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Bistro of Kansas City, Mo., LLC v. Kansas City Live Block 125 Retail, LLC

United States District Court, Fourth Circuit

November 26, 2013

BISTRO OF KANSAS CITY, MO., LLC, Plaintiff,
v.
KANSAS CITY LIVE BLOCK 125 RETAIL, LLC, Defendant & Counter-Plaintiff,
v.
BISTRO OF KANSAS CITY, MO., LLC & ROBERTO RUGGERI, JR., Counter-Defendants.

MEMORANDUM

ELLEN LIPTON HOLLANDER, District Judge.

Bistro of Kansas City, Mo., LLC ("Bistro" or "Tenant") initiated suit against Kansas City Live Block 125 Retail, LLC ("Kansas City Live, " "KC Live, " or "Landlord") in Missouri. After suit was transferred to this Court, Kansas City Live filed a counterclaim against Bistro and its principal owner, Roberto Ruggeri, Jr. ("Ruggeri"). The suit involved two commercial leases and a personal guaranty.

In particular, Kansas City Live and Bistro executed a commercial lease on March 27, 2007, for a 7, 000 square foot space in Kansas City, to be used by Bistro as a restaurant (the "Restaurant Lease"). On October 1, 2007, KC Live and Bistro executed a lease for a smaller, adjoining space, to be used as a gelateria (the "Gelateria Lease"). The premises were located in the Kansas City Power & Light District ("District" or "Power & Light District"), a mixed use real estate development owned by the Cordish Company ("Cordish"). Ruggeri, an experienced restaurateur, executed a personal guaranty for each lease.

At a bench trial in December 2012 and continuing in January 2013, the parties presented competing allegations as to breach of the leases. Post-trial briefing followed, and closing arguments were heard on April 26, 2013.

On August 16, 2013, I issued a 70-page Memorandum Of Decision (ECF 119), setting forth my findings of fact and conclusions of law in regard to the parties' disputes, along with an Order (ECF 120). Issues as to Ruggeri were not resolved, however. This is because in July 2013, Ruggeri filed a voluntary petition for bankruptcy under Chapter 11 of the United States Bankruptcy Code. See ECF 112 ("Notice Of Suggestion Of Bankruptcy"), Voluntary Petition, In Re: Roberto Ruggeri, Number 1:13-bk-14718-AA (Bankr. C.D. Cal., July 16, 2013). Ruggeri's filing resulted in an automatic stay as to KC Live's claims against Ruggeri, pursuant to 11 U.S.C. § 362(a). Although counsel agreed that the Court could recount the facts and make findings of fact as to Ruggeri with respect to corporate issues, they were of the view that I could not make findings of fact and conclusions of law as to Ruggeri's personal liability as guarantor of the two leases. See ECF 114, 117 (status report submitted by Bistro); ECF 115, and 118 (status report submitted by KC Live); see also ECF 119 at 3-4. As a result, I also abstained from resolving any issue as to personal jurisdiction with respect to Ruggeri. See ECF 24, 25, 29, 32, 37, 39, and 40; see also ECF 119 at 4. Nor could I enter judgment against him.

On September 12, 2013, the United States Bankruptcy Court, Central District of California, terminated the automatic stay as to Ruggeri and his estate, under 11 U.S.C. § 362(a), insofar as this case is concerned. See ECF 123, Exhibit A. Thereafter, I directed the parties to submit proposed findings of fact and conclusions of law as to Ruggeri, addressing the remaining matters that counsel believed necessary to conclude the litigation. See ECF 124.

Kansas City Live submitted its proposed findings of fact on October 28, 2013. See ECF 127. No response was filed by Bistro or Ruggeri, however.

In this Memorandum, I shall address the matters as to Ruggeri that I was unable to resolve in ECF 119 because of the bankruptcy stay pending at that time. I need not restate here the factual summary, the findings of fact, and/or the conclusions of law set forth in ECF 119. Instead, I shall incorporate them here by reference.

Personal Jurisdiction

Early in the litigation, Ruggeri moved to dismiss the counterclaim against him, pursuant to Fed.R.Civ.P. 12(b)(2). He argued that, as to KC Live's counterclaim against him, this Court lacked personal jurisdiction. In March 2011, I made a prima facie finding of personal jurisdiction and, on that basis, I denied Ruggeri's motion. See ECF 39, 40. However, I noted that at trial the burden remained on KC Live to prove, by a preponderance of the evidence, the existence of this Court's personal jurisdiction as to Ruggeri. ECF 40 at 3. See E. Wellington Fin. Corp. v. Flagship Resort Development Corp., 416 F.3rd 290, 294 n.5 (4th Cir. 2005); Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989).

In post-trial briefing, Ruggeri did not dispute or even address the personal jurisdiction issue. See ECF 102. At closing argument on April 26, 2013, I inquired of Ruggeri's counsel whether Ruggeri continued to contest the Court's personal jurisdiction over him. Ruggeri's attorney essentially conceded that Kansas City Live established personal jurisdiction as to Mr. Ruggeri. See Transcript, Vol. VIII (April 26, 2013) (ECF 107) at 56.

The evidence adduced at trial supported my previous findings as to personal jurisdiction, as set forth in ECF 40, which I incorporate here. In view of the evidence presented at trial, I am satisfied that Ruggeri had sufficient minimum contacts with Maryland so as to subject him to personal jurisdiction in this forum in regard to the claims lodged against him.

The Personal Guaranties

Ruggeri personally guaranteed all obligations under both leases. I find that Ruggeri is personally liable to Kansas City Live with respect to his personal guaranty of the Restaurant Lease as well as his personal guaranty of the Gelateria Lease.

The guaranties were admitted in evidence at trial. See Defendant's Exhibit 26 (Restaurant Lease); Defendant's Exhibit 32 (Gelateria Lease). At trial, Ruggeri admitted that he signed each one. See Trial Transcript Vol. II (December 4, 2012) (ECF 95) at 12, 21. Each guaranty provided, in part, as follows: "The liability of Guarantor is coextensive with that of Tenant and ...


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