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Salaman v. United Capital Funding Corp.

United States District Court, E.D. Pennsylvania

February 15, 2017



          DuBois, J.


         The Complaint in this case seeks a declaratory judgment of no liability and damages arising out of a dispute over a personal guaranty. Jurisdiction is based on 28 U.S.C. § 1332 and the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202. Presently before the Court are defendant United Capital Funding Corp.'s Motion to Transfer Pursuant to 28 U.S.C. § 1404(a), or in the Alternative, to Dismiss Under the Declaratory Judgment Act and/or Federal Rule 12(b)(6) (Document No. 7, filed July 6, 2016), and Plaintiff's Motion for Leave to File an Amended Complaint Pursuant to Fed. R. Civ. P 15(a) (Document No. 8, filed July 20, 2016). Plaintiff's Motion is conditioned on the granting of United Capital's Motion to Dismiss and does not seek to amend the Complaint to address issues relevant to United Capital's Motion to Transfer. Pl.'s Mem. Opp. Mot. 25.

         This is one of two concurrent cases in which the parties seek a determination of Michael Salaman's liability to United Capital Funding Corp. (“United Capital”) under the same personal guaranty. The other case, United Capital Funding Corp. v. Michael Salaman, No. 8:16-cv-1160-T-27TBM, filed in the United States District Court for the Middle District of Florida (the “Florida action”), seeks damages under the personal guaranty and under a contract for factoring services. The primary issue in both cases at this juncture is determining where the dispute over Salaman's liability to United Capital should proceed-the Middle District of Florida or the Eastern District of Pennsylvania.

         The Florida action is currently stayed pending this Court's decision on whether the first-filed rule applies in this case, which was filed before the Florida action. For the reasons set forth below, this Court concludes that the first-filed rule is inapplicable to this case based on the anticipatory filing exception to the rule. A decision on the two pending Motions in this Court is deferred until the District Court for the Middle District of Florida determines the effect of the Florida forum selection clause in one of the contracts at issue in that case, but not in the Pennsylvania case, and the related question of whether the Florida court has personal jurisdiction over Salaman.


         The relevant evidence referenced in the Complaint and the affidavits and exhibits accompanying the parties' briefs are as follows.[1]

         Plaintiff Michael Salaman, a Pennsylvania resident, is the former president of Skinny Nutritional Corp. (“Skinny”), a Nevada corporation which sold flavored water. Compl. ¶¶ 1, 6, 15 (Document No. 1, filed Apr. 15, 2016); Pl.'s Mem. Opp. Mot., Salaman Aff. (“Salaman Aff.”) ¶¶ 2-3 (Document No. 8, filed July 20, 2016). Defendant United Capital is a Florida corporation that provides financial services including factoring for accounts receivable. Compl. ¶¶ 7, 14; Def.'s Mem. Supp. Mot., Baker Aff. (“Baker Aff.”) ¶ 3 (Document No. 7, filed July 6, 2016).

         The Complaint in this case (the “Pennsylvania Complaint”) seeks a declaratory judgment of Salaman's liability under a personal guaranty executed on June 7, 2012 (the “Personal Guaranty”). Compl. ¶ 19, Ex. B at 1. In 2012, United Capital asked Salaman to execute the Personal Guaranty “because Skinny had insufficient finances for [a] credit extension” of $300, 000 from United Capital under a promissory note dated June 6, 2012 (the “Senior Promissory Note”). Compl. ¶18, Ex. B at 1; Salaman Aff. ¶¶ 32-33. The Pennsylvania Complaint also alleges that, “at the same time, ” United Capital and Skinny entered into a factoring agreement (“the 2012 Factoring Agreement”). Compl. ¶18. United Capital disputes the validity of the 2012 Factoring Agreement and correctly observes that the document attached to the Pennsylvania Complaint is unsigned and dated April 18, 2014. Def.'s Mem. Supp. Mot. 4. It is unclear why the 2012 Factoring Agreement is included in the Pennsylvania Complaint, as there are no allegations that Salaman signed it or has any liability under it.

         In the Pennsylvania Complaint, Salaman claims that his obligations under the Personal Guaranty were discharged by subsequent agreements[2] and by Skinny's Chapter 11 bankruptcy proceeding in 2014. Compl. ¶¶ 27, 29, 30, 36, Ex. D. Salaman also avers that, after Skinny's bankruptcy proceedings and asset sale to Skinny Nutritional, LLC (“Skinny LLC”), United Capital entered into another factoring agreement with Skinny LLC. Compl. ¶ 42. According to Salaman, United Capital began to pursue Salaman for debt owed under the Personal Guaranty after Skinny LLC “defaulted” on its agreement with United Capital. Compl. ¶¶ 44-46.

         The Complaint in the Florida action seeks damages for Salaman's alleged default on the Personal Guaranty and as guarantor on a factoring agreement executed in 2007 between United Capital and Skinny (the “2007 Factoring Agreement”). Pl.'s Mem. Opp. Mot., Ex. K (“Florida Compl.”) ¶¶ 9-11, 14-16. The 2007 Factoring Agreement contains a venue and jurisdiction provision that requires that any suit arising under the agreement be brought in Florida, “if [United Capital] so elects.” Id., Ex. A at 12. As part of the 2007 Factoring Agreement, Salaman signed a Validity Statement, which “irrevocably guarantee[d] . . . the prompt performance of all obligations of [Skinny] . . . of every kind and character owed to [United Capital] . . . .” Id., Ex. A at 16. The parties disagree on whether the Validity Statement operates as a guaranty for the 2007 Factoring Agreement. Salaman Aff. ¶¶ 24-29; Baker Aff. ¶ 6.

         United Capital avers that, on April 7, 2016, it sent two identical demand letters to Salaman at addresses in Villanova, Pennsylvania, and Wayne, Pennsylvania, seeking payment for “past-due amounts” under the 2007 Factoring Agreement and Personal Guaranty. Baker Aff. ¶ 16; Def.'s Mem. Supp. Mot., Ex. 7 at 1-2. In those letters, United Capital demanded that Salaman pay $1, 423, 619.32 within five days of receiving the letters, and stated that if the payment was not made by that time, United Capital would “initiate legal action to cover the amount due and owing.” Id. Salaman received the letter mailed to the Villanova address on April 11, 2016. Id., Ex. 8 at 1.

         On April 15, 2016, Salaman filed the above-captioned case (the “Pennsylvania action”), seeking a declaratory judgment that he was not liable to United Capital under the Personal Guaranty, and for damages for fraudulent misrepresentation and bad faith. Compl. ¶¶ 60, 62-68, 71-72. On April 20, 2016, United Capital filed the Florida action in Florida state court, and Salaman removed the Florida action to the United States District Court for the Middle District of Florida. Florida Compl. at 1; Baker Aff. ¶ 19.

         United Capital then filed the pending Motion to Transfer or Dismiss in the Pennsylvania action. Def.'s Mot. 1. Similarly, in the Florida action, Salaman has filed a Motion to Dismiss for Lack of Personal Jurisdiction or in the Alternative to Transfer ...

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