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MoneyGram Payment Systems, Inc. v. Bullfrog Corner Express, LLC

United States District Court, D. Minnesota

May 25, 2018

MONEYGRAM PAYMENT SYSTEMS, INC., Plaintiff,
v.
BULLFROG CORNER EXPRESS, LLC, doing business as Check Express; NAYYER MAHMOOD; and YASMIN MAHMOOD; Defendants.

          Brian A. Dillon, Gray Plant Mooty, counsel for plaintiff MoneyGram Payment Systems, Inc.

          David Albright, David E. Albright & Associates, counsel for defendants Bullfrog Corner Express, LLC, Nayyer Mahmood, and Yasmin Mahmood.

          ORDER

          Katherine Menendez, United States Magistrate Judge

         Defendants Bullfrog Corner Express, Nayyer Mahmood, and Yasmin Mahmood (collectively “Bullfrog”) have filed a Motion to Dismiss for Improper Venue. For the following reasons, Bullfrog's Motion is DENIED.

         BACKGROUND

         Plaintiff MoneyGram Payment Systems, Inc. (“MoneyGram”) and the individual defendant Bullfrog entered into an agreement in 2013, in which MoneyGram authorized Bullfrog to sell its money transfer and money order services. (Compl., ECF No. 1 ¶ 6.) Under the agreement, Bullfrog was required to maintain funds obtained through the sale of MoneyGram's services in a separate trust fund, and remit the funds to MoneyGram on a daily basis. (Id. ¶¶ 7, 9.) Mr. and Mrs. Mahmood each personally guaranteed Bullfrog's performance under the agreement. (Id. ¶ 12.) MoneyGram now alleges breach of contract and related claims against all the Bullfrog defendants. (Id. ¶¶ 22-34.)

         MoneyGram filed a substantially similar action against Bullfrog in the Circuit Court of Tennessee in 2015. (See Complaint, Moneygram Payment Sys. v. Nayyer Mahmood, CT-002562-15 (Tenn. Cir. Ct., June 17, 2015) (the “Tennessee Action”).) In the Tennessee Action, Bullfrog moved to dismiss the complaint for improper venue and failure to include an indispensable party. (Aff. of Brian A. Dillon, ECF No. 21, Ex. A, March 21, 2018.) Bullfrog's sole legal argument for dismissal was that

Venue is provided for in the contract between MoneyGram and Bullfrog, and the addendum to the contract whereby Nayyer Mahmood and Yasmin Mahmood guarantee Bullfrog's action, all specifically limit all actions by both parties to the State of Minnesota.

(Ex. B to Dillon Aff. ¶ 2; see also Id. ¶ 10 (“In light of the above no action can be taken against Bullfrog save in the jurisdiction and courts of the state of Minnesota as stated above.”).)[1] While Bullfrog's Motion was pending, MoneyGram served initial discovery requests, and when Bullfrog did not respond, a Motion to Compel, followed by a Motion for Default Judgment. (Tennessee Action, Dkt. No. 17, Dec. 7, 2015; id., Dkt. No. 19, Dec. 31, 2015.) Before the pending cross-motions to dismiss and for default were decided, however, MoneyGram voluntarily dismissed the Tennessee action. (Id., Dkt. No. 35, Jan. 28, 2016.)

         MoneyGram filed the current action in December, 2017. (Compl., ECF No. 1.) Bullfrog has filed a Motion to Dismiss for Improper Venue, arguing that because MoneyGram originally filed in Tennessee, it has waived its right to invoke the forum selection clause in order to bring the action in Minnesota. Bullfrog now argues that Tennessee, where Mr. and Mrs. Mahmood reside, or Mississippi, where the individual defendant Bullfrog did business, would be the appropriate forum for the current action. However, Bullfrog does not request transfer of the action back to Tennessee or to Mississippi. Instead, they maintain that dismissal is appropriate under 28 U.S.C. § 1406(a).

         ANALYSIS

         For two reasons, Bullfrog's motion must be denied. First, Bullfrog is estopped from now opposing venue in Minnesota, since that was precisely the forum they demanded of the court in Tennessee. Second, under the circumstances of this case, their waiver argument is unavailing.

         Estoppel

         Estoppel is a “broad equitable doctrine, the application of which is subject to the discretion of the court, and which must turn on the specific facts of each case.” In re Sunde, 149 B.R. 552, 557 (Bankr. D. Minn. 1992); see also Scott County v. Advance Rumley Thresher Co., 288 F. 739, 750 (8th Cir. 1923) (“The doctrine of estoppel is one of fundamental justice…. [C]ourts have gone a long way in applying it to prevent manifest injustice and wrong.”) It is “intended to prevent a party from taking unconscionable advantage of his own wrong by asserting his strict legal rights.” Nelson v. Commissioner of Revenue, 822 N.W.2d 654, 660 (Minn. 2012) (quotation omitted). “In its essence, equitable estoppel prevents a party from ‘having it both ways.' If a party has knowingly and intentionally committed ...


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