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Jetstream of Houston, Inc. v. Aqua Pro

February 22, 2010

JETSTREAM OF HOUSTON, INC., A DELAWARE CORPORATION, GUZZLER MANUFACTURING, INC., AN ALABAMA CORPORATION, PLAINTIFFS,
v.
AQUA PRO INC., AN INDIANA CORPORATION, API SERVICES, INC., A KENTUCKY CORPORATION, DEBRA KOONS AND NATHAN KOONS, DEFENDANTS.



The opinion of the court was delivered by: Hon. Joan H. Lefkow

OPINION AND ORDER

Plaintiffs Jetstream of Houston, Inc. ("Jetstream") and Guzzler Manufacturing, Inc. ("Guzzler") brought suit against defendants Aqua Pro, Inc. ("Aqua Pro"), API Services, Inc. ("API"), Debra Koons, and Nathan Koons (collectively, "the Koons") as a result of Aqua Pro's default on several secured installment notes ("the Notes"), its refusal to relinquish collateral, and the Koons' failure as guarantors to pay the outstanding debt. Counts I and II seek an order of replevin and injunctive relief against all defendants. Counts III and V allege that Aqua Pro defaulted on the Notes, and Jetstream and Guzzler request judgment for the balance due and other fees and costs. Counts IV and VI allege that the Koons breached guarantees on the Notes, and Jetstream and Guzzler request judgment for the balance due and other fees and costs. Aqua Pro, API, and the Koons have moved to dismiss the complaint for lack of personal jurisdiction and improper venue pursuant to Federal Rules of Civil Procedure 12(b)(2) and (3). For the reasons set forth below, both motions [#15 and 16] are denied.

I. JURISDICTION

According to the complaint, Jetstream, a Delaware corporation, and Guzzler, an Alabama corporation, have their principal places of business in Oak Brook, Illinois.*fn1 Aqua Pro is a dissolved Indiana corporation that had its principal place of business in Floyds Knobs, Indiana, and API is a Kentucky corporation with its principal place of business in Floyds Knobs, Indiana.*fn2

The complaint alleges that Debra Koons resides in Simpsonville, Kentucky, and Nathan Koons resides in New Albany, Indiana.*fn3 Debra Koons is the sole incorporator, officer, and shareholder of both Aqua Pro and API. The court has diversity jurisdiction under 28 U.S.C. § 1332(a)(1).

II. ALLEGATIONS

A. The Notes

Between December of 1998 and March of 2000, Aqua Pro purchased equipment from Jetstream and Guzzler on multiple occasions. Jetstream and Guzzler financed these purchases and, to secure payment, required that Aqua Pro execute the Notes, in which Aqua Pro granted a security interest in the purchased equipment and promised monthly payments of varying amounts and duration.*fn4 In addition to stating Aqua Pro's obligations under the Notes, the Notes contained the following paragraph governing enforcement of the Notes:

This Note is made at Oak Brook, Illinois and shall be interpreted in accordance with the laws of the State of Illinois. Borrower irrevocably agrees to submit to the jurisdiction of the courts of the State of Illinois and Service of Process by Certified Mail. Borrower hereby acknowledges and agrees that Illinois is the proper venue in the event a lawsuit is necessary to enforce the parties' rights and obligations under this Note.

Pls.' Resp. to Mot. to Dismiss Exs. A-H.

Aqua Pro failed to make the required payments under the Notes, and, consequently, Jetstream and Guzzler declared Aqua Pro to be in default.*fn5 Jetstream and Guzzler repossessed all of the equipment except two Jetstream 3615D waterblasters, sold the equipment, and applied the proceeds to the balance due under the Notes. As of December 3, 2008, the total amount due under the Notes was $1,008,841.75 exclusive of interest and costs. In their complaint, Jetstream and Guzzler allege that Aqua Pro has refused to pay the balance due under the Notes or return the two Jetstream waterblasters still in its possession.

B. The Koons' Guarantees

For each secured installment note entered into by Aqua Pro, the Koons contemporaneously executed a document entitled "Personal Guarantee" ("the Guarantees"). The Guarantees provide that "the undersigned hereby unconditionally guarantees the full and prompt payment of the Liabilities [] as defined in the foregoing Installment Note and agrees to pay all costs, expenses and attorneys' fees incurred by holder in collecting the same and in enforcing this Guarantee." Pls.' Resp. to Mot. to Dismiss Exs. A-H. Unlike the Notes, the Guarantees do not include the same venue and jurisdiction provision. Rather, the Guarantees state only that "[t]he validity and ...


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