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Frankford Crossing Shopping Center Dallas, Tx. Limited Partnership v. Pho Partners, LLC

United States District Court, Second Circuit

April 29, 2013

FRANKFORD CROSSING SHOPPING CENTER DALLAS, TX. LIMITED PARTNERSHIP Plaintiff,
v.
PHO PARTNERS, LLC, et al., Defendants.

DECISION AND ORDER

DAVID G. LARIMER, District Judge.

This action arises out of a landlord-tenant dispute in connection with a shopping mall in Dallas, Texas. While a court in Rochester, New York might seem an unlikely place to hear a dispute concerning property in Texas, it is well established that "[p]arties can consent to personal jurisdiction through forum-selection clauses in contractual agreements." D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 103 (2d Cir. 2006). The parties to this action have done so, and have contractually agreed that any disputes between them arising out of their lease are to be heard in New York State.

Two motions are currently pending before the Court. Defendants Pho Partners, LLC, Smooth Sailing, LP, and Phillip Silva have moved to dismiss the action for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, or in the alternative to transfer venue to Texas. Plaintiff, Frankford Crossing Shopping Center Dallas ("Frankford"), has moved to remand this action to the New York state court in which it was originally brought.

BACKGROUND[1]

Frankford is a limited partnership organized under the laws of Delaware, with its principal place of business in Rochester, New York. Frankford owns a shopping center, Frankford Crossing, in Dallas, Texas.

In March 2007, Frankford, as the owner/landlord, entered into a lease agreement with a tenant, Aquaesque, Inc., for premises in the shopping center. Silva signed the lease as Aquaesque's president. See Dkt. #11-2 Ex. A. In addition, Silva executed a separate lease guaranty ("Guaranty"), in his individual capacity, guaranteeing Aquaesque's performance under the lease. See Dkt. #11-2 Ex. B.

Of particular importance here are two provisions, one in the lease, one in the Guaranty. The lease provides, at § 22.03:

Owner and Tenant agree that any controversy between them, pursuant to the Lease or otherwise, must be determined in the state, county or city courts in which Owner's principal office is located and Tenant specifically agrees to the jurisdiction of the state in which Owner's principal office is located that the laws of such state shall apply to any proceeding [sic].

Dkt. #11-2 at 13.

The Guaranty, in turn, provides in relevant part, "that the Guarantor [ i.e., Silva], guarantees, unconditionally and absolutely, the full and faithful performance and observance of all the covenants, terms, and conditions of the Lease provided, to be performed and observed by Tenant, expressly including, without being limited to, the payment, when due, of [rent]...." Dkt. #11-2 at 19.

In August 2007, defendant Smooth Sailing, LP was substituted as tenant in place of Aquaesque. Silva signed the written substitution agreement as president of Smooth Sailing. Dkt. #11-2 Ex. C. That document stated in part that except for that substitution, "the Lease shall remain unmodified and in full force and effect." Id. at 1.

At some point, a dispute arose between Silva and Frankford involving Smooth Sailing's performance and rights under the lease, and Silva filed a lawsuit against Frankford in federal court in Dallas. In July 2010, Silva, Smooth Sailing and Frankford entered into an amendment to both the lease and the Guaranty, settling that lawsuit. The amendment provided, inter alia, that Silva agreed to guarantee certain payments by Smooth Sailing, adding that "[a]ll provisions of the Guaranty not amended hereby are hereby ratified and affirmed by the Tenant and Owner." Dkt. #11-2 Ex. D, ¶ 3.

In February 2011, Smooth Sailing assigned its interest in the lease to defendant Pho Partners, LLC ("Pho"). See Dkt. #11-2 Ex. E. Silva executed the assignment on behalf of both Smooth Sailing (in his capacity as its owner) and Pho (as its manager), and in his individual capacity as guarantor. The assignment stated, inter alia, that "[a]ll provisions of the Lease and Guaranty not amended hereby are hereby ratified and affirmed by Owner, Tenant and Guarantor." Id. at 1.

On May 29, 2012, Pho gave notice to Frankford of its intent to vacate the leased premises. Simultaneously, Silva offered to pay Frankford $119, 067.48 in full satisfaction of any claim that Frankford might have against him pursuant to ...


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