The opinion of the court was delivered by: Claudia Wilken United States District Judge
ORDER GRANTING MOTION TO SET ASIDE DEFAULT (Docket No. 29) AND DENYING MOTIONS TO DISMISS (Docket Nos. 27 and 30)
United States District Court For the Northern District of California
Defendant South Atlantic Container Lines, Ltd. (SACL) moves to set aside the default entered against it. Plaintiff CAI 13 International, Inc. has filed a statement of non-opposition to 14 SACL's motion. SACL and Defendant Empresa de Navegacion Maruba 15 S.A. (Maruba SA) also move to dismiss CAI's complaint for improper 16 venue pursuant to Federal of Civil Procedure 12(b)(3).*fn1 CAI 17 opposes their motions. Having considered the papers filed by the 18 parties and their arguments at the hearing, the Court GRANTS 19 SACL's unopposed motion to set aside the default and DENIES the 20 motions to dismiss. 21
Except where noted, the facts material to the resolution of
these motions are not in dispute.
CAI and SACL entered into three agreements whereby CAI leased 2 shipping containers to SACL. 3
The first two lease agreements, dated May 1, 2005 and November 1, 2008, amended December 15, 2008, contain identical 5 venue selection clauses. These clauses state in relevant part, 6 With respect to any claim or controversy arising out of or relating to this agreement, the parties consent to the jurisdiction of State and Federal Courts located in San Francisco, California, U.S.A.
Declaration of Nadine Teixeira in Supp. of Pl.'s Opp. to Def. 9 Maruba SA's Mot. to Dismiss (Teixeira Maruba SA Decl.) ¶ 4, Ex. E 10 at 10, General Terms and Conditions ¶ 11(a); id. at ¶ 4, Ex. F at 10, General Terms and Conditions ¶ 11(a). 12
The third lease agreement, dated August 8, 2009, states, With respect to any claim or controversy arising out of or relating to this agreement, Lessor may require that any dispute or proceeding arising out of or relating to this Agreement, shall, at Lessor's sole option and discretion, be brought only in state or federal courts having jurisdiction over the City and County of San Francisco or before the American Arbitration Association in San Francisco under its Commercial Arbitration Rules. Lessee consents to jurisdiction and venue in those courts. Lessor may opt to commence or allow proceedings in any other jurisdiction.
Teixeira Maruba SA Decl. ¶ 4, Ex. G at 8, General Terms and 20 Conditions ¶ 11(a). 21
On August 10, 2009, CAI entered into an amended and restated 22 guaranty agreement with Maruba SA and Maritima Maruba, in which 23 Maruba SA and Maritima Maruba guaranteed SACL's performance and 24 payment under the lease agreements. Id. ¶ 5, Ex. A at 1. The 25 guaranty agreement contained a forum selection clause stating, 26 CAI may require that any dispute or proceeding arising out of or relating to this Guaranty shall, at CAI's sole option and discretion, be brought only in state or federal courts having jurisdiction over the City and County of San Francisco or before the American Arbitration Association in San Francisco under its Commercial Arbitration Rules. Each of the Guarantors consents to jurisdiction and venue in those courts. CAI may opt to commence or allow proceedings in any other jurisdiction.
On September 30, 2010, CAI entered into a Creditors
with multiple parties, including Maruba SA and SACL, but not 7
Maritima Maruba. Id. ¶ 6, Ex. B. The purpose of this agreement 8 was
to restructure debt that various debtors, including Maruba SA 9 and
others, owed to creditors, including CAI and others, to allow 10 the
debtors to resolve assorted debts, including that owed under
the guaranty and lease agreements described above, with the
assistance of a new investor. Id. at 3-4. The Creditors 13
Agreement incorporated the lease agreements between CAI and SACL 14 by
reference in the schedule of "Charter Party Agreements / 15
Leasing Contracts." Id. at 16. The Creditors Agreement provided 16
that, after certain payments of the outstanding debt amounts were 17
made, forty percent of the total overdue debt would be waived. 18
Id. at 7. The Creditors Agreement also provided that the Company*fn2 would pay, effective June 30, 2010, the original lease amounts in 20 the leasing contracts. Id. at 7 ¶ 2.6. The creditors agreed, 21 "for the duration of the Creditors Agreement, not to take any 22 legal actions against the Company (including but not limited to a 23 demand for payment, filing for insolvency, enforcement action or 24 any other similar proceedings)." Id. at 7 ¶ 4. 25 26
The Creditors Agreement included clauses addressing events of default that allowed CAI and the other creditors to cancel the 3 agreement. If the Company failed to make the payments of 4 outstanding debt required to any creditor within specified amounts 5 of time, the default "shall be deemed to be a repudiatory breach 6 of the Creditors Agreement insofar as it relates to that 7 Creditor." Id. at 8-9 ¶¶ 7.1-7.3. In such an event, the creditor 8 "shall be entitled to cancel the Creditors Agreement insofar as it 9 relates to that Creditor" and to start proceedings to recover the 10 total overdue amount, including any amount that would have been waived had the Creditors Agreement remained in effect. Id.
Further, if ongoing lease payments were not made within a certain 13 time period, the affected creditor could also cancel the Creditors 14 Agreement. Id. at 9 ¶ 7.4.1. In addition, "the Creditors reserve 15 all of their rights to commence any action or proceeding against 16 the relevant counterparty under the relevant Container Lease 17 Agreements / Leasing Contracts and/or Charter Party Agreements to 18 which they are party. This right shall be in addition to and 19 shall not replace or amend any existing rights, terms or 20 conditions contained in the Container Lease Agreements / Leasing 21 Contracts and/or Charter Party Agreements." Id. at 9-10 ¶ 7.4.2.
The Creditors Agreement also included clauses establishing a 23 condition precedent: 24
9.1 The restructuring shall be subject to the Condition Precedent that the Company provides evidence of the undertaking from the New Investor, ...