Judge Rodriguez Finds Jurisdiction and Venue Are Proper Because of Choice of Law Provision, Forum Related Contacts, and Venue Clause

WBCMT 2007-C33 Blanco Retail, LLC v. Salfiti, No. SA-13-CV-716-XR (W.D. Tex. January 29, 2014)(Rodriguez, X.)

Plaintiff Blanco filed suit against defendant Salfiti, seeking to hold Salfiti liable, as guarantor, on a defaulted commercial mortgage. Order at p. 1. Salfiti then moved to dismiss the case for lack of subject-matter jurisdiction, lack of personal jurisdiction, improper venue, and failure to join a necessary party. Id. at 2.

The Court held that subject-matter jurisdiction was proper pursuant to 28 U.S.C. § 1332(a) because Salfiti was a citizen of California and plaintiff, as a limited liability company with U.S. Bank as its sole member, was a citizen of Ohio. Id. at 3.

Applying the Fifth Circuit’s three-step analysis set forth in McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009) to determine whether the Court has specific personal jurisdiction over the defendant, the court held first that the forum-selection clause contained within the guaranty is prima facie valid, and establishes Salfiti’s minimum contacts with Texas. Id. at 4-6. The Court also noted that the guaranty contained a choice-of-Texas-law provision, references to specific Texas statutes and rules of court and also guaranteed a loan for a Texas corporation. Id. The Court further found that the plaintiff’s cause of action arises out of Salfiti’s forum-related contacts, and the exercise of personal jurisdiction over Salfiti is fair and reasonable. Id. at 8. Thus, the Court properly exercised personal jurisdiction over Salfiti.

The Court also rejected Salfiti’s argument regarding improper venue, concluding that through the guaranty’s forum-selection clause, Salfiti agreed to venue in the Western District of Texas. Id. at 8-9.

Finally, the Court rejected Salfiti’s contention that Almanara, the entity that originally entered into the defaulted mortgage, was a necessary party. Id. at 9. Defendant failed to demonstrate that the Court cannot accord complete relief between the parties without joinder of Almanara, or that Almanara claims an interest relating to the subject of the action. Id. at 9-10.