The opinion of the court was delivered by: Paul G. Gardephe, U.S.D.J.
MEMORANDUM OPINION AND ORDER
Plaintiff Sovereign Bank brought this action to enforce a guaranty agreement entered into by Defendants Michael Ellis, Douglas Moskowitz, Steven Paul, The Michael J. Ellis Revocable Trust, and The Douglas Moskowitz Revocable Trust (the "Guaranty Agreement"). (Cmplt. ¶¶ 10-16) Defendants have moved to dismiss the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure or, in the alternative, to transfer this action to the District of Kansas pursuant to 28 U.S.C. § 1404(a). For the reasons stated below, Defendants' motion (Doc. No. 6) is DENIED.
In 2002, Plaintiff entered into a Master Loan and Security Agreement ("Loan Agreement") with Commercial Leasing Corporation ("Borrower"). (Cmplt. Ex. A) Defendant Ellis signed the Loan Agreement on Borrower's behalf.
(Id. at 17) Under the Loan Agreement, Plaintiff agreed to provide Borrower with loans that would finance Borrower's own equipment leases and loan transactions with other entities (the "Assigned Transactions"). (Id. at 1) A single loan under the Loan Agreement -- referred to as a "Loan Amount" (Cmplt. Ex. A §§ 1.1-1.2) -- provided financing for more than one Assigned Transaction. (See Def. Br. at 6-7)
The loans made under the Loan Agreement were secured by Borrower's interests in the Assigned Transactions. (Cmplt. Ex. A at 1) If an Assigned Transaction went into default, Borrower agreed to pay Plaintiff a "Repayment Amount," which is defined in Section 5.2 of the Loan Agreement as an amount that is calculated based on the unpaid payments and net present value of future payments relating to the Assigned Transaction. (Id. § 5.1(a)) However, the Loan Agreement caps Borrower's liability with respect to any particular Loan Amount at a "Maximum Loss Amount" "equal to ten percent (10%) of the Loan Amount for each respective loan." (Id. § 5.1(f))
To induce Plaintiff to enter into the Loan Agreement, Defendants entered into the Guaranty Agreement, in which they "guarantee[d] to [Plaintiff] . . . the due and punctual payment, performance and discharge of all obligations and liabilities . . . of Borrower" under the Loan Agreement. (Cmplt. Ex. B; see also Cmplt. Ex. A § 5.7 ("Personal Guarantees")) The Guaranty Agreement states that "[n]o modification, waiver or discharge of the liability of any Guarantor shall be valid unless in writing, signed and subscribed by [Plaintiff]." (Cmplt. Ex. B at 2) It also contains a forum selection clause in which Plaintiff and Defendants "agree[d] that all legal actions or proceedings between . . . [them] must be brought in a court of competent jurisdiction in the State of New York[,] County of New York, the Guarantors hereby waiving objections to summons, service of process, personal jurisdiction over the person or venue of any such court, unless [Plaintiff] . . . shall give its express written consent . . . ." (Id. at 2-3)
II. DEFENDANTS' MOTION TO DISMISS
In deciding Defendants' motion, this Court must determine whether the Complaint "contain[s] sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009), quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). Defendants, however, have not directly addressed whether Plaintiff has pled facts sufficient to state a claim for enforcement of the Guaranty Agreement. Instead, they offer three meritless arguments as to why Plaintiff cannot prevail on such a claim.
First, Defendants argue that Plaintiff is not entitled to recover the full amount it demands in the Complaint -- i.e., the total Repayment Amounts relating to twelve Assigned Transactions (Cmplt. ¶¶ 13, 16) -- because the Loan Agreement caps the Borrower's repayment obligation at 10% of the Repayment Amounts. (Def. Br. at 10-12) This argument fails for two reasons. As an initial matter, it relates to whether Plaintiff will ultimately be successful in proving that it is entitled to the full amount of damages it seeks, which is not the issue the Court must decide. See Village Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995) (in deciding a Rule 12(b)(6) motion, "[t]he issue is not whether a plaintiff will ultimately prevail" (internal quotation omitted)).
Moreover, Defendants' argument is based on a mischaracterization of the terms of the Loan Agreement. As stated above, the term "Maximum Loss Amount" is explicitly defined in reference to the total Loan Amount for any particular loan, which may cover several Assigned Transactions. (See supra p. 2) Defendants acknowledge that the twelve defaulted transactions listed in the Complaint relate to four loans, and do not assert that the amount Plaintiff seeks to recover is greater than ten percent of the relevant loan amounts. (Def. Br. at 6-7) Therefore, Defendants' argument is baseless.*fn2
Second, Defendants argue that Plaintiff's claim is not ripe because the amounts the Borrower must repay under the Loan Agreement cannot be determined until Plaintiff "realizes all Recovery Amounts" (Def. Br. at 12-13), which are defined as "the aggregate of all amounts recovered from all sources by Borrower or Lender with respect to [a] . . . Defaulted Transaction and related Transaction Collateral. . . ." (Cmplt. Ex. A § 5.1(e)) Defendants further contend that Plaintiff must sell any Transaction Collateral before the Guaranty Agreement can be enforced. (Def. Br. at 13)
Defendants' argument, however, finds no support in the language of the Loan Agreement or the Guaranty Agreement. Neither agreement contains any provision requiring Plaintiff to realize any possible recovery before demanding repayment from the Borrower or before enforcing the guaranty. To the contrary, the Loan Agreement explicitly states that Borrower is liable for paying the "Repayment Amount" (Cmplt. Ex. A § 5.1(a)), which is defined without reference to the "Recovery Amount" (id. at § 5.2(a)). The Guaranty Agreement states just as explicitly that the guarantors must perform Borrower's obligations (Cmplt. Ex. B), which include payment of the Repayment Amount. While Defendants' maximum liability may ultimately be calculated by taking into account any "Recovery Amounts" that have been realized, ...