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York v. Jordan

United States District Court, Ninth Circuit

January 28, 2014

BENNETT V. YORK, Plaintiff,


DERRICK K. WATSON, District Judge.


Before the Court is Defendants Bruce Jordan and Kathleen Jordan's Motion to Dismiss for Lack of Jurisdiction, or in the Alternative to Transfer Venue ("Motion"), filed on September 16, 2013. Plaintiff Bennett V. York opposed the Motion. Pursuant to Local Rule 7.2(d), the Court finds this matter suitable for disposition without a hearing. After careful consideration of the supporting and opposing memoranda, and the relevant legal authority, the Motion is hereby DENIED.


Plaintiff, a citizen of Mississippi, filed a First Amended Complaint against Defendants, citizens of California, on September 6, 2013, alleging state law claims for breach of contract and fraud. The First Amended Complaint asserts that this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a), and that venue is proper under 28 U.S.C. § 1391(b). First Amended Complaint ("FAC") ¶¶ 1-4. Plaintiff was a member of Aloha/King, LLC ("Aloha/King"), a Mississippi limited liability company formed on July 31, 2004 to develop real property located at 1524 King Street, Honolulu, Hawai'i (the "Property"). Aloha Island-King, LLC ("Aloha Island-King"), a California limited liability company, was also a member of Aloha/King. Defendants were each part owners of Aloha Island-King; Mr. Jordan was its managing member. FAC ¶¶ 5-8.

Under the terms of the Limited Liability Company Agreement of Aloha/King, entered into on July 31, 2004 ("LLC Agreement"), Aloha/King's general purpose was to acquire and develop the Property for a self-storage facility. Ex. A (LLC Agreement). Pursuant to the LLC Agreement, each member agreed to contribute specified amounts of capital, including initial contributions, as well as Additional Capital Contributions, Operational Additional Capital Contributions, Construction Overrun Additional Capital Contributions, and Unmatched Construction Overrun Additional Capital Contributions ("COACC"). Ex. A at 4-5.

On September 26, 2006, Mr. Jordan executed a personal guarantee for one-half of Plaintiff's Unmatched COACC to Aloha/King ("Guaranty"). FAC ¶ 14; Ex. C (Guaranty). Under the Guaranty, Mr. Jordan agreed that if Plaintiff had not been repaid all Unmatched COACC on or before a defined Trigger Date, Mr. Jordan would pay Plaintiff one-half of all Unmatched COACC which then remained unpaid. Ex. C. Plaintiff alleges that he has not been repaid a total of $1, 596, 520.60 in Unmatched COACC, and that Mr. Jordan breached the Guaranty by failing to pay Plaintiff one-half of the outstanding Unmatched COACC, or $798, 260.30. FAC ¶¶ 24-26. According to Plaintiff, Mr. Jordan now claims that he is not liable under the Guaranty because he did not execute it; rather, Mrs. Jordan signed his name on the Guaranty. FAC ¶¶ 27-28. Plaintiff alleges that Mr. Jordan breached the Guaranty (Count I) and that Mrs. Jordan committed fraud by forging Mr. Jordan's name on the Guaranty (Count II).

Defendants move for dismissal, claiming that Plaintiff is contractually bound to submit his claims to arbitration. Defendants alternatively contend that transfer of this action to the Central District of California is appropriate because venue does not lie in this district. For the reasons set forth below, neither contention has merit.


Defendants bring the Motion pursuant to Federal Rule of Civil Procedure 12(b)(3). Rule 12(b)(3) provides that a court may dismiss a claim for improper venue. Once venue is challenged, the plaintiff has the burden of proving that venue is proper in this district. See Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). In considering a Rule 12(b)(3) motion, the Court may consider facts outside the pleadings and need not accept the pleadings as true. Kukje Hwajae Ins. Co. v. M/V Hyundai Liberty, 408 F.3d 1250, 1254 (9th Cir. 2005). If there are contested factual issues, the Court is obligated to draw all reasonable inferences and resolve the factual conflicts in favor of the non-moving party or hold a pre-trial evidentiary hearing on the disputed facts. Murphy v. Schneider Nat'l, Inc., 362 F.3d 1133, 1138-39 (9th Cir. 2004).

Pursuant to 28 U.S.C. § 1406(a), "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." The court has discretion in determining whether to transfer or dismiss an action for improper venue. See King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992).


The Court addresses Defendants' arguments regarding mandatory arbitration, personal ...

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