Lasalle Bank N.A. v. Mobile Hotel Properties, LLC

Decision Date01 August 2003
Docket NumberNo. CIV.A.03-0114-CG-L.,CIV.A.03-0114-CG-L.
Citation274 F.Supp.2d 1293
PartiesLASALLE BANK N.A., f/k/a Lasalle National Bank, as Plaintiff for the Registered Holders of Asset Securitization, Corporation Commercial Mortgage Pass-Through Certificates, Series 1996-D2, Plaintiff, v. MOBILE HOTEL PROPERTIES, LLC, f/k/a/ Columbus Mobile Hotel Properties LLC, et al., Defendants.
CourtU.S. District Court — Southern District of Alabama

Michael Edwin Gabel, T. Julian Motes, Melissa Marie Lindquist-King, Sirote & Permutt, P.C., Mobile, AL, for Plaintiff.

Lawrence B. Voit, W. Alexander Gray, Jr., Silver, Voit & Thompson, PC, Mobile, AL, for Defendants.

ORDER

GRANADE, Chief Judge.

This matter is before the court on the motion of defendants Mobile Hotel Properties, LLC ("Mobile Hotel"), CHP Mobile Hotel Properties, Inc. ("CHP"), Columbus Hotel Beverage Company, Inc. ("Columbus Beverage"), and Columbus Hotel Properties, LLC ("Columbus Hotel") to dismiss or, in the alternative, to strike and to transfer venue (Doc. 4), plaintiff's opposition thereto (Dots. 12 & 13), and defendants' reply (Doc. 15). Defendants seek dismissal of CHP and Columbus Beverage from this action pursuant to Rule 12(b)(6), dismissal of Columbus Hotel for lack of in personam jurisdiction pursuant to Rule 12(b)(2), dismissal of this entire action for improper venue pursuant to Rule 12(b)(3) or transfer of the case to the Eastern District of Louisiana pursuant to 28 U.S.C. § 1406(a), or in the alternative, that the amended complaint be stricken pursuant to Rule 15(a) and venue be transferred to the Eastern District of Louisiana pursuant to 28 U.S.C. § 1404(a). The court finds that plaintiff is no longer asserting any claims against CHP or Columbus Beverage and therefore that they are due to be dismissed from this action. The court also finds that this court lacks in personam jurisdiction over Columbus Hotel and, thus, Columbus Hotel is due to be dismissed from this action. Finally, the court finds that venue is proper in this district, but that the action is due to be transferred to the Eastern District of Louisiana pursuant to 28 U.S.C. § 1404(a) for the convenience of the witnesses and parties.

FACTS

Plaintiff LaSalle is a banking corporation organized and existing under the laws of Illinois. Plaintiff presently holds a mortgage note in the original principal amount of $7,700,000.00 made payable originally by Mobile Inn Associates, L.P., a Virginia limited partnership, to Nomura Asset Capital Corporation, a Delaware corporation. The original note was secured by real property located in Mobile, Alabama. The note, mortgage and encumbered property were assigned or transferred to defendant Mobile Hotel. Defendant Columbus Hotel is a Louisiana limited liability company which guaranteed obligations of Mobile Hotel to plaintiff. Columbus Hotel is also the sole member of Mobile Hotel. Columbus Hotel reportedly includes Mobile Hotel's financial information on its own tax return.

The guaranty provides that "concurrently herewith, Mobile [Inn Associates, L.P.] is transferring the Property to [Mobile Hotel Properties, L.L.C.], a Louisiana limited liability company (`Borrower')" and that "Lender is not willing to consent to the transfer of the Property from Mobile [Inn Associates, L.P.] to Borrower, and the assignment and assumption contemplated under the Consent, unless Guarantor unconditionally guarantees payment and performance to Lender of the `Guaranteed Obligations' (as hereinafter defined)." Defendant Mobile Hotel is a Louisiana limited liability company originally formed for the purpose of acquiring, owning, operating and managing a hotel located in Mobile, Alabama.

On March 8, 2002, Mobile Hotel filed for protection under Chapter 11 of the Bankruptcy Code. Columbus Hotel paid the attorney's fees associated with the bankruptcy. Mobile Hotel's bankruptcy case was dismissed on August 6, 2002. Following dismissal of the bankruptcy case, a non-judicial foreclosure sale was conducted on the real estate encumbered by the mortgage to plaintiff.

The guaranty provides that the guarantor shall be liable for the full amount of the loan and all obligations of borrower to lender under the loan documents in the event that borrower "fails to maintain its status as a single purpose entity, each as required by, and in accordance with, the Mortgage." Plaintiff alleges that Mobile Hotel failed to maintain its status as a single purpose entity by amending its articles of organization to state as its purpose "any lawful activity for which limited liability companies may be formed under the Act." Plaintiff claims Mobile Hotel also violated this provision by incurring additional debt, in favor of the guarantor, in an amount in excess of $3.6 million, without plaintiff's consent and in violation of the mortgage. Plaintiff also alleges that guarantor has violated the guaranty agreement by refusing and failing to pay the debt which is due, by failing to provide financial information, and by misapplying and/or converting rents following default. Plaintiff also asserts that Columbus Hotel is liable as the guarantor for the obligations or liabilities of Mobile Hotel or Columbus Hotel in connection with the loan or Mobile Hotel's gross negligence or willful misconduct.

The guaranty states that it "shall be governed by and construed in accordance with the laws of the State in which the real property encumbered by the Mortgage is located and the applicable laws of the United States of America." The guaranty also states that "Guarantor is the owner of a direct or indirect interest in Borrower, and Guarantor will directly benefit from Lender's making the loan to Borrower."

ANALYSIS
I. Dismissal of CHP and Columbus Beverage

Defendants have moved for the dismissal of CHP and Columbus Beverage. The original complaint contained causes of action for temporary restraining orders, preliminary injunction and for appointment of receiver, naming CHP and Columbus Beverage, among others, as defendants. Such relief was granted by the Circuit Court on August 19, 2002. The amended complaint contains no allegations concerning CHP or Columbus Beverage and seeks no relief against them. The amended complaint does not even list CHP or Columbus Beverage as defendants. Therefore, the court finds it appropriate to dismiss CHP and Columbus Beverage from this action.

II. Personal Jurisdiction Over Columbus Hotel

In the context of a motion to dismiss in which no evidentiary hearing is held, a plaintiff need establish only a prima facie case of jurisdiction. Huey v. Am. Truetzschler Corp., 47 F.Supp.2d 1342, 1344 (M.D.Ala.1999) (citing Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990)). "The court, in considering the motion, must take all allegations of the complaint that the defendant does not contest as true, and, where the parties' affidavits conflict, the court must construe all reasonable inferences in favor of the plaintiff." Id.

When a defendant challenges personal jurisdiction, the plaintiff has the twin burdens of establishing that personal jurisdiction over the defendant comports with (1) the forum state's long-arm provision and (2) the requirements of the due-process clause of the Fourteenth Amendment to the United States Constitution. See Olivier v. Merritt Dredging Co., 979 F.2d 827, 830 (11th Cir.1992), cert. denied, 507 U.S. 983, 113 S.Ct. 1577, 123 L.Ed.2d 145 (1993). Because Alabama's long-arm provision, ALA. R. Cry. P. 4.2(a), authorizes the assertion of personal jurisdiction to the limits of the United States Constitution, a plaintiff may carry both burdens by demonstrating that personal jurisdiction over the defendant meets the requirements of federal due process. Id. Due process requires, first, that the defendant have "certain minimum contacts" with the forum state and, second, that the exercise of jurisdiction over the defendant does not offend "traditional notions of fair play and substantial justice." Burnham v. Superior Court of California, County of Marin, 495 U.S. 604, 618, 110 S.Ct. 2105, 109 L.Ed.2d 631 (1990) (quoting International Shoe Co. v. State of Washington, Office of Unemployment Compensation and Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).

A. Minimum Contacts

The Due Process Clause protects one's liberty interests by shielding the individual from binding judgments in a forum with which he has established no meaningful contacts, ties or relations. The nature and quality of the contacts varies depending on whether the type of jurisdiction being asserted is general or specific. Consol. Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1291 (11th Cir.2000). General jurisdiction exists whenever the defendant's connection with the forum state is "continuous and systematic"-there need be no nexus between the forum and the litigation. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). On the other hand, a court can assert specific jurisdiction over a person with a more attenuated connection to the forum when there is a sufficient nexus between the forum and the matter at issue. Id. at 414, n. 8, 104 S.Ct. 1868.

It is clear from the facts submitted that the court does not have general jurisdiction over Columbus Hotel. Columbus Hotel does not have a continuous and systematic connection with Alabama. For specific jurisdiction to apply, "[t]he nonresident defendant's contacts with the forum must be such that he has `fair warning' that a particular activity may subject him to the jurisdiction of a foreign sovereign. A person has fair warning if he `purposefully directs' his activities at the forum, and claims of injury result from these activities". Ruiz de Molina v. Merritt & Furman Insurance Agency, Inc., 207 F.3d 1351, 1355 (11th Cir.2000) (citing Burger King Corp. v. Rudzewicz 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). To constitute minimum contacts for purposes of specific...

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