1990_U[1].S._Dist._LEXIS_7364,_ - 1 of 1 DOCUMENT U S WEST...

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1 of 1 DOCUMENT U S WEST FINANCIAL SERVICES, INC. , Plaintiff, v. ROBERT CIPRIANO and NANCY CIPRIANO, Defendants No. 89 Civ. 7187 (JFK) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK 1990 U.S. Dist. LEXIS 7364 June 18, 1990, Decided June 18, 1990, Filed CASE SUMMARY: PROCEDURAL POSTURE: Plaintiff assignee of a payee on a promissory note filed an action against defendant debt- ors to recover on a promissory note. The debtors filed a motion for an order dismissing the complaint for improper ven- ue under Fed. R. Civ. P. 12(b)(3), or, in the alternative, to transfer the action under 28 U.S.C.S. § 1404(a). The assignee filed a cross-motion for summary judgment pursuant to N.Y. U.C.C. Law § 3-305 and Fed. R. Civ. P. 56. OVERVIEW: The debtors executed a promissory note, which was endorsed and pledged to the assignee in considera- tion of a loan from the assignee to the payee of the note. The debtors made none of the required payments on the note and were in default. The debtors alleged that they were fraudulently induced to make the investment by an accountant, who improperly altered the debtors' financial statements to give the false impression that the debtors were qualified in- vestors. Therefore, the assignee was not a holder in due course because it should have known that the debtors were not qualified investors. The debtors also contended that because they did not actually negotiate the forum selection clause in the note, they were not bound by it. The court held that the debtors failed to show that the assignee was guilty of any fraud or that the forum selection clause was procured by fraud, and sweeping contentions of inconvenience did not overcome the assignee's choice of forum under that provision. The court found that the evidence clearly established that the assignee had no actual knowledge of the alleged fraud; therefore, the debtors could not defeat the assignee's status as a holder in due course. OUTCOME: The court denied the debtors' motion to dismiss or to transfer the action. The court granted the assignee's motion for summary judgment and ordered the action removed from its active docket. CORE TERMS: holder, forum selection clause, investors, summary judgment, procured, venue, interest of justice, promissory note, genuine issue, transferring, convenience, permissive, unjust, security agreement, fraudulently, finan- cing, material facts, convenience of witnesses, citations omitted, choice of forum, good faith, actual knowledge, fraudu- lent conduct, transferred, unwilling, signature, endorser, proven, notice, defeat LexisNexis(R) Headnotes [HN1] In deciding a motion to dismiss, the court must view the complaint in the light most favorable to the plaintiff. Moreover, the allegations set forth in the complaint must be accepted as true.
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This note was uploaded on 03/10/2010 for the course ACCTG 351B taught by Professor Inama during the Fall '09 term at Golden Gate.

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1990_U[1].S._Dist._LEXIS_7364,_ - 1 of 1 DOCUMENT U S WEST...

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