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Spirit Master Funding X LLC v. BCB Holdings Inc.

United States District Court, D. Arizona

September 5, 2018

Spirit Master Funding X LLC, Plaintiff,
v.
BCB Holdings Incorporated, et al., Defendants.

          ORDER

          Douglas L. Rayes, United States District Judge.

         Before the Court is Defendants BCB Holdings, Incorporated (“BCB”), Nicholas Domenico, and Frank DeHoff's Motion to Transfer Venue to the United States District Court for the District of Colorado (Doc. 25), which is fully briefed. For the following reasons, the motion is denied.[1]

         I. Background

         Plaintiff Spirit Master Funding X LLC (“Spirit Master”) as landlord and BCB as tenant entered into a written lease for certain property located in Denver, Colorado. The lease contained a forum-selection provision that reads, in relevant part:

For purposes of any action or proceeding arising out of this Lease, the parties hereto expressly submit to the jurisdiction of all federal and state courts located in the City and County of Denver, State of Colorado. . . . Furthermore, Tenant waives and agrees not to assert in any such action, suit or proceeding that it is not personally subject to the jurisdiction of such courts, that the action, suit or proceeding is brought in an inconvenient forum or that venue of the action, suit or proceeding is improper. Nothing contained in this Section shall limit or restrict the right of Landlord to commence any proceeding in the federal or state courts located in the State of Arizona to the extent Landlord deems such proceeding necessary or advisable to exercise remedies available under this Lease. . . .

         Domenico and DeHoff executed a guaranty, under which they guaranteed certain performance of BCB under the lease. The guaranty includes the following “Governing Law” provision:

This Guaranty is delivered in the State of Arizona . . . . For purposes of any action or proceeding involving this Guaranty, Guarantor submits to the jurisdiction of all federal and state courts located in the State of Arizona . . . . Guarantor waives and agrees not to assert in any such action, suit or proceeding that Guarantor is not personally subject to the jurisdiction of such courts, that the action, suit or proceeding is brought in an inconvenient forum or that venue of the action, suit or proceeding is improper.

         Spirit Master alleges that Defendants are in breach of the lease and guaranty by failing to make payments. Defendants admit in their answer to the complaint that Plaintiff is entitled to recover damages from BCB because of the alleged breach, and Domenico and DeHoff admit the existence of the guaranty. Defendants also raise as an affirmative defense Spirit Master's alleged failure to mitigate its damages.

         Defendants have moved to transfer this matter to the District of Colorado pursuant to 28 U.S.C. § 1404(a), arguing that the factual issues in the case will involve the lease, the property, and Denver-based mitigation efforts. Spirit Master's response indicates that the only witnesses likely to be called at trial are parties to the litigation or expert witnesses.

         II. Legal Standard

         The court, for the convenience of the parties and witnesses, and in the interests of justice, may transfer a civil action to any district in which the case originally could have been brought. 28 U.S.C. § 1404(a). In determining whether a transfer of venue is appropriate under this section, the court must make two findings: (1) the transferee court is one in which the case could have been brought and (2) the convenience of the parties and witnesses and the interests of justice favor transfer. Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985). The movant bears the burden of showing that a transfer is warranted. Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979).

         III. Discussion

         The parties agree that this case could have been brought in the District of Colorado. They disagree over the impact of the forum-selection provisions in the lease and guaranty, and over whether the District of Colorado is a more convenient forum.

         When determining whether the convenience of the parties and witnesses favor a transfer, a court ordinarily ...


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