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Skymark Props. Corp. v. Katebian

Skymark Props. Corp. v. Katebian

United States District Court for the Eastern District of Michigan, Southern Division

March 14, 2022, Decided; March 14, 2022, Filed

Case No. 20-12372

Opinion

REPORT AND RECOMMENDATION TO (1) DENY GREENLAKE DEFENDANTS' MOTION TO COMPEL ARBITRATION (ECF No. 165), (2) DISMISS WITHOUT PREJUDICE THE ARBITRABLE CLAIMS, AND (3) GRANT IN PART AND DENY AS MOOT IN PART GREENLAKE DEFENDANTS' MOTIONS TO DISMISS (ECF Nos. 98, 100)

Normally, the plaintiff in a RICO case attempts to prove [*2]  that the defendants engaged in "specified unlawful activity," such as, say, bank fraud. The principal plaintiffs in this RICO case, however, take the unorthodox approach of beginning with an admission that they committed bank fraud against the very bank they now accuse of being a member of the RICO enterprise at the heart of plaintiffs' complaint. Moreover, to commit that fraud — obtaining a loan by false pretenses — they used a shill who they now accuse of being the RICO enterprise's ringleader.

While the principal plaintiffs' conduct may or may not give the bank a valid defense to at least some of the claims in this case, the Court must first decide whether this is the proper forum to resolve those claims. This is because the salient loan documents contain an arbitration clause, and the defendant bank and its co-defendant CEO have filed a motion to compel arbitration of plaintiffs' claims. Although the bank has assigned its rights in the loan documents to another lender, most of plaintiffs' claims against the bank and its CEO are subject to arbitration because those defendants' alleged wrongful conduct took place prior to the assignment, and the loan documents and the parties' relationship [*3]  thereunder are central to the plaintiffs' claims. However, because the parties agreed to arbitration in Los Angeles, California, the motion to compel arbitration must be denied, and the arbitrable claims must be dismissed without prejudice.

The bank and its CEO have also filed motions to dismiss, and the few claims against them that are not arbitrable are subject to dismissal because the plaintiffs failed to properly plead causation.

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2022 U.S. Dist. LEXIS 59390 *

SKYMARK PROPERTIES CORPORATION, INC., SKYMARK PROPERTIES II, LLC, SKYMARK PROPERTIES III, LLC, SKYMARK SPE, LLC, HAZELTON HOMES, and 2399021 ONTARIO, INC., Plaintiffs, v. MORTEZA KATEBIAN, a/k/a Benham "Ben" Katebian, a/k/a Morteza Katebian Tabari a/k/a Morteza Katebian Tabary, a/k/a Morteza T. Katebian, PAYAM KATEBIAN, MORROW GA INVESTORS, LLC, 2638168 ONTARIO, INC., FLEMINGTON CAPITAL CORPORATION, JORDAN ASHER SAMUEL, PANTEA SAHEBDIVANI, HOSEINALI SAHEBDIVANI, ALI BEHROUZ, GREEN LAKE REAL ESTATE FUND, LLC, and PETER T. CHANG, Defendants.

Subsequent History: Adopted by, Objection overruled by, Motion denied by, in part, Dismissed by, Without prejudice, in part, Dismissed by, in part, Motion denied by, As moot, in part Skymark Props. Corp. v. Katebian, 2022 U.S. Dist. LEXIS 59304 ( E.D. Mich., Mar. 30, 2022)

Prior History: Alizadeh v. Katebian, 2021 U.S. Dist. LEXIS 6059, 2021 WL 120853 ( E.D. Mich., Jan. 13, 2021)

CORE TERMS

arbitration, Properties, Plaintiffs', parties, allegations, entities, Defendants', foreclosure, arbitration clause, arbitration provision, termination, compel arbitration, loan documents, mortgage, scope of arbitration, assignor, rights, motion to dismiss, conspiracy, expiration, assigned, motion to compel arbitration, arbitration agreement, district court, conspired, enterprise, assignee, causation, financing, fraudulent