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Bartlett v. Bartlett

United States District Court, N.D. Illinois, Eastern Division

January 11, 2017

Mark Bartlett, Plaintiff,
James Bartlett, Denise Bartlett, Evan Bartlett, Anoosh Motamedi, and Mark Keenan, Defendants.


          Manish S. Shah United States District Judge.

         Mark Bartlett alleges that his brother James Bartlett-along with James's wife, son, and two employees-participated in a racketeering scheme to set up cash-lending stores that siphoned business and resources away from the brothers' co-owned cash-lending stores. Defendants move to dismiss the complaint for improper venue under Federal Rule of Civil Procedure 12(b)(3) or, in the alternative, to transfer the case under 28 U.S.C. § 1406, to dismiss the complaint for failure to state a claim under Rule 12(b)(6), and to stay the case under the Colorado River abstention doctrine. For the following reasons, the motions are granted in part. This case is transferred to the Southern District of Illinois.

         I. Venue

         A. Legal Standards

         When considering a motion to dismiss, a district court ordinarily assumes the truth of all well-pleaded allegations in the plaintiff's complaint. Deb v. SIRVA, Inc., 832 F.3d 800, 808 (7th Cir. 2016). But in considering a motion to dismiss for improper venue under Rule 12(b)(3), the district court assumes the truth of the allegations in the plaintiff's complaint unless contradicted-at that point, a district court may look beyond the pleadings to determine whether the chosen venue is appropriate. Id. at 809. Once the defendant has submitted affidavits or other evidence in opposition, the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction. Purdue Res. Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 783 (7th Cir. 2003). When a defendant challenges venue, the plaintiff bears the burden of establishing proper venue. See Grantham v. Challenge-Cook Bros., 420 F.2d 1182, 1184 (7th Cir. 1969).

         B. Background

         Mark Bartlett's complaint alleges that he and his brother James Bartlett jointly own American Cash Loans, LLC, and B & B Investment Group, Inc. As relevant here, James manages four cash-lending stores in New Mexico. (American Cash Loans owns three stores, and B & B Investment owns one.) Mark alleges that in 2014, James-along with James's wife Denise, son Evan, and employees Anoosh Motamedi and Mark Keenan-set up rival cash-lending stores in New Mexico and siphoned business and resources away from the brothers' co-owned stores. Mark brings claims against all defendants under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C § 1962(c).

         This is not the first lawsuit to arise out of the brothers' joint business ownership. In early 2015, Mark brought suit against James in Florida state court, alleging that James breached the brothers' business agreement and his fiduciary duties by failing to transfer funds from the cash-lending stores to Mark. See [8-1].[1]Several months later, Mark asserted similar claims against James in New Mexico state court (in two consolidated cases). See [12-5]; [12-6]; [12-7]; [14-5]; [23-1]. The Florida court stayed proceedings pending completion of the New Mexico litigation and then dismissed the case without prejudice. [12-8]; [14] at 2. The New Mexico litigation remains pending. Mark brought this suit in federal court in June 2016. [1].

         Mark's complaint alleges that venue is proper in the Northern District of Illinois under 18 U.S.C. § 1965 “because Jim owns Loan Stores and an internet lending company in this district, lends to customers who reside in this district, and has employees in this district.” [1] ¶ 9. The complaint is silent on the propriety of venue as to the remaining defendants, but in the jurisdictional section, it alleges that Evan, Motamedi, and Keenan reside in Illinois and that Mark, James, and Denise reside in Florida. According to the complaint, James and Denise maintain a home in Illinois and James also maintains business headquarters in Illinois. [1] ¶¶ 11-16.

         The defendants submitted affidavits in support of their motion to dismiss for improper venue. According to these affidavits, Keenan and Motamedi reside in Edwardsville, Illinois (approximately 30 miles from St. Louis, Missouri) and, since 2014, each has worked out of offices located approximately 30 miles from St. Louis. [12-2]; [12-3].[2] They have no agents or employees in the Northern District of Illinois. James, Denise, and Evan Bartlett reside in Florida, although James and Denise also have a home in Edwardsville, Illinois. [12-1]; [25-1]; [25-2]. Evan works both in Florida and in Illinois (approximately 30 miles from St. Louis), and when in Illinois, he stays at his parents' home. [25-2]. James acknowledges his joint ownership of American Cash Loans and B & B Investment Group, but states that his other businesses (named AAA Community Finance I and II, and which are unrelated to the current lawsuit) permanently closed their offices in upstate Illinois in July and August 2016 and that, since August 2016, he has no agents or employees north of Bethalto, Illinois (approximately 30 miles outside of St. Louis). [25-1].

         In response to the motions to dismiss, Mark submitted B & B Investment Group's corporate filings with the state of Illinois, which state that its place of business is in Elgin, Illinois, and that it had a registered agent in Elgin, Illinois. [20-1]; [20-2]. Mark also submitted a website printout for AAA Community Finance, which indicates that it has a branch near Rockford, Illinois. [20-3].

         C. Analysis

         Defendants move to dismiss Mark's complaint under Rule 12(b)(3), arguing that venue is improper under either the general venue statute for federal question cases, 28 U.S.C. § 1391, or the under RICO's venue provisions, 18 U.S.C. § 1965. In the alternative to dismissal of the complaint, defendants seek a transfer (under 28 U.S.C. § 1406(a)) to the Southern District of Illinois, where defendants concede that venue is proper. See [12] at 1, 7, 15; [25] at 1, 8. In response, Mark argues that James waived venue by moving to disqualify Mark's counsel before moving to dismiss based on improper venue. Mark maintains that venue is proper under § 1391 because his RICO claim alleges damage to his proprietary interest in an Illinois corporation (B & B Investment Group) and under § ...

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