Doc. # 33 at 1-2, 10-13).
allegedly “caused LSI’s
employee physicians to fraudulently conceal from patients the
fact that LSI’s physician employees were practicing medicine
in violation of the Financial Responsibility requirements of
§ 458.320, Fla. Stat.” (Id. at 8).
TCB was one of LSI’s lenders under a credit agreement.
(Id. at 2-3). It loaned LSI over $150,000,000.00 through a
2015 “Credit Agreement” that provided, in pertinent part,
that LSI was required to hold $10,000,000.00 in a “Cash
Reserve Account” for, among other things, the payment of
medical malpractice claims. (Id. at 3-5). “TCB had the power
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to require LSI to maintain the Cash Reserve Account, and TCB
retained the ‘sole discretion’ to waive the Cash Reserve
Account only upon (a) LSI’s written request and (b) TCB’s
potential litigation related to such claims are properly
reserved for in the Cash Reserve Account in amounts that are
considered commercially reasonable.’” (Id. at 5).
According to the Langstons, “TCB had actual knowledge
that LSI was not maintaining customary professional liability
insurance as required by Florida law and as required by
Section 7.5 of the Credit Agreement.” (Id. at 6). “Instead of
requiring LSI to comply with Florida law, TCB instead retained
sole discretion upon LSI’s request to fund LSI’s Cash Reserve
Account to fund medical malpractice claims, while maintaining
a first priority lien on said Cash Reserve Account and thereby
maintaining the discretion to apply said funds to TCB’s loans
instead of payment to medical malpractice claims.” (Id. at
7). As a result, the Langstons maintain that TCB, among other
Florida’s requirements for malpractice coverage. (Id. at 1430).
Case 8:20-cv-02954-VMC-AAS Document 50 Filed 02/18/21 Page 4 of 10 PageID 3270
Now, TCB moves to transfer this case to the United States
District Court for the Northern District of Texas because the
credit agreement between TCB and LSI (and others) contains a
mandatory forum-selection clause in favor of Texas. (Doc. #
following relevant language:
(b) Jurisdiction. Each Borrower irrevocably and
unconditionally agrees that it will not commence
any action, litigation or proceeding of any kind or
description, whether in law or equity, whether in
contract or in tort or otherwise, against
Administrative Agent, any Lender, L/C Issuer, Swing
Line Lender or any Related Party of the foregoing
in any way relating to this Agreement or any other
Loan Document or the transactions relating hereto
or thereto, in any forum other than the courts of
the State of Texas sitting in Dallas County, and of
the United States District Court of the Northern
District of Texas, and any appellate court from any
thereof, and each of the parties hereto irrevocably
and unconditionally submits to the jurisdiction of
such courts and agrees that all claims in respect
of any such action, litigation or proceeding may be
heard and determined in such Texas State court or,
to the fullest extent permitted by applicable law,
in such federal court. Each of the parties hereto
agrees that a final judgment in any such action,
litigation or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by
law. Nothing in this Agreement or in any other Loan
Document shall affect any right that Administrative
Agent, any Lender, L/C Issuer or Swing Line Lender
may otherwise have to bring any action or
proceeding relating to this Agreement or any other
Loan Document against any
Borrower or its
properties in the courts of any jurisdiction.
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(c) Waiver of Venue. Each Borrower irrevocably and
unconditionally waives, to the fullest extent
permitted by applicable law, any objection that it
may now or hereafter have to the laying of venue of
any action or proceeding arising out of or relating
to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section.
Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by
applicable law, the defense of an inconvenient
forum to the maintenance of such action or
proceeding in any such court.
(Id. at 116-117)(emphasis added).
The Langstons have responded (Doc. # 34), TCB has replied
(Doc. # 45), and the Langstons have filed a sur-reply. (Doc.
# 48). The Motion is ripe for review.
“For the convenience of parties and witnesses, in the
interest of justice, a district court may transfer any civil
action to any other district or division where it might have
been brought or to any district or division to which all
parties have consented.” 28 U.S.C. § 1404(a). Ordinarily,
following criteria must be met: (1) the action could have
been brought in the transferee district court; (2) a transfer
serves the interest of justice; and (3) a transfer is in the
convenience of the witnesses and parties.” i9 Sports Corp. v.
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Cannova, No. 8:10-cv-803-VMC-TGW, 2010 WL 4595666, at *3
(M.D. Fla. Nov. 3, 2010)(citation omitted).
‘represents the parties’ agreement as to the most proper
forum.’” Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist.
of Tex., 571 U.S. 49, 63 (2013)(citation omitted). “[A] valid
forum-selection clause [should be] given controlling weight
omitted). So, the Court “should not consider arguments about
the parties’ private interests.” Id. at 64. “When parties
agree to a forum-selection clause, they waive the right to
convenient for themselves or their witnesses, or for their
pursuit of the litigation.” Id. “A court accordingly must
deem the private-interest factors to weigh entirely in favor
of the preselected forum.” Id. “A district court may only
Loeffelholz v. Ascension Health, Inc., 34 F. Supp. 3d 1187,
1190 (M.D. Fla. 2014).
TCB’s argument fails because the Langstons are not bound
by the forum-selection clause in the credit agreement. By its
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borrower” and “each of the parties” to the credit agreement.
(Doc. # 8 at 116-117). Yet, the Langstons are not “borrowers”
under the agreement, nor are they parties to the agreement.
It is true the Langstons had asserted breach of contract
claims premised on the credit agreement in their original
beneficiaries of the credit agreement. (Doc. # 1-1 at 15-16).
This is why TCB argues in its Motion that “to the extent that
[the Langstons] intend to interject themselves as parties to
the Credit Agreement by way of their breach of contract and
declaratory judgment claims, they may only enforce the Credit
Agreement pursuant to its terms.” (Doc. # 8 at 6).
But, after the filing of this Motion, the Langstons have
claims. The amended complaint, while referencing the credit
agreement, does not contain a claim for violation of the
credit agreement. (Doc. # 33). The Langstons are no longer
arguing that they are third-party beneficiaries under the
“In order to bind a non-party to a forum selection
clause, the party must be ‘closely related’ to the dispute
such that it becomes ‘foreseeable’ that it will be bound.”
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Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285,
1299 (11th Cir. 1998)(citation omitted); Deloitte & Touche v.
Gencor Indus., Inc., 929 So. 2d 678, 683 (Fla. 5th DCA
2006)(“Florida courts have enforced contract terms, including
forum selection clauses, against non-signatories. This is
relationship between the non-signatory and signatory and the
interests of the signatory.” (citations omitted)). “[T]he
Lipcon court found that the non-signing parties were bound by
the choice of law and choice of forum clauses where the
parties’ rights were ‘completely derivative of those of the
[signing parties] — and thus “directly related to, if not
predicated upon, the interests of the [signing parties].”’”
Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151, 1170 (11th
Cir. 2009)(quoting Lipcon, 148 F.3d at 1299).
While the Court understands that the terms of the credit
agreement between TCB and LSI will be important for this case,
completely derivative of LSI and TCB’s rights under the credit
agreement. The Langstons, who merely became patients at LSI
after the credit agreement was entered between LSI and TCB,
are not “closely related” to LSI and it was not foreseeable
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that the Langstons would be bound by the forum selection
agreement or were bound by any terms of the agreement. See
MoistTech Corp. v. Sensortech Sys., Inc., No. 8:15-cv-434EAK-TBM,
2015)(holding that non-signatory company MoistTech was “‘so
closely related’ to the dispute that it was foreseeable that
it would be bound by the forum-selection clause” where it was
“omnipresent throughout the Agreement,” the signatory owners
of MoistTech “agreed ‘to pay, perform, or discharge and shall
cause MoistTech Corp. to pay, perform, or discharge all debts,
MoistTech assets,” and MoistTech was “both benefitted and
burdened” by certain terms of the agreement). Rather, the
Langstons were patients at LSI who maintain there is no
coverage for their malpractice claims because TCB aided or
conspired with LSI not to require sufficient insurance or to
fund the Cash Reserve Account.
Thus, the Langstons are not bound by the forum selection
clause. And TCB does not argue that transfer to the Northern
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traditional Section 1404(a) analysis. Therefore, the Court
will not transfer the case.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
Motion to Transfer Venue (Doc. # 8) is DENIED.
DONE and ORDERED in Chambers, in Tampa, Florida, this
18th day of February, 2021.
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