United States District Court, D. Utah
MEMORANDUM DECISION AND ORDER
A. KIMBALL, UNITED STATES DISTRICT JUDGE
the court is Defendant Complete Business Solutions Group,
Inc. dba Par Funding (CBSG's) Motion to Dismiss for
improper venue or in the alternative to transfer venue
pursuant to 28 U.S.C. § 1404(a) to the United States
District Court for the Eastern District of Pennsylvania.
CBSG's motion to dismiss for improper venue is based on
the application of a contractually-binding venue provision
between the parties requiring any legal action on the
parties' agreement be brought in court within the
Commonwealth of Pennsylvania.
a Delaware corporation which operates in Philadelphia,
Pennsylvania and is in the business of providing
non-conventional financing options to small and medium sized
businesses through acquiring its clients' accounts
receivables. Plaintiff Jeffrey Peterson is a resident of
Alpine, Utah, and is the Executive Vice President of Orem,
Utah based ActiveCare, Inc. ActiveCare is a health analytics
and monitoring company.
about April 17, 2017, CBSG entered into an agreement (the
“Factoring Agreement”) with ActiveCare whereby
CBSG purchased future receivables of ActiveCare in accordance
with the terms of the parties' agreement. As part of the
agreement, Peterson personally signed a Guaranty as
owner/guarantor. The Factoring Agreement also contains a
Venue provision, which states:
4.5 Binding Effect; Governing Law; Venue and Jurisdiction.
Any suit, action, or proceeding arising hereunder, or the
interpretation, performance, or breach hereof, shall if
[CBSG] so elects, be instituted in any court sitting in
Pennsylvania, (the “Acceptable Forums”). Merchant
agrees that the Acceptable Forums convenient to it, and
submits to the jurisdiction of the Acceptable Forums and
waives any and all obligations to jurisdiction or venue.
Should such proceeding be initiated in any other forum,
Merchant waives any right to oppose any motion or application
made by [CBSG] to transfer such proceeding to an Acceptable
about April 24, 2018, CBSG filed a Civil Action seeking
Judgment in the amount of $1, 772, 095.63 for failure of
ActiveCare and Peterson to cure default(s) on their
obligations under the Agreement. On or about April 24, 2018,
Judgment by Confession was entered in the Pennsylvania case
filed this case in Utah on or about July 2, 2018 seeking
declaratory relief against CBSG finding that he did not
breach the Agreement.
to 28 U.S.C. § 1406(a) “[t]he district court of a
district in which is filed a case laying venue in the wrong
division or district shall dismiss, or if it be in the
interest of justice, transfer such case to any district or
division in which it could have been brought.”
purpose of 28 U.S.C. § 1406(a) is to avoid dismissal
merely because of “an erroneous guess with regard to
the existence of some elusive fact of the kind upon which
venue provisions often turn.” Goldlawr, Inc., v.
Heiman, 369 U.S. 463, 465 (1962). A typical example of
the problem to be avoided is where statute of limitations
would bar a claim because of a mistake about proper venue.
Id. at 466. “In civil cases, the question of
whether a litigant has brought an action in the proper court
is a question of law, while the question of whether to
dismiss or transfer an action filed in an improper venue is
within the district court's sound discretion and reviewed
for abuse of discretion only.” Ballesteros v.
Ashcroft, 452 F.3d 1153 (10th Cir. 2006).
opposes this motion to dismiss asserting that he personally
is not subject to the venue provision in the factoring
agreement. Peterson argues that the venue provision in
Section 4.5 of the Factoring Agreement does not include him
as a guarantor and therefore the venue provision does not
apply to him.
cites BioVeris Corp. v. Wohlstadter, 69 F.Supp.3d
574 (W.D.V.A. 2014) as persuasive authority. In
BioVeris the court determined whether the guaranty
was subject to the forum selection clause of an underlying
agreement. The court found the following circumstances
instructive: 1. Where the guarantor undertakes to perform all
obligations contained in the underlying agreement, courts
have construed the agreements together and incorporated the
forum-selection clause into the guaranty; 2. When the same
parties concerning the same subject matter are