HANCOCK BANK v. MONTE CRISTO OF TALLAHASSEE INC et al

Filing 37

ORDER denied w/o prejudice 24 Motion for Summary Judgment. Signed by JUDGE RICHARD SMOAK on 9/19/2011. (sea)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF FLORIDA
TALLAHASSEE DIVISION
HANCOCK BANK,
successor by merger to
Hancock Bank of Florida,
Plaintiffs,
vs.

CASE NO. 4:11-cv-282/RS-WCS

MONTE CRISTO OF TALLAHASSEE, INC,
MONTE CRISTO OF TALLAHASSEE No. 1, LLC,
MONTE CRISTO OF TALLAHASSEE No. 2, LLC,
MONTE CRISTO OF TALLAHASSEE No. 3, LLC,
MONTE CRISTO OF TALLAHASSEE No. 4, LLC,
HOSSEIN GHAZVINI,
BEHZAD GHAZVINI,
MEHRAN P. GHAZVINI,
Defendants.
_________________________________________/
ORDER
Before me are Plaintiff‟s Motions for Summary Final Judgment (Doc. 24) and
Defendants‟ Response in Opposition (Doc. 36).
Hancock Bank loaned $3.9M to Defendant Monte Cristo of Tallahassee, Inc.
(“Monte Cristo”) in March 2006. The loan was secured by a mortgage on property
owned by Monte Cristo. The bank extended the maturity date of the loan on three
occasions—extending the due date from March 2008 to September 2008, from September
2008 to April 2009, from April 2009 to April 2010. (Doc. 1, p. 3). In May 2009, Monte
Cristo executed and delivered a “renewal promissory note” having a maturity date of
May 2010. Monte Cristo No. 1, Monte Cristo No. 2, Monte Cristo No. 3, and Monte

Cristo No. 4 (“Monte Cristo Nos. 1-4”) executed an assumption agreement whereby they
agreed to assume the liabilities and obligations of Monte Cristo. (See Doc.1, Exhibit 6)
Defendants Hossein Ghazavini, Behzad Ghazvini, and Mehran Ghazvini (“the
Ghazvinis”) executed and delivered commercial guarantees to Plaintiff guaranteeing the
payment and performance of Monte Cristo. (See Doc. 1, Exhibits 7-9). A further
extension was granted (See Doc. 1, Exhibit 10), and the Defendants have defaulted.
Plaintiff contends Defendants‟ first affirmative defense, that the court lacks
jurisdiction, is without merit. (Doc. 24, p. 5). The initial loan agreement (Doc. 1,
Attach.1, p. 4) contains the following language:
Venue and Governing Law
Borrower waives any “venue privilege” and/or “diversity of
citizenship privilege” which Borrower may now or may have
in the future, and does hereby specifically agree,
notwithstanding the provision of any state or federal law to
the contrary, that the venue for the enforcement, construction
or interpretation of this note shall be Leon County, Florida,
and the undersigned hereby specifically waives the right to
sue or be sued in the court of any other county in the State of
Florida, any court in any other state or country or in any
federal court, or in any state or federal administrative tribunal.
The renewal promissory note (Doc. 1, Attach. 3, p. 1) is less restrictive. It
provides the following:
“CHOICE OF VENUE: If there is a lawsuit, Borrower agrees
upon Lender‟s request to submit to the jurisdiction of the
courts of Leon County, State of Florida.”
Plaintiff contends the initial loan agreement‟s venue provision only acts to limit
Defendant‟s rights to choose venue. The language of the initial loan agreement

undermines this argument. The borrower “waives the right to [both] sue or be sued . . . in
any federal court.” Plaintiff does not address the several meanings of this provision. One
possibility is that federal jurisdiction is completely waived. A more creative meaning is
that Defendant waives the right to remove a suit to federal court. That is, because there is
no „right‟ to be sued in federal court, the only implicated „right‟ could be the right to
remove.

Plaintiff also does not address the interplay between the initial loan agreement

and the renewal promissory note. Specifically, Plaintiff does not state whether the
renewal promissory note supersedes the initial agreement or whether they should be read
together. The language of the renewal promissory note is equally complex and requires
more analysis.
The Motion (Doc. 24) is DENIED without prejudice because Plaintiff has not
made a persuasive case that the venue provision does not preclude federal jurisdiction.
Because I must first address the jurisdictional issue, the Defendants shall either consent to
federal jurisdiction or move to dismiss this case for lack of jurisdiction not later than
October 3, 2011.

ORDERED on September 19, 2011.

/S/ Richard Smoak
RICHARD SMOAK
UNITED STATES DISTRICT JUDGE