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December 1, 1993


The opinion of the court was delivered by: PIERRE N. LEVAL


 Defendants' request three alternative forms of relief: (1) dismissal for lack of jurisdiction, improper venue and failure to join a party; (2) transfer to the Western District of Tennessee; or (3) a stay pending the resolution of a case filed by defendant against plaintiff in Tennessee.


 Role of T&W

 According to defendants, a third party not before the court in this action played a significant role in the financing arrangements between Falconwood and themselves. That third party is Thompson and Wallace Memphis, Inc. ("T&W"), a cotton broker based in Memphis, Tennessee. Defendants say that they agreed with Falconwood to appoint T&W to sell the Griffins' warehoused cotton. According to the Griffins' version of the arrangement, Falconwood would release the warehouse receipts it held as security for the Griffins' debt to T&W, which would sell the warehoused cotton, and remit the proceeds to Falconwood for application against the Griffins' debt. Defendants contend that whatever debt they may have to Falconwood is due to errors made by T&W, Falconwood, or both, which resulted in a failure to properly credit defendants with the sale of some 9,000 bales of cotton, worth over $ 2.6 million.

 Prior effort to resolve issues

 Well before the filing of this action, Griffin and Falconwood began discussing the status of Griffin's account. (Aff. of James Van Dover, Griffin's attorney, at P 3; Aff. of W. Rowlett Scott, Falconwood's Memphis attorney, at P 2.) After the circulation of proposals for an audit of the transactions among Griffin, Falconwood, and T&W failed to result in a signed agreement, Griffin, acting on behalf of himself and his farming corporation, brought suit against Falconwood and T&W on October 9, 1992, in the Western District of Tennessee. (Van Dover Aff. PP 5-7 and Exs. A-B.) This suit seeks a declaratory judgment of any indebtedness established by a master to be appointed by the court to audit all records of the parties. (Complaint attached to Aff. of Patti Potash, Griffin's New York counsel, as Ex. B.) Defendants submit an exchange of correspondence between counsel for Falconwood and for Griffin, showing that discussions among the parties were continuing, and that Griffin held off on service of the Western District suit and assured Falconwood's local counsel that service would not be made without advance notice. Falconwood, Griffin and T&W eventually agreed to hire an accounting firm to perform an audit of all transactions among the parties to determine the "appropriate state of accounts" between them. (Agreement, attached as Ex. E to Van Dover Aff.) The audit ultimately produced inconclusive results. (Letter of Ernst & Young to three parties, dated Feb. 12, 1993, attached as Ex. 4 to Aff. of Bob Lee, Griffin's CPA.) On March 23, 1993, the suit in this court was filed. On April 2, 1993, both Falconwood and T&W were served with the complaint in the Tennessee action.


 A. Jurisdiction and venue

 Defendants move for dismissal on the ground that this court lacks personal jurisdiction over them, or alternatively that venue is improper in this district.

 The security agreements signed by the defendants include a forum selection clause whereby the borrower submits to the jurisdiction of this court, designates New York State law to govern the contract, and selects the Southern District of New York (or New York State court) as the exclusive venue for suit with respect to the agreement. *fn1" Settled law permits parties to a contract to select in advance the forum for litigation of disputes that arise under the contract. National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 315-16, 11 L. Ed. 2d 354, 84 S. Ct. 411 (1964); Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 111 S. Ct. 1522, 1526-28, 113 L. Ed. 2d 622 (1991). These parties contracted to brings such actions here, in the Southern District of New York, and to that end, consented to personal jurisdiction here.

 Limits on a court's jurisdiction over the person of a defendant exist to protect individuals from being haled into distant courts to defend their interests. As protections of personal rights, they may be waived. Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703, 72 L. Ed. 2d 492, 102 S. Ct. 2099 (1982). Defendants submitted to the jurisdiction of this court when they signed their security agreements with plaintiff. They do not claim that they were fraudulently induced to agree to this provision in their contracts. *fn2" I find that defendants waived any objection to the court's personal jurisdiction over them when they signed the security agreements. On that ground, I deny their motion to dismiss the action for lack of personal jurisdiction.

 The motion to dismiss for improper venue is denied on the same grounds. Venue is proper in this diversity action in "a judicial district in which the defendants are subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(a)(3). The defendants have made themselves subject to the ...

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