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Abraham v. Centris Federal Credit Union

United States District Court, D. Kansas

November 19, 2019

GARY L. ABRAHAM, Plaintiff,
v.
CENTRIS FEDERAL CREDIT UNION, Defendant.

          MEMORANDUM AND ORDER

          Kathryn H. Vratil, United States District Judge.

         On September 16, 2019, pro se plaintiff Gary L. Abraham filed suit against Centris Federal Credit Union. Complaint (Doc. #1).[1] As best the Court can ascertain, plaintiff alleges that defendant engaged in predatory lending relating to a home loan, and brings his claims under the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., and the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. This matter is before the Court on plaintiff's Motion To Stay Collection Payment To Defendant (Doc. #6) filed September 18, 2019, plaintiff's Request For Entry Of Default By The Clerk (Doc. #14) filed October 18, 2019, defendant's Motion To Transfer Venue And Motion To Dismiss For Failure To State A Claim (Doc. #15) filed October 21, 2019 and plaintiff's Motion For Entry Of Default Judgment Against Defendant By The District Clerk (Doc. #26) filed October 29, 2019. For reasons stated below, the Court sustains defendant's motion in part and does not rule on plaintiff's motions.

         Factual Background

         As best the Court can ascertain, plaintiff alleges the following:

         On or about May 21, 2019, plaintiff contacted defendant's mortgage department to inquire about eligibility requirements for home loans. Defendant ultimately denied plaintiff a loan because he did not satisfy its debt ratio guidelines.

         On or about May 24, 2019, plaintiff again contacted defendant to discuss loan options. Defendant advised plaintiff that to lower his debt ratio, he should refinance existing loans, pay off credit cards and trade both of his cars for a more economical option. With the understanding that defendant would lower his debt ratio to allow him to obtain a home loan, plaintiff used $29, 000 from his savings.[2] Although it is unclear to the Court, it appears that defendant ultimately granted plaintiff a loan.

         In obtaining his loan, plaintiff did not understand the forms that he signed, including the terms and conditions, disclosures, amount financed and finance charges. After he expressed concern to defendant, defendant sent new documents. Plaintiff did not receive them, however, for several weeks. When plaintiff then attempted to cancel the loan, defendant avoided his calls. Once defendant responded, it explained that it had already disbursed the funds, despite plaintiff's prior instructions by email and voice messages to cancel the deal. Weeks later, defendant pressured plaintiff to pay off the loan.

         Analysis

         Under 28 U.S.C. § 1404(a), defendant requests that the Court transfer this case to the District of Nebraska pursuant to a valid forum selection clause that governs plaintiff's claims. A forum selection clause in a freely-entered contract is presumptively valid. See Bowen Eng'g, Corp. v. Pac. Indem. Co., 83 F.Supp.3d 1185, 1190 (D. Kan. 2015). Accordingly, the Court will enforce a forum selection clause unless the party challenging it “clearly show[s] that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.” Kufahl v. Spaulding Decon Indus., Corp., No. 19-1036-EFM, 2019 WL 5424791, at *2 (D. Kan. Oct. 23, 2019) (citing Niemi v. Lasshofer, 770 F.3d 1331, 1351 (10th Cir. 2014)).

         Here, a valid forum selection clause governs plaintiff's claims. On June 7, 2012, plaintiff became a member of defendant by signing a Membership Application Account Card. By doing so, plaintiff agreed to “the terms and conditions of the Membership and Account Agreement.” Account Card (Doc. #17-2) filed October 21, 2019 at 4. The Account Agreement clearly states that it “covers [plaintiff's] rights and responsibilities concerning [his] accounts, ” and that “any legal action regarding this Agreement shall be brought in the county in which the Credit Union is located, ” which is Douglas County, Nebraska.[3] Account Agreement (Doc. #17-2) at 5, 10. Plaintiff does not argue that enforcing the forum selection clause would be unreasonable or unjust, or that the clause was invalid for reasons such as fraud or overreaching. Accordingly, absent argument to the contrary, the Court finds that plaintiff agreed to a valid forum selection clause that governs his claims.[4]

         When defendant files a motion under 28 U.S.C. § 1404(a) and presents a valid forum selection clause, the Court “should ordinarily transfer the case to the forum specified in that clause.” Atl. Marine Constr. Co. v. United States Dist. Court, 571 U.S. 49, 52 (2013). As the Supreme Court explained, “[w]hen parties agree to a forum-selection clause, they waive the right to challenge the preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of litigation.” Id. Accordingly, the Court “should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer.” Id. To determine whether such extraordinary circumstances exist, the Court “does not give any weight to plaintiff's choice of forum and should only consider arguments related to public-interest factors.” Kufahl, 2019 WL 5424791, at *2 (citing Atl. Marine Constr. Co., 571 U.S. at 62). These factors include: (1) administrative difficulties of courts with congested dockets which can be caused by cases not being filed at their place of origin; (2) the burden of jury duty on members of a community with no connection to the litigation; (3) the local interest in having localized controversies decided at home; and (4) the appropriateness of having diversity cases tried in a forum that is familiar with the governing law. Id. The Supreme Court explained that because public-interest factors “will rarely defeat a transfer motion, ” the practical result is that forum selection clauses should control except in unusual cases. Atl. Marine Constr. Co., 571 U.S. at 64.

         Here, plaintiff has not shown extraordinary circumstances that would override the valid forum selection clause to which he agreed. Indeed, plaintiff does not address any public-interest factors. He merely complains about the inconvenience of litigating outside of Kansas, where he and his witnesses live. As the Supreme Court has made clear, however, convenience for plaintiff and his witnesses is simply irrelevant when he agreed to a valid forum selection clause. See id. at 52. Accordingly, plaintiff has failed to satisfy his burden of showing extraordinary circumstances preventing transfer of venue. See id. at 64 (plaintiff bears burden of establishing that transfer to forum to which parties agreed is unwarranted).

         Plaintiff apparently argues that defendant waived its right to transfer this case because it did not timely answer his complaint. This argument was the basis for two separate motions in which plaintiff asked the Court clerk to enter default against defendant. Request For Entry Of Default By The Clerk (Doc. #14); Motion For Entry Of Default Judgment Against Defendant By The District Clerk (Doc. #26). Plaintiff's argument is frivolous. Although he served his original complaint on September 18, 2019, he served an amended complaint on October 7, 2019. See Notice Of Proof Of Service Of Plaintiff Amended Complaint To Defendant (Doc. #11). Pursuant to Fed.R.Civ.P. 15(a)(3), defendant had until October 21, 2019 to respond. Defendant complied with Rule 15(a)(3), filing its motion to transfer or dismiss on October 21, 2019. See Motion To Transfer Venue And Motion To Dismiss For Failure To State A Claim (Doc. #15). Thus, defendant did not default or waive the right to request a transfer.

         Plaintiff's disregard for these rules in filing multiple default motions is worth noting, particularly in light of the warning that he received from this Court on a different matter just last year. On September 7, ...


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