United States District Court, D. Minnesota
T. B. Audley, Esq., and Michael T. Benz, Esq., Chapman &
Cutler, LLP; and Thomas J. Lallier, Esq., Foley &
Mansfield, PLLP, counsel for Plaintiff.
Brakke, Esq., Vogel Law Firm, counsel for Defendants.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE
matter is before the Court on a Motion to Dismiss, on the
Alternative, to Transfer Venue brought by Defendant Ronald G.
McMartin Jr. (“McMartin Jr.”) (Doc. No. 19); a
Motion to Appoint Receiver Over the Assets of McMartin Jr.
brought by Plaintiff BMO Harris Bank, N.A.
(“BMO”) (Doc. No. 24); and a Motion for Leave to
Supplement the Record and Requesting that the Court Take
Judicial Notice brought by BMO (Doc. No. 50). For the reasons
set forth below, the Court denies the motion to dismiss or
transfer, grants the motion to appoint a receiver, and grants
the motion to supplement and take judicial notice.
diversity action involves allegations by BMO that McMartin
Jr. personally guaranteed a revolving line of credit extended
by BMO to Defendant McM, Inc. (“McM, Inc.”). McM,
Inc. was a farming and cattle operation before filing for
bankruptcy.McM, Inc. is a North Dakota corporation
with its principal place of business in St. Thomas, North
Dakota. (Doc. No. 1 (“Compl.”) ¶ 6; Doc. No.
22 (“McMartin Jr. Aff.”) ¶ 1.) McMartin Jr.
is a citizen of the State of North Dakota and the sole owner
and officer of McM, Inc. (Compl. ¶¶ 1, 7; McMartin
Jr. Aff. ¶ 1.). BMO is a national banking association with
its primary office in Chicago, Illinois. (Compl. ¶ 5.)
BMO alleges that McM, Inc. borrowed approximately $43 million
from BMO and that McM, Inc.'s obligations have now
matured. The Complaint details the loan agreements and
related documents. (Compl. ¶¶ 8-36.) In addition,
the Complaint alleges that McMartin Jr. executed and
delivered to BMO a Guaranty dated July 31, 2012. (Compl.
¶ 30, Ex. 17; Doc. No. 34, Ex. 1 (the
“Guaranty”).) The Guaranty contains a forum
CHOICE OF VENUE GUARANTOR HEREBY AGREES THAT ALL
ACTIONS OR PROCEEDINGS INITIATED BY GUARANTOR AND ARISING
DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY OR THE OTHER LOAN
DOCUMENTS SHALL BE LITIGATED IN THE DISTRICT COURT OF BROWN
COUNTY, MINNESOTA, OR AT LENDER'S DISCRETION IN THE
UNITED STATES DISTICT COURT FOR THE DISTRICT OF MINNESOTA.
GUARANTOR HEREBY EXPRESLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY
LENDER IN SUCH COURT. GUARANTOR WAIVES ANY CLAIM THAT . . .
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MINNESOTA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED
ON LACK OF VENUE. THE EXCLUSIVE CHOICE OF FORUM FOR GUARANTOR
SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT, BY LENDER, OF ANY JUDGMENT OBTAINED IN ANY OTHER
FORUM OR THE TAKING, BY LENDER, OF ANY ACTION TO ENFOCE THE
SAME IN ANY OTHER APPROPRIATE JURISDICTION, AND GUARANTOR
HEREBY WAIVES THE RIGHT, IF ANY, TO COLLATERALLY ATTACK ANY
SUCH JUDGMENT OR ACTION.
(Guaranty ¶ 13.)
addition, BMO alleges that McMartin Jr. granted BMO a
security interest in all of his personal property
(collateral). (Compl. ¶ 32.) BMO also alleges that
McMartin Jr. breached the Guaranty, and further that McM,
Inc. and McMartin Jr. fraudulently misrepresented (by
millions of dollars) the financial statements and financial
information that they delivered to BMO in support of the
loans received and requests for advances under its revolving
credit line with BMO. (See generally Compl.
¶¶ 37-58; see generally Doc. No. 26
February 1, 2017, BMO filed the present Complaint and a
Motion for Appointment of a Receiver over the assets of McM,
Inc. On the day that the motion was scheduled to be heard,
McM, Inc. filed a voluntary petition under chapter 7 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the District of North Dakota. By operation of law,
this case is stayed as to McM, Inc. Subsequently, BMO filed
the present Motion for the Appointment of a Receiver Over the
Assets of McMartin Jr. McMartin Jr. moves to dismiss this
case or to transfer it to the U.S. District Court for the
District of North Dakota. Finally, BMO moves for leave to
supplement the record and requests that the Court take
judicial notice. The Court considers the motions below.
Motion to Dismiss or Transfer
Jr. moves to dismiss this action pursuant to Rules 12(b)(3),
28 U.S.C. § 1391(b), and 28 U.S.C. § 1406(a), or,
in the alternative, to transfer the action under 28 U.S.C.
§ 1406(a) and/or § 1404(a). Specifically, McMartin
Jr. argues that this case should ...