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International Speedway Corp. v. Suntrust Bank

United States District Court, M.D. Florida, Orlando Division

October 22, 2019




         THIS CAUSE is before the Court on Defendant SunTrust Bank's (“SunTrust”) Motion to Consolidate Related Cases for Pretrial Purposes (“Motion, ” Doc. 32) and Plaintiff International Speedway Corporation's (“ISC”) Response in Opposition (Doc. 37). For the reasons stated herein, the Motion will be denied.

         I. Background

         To understand the Court's position in this Order, a brief factual and procedural background of the two cases being considered for consolidation is necessary.

         A. International Speedway Corporation v. SunTrust Bank

         Case number 6:19-cv-1544-Orl-41LRH (the “1544 Case”) was originally filed in state court on August 19, 2019, and removed here the following day. (Notice of Removal, Doc. 1, at 1). ISC is a corporation, and SunTrust is a Federal Deposit Insurance Corporation (FDIC)-insured commercial bank. (Compl., Doc. 1-1, at 1-2). ISC alleges that it has had a banking relationship with SunTrust “for over twenty years, ” including two accounts with SunTrust totaling nearly $57 million, as of June 4, 2019. (Id. at 2-3). ISC believes that these accounts are governed by certain Rules and Regulations for Deposit Accounts. (Id. at 2; Motto Aff., Doc. 1-3, at 1-2; “Account Rules, ” Doc. 1-3, at 8-31).

         In April 2019, SunTrust Equipment Finance & Leasing Corporation (“STEFL”), who is allegedly an affiliate of SunTrust, filed a complaint against ISC in the United States District Court for the Northern District of Georgia (“Georgia Lawsuit”).[1] (Doc. 1-1 at 2; see Georgia Lawsuit Compl., Doc. 1-3, at 33). Subsequent to initiation of the Georgia Lawsuit, ISC asserts that it successfully withdrew-without issue-$50 million of its funds out of its accounts held with SunTrust. (Doc. 1-1 at 3-4). ISC states that its reason for withdrawing the funds was based on “the deterioration” of its relationship with SunTrust-resulting from, inter alia, the Northern District of Georgia lawsuit-and a variety of other factors. (Id. at 3). However, when ISC requested for SunTrust to “transfer the remaining balance” of its funds to an outside bank, SunTrust allegedly rejected the transfer. (Id. at 5). The purported reason for rejecting the withdrawal-per the Georgia Lawsuit-was that ISC allegedly owed SunTrust's affiliate nearly $47, 000, 000. (Id.; Account Hold Ltr., Doc. 1-3, at 85). Based on SunTrust's interpretation of the Account Rules, SunTrust asserts that it was permitted to hold the funds under these circumstances. (Doc. 1-3 at 85).

         Herein lies the essential dispute between the parties in the 1544 Case-whether SunTrust may hold these funds or must release them, in accordance with the Account Rules and Florida law. (Doc. 1-1 at 8). ISC requests declaratory and injunctive relief in the 1544 Case., (id.), and filed a Motion for Preliminary Injunction (Doc. 4). The Court previously set the matter of preliminary injunctive relief for hearing on October 31, 2019. (Aug. 20, 2019 Order, Doc. 8, at 2).[2]

         B. SunTrust Equipment Finance & Leasing Corporation v. International Speedway Corporation

         Case number 6:19-cv-1624-Orl-EJK (the “1624 Case”) was filed on August 22, 2019, just two days after the 1544 Case was removed here. (1624 Case Compl., Doc. 33-1, at 2). SunTrust explains that the 1624 Case is essentially the same case as the Georgia Lawsuit, which it voluntarily dismissed without prejudice the same day as filing the 1624 Case. (Doc. 32 at 4).[3] The 1624 Case arises out of a dispute between STEFL and ISC. (Doc. 33-1 at 2).

         STEFL alleges that in 2017 it entered into a commercial arrangement with DC Solar Distribution, Inc. (“DC Solar”)-a non-party to both cases at issue here. (Id.). DC Solar allegedly manufactures and distributes mobile solar generators. (Id.). The basis of the purported agreement between STEFL and DC Solar was that “STEFL agreed to purchase from a DC Solar affiliate 500 [mobile solar generators] . . . . STEFL then agreed to lease the [generators] back to DC Solar, which in turn subleased the[m] to ISC.” (Id. at 3). DC Solar allegedly stopped making payments to STEFL under the agreement in December 2018. (Id.). While the cause of the failure to pay is unknown at this time, DC Solar and several of its affiliates are alleged to have been operating a Ponzi Scheme[4] and have filed for bankruptcy.[5] (Id. at 4, 19). As a result, STEFL purportedly “stepped into the shoes of DC Solar” and demanded payment directly from ISC under the apparent sublease. (Id. at 3). STEFL then initiated the 1624 Case. (Id.). STEFL believes that ISC owes STEFL approximately $46 million pursuant to the agreement. (Id. at 5). As asserted in the 1544 Case, ISC believes that it does not owe any money to SunTrust or any of its affiliates and that SunTrust is therefore improperly holding ISC's money. (Doc. 1-1 at 5-6).

         C. Motion to Consolidate

         The 1544 Case was originally assigned to the Undersigned. (New Case Assignment, Doc. 2). The 1624 Case was originally assigned to United States District Court Judge Roy B. Dalton. (1624 Case, New Case Assignment, Doc. 2). The 1624 Case, upon motion, was transferred to the Undersigned. (1624 Case, Sept. 9, 2019 Order, Doc. 17). SunTrust now moves to consolidate the 1544 Case and the 1624 Case for pretrial purposes, arguing that “[b]oth cases arise out of ISC's refusal to pay amounts it owes SunTrust's affiliate [STEFL].” (Doc. 32 at 1). ISC opposes consolidation, arguing that the two cases do not involve a common question of law or fact. (Doc. 37 at 1).

         II. ...

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