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Southern Bank and Trust Co. v. Prosperity Beach, LLC

United States District Court, E.D. Virginia, Norfolk Division

May 7, 2015

SOUTHERN BANK AND TRUST COMPANY, Plaintiff,
v.
PROSPERITY BEACH, LLC, ROBERT F. WRIGHT, CRAIG DEAN, Defendants.

OPINION & ORDER

TOMMY E. MILLER, Magistrate Judge.

This breach of contract action is brought by Plaintiff Southern Bank and Trust Company ("Southern") seeking judgment against Defendants for their failure to perform their obligations under three contracts-a Promissory Note entered into by Prosperity Beach, LLC, ("Prosperity Beach"), a Guaranty entered into by Robert F. Wright ("Wright"), and a Guaranty entered into by Craig Dean ("Dean"). The parties consented to proceed before a United States Magistrate Judge in accordance with the provisions of 28 U.S.C. § 636(c) and Federal Rule of Civil Procedure 73. The matter is before the Court on Plaintiff's Motion for Summary Judgment against Wright (ECF No. 21) and Plaintiff's Motion for Default Judgment against Prosperity Beach and Dean (ECF No. 6). For the reasons stated herein, Plaintiff's Motion for Summary Judgment is GRANTED and Plaintiff's Motion for Default Judgment is GRANTED.

I. JURISDICTION AND VENUE

Based on the facts of this case, the Court holds both subject matter jurisdiction over the case and personal jurisdiction over the defendants. Similarly, venue is proper.

A. Subject Matter Jurisdiction

A federal district court has subject matter jurisdiction over all civil actions where the matter in controversy exceeds $75, 000, exclusive of interest and costs, and is between citizens of different States. See 28 U.S.C. § 1332 (2012). A corporation is a citizen of every state by which it has been incorporated and the one state where it has its principal place of business. Id.

Here, Southern is a banking corporation incorporated and maintaining its principal place of business in North Carolina. Pl. Mem. in Support of Mot. for Sum. Judg. ("Pl. Mem.") 3, ECF No. 22. Prosperity Beach, Dean, and Wright are all citizens of the Commonwealth of Virginia. Id; ECF No. 1. Because the parties are of diverse citizenship, and the amount in dispute exceeds $75, 000, the Court holds subject matter jurisdiction over this case.

B. Personal Jurisdiction

Personal jurisdiction over a defendant is established when a defendant has sufficient "minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice, '" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1941)), and when the defendant is subject to the personal jurisdiction of the courts of general jurisdiction of the forum state. See Fed.R.Civ.P. 4(k)(1)(A). The Court has personal jurisdiction over Prosperity Beach, Wright, and Dean pursuant to Virginia Code Section 8.01-328.1 because they transact business, including the transaction at issue in this case, in the Commonwealth of Virginia. Va. Code § 8.01-328.1; see also Pl. Mem., ECF No. 22; ECF No. 1.

C. Venue

Venue is proper under 28 U.S.C. § 1391(b)(1)-(2) because a substantial part of the events giving rise to Southern's claim occurred in this judicial district and division. Pl. Mem., ECF No. 22.[1]

II. UNDISPUTED FACTS

On October 16, 2007, Prosperity Beach executed a Promissory Note in the amount of $8, 341, 259.00 in favor of Bank of the Commonwealth. Promissory Note, ECF No. 1-1; Wright's Ans. to Compl. ("Answer") ¶ 7, ECF No. 5; Pl. Mem. 3, ECF No. 22. On October 29, 2009, Prosperity Beach executed the first of two Change in Terms Agreements in favor of Bank of the Commonwealth, and on May 28, 2010, the second Change in Terms Agreement was executed which further modified the Note. Change in Terms Agreements, ECF Nos. 1-2, 1-3; Answer ¶¶ 8, 9. The original Promissory Note as modified by the two Change in Terms Agreements will be collectively referred to as the "Note."

Also on May 28, 2010, Wright executed a Commercial Guaranty (the "Wright Guaranty") personally guarantying "full and punctual payment and satisfaction of the Indebtedness of [Prosperity Beach, LLC] to Lender, and the discharge of all of [Prosperity Beach, LLC]'s obligations under the Note and the Related Documents." Wright Guaranty, ECF No. 1-5. Craig Dean also executed a Commercial Guaranty personally guarantying the Note on June 8, 2010. Dean Guaranty, ECF No. 1-6. Prosperity Beach, LLC defaulted on the Note. Answer ¶ 11, ECF No. 5. By a Demand Letter dated March 15, 2013, Southern demanded payment in full under the Note from Prosperity Beach, and under the Guaranties from Wright and Dean. Demand Letter, ECF No. 1-4; Answer ¶ 18, ECF No. 5. Southern made a demand for payment in full of the principal balance of $3, 230, 347.77, interest in the amount of $1, 482, 985.99 through June 2, 2014, late charges in the ...


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