Tech. Credit Corp. v. N.J. Christian Acad., Inc.

307 F. Supp. 3d 993
CourtDistrict Court, N.D. California
DecidedApril 18, 2018
DocketCase No.5:17–cv–06130–HRL
StatusPublished
Cited by14 cases

This text of 307 F. Supp. 3d 993 (Tech. Credit Corp. v. N.J. Christian Acad., Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tech. Credit Corp. v. N.J. Christian Acad., Inc., 307 F. Supp. 3d 993 (N.D. Cal. 2018).

Opinion

In May 2017, Dr. Shinn and Adam Kim say they met with an attorney to discuss opening a fraud investigation into Green Life Solar's conduct. (Shinn Decl., ¶¶ 24-25, Ex. P; Kim Decl. ¶¶ 7-8). That attorney asked the Monmouth County, New Jersey prosecutor to investigate the matter, and defendants say that the prosecutor's investigation is still pending. (Shinn Decl. ¶ 25, Ex. P; Kim Decl. ¶ 8).

Shortly after, TCC wrote defendants to advise that it had retained counsel to pursue collection of the amounts TCC claims they owe. (Shinn Decl. ¶ 26, Ex. Q). This lawsuit followed. In its complaint, TCC says that as a result of defendants' (alleged) breach of contract, TCC has been damaged in a sum exceeding $470,939.46.

Defendants contend that this matter doesn't belong here and should proceed in New Jersey in any event. For the reasons to be discussed, this court denies the Fed. R. Civ. P. 12(b)(3) motion to dismiss, as well as the alternate motion to transfer pursuant to 28 U.S.C. § 1404(a).

DISCUSSION

I. FED. R. CIV. P. 12(b)(3) MOTION TO DISMISS

A venue challenge may be raised by motion under Federal Rule of Civil Procedure 12(b)(3). In such a motion, "pleadings need not be accepted as true, and facts outside the pleadings may be considered." Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir. 2009). Rule 12(b)(3)"allow[s] dismissal only when venue is 'wrong' or 'improper.' " Atlantic Marine Constr. Co. v. U.S. Dist. Ct., 571 U.S. 49, 134 S.Ct. 568, 577, 187 L.Ed.2d 487 (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 the question whether venue is proper generally is governed by 28 U.S.C. § 1391. Id. Section 1391 provides that venue is proper: (1) in "a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located"; (2) in "a judicial district in which a substantial part of the events or *1001omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated"; or (3) "if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action." 28 U.S.C. § 1391(b)(1)-(3). TCC acknowledges that it bears the burden of showing that venue is proper in the Northern District of California. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979).

"When venue is challenged, the court must determine whether the case falls within one of the three categories set out in § 1391(b)." Atlantic Marine, 134 S.Ct. at 577. "If it does, venue is proper; if it does not, venue is improper, and the case must be dismissed or transferred under [ 28 U.S.C.] § 1406(a)" to any district in which it could have been brought. Id."Whether the parties entered into a contract containing a forum selection clause has no bearing on whether a case falls into one of the categories of cases listed in § 1391(b)." Id.

Venue in California cannot be based on § 1391(b)(1) since both defendants reside in New Jersey. (As will be discussed more fully below, § 1391(b)(1) does provide a basis for venue in New Jersey. Thus, § 1391(b)(3) does not apply.)

The key dispute is whether a substantial part of the events or property giving rise to TCC's claims occurred in the Northern District of California, thus providing a basis for venue here under § 1391(b)(2). Plaintiff argues that venue is proper under § 1391(b)(2) because its agreements with defendants were made in California and were to be performed here and because, according to the complaint, TCC suffered harm here as a result of defendants' alleged breach of contract. Citing Farm Credit West, PCA v. Lanting, No. 1:13-cv-00712-AWI-SMS, 2013 WL 3730391 (E.D. Cal., July 12, 2013), TCC argues that its contracts with defendants were made in California because Hartigan's execution of those documents was the last act necessary to give them binding effect. Like TCC, in Farm Credit West, the California plaintiff sued for breach of a guaranty, and the Washington state defendant moved for a more definite statement, arguing that the complaint's allegations were too vague or ambiguous to establish that venue was proper in California. Concluding that the complaint's allegations were sufficient to establish proper venue, the Farm Credit West court noted that "[a] contract is to be performed at the place where it is made, when no other place is indicated"; "[a] contract is 'made' in the place of acceptance"; and "[a]n obligation evidenced by an instrument is created at the place where the instrument is delivered." Id. at *2. The guaranty at issue in Farm Credit West was deemed to be made in California (not Washington) because the defendants executed the guaranty and delivered it to plaintiff; plaintiff signed and accepted the guaranty in California; plaintiff's acceptance was the last act necessary to give the guaranty binding effect; and no place of performance was expressly mentioned in the document. Id. TCC argues, persuasively, that the same operative facts are present here.

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Bluebook (online)
307 F. Supp. 3d 993, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tech-credit-corp-v-nj-christian-acad-inc-cand-2018.