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Versant Funding, LLC v. Teras Breakbulk Ocean Navigation Enterprises, LLC

United States District Court, W.D. Washington, Tacoma

September 21, 2017

VERSANT FUNDING, LLC, Plaintiff,
v.
TERAS BREAKBULK OCEAN NAVIGATION ENTERPRISES, LLC, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS OR TRANSFER AND TRANSFERRING CASE

          BENJAMIN H. SETTLE, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Sonny Joe Sanders (“Sanders”), Teras Breakbulk Ocean Navigation Enterprises, LLC (“Teras Ocean”), Teras Cargo Transport (America), LLC (“Teras Cargo”), and Teras Chartering, LLC's (“Teras Chartering”) (collectively “Defendants”) motion to dismiss or, in the alternative, to transfer under 28 U.S.C. § 1404(a) (Dkt. 18). The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby grants the motion in part and denies it in part for the reasons stated herein.

         I. PROCEDURAL HISTORY

         On April 14, 2017, Versant filed a complaint against Defendants asserting causes of action for breach of contract, breach of performance guarantees, and fraud. Dkt. 1.

         On May 27, 2017, Defendants moved to dismiss or, in the alternative, transfer, arguing that the contract at issue contained mandatory forum-selection clauses requiring the dispute to be heard in Florida. Dkt. 15.

         On June 14, 2017, Versant filed an amended complaint adding another breach of contract claim and requesting the appointment of a receiver. Dkt. 16 (“FAC”).

         On June 26, 2017, Defendants moved to dismiss or, in the alternative, to transfer. Dkt. 18. On July 14, 2017, Versant moved for an extension of time to respond and file a cross motion. Dkt. 20. On July 17, 2017, Defendants responded to Versant's motion. Dkt. 22. On July 18, Defendants filed a reply to its motion to dismiss, arguing that the Court should grant the motion because Versant failed to respond. Dkt. 24. On July 21, 2017, Versant filed a substantive response to Defendants' motion. Dkt. 25. Later that day, Defendants filed a reply and moved to strike Versant's untimely response. Dkt. 29.[1]

         II. FACTUAL BACKGROUND

         Versant is a Delaware company that provides factoring services to its clients. FAC, ¶¶ 2, 18. Factoring is a type of credit arrangement where credit is extended to companies under stricter than normal terms. Id. ¶ 17. On October 30, 2015, Versant and Teras Cargo entered into a factoring agreement and a security agreement. Id., Exh. E. In the factoring agreement, Versant agreed to purchase some of Teras Cargo's accounts receivable in exchange for money in advance of payment on the particular account. Id., Exh. E. The factoring agreement contained a forum selection clause that provides in relevant part as follows:

The parties hereto mutually agree that any legal action relating to or arising from the Factoring Agreement, the Security Agreement, the Account Agreements or the Performance Guaranty (or Guaranties), if any, or relating in any way to the factoring relationship between Versant and the Seller and Guarantor(s), shall be maintained only in (a) state courts of Palm Beach County, Florida, or (b) the United States District Court serving Palm Beach County, Florida (except that Versant shall have the right to bring any action or proceeding against Seller or its property in the courts of any other jurisdiction that Versant deems necessary or appropriate, in Versant's sole discretion, to realize upon the Accounts Receivable or any other collateral of Seller subject to Versant's lien)

Id. ¶ 11.

         In the security agreement, Versant obtained an interest in all property owned or acquired by Teras Cargo. Id. This agreement does not contain a forum selection clause.

         On November 20, 2015, Versant and Teras Ocean entered into the identical factoring and security agreements. FAC, Exhs. A, B. Sanders also entered into agreements personally guaranteeing the performance of Teras Cargo and Teras Ocean. Id., Exhs. C, G. The performance guarantees include the same forum selection clause.

         On July 21, 2016, Versant and Teras Charting entered into the identical factoring and security agreements. FAC, Exh. D. Sanders, as CEO of Teras Cargo, sent Versant a letter confirming a cross collateralization of the “invoices, reserves, assets and/or funds” of ...


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