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Scott v. Lopez

United States District Court, Ninth Circuit

March 21, 2013

PHILIP B. SCOTT, Plaintiff,
v.
EDGAR LOPEZ, Defendant.

NOT FOR PUBLICATION

ORDER GRANTING DEFENDANT’S MOTION TO ENFORCE FORUM SELECTION CLAUSE

HOWARD R. LLOYD, UNITED STATES MAGISTRATE JUDGE.

In this diversity action, plaintiff Philip B. Scott, a California resident, seeks redress for alleged fraud and breach of fiduciary duty. Defendant Edgar Lopez, who lives in New Mexico, moves to dismiss for lack of personal jurisdiction and improper venue. Lopez contends that a forum selection clause in an agreement between the parties requires this case to be litigated in New Mexico. Plaintiff opposes the motion. Upon consideration of the moving and responding papers, the parties’ respective supplemental briefs, as well as the arguments of counsel, this court concludes that, even if jurisdiction properly could be exercised over Lopez here, the parties’ forum selection clause should be enforced.[1]

BACKGROUND

According to the complaint, in 1993 Lopez formed Amador Associates, LLC (Amador Associates), a New Mexico limited liability company.[2] The only members of Amador Associates are Scott and Lopez, who each own 50% interest in the company. Lopez is the managing member. The Amador Associates Operating Agreement contains a forum selection clause that provides:

G. Applicable Law

This agreement shall be governed by and construed in accordance with the laws of the State of New Mexico. Any action concerning the interpretation or administration of this Agreement or any other matter concerning the Members with respect to the Company shall be brought in Dona Ana County, New Mexico.

(Dkt. No. 6, Lopez Decl., Ex. A (Operating Agreement, Section XIII, G)).

The complaint further alleges that in 1995, Lopez formed Garfield, LLC (Garfield), an Indiana limited liability company. Amador Associates owns 98% interest in Garfield. Lopez, Garfield’s managing member, owns a 2% interest.

Plaintiff alleges that on or about July 10, 2006, Lopez, in his capacity as Garfield’s managing member, executed a promissory note in connection with Garfield’s purchase of real property in Marion County, Indiana. The note was executed in favor of Bond Street Capital Corp. (Bond Street), a California corporation, for $1, 350, 000. (Complaint ¶ 8, Ex. A). As security for the note, Lopez executed an “Unconditional Guaranty of Payment.” (Id., ¶ 9, Ex. B). And, as further security for the note, the complaint alleges that Lopez forged Scott’s signature on an “Unconditional Guaranty of Payment” (Scott Guaranty). (Id. ¶ 10, Ex. C). Plaintiff says that he did not know about the Scott Guaranty and that Lopez did not have his permission to sign his name to that document. The promissory note reportedly was also secured by a “Real Estate Mortgage, Security Agreement and Assignment of Leases, and Fixture Filing” executed by Lopez on Garfield’s behalf and recorded in Marion County, Indiana.

Plaintiff says that several years later, on January 15, 2010, Bond Street endorsed an Allonge to Note, making the note payable to Bond Street’s successor-in-interest, Presidential Bank, FSB (Presidential).

The complaint goes on to allege that Garfield subsequently defaulted on the note. Presidential then sued Garfield, Lopez, and Scott in Indiana state court. Presidential also sought a decree of foreclosure with respect to the Indiana property and a receiver was appointed to collect rents from the property pursuant to the Security Agreement and Assignment of Leases.

Scott says that Lopez was served with summons in the Indiana action; and, Lopez reportedly hired attorney Herbert Jensen to represent himself, Garfield, and Scott. Plaintiff alleges that he was never served with a copy of the summons and complaint. And, he claims that neither Lopez nor Jensen ever contacted him about the suit.

According to the complaint, Presidential obtained summary judgment against Garfield, Lopez and Scott in the amount of $1, 538, 916.76 (plus 8% interest per annum). Presidential was also permitted to foreclose on the subject property. Scott says that he was never ...


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