MINNEAPOLIS PERSONAL INJURY ATTORNEY  
attorney Michael E. Douglas Attorney at Law
  Personal Injury Attorney
  St. Paul Workers Compensation Lawyer work comp attorney
 > About Me
   :: My Commitment
   :: Our Community
   
 > Legal Practice Areas
  twin cities comsumer lawPersonal Injury
   :: Traffic Accidents
   :: Medical Malpractice
   :: Social Security Disability
   :: Premises Liability
   :: Wrongful Death
   :: Dog Bite
   :: Back/Spinal/Neck Injuries
   :: Whiplash
   :: Defective Medical Devices
   :: Defective Drugs
  Minnesota Personal InjuryWorkers Compensation
  St. Paul personal injuryConsumer Law
   :: Debt Collection
   :: Repossessions
   :: Foreclosures
   :: Loan, Credit, Banking
   :: Arbitration Agreements
   :: Deception and Fraud
   :: Auto Fraud / Lemon Law
   :: Warranties
   :: Predatory Lending
   
 > Contact Us
   :: Contact Us
 

Law Offices of Michael E. Douglas
P.O. Box 251551
Woodbury, Minnesota 55125-6551
   

 Saint Paul Lawyer
 
 mdouglas@injurylawtwincities.com

 

BankFirst v. Ginsburg: US District Court : CIVIL PROCEDURE - specific jurisdiction; defendants' attorney came to Minnesota to negotiate; Minnesota choice-of-law in contract; no venue transfer

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
BankFirst, a South Dakota state bank, Civil No. 08-5897 (DWF/FLN)
Plaintiff,
v. MEMORANDUM
OPINION AND ORDER
Alan H. Ginsburg, an individual; Frank Shunock,
an individual; BEH Gaming, Ltd., a limited
partnership; Warm Wind Trust; and Warm Winds
Partners, Ltd., a limited partnership,
Defendants.
Jerome A. Miranowski, Esq., and S. Renee Dotson, Esq., Faegre & Benson LLP, counsel
for Plaintiff.
Jason A. Lien, Esq., Keiko L. Sugisaka, Esq., and Richard G. Wilson, Esq., Maslon
Edelman Borman & Brand, LLP, counsel for Defendants.
INTRODUCTION
This matter is before the Court on a Motion to Dismiss or Alternatively to Transfer
Venue brought by BEH Gaming, Ltd. (BEH Gaming); a Motion to Dismiss or
Alternatively to Transfer Venue brought Warm Wind Trust (WWT) and Warm Winds
Partners, Ltd. (WWP) (together with BEH Gaming, the BEH Entities); and Motions
to Transfer Venue brought by defendants Alan H. Ginsburg and Frank Shunock. For the
reasons stated below, the Court denies all motions.
2
BACKGROUND
Bank First is a South Dakota state bank, with its largest office located in
Minneapolis, Minnesota, and a holding company, Marshall BankFirst, located in
Minnesota. BEH Gaming is a limited partnership organized under the laws of the state of
Florida. (Decl. of Joseph Shunock (Shunock Decl.) 2.) BEH Gaming was formed
for the purpose of developing an Indian gaming facility called the Northern Winz Casino
(the Casino Project) for the Chippewa Cree Tribe of the Rocky Boys Reservation, a
federally recognized Indian Tribe, located in Box Elder, Montana. (Decl. of Gene Harris
(Harris Decl.) 2.) Defendants Alan Ginsburg and Frank Shunock are the principals of
BEH Gaming. (Id.) Ginsburg is a resident of Florida and Shunock is a citizen of Canada
and a resident of Florida. WWP is a limited partnership organized under the laws of the
state of Florida and a partner of BEH Gaming. (Shunock Decl. 2.) Ginsburg and
Shunock hold interests in BEH Gaming through certain entities, including WWP. (Harris
Decl. 2.) WWT is a trust formed under the laws of Canada. Shunock is a beneficiary of
WWT.
BEH Gaming agreed to assist the Chippewa Cree Community Development
Corporation (CCCDC) obtain construction financing for the Casino Project. (Shunock
Decl. 2.) In August 2005, BEH Gaming and CCCDC entered into a Turn-Key Facility
Agreement (the Development Agreement), under which BEH Gaming warranted and
represented that it would provide, or arrange for a third party to provide, financing to the
CCCDC for the construction of the Casino Project. (Decl. of Keiko L. Sugisaka
3
(Sugisaka Decl.) 14, Ex. K at 3.3.) Prior to signing the Development Agreement
with the CCCDC, BEH Gaming hired a hospitality consulting firm located in
Minneapolis, Minnesota, to conduct a feasibility study for the Casino Project. BEH
Gaming provided this study to BankFirst in Minneapolis. (Aff. of Steven W. Erickson
(Erickson Aff.) 3.)
BEH Gaming sought financing from BankFirst and engaged in discussions
regarding financing for the Casino Project, primarily with John Jagiela and Steven
Erickson of BankFirst. (Erickson Aff. 2; Harris Decl. 3; Decl. of Ray Brown (Brown
Decl.) 2.) During negotiations between BankFirst and BEH Gaming, Jagiela flew to
Montana to meet with representatives of BEH Gaming to inspect the proposed site, visit
with Tribal officials, and to discuss the feasibility study. (Decl. of John Gruttadaurio
(Gruttadaurio Decl.) 3.) Jagiela also visited Montana in September 2006 to review
the Casino Projects status and to assemble the outstanding loan package. (Brown Decl.
3.)
Representatives of BEH Gaming had contacts with BankFirst in Minneapolis.
Specifically, in 2005 and 2006, BEH Gaming representative Gene Harris communicated
with BankFirst representatives via telephone, e-mail, and written correspondence in an
effort to obtain financing for the Casino Project. (Harris Decl. 4.) These
communications continued through 2007, during and after the construction phase of the
Casino Project. (Id.) Ray Brown, an Indian gaming consultant acting on behalf of BEH
Gaming, also participated in discussions with Jagiela in 2005 and 2006; these
4
communications were related to efforts to obtain construction financing and occurred
mainly over the telephone, via e-mail, or by written correspondence. (Brown Decl. 2.)
Brown continued to have communications with Erickson and Jagiela through 2008. (Id.)
In 2006 and 2007, John Gruttadaurio, counsel for Ginsburg, Shunock, BEH Gaming,
WWT, and WWP, had contacts with BankFirst in Minneapolis via telephone, e-mail, and
written correspondence. (Erickson Aff. 2-3; Gruttadaurio Decl. 2.) Gruttadaurio also
traveled to Minneapolis on two occasions. On or around June 1, 2006, Gruttadaurio
visited Minneapolis to review and discuss loan documents with representatives of
Marshall BankFirst, BankFirst, and the CCCDC. (Gruttadaurio Decl. 4.) Gruttadaurio
visited BankFirst in Minneapolis again in March 2007, during which he discussed the
obligations arising under the WWT and WWP Guaranty Agreements and the documents
that BEH Gaming, WWP, and WWT were required to provide to BankFirst during the
term of the loan. (Aff. of Mary Jo Brenden (Brenden Aff.) 3.) In addition, G. Joseph
Shunock, a BEH Gaming representative and the sole member of WWP, communicated
with BankFirst in Minneapolis via telephone, e-mail, and written correspondence
regarding financing for the Casino Project. (Erickson Aff. 5.)
On August 1, 2006, the CCCDC and BankFirst entered into a Loan Agreement.
(Decl. of Keiko L. Sugisaka (Sugisaka Decl.) 3, Ex. A.) BankFirsts Minneapolis
office originated and administered the loan to CCCDC. (Erickson 11; Supp. Aff. of
Steven W. Erickson 2.) Each of the defendants executed Guaranty Agreements
whereby each guaranteed the timely payment in full and performance of all amounts due
5
under the loan documents, plus accrued interest and other fees. (Sugisaka Decl. 5-9,
Exs. C-G.) Ginsburg signed his Guaranty Agreement in Florida. (Gruttadaurio Decl.
6.) The Shunock, BEH Gaming, WWT, and WWP Guaranty Agreements were all
signed in Canada. (Shunock Decl. 6; Decl. of John Burchynsky (Burchynsky Decl.)
4.) The Guaranty Agreement executed by Ginsburg and Shunock included provisions
indicating that they consented to personal jurisdiction in Minnesota. (Sugisaka Decl.
5-6, Ex. C-D at 5.14.) All five of the Guaranty Agreements contain a Minnesota choice
of law provision and require that all written notices and annual and quarterly financial
statements or audits be sent to BankFirst in Minneapolis, Minnesota. In addition, the
Guaranty Agreements also state that the obligations of the guarantors are joint and several
and independent of those of all other guarantors and the borrower.
BankFirst closed on the loan on or about November 15, 2006, in Box Elder,
Montana. (Harris Decl. 9.) On or around February 21, 2008, BankFirst gave the
CCCDC and the defendant guarantors written notice that the CCCDC had breached the
Loan Agreement.1 (Erickson Aff. 8.) Beginning in March 2008, the guarantors made
payments due on the loan directly to BankFirst in Minneapolis. (Id. 9.) BankFirst and
the guarantors then engaged in discussions regarding possible modifications to the loan
1 The parties vigorously dispute the facts leading up to the default. BankFirst asserts
that it agreed to provide financing after certain conditions precedent were satisfied and
that delays in financing occurred due to delays in satisfying those conditions. Defendants
assert that BankFirst breached promises and made misrepresentations regarding the
timing of BankFirsts financing that caused construction delays and contributed to the
(Footnote Continued on Next Page)
6
documents, including a potential forbearance plan. (Id. 10.) In June 2008, Harris
traveled to Minneapolis on behalf of BEH Gaming to discuss a forbearance agreement.
(Id.; Harris Decl. 5.) These discussions ultimately failed and BankFirst accelerated the
loan and demanded payment. The guarantors failed to pay the accelerated balance.
(Erickson Aff. 10.)
On October 9, 2008, BankFirst brought this action against the Defendants as
guarantors of the construction financing loan after the borrower, the CCCDC, defaulted
on the loan. BankFirst originally brought the action in Hennepin County District Court
and Defendants removed the action to this Court. After removal, Ginsburg and Shunock
filed answers and counterclaims alleging fraud, breach of contract, breach of implied
covenant of good faith and fair dealing, and promissory and equitable estoppel. Ginsburg
and Shunock seek to extinguish their Guaranty Agreements and to recover damages for
BankFirsts alleged misrepresentations. The BEH Entities moved to dismiss for lack of
personal jurisdiction. All defendants move to transfer venue to the District of Montana.
(Footnote Continued From Previous Page)
failure of the Casino Project and the subsequent default.
7
I. Motion to Dismiss for Lack of Jurisdiction
A. Standard for Establishing Personal Jurisdiction
When a defendant challenges personal jurisdiction, the plaintiff has the burden to
show that personal jurisdiction exists. Burlington Indus., Inc. v. Maples Indus., Inc., 97
F.3d 1100, 1102 (8th Cir. 1996) (citing Gould v. P.T. Krakatau Steel, 957 F.2d 573, 575
(8th Cir. 1992)). To survive a motion to dismiss for lack of personal jurisdiction,
however, the plaintiff need only make a prima facie showing of personal jurisdiction over
the defendant. Digi-Tel Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d 519,
522 (8th Cir. 1996) (citing Northrup King Co. v. Compania Productora Semillas
Algodoneras Selectas, S.A., 51 F.3d 1383, 1387 (8th Cir. 1995)).
When considering whether personal jurisdiction exists, the court may consider
matters outside the pleadings; the court may inquire, by affidavits or otherwise, into the
facts as they exist. Stevens v. Redwing, 146 F.3d 538, 543 (8th Cir. 1998) (quoting Land
v. Dollar, 330 U.S. 731, 735 n. 4 (1947)). For the purposes of determining whether the
plaintiff has made a prima facie showing of personal jurisdiction, the court must view the
evidence in the light most favorable to the plaintiff and resolve all factual conflicts in the
plaintiffs favor. Digi-Tel, 89 F.3d at 522 (citing Dakota Indus., Inc. v. Dakota
Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991)). Each defendants contacts with
the forum state must be assessed individually. See, e.g., Minn. Mining & Mfg. Co. v.
Rauh Rubber, Inc., 943 F. Supp. 1117, 1122 (D. Minn. 1996).
In determining whether a court has personal jurisdiction over a non-resident
8
defendant, a court must ordinarily satisfy both the requirements of the state long-arm
statute and of federal due process. Id. (citing Northrup King, 51 F.3d at 1387). The
Minnesota long-arm statute extends jurisdiction to the maximum limit consistent with due
process, and therefore a court in Minnesota need only evaluate whether the requirements
of due process are satisfied. Wessels, Arnold & Henderson v. Nat'l Med. Waste, Inc., 65
F.3d 1427, 1431 (8th Cir. 1995).
Federal due process requires that a defendant have certain minimum contacts
with the forum state such that maintenance of the suit does not offend traditional notions
of fair play and substantial justice. Intl Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)
(internal quotations omitted). The defendants conduct and connection with the forum
state must be such that the defendant should reasonably anticipate being haled into court
there. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). It is
essential in each case that the defendant has purposefully availed itself of the privilege of
conducting activities within the forum state, thus invoking the benefits and protections of
its laws. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (quoting Hanson v.
Denckla, 357 U.S. 235, 253 (1958)).
A court may use one of two different analyses to determine whether a defendants
contacts with the forum state establish personal jurisdiction. Epps v. Stewart Info. Servs.
Corp., 327 F. 3d 642, 648 (8th Cir. 2003). In a general jurisdiction case, a defendant
maintains such continuous and systematic contacts with a state that it becomes subject
to the jurisdiction of that states courts for any purpose. Morris v. Barkbuster, Inc., 923
9
F.2d 1277, 1281 (8th Cir. 1991) (quoting Helicopteros Nacionales de Columbia v. Hall,
466 U.S. 408, 414 n. 9, 416, 418-19 (1984)). Specific jurisdiction, on the other hand,
requires that the defendant has purposely directed its activities at residents of the forum
and that the litigation results from alleged injuries that arise out of or relate to those
activities. Wessels, 65 F.3d at 1432 (quoting Burger King, 471 U.S. at 472).
Regardless of which analysis is used, the Eighth Circuit applies a five-factor test in
determining whether the exercise of personal jurisdiction would pass constitutional
muster: (1) the nature and quality of defendants contacts with the forum state; (2) the
quantity of contacts; (3) the source and connection of the cause of action with those
contacts; and, to a lesser degree, (4) the interest of the forum state; and (5) the
convenience of the parties. Wessels, 65 F.3d at 1432. The first three factors are of
primary importance, while the last two are secondary factors. Minn. Mining & Mfg.
Co. v. Nippon Carbide Indus. Co., 63 F.3d 694, 697 (8th Cir. 1995). The third factor
distinguishes between specific and general jurisdiction. Digi-Tel, 89 F.3d at 523 n.4
(citing Wessels, 65 F.3d at 1432 n.4).
B. Personal Jurisdiction over the BEH Entities
The parties agree that the inquiry in this case is whether specific jurisdiction exists.
The BEH Entities argue that this Court lacks specific jurisdiction over them. The BEH
Entities point out that none of the entities are registered to do business in Minnesota and
do not conduct business in Minnesota; that none of the entities have assets, property,
records, employees, or offices in Minnesota; and that the relevant Guaranty Agreements
10
were executed in Canada. Further, the BEH Entities assert that their contacts with
Minnesota, taken individually, are insufficient to establish personal jurisdiction. The
BEH Entities maintain that nearly all of the operative facts underlying this dispute
occurred outside of Minnesota. For example, the BEH Entities assert that the parties due
diligence for the Casino Project, many of the negotiations over the financing and
guarantees, the actual execution of the guarantees, and the underlying causes for the
alleged breach of the guarantees all occurred outside of Minnesota. The BEH Entities
further assert that this litigation did not arise out the BEH Entities contacts with
Minnesota. The BEH Entities also argue that the choice of law clauses in the guarantees
cannot alone support personal jurisdiction and the lack of minimum contacts outweighs
any interest that the state of Minnesota may have in providing a forum for this dispute.
The Court disagrees and concludes that it has specific personal jurisdiction over
each of the BEH Entities. None of the BEH Entities have operations in Minnesota, but
each of their contacts with Minnesota are sufficient for the Court to exercise personal
jurisdiction over them. BEH Gaming sought over million in financing from
BankFirst in Minneapolis, Minnesota. Each of the BEH Entities had contacts with
BankFirsts Minneapolis office. For example, representatives for the BEH Entities made
phone calls and sent e-mails and written correspondence to BankFirst in Minnesota on
numerous occasions. (Brown Decl. 2; Erickson Aff. 2, 4, 5, 9, 10; Brenden Aff. 3;
Harris Decl. 3, 4, 5; Gruttadaurio Decl. 2, 3, 4.)
In addition, representatives of the BEH Entities visited BankFirst in Minnesota
11
regarding the Casino Project. (Brenden Aff. 3; Gruttadaurio Decl. 4; Harris Decl. 5;
Erickson Aff. 10.) Gruttadaurio, an attorney for all of the guarantors, including each of
the BEH Entities, visited Minneapolis on or around June 1, 2006 to discuss financing of
the Casino Project. The BEH Entities argue that Gruttadaurios June 2006 visit was not
related to WWTs and WWPs guaranty agreements because the only agreements drafted
at that time were for Ginsburg, Shunock, and BEH Gaming. In addition, the BEH
Entities claim that Gruttadaurio did not yet represent WWT or WWP with respect to
their guarantees. (Gruttadaurio Decl. 4.) The record before the Court establishes that
BEH Gaming and its principals, Ginsburg and Shunock, sought financing with BankFirst;
that BankFirst initially required guarantees from Ginsburg, Shunock, and BEH Gaming;
and that after learning that a significant portion of Shunocks assets were held by WWT
and WWP, that BankFirst also required guarantees from WWP and WWT. (Erickson
Aff. 6.) The record also shows that BankFirst requested that WWT and WWP sign
guarantees on June 7, 2006, just days after Gruttadaurios June 2006 visit. (Id. at 5.)
Gruttadaurio asserts that he was engaged by WWT and WWP in connection with their
guarantees when this request was made. (Id.) Viewing the facts in the light most
favorable to BankFirst, the Court determines that BankFirst has made a prima facie
showing that Gruttadaurios visit was related to the same overall financing deal that
included all of the BEH Entities, including WWT and WWP; and that Gruttadaurio
represented all of the BEH Entities. Therefore, the Court considers this trip to constitute
a contact made on behalf of each of the BEH Entities.
12
In 2007, Gruttadaurio visited Minneapolis again and during the visit discussed his
clients obligations under the WWT and WWP guaranty agreements, as well as
documents that Ginsburg and the BEH Entities were required to provide BankFirst during
the term of the loan. (Gruttadaurio Decl. 4; Brenden Aff. 3.) The BEH Entities assert
that Gruttadaurio was visiting on an unrelated matter and did not have a substantive
discussion about the guaranty agreements. However, the record before the Court contains
evidence contradicting this assertion. Therefore, viewing the facts in the light most
favorable to BankFirst, the Court also considers this a contact made on behalf of each of
the BEH Entities, including WWT and WWP. Finally, Harris, a representative of BEH
Gaming, visited BankFirst in June 2008 to discuss the modification of payment terms
under the Loan Agreement.2 (Harris Decl. 5.)
The BEH Entities also had contacts with Minnesota through their performance
under their respective Guaranty Agreements. For example, all of the Guaranty
Agreements required the guarantors, including the BEH Entities, to send annual audits,
financial statements, and notices to BankFirst in Minneapolis. (See, e.g., Sugisaka Decl.
7, 8, 9, Exs. E, F, G, at 11(c)(i)-(ii), 16.) Further, the BEH Entities communicated
with BankFirst in Minnesota regarding the default under the Loan Agreement and the
2 The BEH Entities assert that because the June 2008 visit occurred after BankFirst
gave its written notice of default to the guarantors, it could not have given rise to
BankFirsts cause of action. Regardless, the Court considers it as just one of several
contacts when determining whether to exercise personal jurisdiction over BEH Gaming.
13
guarantors (including the BEH Entities) made payments directly to BankFirst in
Minneapolis. (Erickson Decl. 8-10.) Ginsburg and Shunock, the principals of BEH
Gaming, explicitly consented to jurisdiction in Minnesota.
The BEH Entities also agreed to a choice of law provision specifying the
application of Minnesota law. Each of the Guaranty Agreements include a provision
stating that they shall be construed in accordance with and governed by the laws of the
State of Minnesota. (Sugisaka Decl. 7, 8, 9, Exs. E, F, G at 13.) While a choice of
law provision, standing alone, is insufficient to create personal jurisdiction, it is a relevant
consideration in determining whether a defendant has purposefully invoked the benefits
and protections of a States law. Wessels, 65 F.3d at 1434.
Based on the nature, quality, and quantity of each of the BEH Entities contacts
with Minnesota, the Court concludes that each of the BEH Entities could reasonably
anticipate being haled into court in Minnesota in connection with the Guaranty
Agreements that they executed in order to receive financing from BankFirst.
The Court also considers the source and connection of the cause of action with
those contacts. Here, the connection is significant as BankFirsts claims are directly
related to the BEH Entities contacts with Minnesota. In particular, BEH Gaming sought
financing from BankFirst, the BEH Entities had several contacts with BankFirst in
Minnesota regarding the financing, visited Minnesota to discuss issues related to the
financing, and secured financing with BankFirst by executing the Guaranty Agreements
with Minnesota choice of law provisions. In addition, when the CCCDC ultimately failed
14
to make timely payments, the BEH Entities received BankFirsts default notices and
subsequently tried to negotiate forbearance with BankFirst in Minneapolis. The Court
concludes that the connection of the cause of action with the BEH Entities contacts with
Minnesota supports jurisdiction.
The final two factors, which are accorded less weight in the Courts analysis, also
support jurisdiction. The BEH Entities have allegedly failed to pay the balance of a loan
that they guaranteed, which in turn has deprived BankFirst, which has an office in
Minnesota, of money it claims it is owed. Minnesota has an obvious interest in providing
a forum in which BankFirst may litigate its claims. See Northrup, 51 F.3d at 1388-89. In
addition, the convenience of the parties favors jurisdiction. A plaintiff is normally
afforded its selected forum. As discussed below, some witnesses and evidence are
located in Minnesota; other witnesses and evidence are located outside of Minnesota.
Any inconvenience to defendants in litigating in Minnesota would be similarly
experienced by BankFirst if required to litigate elsewhere.
The BEH Entities assert that, considered separately, none of the BEH Entities have
sufficient contacts with Minnesota and that the fact that the BEH Entities guaranteed an
obligation to a resident of Minnesota does not subject them to personal jurisdiction. The
Court recognizes that the Eighth Circuit has held that nonresident guarantors of a
contractual obligation have had insufficient contact with a forum-state to confer
jurisdiction. See Arkansas Rice Growers Coop. Assn v. Alchemy Indus., Inc., 797 F.2d
565 (8th Cir. 1986); see also Arkansas Poultry Coop. Inc. v. Red Barn Sys., 468 F.2d 538
15
(8th Cir. 1972). In Arkansas Rice Growers, the Eighth Circuit explained that the mere
fact that a defendant guarantees an obligation to a resident corporation does not subject
the guarantors to jurisdiction in that resident corporations state. Id. at 573. In so
holding, the Eighth Circuit, however, distinguished cases where courts had exercised
personal jurisdiction over nonresident guarantors. Id. In the distinguished cases, there
was substantive identity of the guarantors and the corporation whose obligation they
guaranteed, evidence that the beneficiary of the guarantee contract would not have
entered into the transaction with the guarantees of specific individuals, or a provision in
the guarantee contract or the underlying contract stating that the law of the forum state
would control. Id. at 573-74. Here, each of the BEH Entities had other contacts with
Minnesota beyond simply guaranteeing an obligation to a Minnesota corporation. First,
as discussed above, each of the BEH Entities had contacts with BankFirsts Minneapolis
office. Second, performance under the Guaranty Agreements required continued contact
with BankFirst in Minnesota. Finally, each of the BEH Entities signed agreements
containing a Minnesota choice of law provision.
Based on the foregoing, the Court concludes that the BEH Entities purposefully
directed their activities toward Minnesota and could reasonably expect that a dispute over
their obligations under the Guaranty Agreements could be litigated in Minnesota.
BankFirst has made a sufficient prima facie showing of personal jurisdiction and the
Court is satisfied that it can exercise personal jurisdiction over each of the BEH Entities.
The Court recognizes that the BEH Entities contacts with Minnesota may not rise very
16
far above the minimum contacts necessary to establish jurisdiction. The Courts task,
however, is not to determine the best forum for a suit, but to determine whether
sufficient minimum contacts exist so that a suit against each of the BEH Entities in
Minnesota does not offend traditional notions of fair play and substantial justice. Such
contacts exist here. Therefore, the Court denies the BEH Entities motions to dismiss.
II. Motion to Transfer
All Defendants move to transfer this action to the District of Montana pursuant to
28 U.S.C. 1404(a). That section provides: AFor the convenience of the parties and
witnesses, in the interest of justice, a district court may transfer any civil action to any
other district or division where it might have been brought.@ 28 U.S.C. 1404(a). When
deciding a motion to transfer pursuant to 1404(a), the Court must consider the
convenience of the parties, the convenience of the witnesses, and the interest of justice.
See Terra Intl, Inc. v. Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997). In
considering these factors, the Court must make a case-by-case evaluation of the
particular circumstances at hand and a consideration of all relevant factors. Id. The
burden is on the party seeking the transfer to show that the balance of factors strongly
favors the movant. Graff v. Qwest Commcns Corp., 33 F. Supp. 2d 1117, 1121
(D. Minn. 1999). Here, there is no dispute that this case might have been brought in
Montana. The Court therefore considers the relevant transfer factors.
A. Convenience of the Parties
[S]ection 1404(a) provides for transfer to a more convenient forum, not to a
17
forum likely to prove equally convenient or inconvenient, and a transfer should not be
granted if the effect is simply to shift the inconvenience to the party resisting the
transfer. Id. Normally, there is a presumption in favor of the plaintiffs forum. Id.
Defendants assert that Montana would be a more convenient forum because the operative
events leading to this action center in Montana. In particular, Defendants assert that the
Guaranty Agreements cover a loan agreement that was entered into to develop the Casino
Project in Montana; BankFirst made trips to Montana; the closing of the loan occurred in
Montana; and the construction problems occurred in Montana.
Here, BankFirst chose Minnesota as its forum and events giving rise to this
litigation occurred, at least in part, in Minnesota. BankFirsts Minneapolis office
originated and administered the defaulted loan that the Defendants guaranteed. (Erickson
Aff. 11.) The individual guarantors, Shunock and Ginsburg, consented to jurisdiction in
Minnesota. Ginsburg and Shunock are the principals of BEH Gaming, which in turn is a
partner of WWP. None of the individual guarantors, nor any of the representatives of the
BEH Entities, reside in Montana. Thus, at most, Minnesota and Montana would be
equally inconvenient for the Defendants. The Court finds that the convenience of the
parties does not weigh in favor of transferring this case to the District of Montana.
B. Convenience of Witnesses
The convenience of witnesses is an important factor for the Court and the parties
because it affects the access to sources of proof. Graff, 33 F. Supp. 2d at 1121. In
considering the convenience of witnesses, courts have focused on the number of
18
non-party witnesses, the location of all witnesses, and the preference of courts for live
testimony as opposed to depositions. See id. Defendants argue that they will seek to add
CCCDC to this action, and that many of the witnesses and evidence central to their
defenses and counterclaims are located in Montana. BankFirst asserts that it will call its
current and former employees, including five Minnesota residents, and perhaps other
witnesses, none of whom reside in Montana, depending on the status of Defendants
counterclaim. There is no question that at least some of the fact witnesses reside in
Minnesota and some in Montana. The Court concludes that the convenience of the
witnesses does not weigh in favor of transferring this action to the District of Montana.
C. Interests of Justice
The Court must also evaluate what venue will best promote the interests of justice.
Id. This factor is weighed very heavily. Id. A number of relevant considerations
include judicial economy, the plaintiffs choice of forum, the costs of litigating in each
forum, obstacles to a fair trial, choice of law issues, and the advantages of having a local
court determine questions of local law. See Terra Intl, 199 F.3d at 696. The Court
recognizes the interest in protecting the plaintiffs choice of forum. In addition, each of
the Guaranty Agreements contains a choice of law provision requiring the application of
Minnesota law. Minnesota has an interest in providing a forum for BankFirst and this
Court would have the advantage of being familiar with Minnesota law. Finally, the Court
notes that both Ginsburg and Shunock consented to jurisdiction. Ginsburg and Shunock
are also the principals, owners, and/or beneficiaries of the BEH Entities. Maintaining the
19
action here would promote the interests of justice and the Court finds that this factor does
not weigh in favor of transferring this action to the District of Montana.
CONCLUSION
Based on the files, records, and proceedings herein, and for the reasons set forth
above, IT IS ORDERED that:
1. The Motion of Defendant Frank Shunock to Transfer Venue (Doc. No. 18)
is DENIED.
2. The Motion of Defendants Warm Wind Trust and Warm Winds Partners,
Ltd. To Dismiss or Alternatively to Transfer Venue (Doc. No. 10) is DENIED.
3. The Motion of Defendant BEH Gaming, Ltd. to Dismiss or Alternatively to
Transfer Venue (Doc. No. 6) is DENIED.
4. The Motion of Defendant Alan H. Ginsburg to Transfer Venue (Doc. No. 4)
is DENIED.
Dated: February 24, 2009 s/Donovan W. Frank
DONOVAN W. FRANK
Judge of United States District Court
 

 
 
 

  What day were you injured?

  / /


  What caused your injuries?
Traffic/Bicycle Accident
Work-Related Injury
Wrongful Death
Dog Bite
Slip and Fall
Other:


  How have your injuries affected

  your life?

 


  What kinds of medical care
  professionals have you seen?

 


  What has your treatment cost?

 

  Is Insurance Involved?
My insurance may cover
        this.

Someone else's insurance
        may cover this.

I already filed a claim.
I rejected a settlement
        offer.

I accepted a settlement
        offer.

  Were there any witnesses?
Bystanders Witnessed This.
Police Responded and Filed
        a Police Report

Police Responded but Did
        Not File a Police Report


 

 

          By visiting this page or clicking the
  "submit" button above, you agree
  that you have read and accept this   "disclaimer".
 
Copyright © Michael E. Douglas, Attorney at Law, Saint Paul MN. All Rights Reserved.
Minnesota Law Firm representing Personal Injury, Car / Auto Accident, Workers Compensation, Medical Malpractice, Social Security Disability claims.
Dedicated to Injured Workers, Victims of Negligence, Car Accidents, Victims of Fraud, and those in need of legal assistance.