Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_12-cv-00301/USCOURTS-azd-4_12-cv-00301-0/pdf.json

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

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1 In its discretion, the Court denies Defendant’s request for oral argument on

these motions. LR Civ. 7.2(f).

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Fannie Mae, 

Plaintiff, 

vs.

Anthony P. Laruffa, et al., 

Defendants. 

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No. CV-12-301-TUC-RCC-DTF

REPORT AND RECOMMENDATION

Pending before the Court are Defendant Anthony LaRuffa’s Rule 12(b)(3) & 12(b)(5)

Motions to Dismiss for failure to properly serve and improper venue. (Docs. 5, 6.) Plaintiff

opposed both motions and Defendant filed replies. (Docs. 10, 11, 13, 14.) Plaintiff filed a surreply as to the venue motion. (Doc. 17.) Pursuant to the Rules of Practice in this Court, the

matter was assigned to Magistrate Judge Ferraro for a report and recommendation. The

Magistrate recommends the District Court, after its independent review of the record, enter

an order denying the motions to dismiss.1

Motion to Quash Service and Dismiss

Defendant LaRuffa requests that the Court quash service and dismiss the case because

he was not properly served. Process server Frank Harrigan attested that he personally served

a copy of the complaint and summons on Anthony LaRuffa at 4:30 p.m. on March 5, 2012,

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at his home address. (Doc. 11, Ex. 1.) LaRuffa declares that he was not at home at that time

and when he returned home after 8:00 p.m., he found the documents stuffed in his mailbox.

(Doc. 6, Ex. 1.)

“A signed return of service constitutes prima facie evidence of valid service ‘which

can be overcome only by strong and convincing evidence.’” S.E.C. v. Internet Solutions for

Bus., Inc., 509 F.3d 1161, 1166 (9th Cir. 2001). Defendant argues that his declaration is

sufficient evidence to establish that service was not accomplished. The Court disagrees. A

mere denial of service by the party is not strong and convincing evidence. See Am. Honda

Motor Co., Inc. v. Azgrafix, No. CV-08-0656-PHX-FJM, 2008 WL 5329062, at *1 (D. Ariz.

Dec. 22, 2008). Defendant LaRuffa has not established that dismissal for improper service

is warranted.

In response to the motion, Plaintiff also argues that LaRuffa waived the defense of

improper service by not including it in his first Rule 12 motion to dismiss. Although it is true

that such a motion is waived if not included in a first motion to dismiss, Fed. R. Civ. P.

12(g)(2), (h)(1), the Court does not find waiver applicable here. LaRuffa filed essentially

simultaneous motions to dismiss (the one alleging improper service was received

electronically by the Court two minutes after the one alleging improper venue). The Court

finds these separate documents are reasonably treated as one motion to dismiss on multiple

grounds.

Motion to Dismiss or Transfer Venue

Defendant LaRuffa moves the Court to dismiss the case for improper venue or to

transfer the action to the United States District Court for the Central District of California.

The Complaint alleges that Fannie Mae made two loans, evidenced by a First Note

and a Second Note, each of which were secured by Arizona property, set forth in a Security

Agreement. Each note has associated with it a Guarantee signed by one or more Key

Principals. The Borrowers under the First and Second Note are alleged to have defaulted and

the Key Principals (Defendants LaRuffa and Grassia) are alleged to have subsequently

defaulted on their obligations under the Guarantees.

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Defendant LaRuffa argues that Plaintiff has not pled facts demonstrating that the

alleged acts or omissions occurred in Arizona. The Court disagrees. Venue is proper in

Arizona as Defendants guaranteed notes executed by Arizona companies, that were recorded

with the Pima County recorder in Arizona, for property located in Arizona. 28 U.S.C.

§ 1391(b).

Next, the parties dispute the significance of a forum selection clause contained in the

Notes. Plaintiff contends that the forum selection clause governs and identifies Arizona as

the exclusive venue for any case related to the Notes. Defendant LaRuffa argues that the

Guarantee he signed, in contrast to the Notes, does not contain such a forum selection clause.

In fact, the Guarantees signed by LaRuffa and Grassia incorporate the forum selection clause

from the Notes. (Doc. 10, Ex. 2 at 8, ¶ 20; Ex. 2 at 11.) That clause provides that:

any controversy arising under or in relation to this Note shall be litigated

exclusively in the Property Jurisdiction . . . Borrower and Key Principal each

irrevocably consents to service, jurisdiction, and venue of such courts for any

such litigation and waives any other venue to which it might be entitled by

virtue of domicile, habitual residence or otherwise.

(Doc. 10, Ex. 2 at 8, ¶ 20.)

Forum selection causes are presumed valid and enforceable absent specific

circumstances Defendant has not raised in this case – enforcement is shown to be

unreasonable or the clause was obtained through fraud or overreaching. Bremen v. Zapata

Off-Shore Co., 407 U.S. 1, 15 (1972). Defendant argued solely that the forum selection

clause did not apply to him, which is refuted by the documents. He did not argue in the

alternative that, if the forum selection clause was applicable, there was any basis to challenge

it. Based on the forum selection clause, which has not been demonstrated to be

unenforceable, the Court finds venue should be retained in Arizona.

Recommendation

The Magistrate Judge recommends the District Court, after its independent review of

the record, enter an order DENYING Defendant LaRuffa’s Motion to Quash Service and

Dismiss (Doc. 6) and Motion to Dismiss or Transfer Venue (Doc. 5).

Pursuant to Federal Rule of Civil Procedure 72(b)(2), any party may serve and file

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written objections within 14 days of being served with a copy of the Report and

Recommendation. If objections are not timely filed, they may be deemed waived.

DATED this 7th day of June, 2012.

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