PNC Bank, National Association v. HG Property Holdings LLC et al

Filing 22

OPINION AND ORDER denying 14 Motion to Dismiss for Lack of Jurisdiction. The parties are REMINDED that motions for summary judgment may be filed, if at all, within thirty (30) days of the date of this Opinion and Order. Signed by Magistrate Judge Norah McCann King on 10/28/2015. (pes)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
PNC BANK, NATIONAL ASSOCIATION,
Plaintiff,
vs.

Civil Action 2:15-cv-1353
Magistrate Judge King

HG PROPERTY HOLDINGS, LLC,
et al.,
Defendants.
OPINION AND ORDER
Plaintiff seeks recovery under a promissory note and a commercial
guaranty of that promissory note, and a convertible line of credit
note and a commercial guaranty of that convertible line of credit
note.

With the consent of the parties, see 28 U.S.C. § 636, this

matter is before the Court on Defendants’ Motion to Dismiss, ECF 14
(“Motion to Dismiss”).
to Dismiss.

Plaintiff has filed a response to the Motion

Memorandum of Plaintiff PNC Bank, National Association to

Defendants’ Motion to Dismiss [Doc #14], ECF 21 (“Memo. Contra”).
reply has been filed.

No

For the reasons that follow, the Motion to

Dismiss is DENIED.
I.

Background
Plaintiff is a national banking association headquartered in the

Commonwealth of Pennsylvania and a citizen of the State of Delaware.
Complaint on Promissory Note, Line of Credit and Guarantys, ECF 1, ¶ 1
(“Complaint”).

Defendants HG Property Holdings LLC (“HGPH”) and His

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Grace Medical LLC (“HGM”) are Ohio limited liability companies located
in Lewis Center, Ohio and Columbus, Ohio, respectively, whose sole
member is defendant Olugbenga Felix Tolani, an Ohio citizen residing
in Lewis Center, Ohio.
2-3 (“Answer”).

Id. at ¶¶ 2-5; Defendants’ Answer, ECF 13, ¶¶

On or around March 30, 2012, defendants executed and

delivered to plaintiff a promissory note in the original principal
amount of $408,000.00 (“the $408,000 Note”).
¶ 8.

Complaint, ¶ 11; Answer,

The $408,000 Note addresses, inter alia, the issue of venue:

“Choice of Venue.

If there is a lawsuit, Borrower agrees upon

Lender’s request to submit to the jurisdiction of the courts of
Franklin County, State of Ohio.”

Exhibit A, p. 2 (copy of $408,000

Note), attached to Complaint.
On or about December 7, 2012, HGPH executed and delivered to
plaintiff a convertible line of credit note in the original principal
amount of $472,000.00 (“the $472,000 Note”).

Complaint, ¶ 21; Exhibit

C, p. 1, attached to Complaint (copy of $472,000 Note); Answer, ¶ 15.
The $472,000 Note delivered to plaintiff, whose office was identified
as 1900 East Ninth Street, Cleveland, Ohio 44114, contains the
following language regarding venue:
THIS NOTE WILL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE BANK AND THE BORROWER [HGPH, LLC]
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE
THE BANK’S OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS
CONFLICT OF LAW RULES. The Borrower hereby irrevocably
consents to the exclusive jurisdiction of any state or
federal court in the county or judicial district where the
Bank’s office indicated above is located . . . The Borrower
acknowledges and agrees that the venue provided above is
the most convenient forum for both the Bank and the
Borrower. The Borrower waives any objection to venue and
any objection based on a more convenient forum in any

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action instituted under this Note.
Exhibit C, Section 14 (emphasis in original), attached to Complaint.
In order to induce plaintiff to extend certain credit
accommodations to defendants as evidenced by the $408,000 Note and the
$472,000 Note, on or about March 3012 and December 7, 2012, defendants
Tolani and HGM executed and delivered to plaintiff commercial
guarantees.

Complaint, ¶¶ 16, 26, 31; Exhibits B, D, E (copies of

commercial guarantees) (collectively, “the Commercial Guarantees”),
attached thereto; Answer, ¶¶ 12, 19, 22.

The Commercial Guarantees

guaranteed the prompt payment of all obligations of defendants HGPH
and HGM when due to plaintiff.
12, 19, 22.

Complaint, ¶¶ 18, 28, 33; Answer, ¶¶

The Commercial Guarantees also included the same venue

language as the $408,000 Note.

See Exhibits B, p. 3; D, p. 3; E, p.

3, attached to Complaint.
HGPH and HGM have missed at least some payments on the $408,000
Note and the $472,000 Note (collectively, “the Notes”).
14, 23; Answer, ¶¶ 9, 16.

Complaint, ¶¶

Plaintiff alleges that HGPH and HGM are in

default of these notes and has declared the entire amount on both
notes as immediately due and payable.

Complaint, ¶¶ 13, 23.

On April 22, 2015, plaintiff filed this action, seeking recovery
under the Notes and the Commercial Guarantees.

See generally id.

Defendants have now moved to dismiss plaintiff’s claims pursuant to
Rules 12(b)(2)1 and 12(b)(3) of the Federal Rules of Civil Procedure.
See Motion to Dismiss.

This matter is now ripe for resolution.

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The Motion to Dismiss does not challenge the Court’s subject matter
jurisdiction.

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II.

Personal Jurisdiction
A.

Standard

Rule 12(b)(2) of the Federal Rule of Civil Procedure authorizes
the filing of a motion to dismiss for lack of personal jurisdiction
over a defendant.

In considering a properly supported motion to

dismiss for lack of personal jurisdiction, a district court is vested
with the discretion to decide the motion upon the affidavits alone, to
permit discovery in aid of deciding the motion, or to conduct an
evidentiary hearing to resolve any apparent factual question.
Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991) (citing
Serras v. First Tenn. Bank Nat’l Ass’n, 875 F.2d 1212, 1214 (6th Cir.
1989)).

Here, no party has requested additional discovery or an

evidentiary hearing and this Court concludes that neither is necessary
to the resolution of the issue of personal jurisdiction.
A plaintiff bears the burden of establishing personal
jurisdiction.

Estate of Thomson v. Toyota Motor Corp. Worldwide, 545

F.3d 357, 360 (6th Cir. 2008) (citing Brunner v. Hampson, 441 F.3d
457, 462 (6th Cir. 2006)).

However, where a motion under Rule

12(b)(2) is decided solely on written submissions and affidavits, as
here, “the plaintiff’s burden is relatively slight, and the plaintiff
must make only a prima facie showing that personal jurisdiction exists
in order to defeat dismissal.”
citations omitted).

Id. (internal quotation marks and

Indeed, “[t]he pleadings and affidavits submitted

must be viewed in a light most favorable to the plaintiff, and the []
court should not weigh ‘the controverting assertions of the party

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seeking dismissal.’”

Id. (quoting Theunissen, 935 F.2d at 1459).

Nevertheless, the pleadings must set forth with “‘reasonable
particularity’ those specific facts that support jurisdiction.”
Palnik v. Westlake Entm’t, Inc., No. 09-3062, 344 F.App’x 249, at *251
(6th Cir. Aug. 31, 2009) (quoting Neogen Corp. v. Neo Gen Screening,
Inc., 282 F.3d 883, 887 (6th Cir. 2002)).
B.

Discussion

In the case presently before the Court, defendants contend that
the Court lacks personal jurisdiction over them simply “because venue
is not proper in this instance pursuant to the parties’ contractual
agreements. . . .”
misplaced.
concepts.

Memo. Contra, p. 2.

Defendants’ argument is

Venue and personal jurisdiction are separate and distinct
See, e.g., Flagstar Bank, FSB v. Estrella, No. 13-cv-13973,

2013 U.S. Dist. LEXIS 176504, at *8 (E.D. Mich. Dec. 16, 2013)
(“Personal Jurisdiction is not the same issue as venue.

Personal

jurisdiction is a question of whether a court can exercise its
authority over a party, whereas, venue is a matter of choosing the
proper forum in which to litigate.”).

It therefore follows that this

Court does not lack personal jurisdiction simply because defendants
believe that venue is improper.
Indeed, “defendants who reside in the forum state will always be
subject to the personal jurisdiction of the court.”
667 F.3d 705, 711 (6th Cir. 2012).

Conn v. Zakharov,

Here, plaintiff alleges and

defendants admit that defendant Tolani is an Ohio citizen with a last
known address in Lewis Center, Ohio.

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Complaint, ¶¶ 4-5; Answer, ¶¶ 2-

3.

See also ECF 6, PAGEID#:64-67 (reflecting that the Complaint was

successfully served on defendant Tolani in Lewis Center, Ohio).
Plaintiff further alleges and defendants admit that HGPH and HGM are
Ohio limited liability companies whose sole member is defendant
Tolani.

Complaint, ¶¶ 2-3; Answer, ¶ 2.

There is no dispute that

HGPH and HGM’s last known addresses are in Lewis Center, Ohio and
Columbus Ohio, respectively, and that service of process was effected
on these defendants at these addresses.
5; Answer, ¶¶ 2-3; ECF 6, PAGEID#:54-62.

Complaint, caption, ¶¶ 2-3,
Even construing this record

in the light most favorable to plaintiff, the Court concludes that
plaintiff has made a prima facie showing of personal jurisdiction over
the defendants.

See Estate of Thomson, 545 F.3d at 360-61.

III. Venue
Again referring to “the parties’ contractual agreements,”
defendants also move to dismiss this action under Rule 12(b)(3) for
improper venue. Motion to Dismiss, p. 2.

Defendants specifically

argue that the venue language contained in the $408,000 Note and the
Commercial Guarantees provides that venue shall be in “Franklin County
courts[.]”

Id. at 2-3 (citing Exhibits A, B, D) (providing, inter

alia, that “[i]f there is a lawsuit, Guarantor agrees upon Lender’s
request to submit to the jurisdiction of the courts of Franklin
County, State of Ohio”).

Alternatively, defendants contend that venue

would be proper in “state courts in Cuyahoga County or a federal court
in Cleveland within the district of the Bank’s location” as specified
in the $472,000 Note.

Id. at 3 (citing Exhibit C, attached to the

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Complaint).

Defendants’ argument in this regard is not well-taken.

“Rule 12(b)(3) allow[s] dismissal only when venue is ‘wrong’ or
‘improper.’”

Atlantic Marine Constr. Co., Inc. v. U.S. Dist. Court

for the Western Dist. of Texas, -- U.S. --, 134 S.Ct. 568, 577 (2013).
“Whether venue is ‘wrong’ or ‘improper’ depends exclusively on whether
the court in which the case was brought satisfies the requirements of
federal venue laws, and those provisions say nothing about a forumselection clause.”

Id.

In other words, “a forum-selection clause

does not render venue in a court ‘wrong’ or ‘improper’ within the
meaning of . . . Rule 12(b)(3)[.]”

Id. at 579.

“If a forum-selection

clause rendered venue in all other federal courts ‘wrong,’ a defendant
could always obtain automatic dismissal or transfer under § 1406(a)
and would not have any reason to resort to § 1404(a).”

Id. (stating

further that “the clause may be enforced through a motion to transfer
under § 1404(a)”).
Under 28 U.S.C. § 1391(b)(1), venue is proper in “a judicial in
which any defendant resides, if all defendants are residents of the
State in which the district is located[.]”

For venue purposes, a

natural person is deemed to reside in the judicial district in which
that person is domiciled.

28 U.S.C. § 1391(c)(1).

Entities “with the

capacity to sue and be sued in [their] common name under applicable
law . . . shall be deemed to reside, if a defendant, in any judicial
district in which such defendant is subject to the court’s personal
jurisdiction with respect to the civil action in question[.]”
U.S.C. § 1391(c)(2).

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In the case presently before the Court, it is

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undisputed that defendant Tolani is an Ohio citizen residing in Lewis
Center, Ohio.

It is likewise uncontroverted that HGPH and HGM are

Ohio limited liability companies whose sole member is defendant
Tolani.

Moreover, the Court has already determined that it has

personal jurisdiction over defendants.
in this district under § 1391(b)(1).

Accordingly, venue is proper
Therefore, and for the reasons

addressed supra, defendants’ arguments based on the venue provisions
contained in the Notes and the Commercial Guarantees do not render
venue improper and do not authorize dismissal of the action pursuant
to Rule 12(b)(3).

See, e.g., Nash & Powers Ins. Servs. v. Astonish

Results, LLC, No. 2:13-CV-257, 2014 U.S. Dist. LEXIS 175060, at *3-4
(E.D. Tenn. May 16, 2014) (denying Rule 12(b)(3) motion to dismiss
based on defendants’ argument that forum-selection clause rendered
venue “wrong” or “improper”).2
WHEREUPON, Defendants’ Motion to Dismiss, ECF 14, is DENIED.
The parties are REMINDED that motions for summary judgment may be
filed, if at all, within thirty (30) days of the date of this Opinion
and Order.

See Preliminary Pretrial Order, ECF 18, pp. 1-2 (providing

that motions for summary judgment may be filed within thirty (30) days
following resolution of the Motion to Dismiss).

October 28, 2015

s/Norah McCann King
Norah McCann King
United States Magistrate Judge

2

In reaching this conclusion, the Court need not address plaintiff’s
additional arguments, including that defendants waived their right to object
to venue and that the parties agreed to venue in this district.

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