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A.I. CREDIT CORP. v. LIEBMAN

May 13, 1992

A.I. CREDIT CORPORATION, Plaintiff,
v.
STEVEN LIEBMAN, Defendant.



The opinion of the court was delivered by: ROBERT P. PATTERSON, JR.

 ROBERT P. PATTERSON, JR., U.S.D.J.

 This is an action for damages alleging default on payments due under four promissory notes. Defendant moves for an order: (1) pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure dismissing this action for lack of personal jurisdiction; (2) pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure dismissing this action for improper venue; and (3) pursuant to 28 U.S.C. § 1404(a) transferring this action to the District of Connecticut. Based on the allegations in the complaint and for the reasons set forth below, Defendant's motion is denied in its entirety.

 BACKGROUND

 This action arises from certain investments made by Defendant Steven Liebman, a Connecticut resident, in four limited partnerships. Each limited partnership was syndicated by Colonial Realty Company ("Colonial"), a Connecticut real estate concern. Colonial has since been forced into bankruptcy amidst allegations of fraud, forgery, and embezzlement involving thousands of investors and hundreds of millions of dollars. See George Judson, Investors Say Connecticut Empire Is Fraud, N.Y. Times, Mar. 9, 1990, at A1, B4.

 Plaintiff A.I. Credit Corporation ("AICCO"), a subsidiary of American International Group, is a New Hampshire corporation with its principal place of business in New York City. For its complaint, AICCO alleges the following.

 In 1986 and 1987, Liebman purchased interests in four limited partnerships syndicated by Colonial: Colonial Potomac Limited Partnership, Colonial Cheshire II Limited Partnership, Colmark II Limited Partnership, and Colonial Cheshire I Limited Partnership. *fn1" As part of the purchase price for each limited partnership interest, Liebman signed a "Negotiable Investor Note" ("Note"). *fn2" Payment of principal and interest under each Note was to be made in installments. Under the terms of each Note, a default by the maker in the payment of any installment of principal or interest rendered the whole of the outstanding principal and interest immediately due and payable at the holder's option.

 AICCO acquired an interest in each Note for value, in good faith, and without notice of any defects or defenses. Each Note has been duly negotiated to AICCO, and AICCO is a holder in due course of each Note.

 After Liebman defaulted in making payments on each Note, AICCO exercised its option to demand payment of the full amount of the principal outstanding plus accrued interest and applicable penalties. Liebman has failed to and refuses to make payment pursuant to AICCO's demand. AICCO therefore seeks judgment, plus interest, costs, disbursements, expenses, and attorneys' fees, in the amount of: $ 19,835.80 on the Colonial Potomac Note, $ 48,922.89 on the Colonial Cheshire II Note, $ 23,979.50 on the Colmark II Note, and $ 19,089.22 on the Colonial Cheshire I Note.

 DISCUSSION

 I. PERSONAL JURISDICTION

 In opposition to Defendant's motion to dismiss on jurisdictional grounds, Plaintiff asserts that Defendant has consented to this Court's jurisdiction with respect to actions arising out of each Note. The bases for this consent are "Investor Representations," allegedly agreed to by Liebman in connection with his investment in each limited partnership. The Investor Representations each contained the following clause:

 The undersigned hereby agrees and consents to the in personam jurisdiction of any court of competent jurisdiction and proper venue within (i) the state in which the Partnership has its principal place of business at the time of any suit, action, or proceeding, and (ii) the state in which the transferee of the Negotiable Investor Note is domiciled or otherwise has its principal place of business at the time of the suit, action or proceeding, arising out of or in connection with the Negotiable Investor Note or the Investment in the Partnership.

 Complaint, Exhs. B, D, F, H. Plaintiff argues that because it is the transferee of each Note and because its principal place of business in New York City, Defendant has consented to ...


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