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Northstar Services Ltd. v. MJM Investment Properties LLC

United States District Court, D. Maryland

April 3, 2017

NORTHSTAR SERVICES, LTD. Plaintiff
v.
MJM INVESTMENT PROPERTIES, LLC Defendant

          MEMORANDUM AND ORDER STAYING CASE

          Marvin J. Garbis United States District Judge.

         The Court has before it Defendant MJM Investment Properties, LLC's (“MJM's”) Motion to Stay Proceedings [ECF No. 11], [1] and the materials submitted relating thereto. The Court finds a hearing unnecessary.

         I. INTRODUCTION

         As discussed in detail herein, the instant case and a case pending in a New Jersey state court are related.

         As pertinent hereto, in the New Jersey case, [2] Martin Marano (“Marano”) and Northstar Services, Ltd. (“Northstar”) are asking the court to decide whether Marano or Northstar owns the right to collect $784, 908.00 from MJM Investment Properties, LLC (“MJM”).

         In the instant case, Northstar seeks to have this Court enforce against MJM certain rights that are in dispute in the New Jersey case. The Court can enforce these rights as Northstar wishes only if Northstar is determined to own the rights at issue.

         By the instant motion, MJM seeks to have the Court stay the instant case pending resolution in the New Jersey case of the ownership of the rights at issue.

         II. DISCUSSION

         A. Background

         At all times pertinent hereto, Marano and his wife[3] have owned all the membership interests in MJM, an entity engaged in certain commercial operations not here relevant.

         In 2012, Marano was the sole owner of the stock of Northstar, a Delaware corporation with its principal place of business in New Jersey, engaged in the trucking business. On August 12, 2012, Northstar and MJM entered into an agreement whereby MJM agreed to pay Northstar $784, 908.00 for certain services and advances. The agreement, made between an entity owned by Marano and an entity owned jointly by Marano and his wife, is referred to as the “Loan Agreement.”

         On December 30, 2013, Marano entered into an agreement, entitled “Stock Purchase Agreement (“the SPA”) whereby four individuals[4] (“the Buyers”) bought all of the shares of Northstar, but certain assets of Northstar were effectively excluded from the transaction. Hence, on the closing date, January 31, 2014, the Buyers owned all shares of Northstar, but Northstar did not thereafter continue to own certain assets. As pertinent hereto, the parties dispute whether after January 31, 2014, Northstar continued to own the right to enforce the Loan Agreement against MJM.

         On January 12, 2016, Marano filed an Amended Complaint in the New Jersey case seeking, among other things, a declaratory judgment establishing that Northstar did not own the right to enforce the Loan Agreement against MJM[5] but that he personally owned that right. Essentially, the question presented was whether, by virtue of the SPA, Northstar ceased to own the right to enforce the Loan Agreement and it was then owned by Marano. The New Jersey litigation remains pending, and the New Jersey court is proceeding to answer the question.

         On December 16, 2016, Northstar filed the instant law suit seeking, among other things, to enforce the Loan Agreement and require MJM ...


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