It's My Seat, Inc. v. Hartford Capital LLC

CourtDistrict Court, C.D. California
DecidedApril 4, 2024
Docket2:22-cv-02192
StatusUnknown

This text of It's My Seat, Inc. v. Hartford Capital LLC (It's My Seat, Inc. v. Hartford Capital LLC) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
It's My Seat, Inc. v. Hartford Capital LLC, (C.D. Cal. 2024).

Opinion

O 1

2 3 4 5 6 7

8 United States District Court 9 Central District of California

11 IT’S MY SEAT, INC. et al., Case № 2:22-cv-02192-ODW (AFMx)

12 Plaintiffs, ORDER DENYING DEFENDANTS’ 13 v. MOTION TO TRANSFER [69] 14 EIN CAP, INC. et al.,

15 Defendants.

16 17 I. INTRODUCTION 18 Plaintiffs It’s My Seat, Inc. and Vahe Shahinian (collectively “Plaintiffs”) 19 initiated this action against Defendants EIN CAP, Inc., Kevin Woodley, Gene Slavin, 20 and Russell Naftali (collectively “Defendants”), for the alleged fraudulent inducement 21 of a merchant cash advance agreement.1 (Notice Removal (“NOR”) Ex. A (“Compl.”), 22 ECF No. 1.) Defendants now move to transfer the action to the United States District 23 Court for the Southern District of New York pursuant to a forum selection clause in the 24 cash advance agreement. (Mot. Dismiss or Transfer (“Motion” or “Mot.”), ECF 25 No. 69.) For the following reasons, the Court DENIES Defendants’ Motion.2 26

27 1 The Court dismissed Defendant Hartford Capital LLC from the action pursuant to the parties’ Joint Stipulation to Dismiss, entered on September 30, 2022. (Order Grant. Joint Stip., ECF No. 61.) 28 2 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 II. BACKGROUND 2 The following facts are taken from Plaintiffs’ Complaint. See Ashcroft v. Iqbal, 3 556 U.S. 662, 678 (2009) (holding that well-pleaded factual allegations are accepted as 4 true for purposes of a motion to dismiss). 5 A. The Parties 6 It’s My Seat, Inc. (“IMS”) is a concert promoter and ticket vending agency 7 incorporated in California with its principal place of business in Los Angeles County. 8 (Compl. ¶¶ 1–2.) Vahe Shahinian (“Shahinian”) is the owner and president of IMS and 9 resides in Los Angeles County. (Id.) 10 Hartford Capital LCC (“Hartford”) is a business loan provider organized as a 11 New York limited liability company. (NOR ¶ 5; see Compl. ¶¶ 3, 16, 25–26.) Boris 12 Stein (“Stein”) is a managing partner at Hartford and resides in New York. (NOR ¶ 5; 13 Compl. ¶ 26.) EIN CAP, Inc. (“EIN”) is a merchant cash advance lender incorporated 14 in New York. (NOR ¶ 5; Compl. ¶ 26.) Kevin Woodley, Gene Slavin, and Russell 15 Naftali are employed by or manage EIN and reside in New York. (Compl. ¶¶ 16–21, 16 39.) Although Hartford is a separate entity from EIN, Plaintiffs allege that Hartford has 17 its money invested in EIN. (Compl. ¶ 26.) 18 B. The Dispute 19 On January 8, 2019, Stein reached out to Shahinian with a loan opportunity for 20 IMS. (Id. ¶ 26.) Stein offered a $750,000 line of credit (the “Term Loan”) that carried 21 an annual interest rate of 8.89%. (Id.) However, to qualify for the Term Loan, IMS 22 would first need to take out a $250,000 bridge loan (the “Bridge Loan”) from EIN, to 23 demonstrate IMS’s credit worthiness. (Id.) The Bridge Loan would take the form of a 24 “Merchant Cash Advance,” and carry a monthly interest rate of 15% “with a daily 25 payment of $3,600.00.” (Id.) IMS would need to make daily payments on the 26 high-interest Bridge Loan for thirty days before the remainder of the loan transitioned 27 to the lower-interest Term Loan with the higher line of credit. (Id.) Additionally, 28 Plaintiffs would be prohibited from taking out any other third-party loans during the 1 thirty day repayment period on the Bridge Loan. (Id.) Based on Stein’s promises, 2 IMS—through Shahinian—entered into the Bridge Loan with EIN. (Id. ¶ 27.) The 3 Bridge Loan Agreement includes only the terms pertaining to the Bridge Loan, and does 4 not mention the Term Loan. (See Decl. Russell Naftali ISO Mot. (“Naftali Decl.”) Ex. 1 5 (“Bridge Loan Agreement”), ECF No. 69-1.) 6 On January 10, 2019, Plaintiffs received the Bridge Loan funds and began to 7 make timely payments. (Compl. ¶¶ 30–32.) However, Plaintiffs did not hear from 8 Defendants after the initial thirty days. (Id. ¶ 35.) When Plaintiffs inquired about the 9 status of the Term Loan on February 12, 2019, Stein responded that the Term Loan 10 “was being worked on.” (Id.) Over the following weeks, “Defendants gave Plaintiffs 11 string-along statements to reassure [them] that the Term Loan would come through.” 12 (Id.) Meanwhile, IMS continued making the daily required high-interest payments on 13 the Bridge Loan for more than a month beyond the date the Term Loan should have 14 taken effect. (Id. ¶ 36.) 15 Seventy days passed and Stein did not transition the Bridge Loan into the Term 16 Loan. (Id.) In need of capital to fund its operations, IMS took out additional third-party 17 loans. (Id. ¶ 38.) When Defendants learned of IMS’s third-party loans, Defendants 18 accused IMS of violating the Bridge Loan Agreement and refused on that basis to 19 provide the Term Loan. (Id.) 20 Plaintiffs contend that Stein and EIN “were acting in cahoots” and “purposely 21 delayed . . . the line of credit until Plaintiffs were in a financial corner and were forced 22 to seek third-party funding.” (Id.) Defendants then used Plaintiff’s third-party funding 23 “as an excuse to not transition the Bridge Loan to a Term Loan.” (Id.) 24 C. The Litigation 25 On March 4, 2022, Plaintiffs initiated this action in Los Angeles County Superior 26 Court. (See Compl.) Defendants subsequently removed the action to the United States 27 District Court for the Central District of California. (See NOR.) Based on the 28 allegations above, Plaintiffs assert causes of action for: (1) violation of the civil 1 Racketeer Influenced and Corrupt Organizations (“RICO”) Act; (2) conspiracy to 2 commit RICO; (3) promissory estoppel; (4) fraud; (5) intentional misrepresentation; 3 (6) negligent misrepresentation; and (7) unfair competition in violation of California 4 Business and Professions Code section 17200. (Compl. ¶¶ 42–92.) Defendants seek to 5 transfer the action to the United States District Court for the Southern District of New 6 York pursuant to a forum selection clause in the Bridge Loan Agreement.3 (See Mot.; 7 Joinder Mot., ECF No. 70.) Plaintiffs oppose transfer, arguing that the forum selection 8 clause does not apply to this action. (See Opp’n Mot. (“Opp’n”), ECF No. 78.) 9 III. LEGAL STANDARD 10 A district court has discretion to transfer an action to another district court “where 11 it might have been brought,” if “the convenience of parties and witnesses” and the 12 interest of justice favor transfer. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 13 (1988) (quoting 28 U.S.C. § 1404(a)). When considering a motion to transfer under 14 § 1404(a), “[s]ubstantial weight is accorded to the plaintiff’s choice of forum, and a 15 court should not order a transfer unless the ‘convenience’ and ‘justice’ factors . . . weigh 16 heavily in favor of venue elsewhere.” Catch Curve, Inc. v. Venali, Inc., No. 2:05-cv- 17 04820-DDP (AJWx), 2006 WL 4568799, at *1 (C.D. Cal. Feb. 27, 2006) (citing Sec. 18 Inv. Prot. Corp. v. Vigman, 764 F.2d 1309, 1317 (9th Cir. 1985)). Thus, “[t]he party 19 seeking the transfer bears the burden of persuasion.” Id. 20 However, when a valid forum selection clause is present, the district court must 21 “adjust their usual § 1404(a) analysis.” Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. 22 Dist. Texas, 571 U.S. 49, 51 (2013).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Piper Aircraft Co. v. Reyno
454 U.S. 235 (Supreme Court, 1982)
Stewart Organization, Inc. v. Ricoh Corp.
487 U.S. 22 (Supreme Court, 1988)
Ashcroft v. Iqbal
556 U.S. 662 (Supreme Court, 2009)
In Re Genentech, Inc.
566 F.3d 1338 (Federal Circuit, 2009)
J. McIntyre Machinery, Ltd. v. Nicastro
131 S. Ct. 2780 (Supreme Court, 2011)
Cape Flattery Limited v. Titan Maritime, LLC
647 F.3d 914 (Ninth Circuit, 2011)
Decker Coal Company v. Commonwealth Edison Company
805 F.2d 834 (Ninth Circuit, 1986)
Matheson v. Progressive Specialty Insurance Company
319 F.3d 1089 (Ninth Circuit, 2003)
Boston Telecommunications Group, Inc. v. Wood
588 F.3d 1201 (Ninth Circuit, 2009)
Vu v. Ortho-McNeil Pharmaceutical, Inc.
602 F. Supp. 2d 1151 (N.D. California, 2009)
Metz v. US Life Ins. Co. in City of New York
674 F. Supp. 2d 1141 (C.D. California, 2009)
Safarian v. Maserati North America, Inc.
559 F. Supp. 2d 1068 (C.D. California, 2008)
Burt v. Titlow
134 S. Ct. 10 (Supreme Court, 2013)
Yei Sun v. Advanced China Healthcare
901 F.3d 1081 (Ninth Circuit, 2018)
Jones v. GNC Franchising, Inc.
211 F.3d 495 (Ninth Circuit, 2000)
Lacross v. Knight Transportation, Inc.
95 F. Supp. 3d 1199 (C.D. California, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
It's My Seat, Inc. v. Hartford Capital LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/its-my-seat-inc-v-hartford-capital-llc-cacd-2024.