Federal Deposit Insurance Corporation v. Alliance Financial Resources, LLC
Opinion and Order. Defendant's Motion to Change Venue (Related doc # 7 ) is denied. Judge Christopher A. Boyko on 2/13/2017. (H,CM)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
FEDERAL DEPOSIT INSURANCE
CORPORATION AS RECEIVER
FOR AMTRUST BANK,
CASE NO. 1:15CV2481
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER
CHRISTOPHER A. BOYKO, J.:
This matter comes before the Court upon the Motion (ECF DKT #7) of Defendant,
Alliance Financial Resources, LLC (“Alliance”), to Change Venue. For the following
reasons, the Motion is denied.
On March 2, 2007, Alliance entered into a Master Correspondent Loan Purchase
Agreement with AmTrust Bank. Pursuant to the Agreement, Alliance sold and/or submitted
mortgage loans to AmTrust for purchase and/or funding. The residential loans at issue related
to two 2008 Arizona mortgages. Alliance represented and warranted that the information in
the underwriting packages it submitted to AmTrust was “complete, true and correct.”
Alliance agreed to repurchase any defective loan or to indemnify AmTrust for all losses
resulting from a breach of any representation or warranty. Paragraph 9.13 of the Agreement
recited in part:
The parties hereby consent and submit themselves to the jurisdiction and venue
in any State or Federal court located in the City of Cleveland, Ohio for
purposes of any legal or equitable proceeding arising from, out of or in
connection with this Agreement or any transaction contemplated hereby...
Further, pursuant to Paragraph 9.16, this Agreement is construed and enforced in
accordance with the laws of the State of Ohio.
In December 2009, the U.S. Department of the Treasury, Office of Thrift Supervision
closed AmTrust and appointed the Federal Deposit Insurance Corporation (“FDIC”) as
On December 2, 2015, FDIC, as Receiver, filed the within lawsuit alleging breach of
the Agreement. The Complaint alleges that Alliance must indemnify the FDIC for any losses
suffered when the Arizona mortgagors defaulted on their respective loans.
Alliance moves for an order transferring venue to the District of Arizona, Phoenix
Division, pursuant to 28 U.S.C. § 1404(a). Alliance offers the affidavit of its President, Jamie
Korus, and argues that almost all of the events occurred in Arizona, where Alliance’s
principal place of business is located. Both the borrowers and the property securing the
mortgages are located in Arizona. Alliance employees and witnesses are located in Arizona.
AmTrust Bank, the only entity with connections to Ohio, is not a party and no longer exists.
FDIC is a federal agency which will not be inconvenienced by a transfer of venue. Alliance
also asserts that the forum selection clause in the Agreement is permissive and not mandatory.
II. LAW AND ANALYSIS
Under 28 U.S.C. § 1404(a), “[f]or 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.” The court is typically required to consider the private
interests of the parties, their convenience and the convenience of potential witnesses, as well
as public-interest concerns, such as systemic integrity and fairness. Then, the court must
decide whether, on balance, a transfer would promote the interests of justice. Stewart
Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29-30 (1988).
However, when a valid and enforceable forum selection clause evidences the parties’
intent to bring an action in a particular federal district, the forum selection clause must be
given “controlling weight in all but the most exceptional circumstances.” Atlantic Marine
Construction Co. Inc. v. United States District Court for the Western District of Texas, et al.,
134 S.Ct. 568, 581 (2013). In addition,
when parties agree to a forum selection clause, they waive the right to
challenge the preselected forum as inconvenient or less convenient for
themselves or their witnesses, or for their pursuit of the litigation. A court
accordingly must deem the private-interest factors to weigh entirely in favor of
the preselected forum ... As a consequence, a district court may consider
arguments about public-interest factors only. Atlantic Marine, 134 S.Ct. at
Alliance does not assert that the forum selection clause in the Agreement is invalid or
unenforceable. Rather, Alliance argues that the language of the forum selection clause at
issue (“consent and submit”) is permissive, whereas the provision in Atlantic Marine (“shall
be litigated”) is mandatory. Even if the Court accepts Alliance’s categorizations, the Court
does not read Atlantic Marine so narrowly. The Supreme Court focused on valid and
enforceable forum selection clauses that protect the parties’ “settled expectations” whether
mandatory or permissive. Id. at 583. “[T]he interest of justice is served by holding parties to
their bargain.” Id.
The Court need not discuss private-interest factors because they are presumed to favor
the preselected forum. Id. at 582. Pursuant to the choice of law provision in the Agreement,
the public-interest factor of “having the trial in a forum that is at home with the state law that
must govern the case” is satisfied. In addition, Ohio public interest favors enforcing Ohio
contracts as they are written. This Court is certainly capable of applying Arizona foreclosure
law if that becomes necessary to the breach of contract analysis; so, Alliance’s argument in
this regard is not persuasive. Lastly, the Court finds that judicial economy and docket
congestion do not weigh significantly in favor of either jurisdiction.
For these reasons, the Motion (ECF DKT #7) of Defendant, Alliance Financial
Resources, LLC (“Alliance”), to Change Venue is denied.
IT IS SO ORDERED.
s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge
Dated: February 13, 2017
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