Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-02787/USCOURTS-cand-3_05-cv-02787-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition For Removal--Other Contract

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IRWIN GOOTNICK and SUSAN GOOTNICK,

Plaintiffs,

 v.

ERIC A. LIGHTER, HONOLULU RAIL &

DEVELOPMENT, LTD., and CREDIT BUREAU

INTERNATIONAL INC.

Defendants.

 /

No. C 05-02787 SI

ORDER DENYING DEFENDANTS’

MOTIONS TO DISMISS OR TRANSFER

VENUE

On October 25, 2005, the Court heard argument on defendants’ motions to dismiss or transfer

venue. Having carefully considered the arguments of the parties and the papers submitted, the Court

DENIES the motions for the reasons set forth below.

BACKGROUND

This case arises out of a series of business transactions entered into between the defendant, Eric

Lighter, acting in various capacities, and the plaintiffs, Irwin and Susan Gootnick. Defendant Lighter is a

resident ofHawaii and the defendant corporations are incorporated in Hawaii, while the plaintiffs are residents

of California. 

Plaintiffs bring suit in this Court to cancel several written sale instruments entered into by plaintiffs, and

to cancelseveralmortgage instruments entered into by defendant Lighter as president of Honolulu Rail & Dev.

Ltd (“HRD”) and Credit Bureau Int’l, Inc. (“CBII”) and as trustee ofGootnickCharitable Trust,Inc. (“GCTI”)

and Gootnick Family Trust (“GFT”). Compl. ¶ 28. Plaintiffs also bring suit to quiet title to a parcel of land

located in San Francisco, California. Id. at ¶ 33. Plaintiffs allege that the written sale instruments are void

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 1 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1The October 8, 2004 Promissory Note is an instrumentsigned only by defendant Lighter, wherein he

promises to pay the plaintiffs two million dollars, plus interest, in payments equal to 85% of the rentalincome

ofthe 4333 California Street property conveyed to defendant Lighter in an October 8, 2004 Bill ofSale signed

by the plaintiffs. The Note includesthe following choice of law/forum-selection clause: “All matters regarding

this note shall be determined according to the laws of the State of Hawaii. Any disputes arising fromor related

hereto shall be exclusively heard in a Hawaii court, or before Hawaii arbitrators ifthe parties choose arbitration

therefore.”

2

because theywere obtained fraudulently and the mortgage instruments are void because the defendant was not

authorized to act on behalf of GCTI. Compl. ¶¶ 25, 26.

Defendant Lighter moves pursuant to Federal Rule of Civil Procedure 12(b)(2) to dismiss for lack of

jurisdiction, and, in the alternative, to dismiss or transfer venue to the DistrictCourt for the District of Hawaii.

Defendant Lighter bases his venue-based motions on a forum selection clause contained in anOctober 8, 2004

PromissaryNote,1 on28 U.S.C. § 1391(a), and on 28 U.S.C. § 1404(a). Defendants HRD and CBII consent

to personal jurisdiction in this Court but join defendant Lighter's motion to dismiss or transfer venue to the

District of Hawaii.

According to plaintiffs'verifiedcomplaint and the Declaration ofIrwin Gootnick in Support ofPlaintiff’s

Opposition to the Motion to Dismiss for Lack of Personal Jurisdiction, Irwin Gootnick (“Gootnick”) deeded

his property located at4333 California Street, San Francisco, California, to the Gootnick Family Trust(“GFT”)

via quitclaim deed in 1997. Compl. ¶ 14; I. Gootnick Decl. ¶ 6. In 2003, Gootnick’s tax preparer, Sam Fung,

advised him to establish a California corporation to hold the assets of the Gootnick Family Trust. I. Gootnick

Decl. ¶ 2. Fung suggested that Gootnick contact Eric Lighter to assist with the details and requirements of

creating the corporation. Id. at ¶ 2. In early 2004, Gootnick called Lighter to request his assistance. Id. at

¶ 2. After the initial communication between Gootnick and Lighter, Mr. Fung informed Gootnick that Lighter

required $10,000, in cash, to continue assisting him. Id. at ¶ 3. On March 24, 2004, Gootnick gave Mr. Fung

$10,000 in cash, receiving a receipt. Id. at ¶ 3. On multiple occasions in March of 2004 and after, Lighter

contacted Gootnick to discuss business propositions and Gootnick contacted Lighter to discuss advice and

recommendations with regard to GFT. Id. at ¶ 4. After requesting and receiving advice from both Mr. Fung

and Lighter, Gootnick converted the Gootnick Charitable Trust into a corporation, GCTI, and transferred all

of the assets of GFT to the corporation by transforming GFT into subsidiary of GCTI. Id. at ¶¶ 4,5. Lighter

prepared the legal documents for these transactions in Hawaii and sent themto Gootnick to sign in California

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 2 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

and return. Id. at ¶¶ 5-7.

One of the transactions was a Bill of Sale executed by Gootnick, transferring 150 shares of GFT

interest to GCTI. Id. at ¶ 5. Lighter sent several other legal documents to Gootnick to sign in California,

including a Mutual Assignment of Stock, executed by Gootnick on April 3, 2004, wherein he assigned 100

shares of GCTI to Lighter in return for 100 shares of a Hawaiian corporation. Id. at ¶ 7; Compl., Ex. F.

Gootnick’s wife, Susan Gootnick, also executed a Bill of Sale on October 8, 2004, wherein she sold 450

shares of GCTI to Lighter in consideration of a small property owned by GCTI. S. Gootnick Decl. ¶ 2; Ex.

1. Mr. Gootnick himself executed a Bill of Sale on October 8, 2004, wherein he sold 450 shares of GCTI to

Lighter in consideration of anunsecured promissory note for $2 milliondollars. Compl. ¶ 17; I. Gootnick Decl.

¶ 8. 

In December 2004, Lighter traveled to California in order to obtain signature authority on the GCTI

bank account. I. Gootnick Decl. ¶ 8. According to the complaint, Lighter subsequently took out three

mortgages secured with GCTI's real property located at 4333 California Street, San Francisco, California.

Compl. ¶ 18, Ex. C, D, E. A mortgage dated October 14, 2004 was signed by Lighter, in his capacity as

trustee of GFT, the mortgagor. Id. The mortgagee in the transaction was HRD and Lighter also signed the

mortgage in his capacity as president of HRD. Id. This mortgage conveyed GCTI’s real property at 4333

California Street to HRD in return for $350,000. Id. On January 14, 2005, Lighter, in his capacity as

president of HRD, executed a mortgage and promissory note representing that the initial mortgage between

GFT and HRD had been increased to $1.5 million. Id. The transaction also assigned HRD's rights to the

mortgaged property to CBII, signed by Lighter, in his capacity as president of CBII. Id. That instrument also

is signed by Lighter as president of Super Teaching Corporation, the consenting trustee of GFT. The third

mortgage, dated November 15, 2004, was executed by Lighter, as trustee of GFT and GCTI, assigning all of

its rights in the real property to CBII, in consideration of $1.5 million dollars. Id. All of the signatures in that

transaction were Lighter’s. Id. All of the mortgages were recorded in the San Francisco Office of the

Assessor-Recorder and all were executed by Lighter. Id.

LEGAL STANDARD

1. Personal jurisdiction

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 3 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

In any action, personal jurisdiction must exist for each defendant. See Fed. R. Civ. P. 12(b)(2).

Personal jurisdiction over a non-resident defendant may exist if the defendant has either a continuous and

systematic presence in the state (general jurisdiction), or minimum contacts with the forum state such that the

exercise ofjurisdiction“does not offend traditional notions of fair play and justice” (specific jurisdiction). Int'l

Shoe Co. v. Washington, 326 U.S. 310, 316 (1946). Where there is no federal statute applicable to

determine personal jurisdiction, a district court should apply the law of the state where the court sits. See

Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). California law requires

only thatthe exercise ofpersonaljurisdictioncomply with federaldue process requirements. See id. at 800-01.

If personal jurisdiction is challenged, the plaintiff bears the burden of establishing the district court's

personal jurisdiction over the defendants. See Doe I v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001)

(per curiam). However, without an evidentiary hearing, the plaintiff need only make a prima facie showing of

jurisdictionto avoid the motion to dismiss. See id.;seealso Data Systems, Inc. v. SystemsTech Assoc., Inc.,

557 F.2d 1280, 1285 (9th Cir. 1977). That is, the plaintiff must present facts which, if true, establish

jurisdiction. See Unocal, 248 F.3d at 922.

A district court’s jurisdiction analysis must consider plaintiffs’ version of the facts to be true, and

“conflicts between the facts contained in the parties’ affidavits must be resolved in [plaintiffs’] favor.” Unocal,

248 F.3d at 922 (quoting AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996)); see

also Bancroft & Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082, 1087 (9th Cir. 2000). 

2. Venue

Pursuant to 28 U.S.C. § 1391(a), in a diversity action venue is proper in (1) a judicial district where

any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantialpart

of the events of omissions giving rise to the claim occurred, or a substantial part of property is the subject of

the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the

time the action is commenced, if there is no district in which the action may otherwise be brought. See 28

U.S.C. § 1391(a). 

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 4 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

Pursuant to 28 U.S.C. § 1404(a), a district court may transfer any civil action for the convenience of

the parties, witnesses, or in the interests ofjustice. See 28 U.S.C. § 1404(a). To support a motion for transfer

ofvenue under 28 U.S.C. § 1404(a), the moving party must establish:(1) that venue is proper in the transferor

district; (2) that the transferee districtis one where the actionmight have been brought; and (3) that the transfer

will serve the convenience ofthe parties and witnesses and will promote the interests of justice. See Geo. F.

Martin Co. v. Royal Ins. Co. of America, 2004 U.S. Dist. LEXIS 8927 at *4 (N.D. Cal. May 14, 2004).

DISCUSSION

1. Defendant Lighter's motion to dismiss for lack of personal jurisdiction

Plaintiffs do not contend that Lighter’s actions in California have been systematic or continuous such

that the Court may exercise generalpersonaljurisdictionover Lighter. See Schwarzenegger, 374 F.3d at 801

(“For general jurisdiction to exist over a nonresident defendant . . . the defendant must engage in continuous

and systematic generalbusiness contacts.”) (internalquotations omitted). Therefore, the Court must determine

whether it may exercise specific jurisdiction over defendant Lighter. See Core-Vent Corp. v. Nobel Ind. AB,

11 F.3d 1482, 1485 (9th Cir. 1993). 

The Ninth Circuit has established a three-part testto determine whetherthe Court may exercise specific

jurisdiction over a non-resident defendant. First, the defendant must purposefully direct his activities to the

forum state, consummate some transaction with the forum or resident thereof, or purposefully avail himself of

the privileges of conducting activities in the forum state, thereby invoking the benefits ofthe forum state’s laws.

See Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003).

Second, the plaintiff’s claim must be one that arises out of the defendant’s forum-related activities. See id.

Third, exercising jurisdiction must be reasonable. See id.

A. Purposeful availment of the privileges and benefits of this forum

Defendant Lighter argues that the plaintiffs have failed to establish that he purposefully availed himself

of California’s privileges and benefits. He points out that Gootnick initiated the business dealings; that the

written instruments at issue were prepared and implemented in the State of Hawaii; that Gootnick traveled to

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 5 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

Hawaii in December of 2004 to discuss their business endeavors; and that Gootnick sent five boxes of

documents pertaining to GCTI and GFT to Hawaii for Lighter to review. 

Although these facts demonstrate thatsome ofthe events in this action took place in Hawaii, that is not

the relevant question. Rather, the question is whether defendant Lighter “purposefully avail[ed] [him]self of

the privilege of conducting activities within the forum State.” Burger King Corp. v. Rudzewicz, 471 U.S. 462,

475 (1985). The Court held that if there is such a purposeful act, jurisdiction cannot be avoided simply

because the defendant did not physically enter the forum state. See id. at 476. Here, plaintiffs allege that

defendant Lighter did enter the forum state in order to obtain executive control of the plaintiffs’ trust fund. I.

Gootnick Decl. ¶ 8. After taking advantage of the benefits of controlling GCTI, a California corporation,

plaintiff alleges that defendant recorded several mortgages, stemming from GCTI's real property assets, with

the City and County ofSan Francisco Office of the Assessor-Recorder as trustee ofGCTI I. Gootnick Decl.

¶ 8. Lighter purposefully recorded his mortgages with San Francisco County and he purposefully engaged in

business activity with California based trusts. The Court concludes that defendant Lighter has purposefully

availed himself of the privilege of conducting activities within California.

Defendant's assertion that none of the transactions were finalized or implemented in California is

addressed by Haisten v. Grass ValleyMedicalReimbursement Fund,Ltd., 784 F.2d 1392 (9th Cir. 1986).

In Haisten, the court held that there was personaljurisdictionover an insurance company based in the Cayman

Islands which had no physicalcontacts in California. Because the company knowingly and intentionally insured

California residents, such activity constituted purposeful direction even though the policies provided to the

California residents were issued, delivered, and paid forin the Cayman Islands. Id. at 1397. Here, defendant

knowingly and intentionally contracted with plaintiff, and those contracts directly implicate GCTI and GFT, two

California entities. 

B. Claims arising out of defendant's activity in the forum

Defendant Lighter argues that the plaintiffs’ causes of action involve stock transactions that were not

finalized in California. The Ninth Circuit applies a “but-for” test to this second prong of the specific jurisdiction

analysis. See Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). The claims of this case would not have

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 6 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

arisen but for defendant Lighter’s business dealings with the plaintiffs involving the California-based entities,

GCTI and GFT, and the real property located at 4333 California Street in San Francisco, California.

Therefore, the claims do arise from defendant's activity in the forum.

C. Reasonable exercise of jurisdiction

The Ninth Circuit considers seven factors in determining whether the exercise of jurisdiction is

reasonable:1) the extent of the defendant’s purposeful interjection into the forum state’s affairs, 2) the burden

on the defendant ofdefendinginthe forum, 3) the extent of conflictwith the sovereignty ofthe defendant’s state,

4) the forum state's interest in adjudicating the dispute, 5) the most efficient judicial resolution of the

controversy, 6) the importance of the forum to the plaintiff’s interest in convenient and effective relief, and 7)

the existence ofanalternative forum. See Mattel, Inc. v. Greiner & Hausser GmbH, 354 F.3d 857, 866 (9th

Cir. 2003). 

With the first two prongs of the analysis satisfied, the defendant must rebut the presumption of proper

jurisdiction and present a compelling case that exercising jurisdictionwould be unreasonable. See Ballard, 65

F.3d at 1500. Defendant has failed to address that burden in his motion to dismiss for lack of personal

jurisdiction. 

Defendant Lighter’s Fed. R. Civ. P. Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction

is DENIED.

2. Defendant Lighter's motion to dismiss for improper venue

Defendant Lighter alternatively moves for dismissalforimproper venue pursuant to 28 U.S.C. § 1391.

Defendant argues that venue is improper in California and should be in Hawaii because he, as the defendant,

resides in Hawaii, and because a substantial part of the events or omissions occurred in Hawaii.

The Court concludes that venue is proper under 28 U.S.C. § 1391(a)(2) because “a substantial part

ofproperty that is the subject ofthe action is situated” in this judicialdistrict. 28 U.S.C. § 1391(a). Moreover,

three of the six written instruments at issue in the case involve mortgages recorded with the San Francisco

Office of the Assessor-Record, and thus “a substantial part of the events or omissions giving rise to the claim”

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 7 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 The Court further notes that defendant Lighter filed a “Demand for Trial by Jury” on July 12, 2005.

8

occurred in this judicial jurisdiction. Id. Accordingly, the Court concludes that venue is proper pursuant to 28

U.S.C. § 1391(a). See Engel v. CBS, Inc., 886 F. Supp. 728, 732 (9th Cir. 1995).

Defendant Lighter also contends that venue is improper based upon the forum selection clause

contained in the October 8, 2004 Promissory Note which was signed by Lighter (and notsigned by plaintiffs).

Defendant’s argument for dismissal based on the forum selection clause is untimely, however, because he did

not raise this argument in his first Rule 12 motion. The Ninth Circuit has held that a motion for dismissal for

improper venue based upon a forum selection clause should be brought pursuant to Rule 12(b)(3). See

Argueta v. Banco Mexicano S.A., 87 F.3d 320, 324 (9th Cir. 1996). The Ninth Circuit has also held that

certain defenses, such as the defense of improper venue, “must be raised at the first available opportunity or,

ifthey are not, they are forever waived.” See Am. Ass’n of Naturopathic Physicians v. Hayhurst, 227 F.3d

1104, 1106-07 (9th Cir. 2000) (citing Rule 12 and specifically mentioning defense of improper venue). 

Here, defendant Lighter filed a motion to dismiss for lack of personal jurisdiction pursuant to Rule

12(b)(2) on July 7, 2005. Defendant Lighter filed a motion to dismiss for improper venue on August 25, 2005.

Pursuant to the Ninth Circuit authority cited above, defendant Lighter waived his improper venue argument

based on the forum selection clause by notraising it in his first Rule 12 motion.2 Defendant’s statement that his

August 25, 2005 improper venue motion is “joinedwithdefendants’ notice ofremoval” is an implicit recognition

ofthe fact that the venue argumentshould have been raised at the first opportunity; such a “joinder” has no legal

significance and does not cure defendant’s waiver. The Court will consider the forum selection clause only in

connection with defendants’ motions to transfer venue pursuant to 28 U.S.C. § 1404. 

3. Defendant Lighter’s motion to transfer venue pursuant to 28 U.S.C. § 1404

Defendant Lighter moves, in the alternative, to transfer this case to the District of Hawaii pursuant to

28 U.S.C. § 1404. Section 1404(a) provides, “[f]or the convenience of the parties and witnesses, in the

interest of justice, a district court may transfer any civil action to any other district or division where it might

have been brought.” 28 U.S.C. § 1404(a). Transferring an action pursuant to Section 1404(a) is at the broad

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 8 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

discretion of the court. See Commodity Futures Trading Com. v. Savage, 611 F.2d 270, 279 (9th Cir.

1979).

In determining whether to transfer an action, the Court considers the following factors: (1) the location

where the relevant agreements were negotiated and executed, (2) the ease of access to sources of proof, (3)

the differences in the costs of litigation in the two forums, (4) the respective parties' contacts with the forum,

(5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the plaintiff's choice offorum,

(7) the availability of compulsory process to compelattendance of unwilling non-party witnesses, and (8) the

state that is most familiar with the governing law. See Jones v. GNC Franchising Inc., 211 F.3d 495, 498

(9th Cir. 2000). The presence of a valid forum selection clause also is a significant, but not determinative

aspect of the Court’s analysis. See id. 

In this case, the agreements were negotiated and executed in both Hawaii and California, and generally

over the phone and through the mail. With regard to access to proof and evidence, defendants anticipate the

eventual participation ofnon-party witnesses who reside in Hawaii, while plaintiffs contend that their witnesses

are in California. Plaintiffs also assert in their complaint that several of the written instruments at issue are in

the possession of defendant Lighter, presumably in Hawaii, but other instruments at issue are located in San

Francisco, namely the mortgagesrecorded with the San Francisco Assessor-Recorder. On balance, the access

to proof factor benefits neither party significantly. Although the plaintiffs’ contacts with the Hawaii forum are

not extensive, they did voluntarily engage in business dealings relating to development projects located in

Hawaii. Considering plaintiffs’ involvement with the forum, Hawaii is not an altogether inconvenient location

to proceed with this litigation. The costs of the litigation are not significantly different. Plaintiffs argue that

because two of the defendants are corporations, it would not serve justice to require plaintiffs to travel to

Hawaii to litigate their claims. However, plaintiffs are both successful entrepreneurs who voluntarily entered

into investment deals with the defendant and several Hawaiian development projects. This Court is not

convinced that proceeding with litigation in Hawaii would significantly impede plaintiffs. As for the ability to

compel witnesses, both California and Hawaii have sufficient processes to compel witnesses. 

The remaining factors to consider – plaintiffs’ choice of forum and familiarity with governing state law

– are the most significant in this case. Plaintiffs’ choice offorum is givensubstantialweight in analyzing a Section

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 9 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

1404(a) motion to transfer venue. See Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1334-35 (9th Cir.

1984). Further, it appears that California law will govern some, perhaps most, of the claims. The choice of

law/forum selection clause in the promissory note executed by defendant Lighter provided only that “all matters

regarding this note shall be determined according to the laws of the State of Hawaii.” It is unlikely thatmany

legal issues in the claims asserted here will turn on legal interpretation of the note itself, and none of the other

relevant documents or contracts contain such a provision. 

Further, the cause of action against defendants HRD and CBII is an action to quiettitle to realproperty

located in California. Not only does California law govern that claim, but a Hawaii court would be unable to

order effective relief . In Sherrill v. McShan, 356 F.2d 607 (9th Cir. 1966), the Ninth Circuit held that a

district court acts as an adjunct court of the state in which it sits, and it has no jurisdictionto issue a decree to

any party quieting title to any real property located outside of that state. See id. at 610. 

This Court finds that consideration of all the relevant factors militates against transfer to the District of

Hawaii. Defendant Lighter’s motion to transfer venue pursuant to 28 U.S.C. § 1404 is DENIED. 

4. Defendants HRD and CBII’s motion to transfer venue 

Defendants HRD and CBII have filed a motion to dismiss or transfer venue advancing the same

arguments discussed above. The Court’s analysis of defendant Lighter’s motion dismiss under 28 U.S.C. §

1391 and to transfer venue under 28 U.S.C. § 1404 applies equally here.

However, the corporate defendants’ motion to dismissforimproper venue based onthe forumselection

clause raises somewhat different questions. Counsel for defendant stated at oralargument that the corporate

defendants had asserted improper venue as the 15th affirmative defense in their answer to the complaint, and

thus had not waived the claim. Although it appears from the parties’ briefs that the corporate defendants filed

an answer in state court on July 7, 2005, no such answer has been filed in this Court and thus this Court cannot

confirm counsel’s representation.

However, even if the corporate defendants are procedurally entitled to bring a Rule 12(b)(3) motion

to dismiss for improper venue due to the forum selection clause, they have not demonstrated its applicability.

Plaintiffs obtained the October 8, 2004 Promissory Note containing the forum selection clause as consideration

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 10 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11

for granting defendant Lighter controlofGCTI and GFT. The promissory note is a single document signed only

by defendant Lighter, in his individual capacity, and it makes no reference to the corporate defendants.

Plaintiffs have notsought to enforce and collect upon the promissory note, either fromLighter or the corporate

defendants, distinguishing this case from TAAG Linhas Aereas v. Transamerica Airlines, Inc., 915 F.2d

1351 (9th Cir. 1989). The venue selection provision of the promissory note does not apply to these defendants

or the claims now being brought against them. 

The corporate defendants’ motion to dismiss or transfer venue pursuant to the forum selection clause

contained in the October 8, 2004 Promissory Note is DENIED.

CONCLUSION

For the foregoing reasons and for good cause shown, the Court hereby DENIES defendant Lighter’s

motion to dismiss for lack of personal jurisdiction and all defendants’ motion to dismiss or transfer venue.

[Docket Nos. 3, 7, 8] 

Dated: November 15, 2005

 

SUSAN ILLSTON

United States District Judge

Case 3:05-cv-02787-SI Document 43 Filed 11/16/05 Page 11 of 11