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Farouki v. Petra International Banking

February 4, 2010

A. HUDA FAROUKI, PLAINTIFF,
v.
PETRA INTERNATIONAL BANKING, CORP., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Deborah A. Robinson United States Magistrate Judge

MEMORANDUM OPINION

BACKGROUND

Plaintiff is the founder of American Export Group International Services, Inc. ("AEGIS"). Complaint (Document No. 1), ¶¶ 7-8. Plaintiff alleges that in 1986, AEGIS secured a loan from Defendant Petra Banking International Corporation ("PIBC"),*fn1 for which Plaintiff personally guaranteed payment. Compl., ¶ 2. Plaintiff alleges that between 1989 and 1993, he satisfied the terms of both the release of the deed of trust which secured his personal guarantee, and the AEGIS guarantee, and that Defendant PIBC released the deed of trust and the AEGIS guarantee in 1990 and 1993, respectively. Id., ¶ 4. Plaintiff further alleges that between 1993 and 2007, Defendants made no effort to collect on the AEGIS guarantee, but in 2008, enlisted the administrative agencies of the Jordanian government to seize property in Jordan belonging to him. Id., ¶ 5.

On December 9, 2008, Plaintiff initiated the instant action against Defendants PIBC, Petra Bank and Old seeking injunctive relief and a declaratory judgment that he was released from the guaranty, and that any efforts to collect are barred by the doctrine of laches and the statute of limitations. Compl., ¶¶ 46-66. Plaintiff also brings causes of action for "injurious falsehood[,]" defamation and tortious interference against Defendant Old. Id., ¶¶ 67-80.

On February 17, 2009, Defendant PIBC answered the complaint, and generally denied the allegations and pled the affirmative defenses of failure to state a claim upon which relief can be granted and that the complaint is barred by the statute of frauds. Answer of Defendant Petra International Banking Corp. and Counterclaim of Defendant Petra International Banking Corp. ("Def. PIBC's Answer and Counterclaim") (Document No. 8) at 8. PIBC also pled a counterclaim predicated upon Plaintiff's alleged failure to satisfy his obligations under the guaranty. Id., ¶¶ 34-36. On the same date, all three Defendants filed a motion to dismiss. Defendants Petra Bank and Old moved to dismiss the complaint in its entirety. See Motion of Defendants to Dismiss Counts III, IV, V, VI and VII of the Complaint and Motion of Randolph B. Old and Petra Bank to Dismiss the Complaint in its Entirety ("Defs.' Motion to Dismiss") (Document No. 9) at 1. In the motion, Defendant Petra Bank submits that the court lacks personal jurisdiction; Defendant Old alleges that the court lacks both personal jurisdiction, and that venue is not proper in this district. Defendant PIBC moves to dismiss Counts III, IV, V, VI and VII for failure to state a claim upon which relief can be granted.

Additionally, Plaintiff has moved to dismiss Defendant PIBC's counterclaim on the ground that the statute of limitations has run, and for leave to amend his complaint.

Memorandum of Points and Authorities in Support of Counterclaim Defendant A. Huda Farouki's Motion to Dismiss Counterclaim (Document No. 13) at 1; Memorandum of Points and Authorities in Support of Plaintiff's Motion to Amend Complaint ("Pl.'s Motion to Amend Complaint") (Document No. 15) at 1.

Both motions to dismiss, and the companion motion for leave to amend the complaint, have been fully briefed. Issues with respect to this court's jurisdiction -- personal and subject matter -- are presented in all three motions. See, e.g., Defs.' Motion to Dismiss at 22 ("[t]he Complaint fails to make a prima facia showing that personal jurisdiction exists over [Petra Bank]"); Pl.'s Motion to Dismiss at 10 ("PIBC's breach of contract claim against [Plaintiff] is time -- barred"); Pl.'s Motion to Amend Complaint at 2 ("the Amended Complaint serve[s] to supplement the bases for the Court's exercise of personal jurisdiction over Petra Bank and Mr. Old[.]").

Five motions are pending in which the conduct of discovery is addressed. Two of the five are motions to compel discovery: Defendant PIBC moves to compel Plaintiff to answer Interrogatory No. 3 and to produce the documents responsive to its Request for Production of Documents Nos. 2 and 3; Plaintiff seeks to compel responses from Defendant PBIC to several of Plaintiff's requests for production of documents. See Memorandum of Defendant Petra International Banking Corp. in Support of its Motion for an Order to Compel Discovery ("Def. PIBC's Motion to Compel") (Document No. 30) at 2-4; Plaintiff's Memorandum in Support of Motion to Compel Discovery from Petra International Banking Corp. ("Pl.'s Motion to Compel") (Document No. 35) at 7-10.

The parties from whom discovery is sought have filed oppositions to the motions. In addition, each of the three defendants has moved to stay jurisdictional discovery until the motions to dismiss have been determined. See Motion of Defendants Petra Bank and Randolph B. Old to Stay Defendants' Obligation to Provide Discovery Until Thirty Days After the Court's Ruling on Defendants' Motion for a Protective Order ("Def. Petra Bank's and Old's Motion to Stay") (Document No. 23); Motion of Defendants Petra Bank and Randolph B. Old for a Protective Order (1) Staying Discovery as to Them Pending Ruling on Motion to Dismiss for Lack of Personal Jurisdiction and Venue; and (2) Requiring that the Depositions of Petra Bank, if any, be Conducted at its Residence and Only Place of Business in Amman, Jordan ("Def. Petra Bank's and Old's Motion to for Protective Order") (Document No. 24); Motion of Defendant Petra International Banking Corp. for a Protective Order Staying Jurisdictional Discovery Pending Ruling on Motion to Dismiss for Lack of Personal Jurisdiction and Venue ("Def. PIBC's Motion for a Protective Order") (Document No. 39).*fn2

Plaintiff opposes each of the three motions for a stay of discovery.

DISCUSSION

Evaluation of the five pending motions in which the conduct of discovery is addressed must begin with the settled proposition that a "court has broad discretion and inherent power to stay discovery until preliminary questions that may dispose of the case are determined." Chavous v. D.C. Fin. Responsibility & Mgmt. Assistance Auth., 201 F.R.D. 1, 2 (D.D.C. 2001); see also Covad Communications Co. v. Revonet, Inc., 250 F.R.D. 14, 18 (D.D.C. 2008) (discovery stayed pending resolution of the defendant's motion for judgment on the pleadings "in order to save the litigants potentially unnecessary discovery expenses."); Institut Pasteur v. Chiron Corp., 315 F. Supp. 2d 33, 37 (D.D.C. 2004) ("The decision whether to stay discovery lies within the sound discretion of the district court[]"; "[a]ccordingly, 'it is well settled that discovery is generally considered inappropriate while a motion that would be thoroughly dispositive of the claims in the Complaint is pending.'") (citations omitted).

Consistent with the these authorities, the undersigned has reviewed all of the motions -- the motions to dismiss and for leave to amend, as well as the motions in which the conduct of discovery is directly addressed -- in order to determine the extent to which any of the discovery which is at issue in either of the motions to compel is needed to permit the parties to further support or oppose the pending motions to dismiss.*fn3 Cf. Klugel v. Clough, 252 F.R.D. 53, 56 (D.D.C. 2008) ("court would appropriately exercise its discretion to stay consideration of [a motion to compel] pending the determination of the motion for summary judgment [filed by the ...


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