Corporacion Tim, S.A. v. Schumacher

• Decision Date: 01 March 2006
• Docket Number: No. 05 Civ. 08311(VM).,05 Civ. 08311(VM).
• Citation: 418 F.Supp.2d 529
• Parties: CORPORACION TIM, S.A., et al., Plaintiffs, v. Hans SCHUMACHER, Defendant.
• Court: U.S. District Court — Southern District of New York

418 F.Supp.2d 529

CORPORACION TIM, S.A., et al., Plaintiffs, v. Hans SCHUMACHER, Defendant.

No. 05 Civ. 08311(VM).

United States District Court, S.D. New York.

March 1, 2006.

Anthony L. Tersigni, Richard Neil Gray, Meyers, Tersigni, Feldman & Gray LLP, New York, NY, for Plaintiffs.

Kristen Margaret Keenan, Fulbright & Jaworski, L.L.P., New York, NY, for Defendant.

DECISION AND ORDER

MARRERO, District Judge.

I. BACKGROUND

Plaintiffs Corporacion Tim, S.A. ("TIM") and Anna-Caroline Wohr ("Wohr") (together with TIM, "Plaintiffs") brought this action against defendant Hans Schumacher ("Schumacher") asserting claims of breach of fiduciary duty, conversion of trust funds, malicious interference with contractual agreements, improper accounting, and refusal to deliver title documents. Schumacher moves for dismissal of the action under the doctrine of forum non conveniens, or alternatively pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim on which relief can be granted. For the reasons stated below the Court grants the motion on the ground of inconvenient venue.

II. FACTS

The complaint indicates that TIM is a corporation organized under the laws of the Dominican Republic, and that Wohr is a resident of Germany and the owner of more than 98 percent of the capital stock of TIM. Schumacher is a citizen of New York and a director, officer, managing member and/or partner engaged in administering, from his residence or place of business in New York, the business affairs of a number of affiliated entities located in the Dominican Republic. The entities in question are comprised of the Cabarete Palm Beach Condos ("CPBC"), a sixteenunit residential condominium complex, and the owners' association, management corporation and rental pool partnership formed by the CPBC members to administer the operations of CPBC. According to the complaint, Schumacher effectively controls the affairs of these entities, including maintaining trust accounts in New York banks that hold the deposits of the members' rental pool income.

Plaintiffs allege that shortly after the CPBC was formed in 1989 Schumacher was entrusted with correcting title defects on behalf of the sixteen unit owners. For this purpose Schumacher was given original title documents for each of the units in 1990 and to this date he has failed to correct the title defects. Moreover, according to Plaintiffs, when Wohr and her husband made inquiries concerning the title defeats and the policies and finances of CPBC and the rental pool, Schumacher allegedly ignored the requests and engaged in a course of action designed to force the Wohrs out of the condominium. Schumacher's alleged wrongful conduct included making an unauthorized payment of TIM funds to the former owner of TIM; causing other members to exclude TIM from the rental pool; directing the local manager to discontinue rentals and hotel services to TIM's unit and to deny other benefits to which all CPBC owners are entitled; obstructing renovation work on TIM's unit in preparation for its rental; and seeking to place a lien on Plaintiffs' unit. Plaintiffs assert that as a result of Schumacher's continued hindrance of their renovation work, they lost their prospective tenant and were forced to pursue legal proceedings before the local State Attorney for an order determining that such interference was unlawful and entitled Plaintiffs to police protection if necessary. Plaintiffs also recite numerous other improper actions Schumacher allegedly took at meetings of the CPBC owners intended to deprive Plaintiffs of their rights as condominium unit owners, including obstructing Wohr from attending the members' meetings, adopting resolutions, limiting discussions and withholding financial reports, all aimed at harming Plaintiffs' interests in the CPBC.

III. DISCUSSION

Courts employ a two-part test to analyze an invocation of the forum non conveniens doctrine. Initially, the court determines whether there exists an adequate alternative forum. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506-07, 67 S.Ct. 839, 91 L.Ed. 1055 (1947). If so, the court assesses the appropriateness of litigating the action in the plaintiffs choice of forum, as opposed to the alternative venue, by balancing the private interests of the litigants and the public interest concerns of the court in accordance with the factors articulated by the Supreme Court in Gilbert. See id. at 508-09, 67 S.Ct. 839; see also Ismail v. American Univ. of Beirut, 246 F.Supp.2d 330 (S.D.N.Y.2003); VictoriaTea.com Inc. v. Cott Bev. Canada, 239 F.Supp.2d 377 (S.D.N.Y.2003); Moscovits v. Magyar Cukor Rt., No. 00 Civ. 0031, 2001 WL 767004, at *2 (S.D.N.Y. July 9, 2001), aff'd, 34 Fed. Appx. 24 (2d Cir.2002); Ilusorio v. Ilusorio-Bildner, 103 F.Supp.2d 672, 673 (S.D.N.Y.2000), aff'd, 2001 U.S.App. Lexis 17157 (2d Cir. March 23, 2001). The inquiry probes whether in the interest of justice and all other relevant concerns the action would best be brought in another forum. A threshold question is the degree of deference that should be accorded to the plaintiffs choice of forum. See Moscovits, 2001 WL 767004, at *5.

A. ADEQUATE ALTERNATIVE FRUM

The adequate alternative venue requirement of the forum non conveniens doctrine is ordinarily satisfied if (1) the defendants are amenable to service of process there, and (2) the forum permits litigation of the subject matter of the dispute. See DiRienzo v. Philip Servs. Corp., 232 F.3d 49, 57 (2d Cir.2000) (vacated in part on other grounds); Ilusorio, 103 F.Supp.2d at 674 (citing Piper Aircraft v. Reyno, 454 U.S. 235, 254 n. 22, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981)).

The Court notes that Schumacher has consented to personal jurisdiction in the Dominican Republic for the purposes of adjudicating this dispute in that country. (See Affidavit of Hans Schumacher, dated November 10, 2005, attached to Notice of Motion, dated November 14, 2005 at ¶ 19)

With regard to the second requirement, generally a court may find a forum inadequate only where there is "a complete absence of due process and an inability of a plaintiff to obtain substantial justice." Monegasque de Reassurances S.A.M. (Monde Re) v. NAK Naftogaz of Ukraine, 158 F.Supp.2d 377, 385 (S.D.N.Y.2001), aff'd, 311 F.3d 488 (2d Cir.2002); see also Moscovits, 2001 WL 767004, at *3. Addressing this standard, Schumacher submitted the affidavit of counsel to the administrator of the CPBC's unit owner's association indicating that the laws of the Dominican Republic provide rights and remedies recognizing the substance of the causes of action they raise in the instant case and that the country's judicial system provides a forum in which Plaintiffs may assert such claims. (See Affidavit of Jose Carlos Gonzalez del Rosario, attached to Notice of Motion, dated November 14, 2005, at ¶ 5-6.) Moreover, the Court notes that in the context of forum non conveniens inquiries, other courts have rejected the contention that the Dominican Republic is an inadequate forum for adjudication of private disputes as common those at issue here. See, e.g., Banco Mercantil, S.A. v. Arencibia, 927 F.Supp. 565, 568 (D.P.R.1996) (contract dispute involving failure to pay a bank loan); see also Dominguez v. Pyrgia Shipping Corp., No. 98 Civ. 529, 1999 WL 438477, at *4 (E.D.La. June 28, 1999) (personal injury of seaman employed under contract entered into in the Dominican Republic). Finally, Plaintiffs indicate in the complaint that they resorted to legal proceedings before the local State Attorney in the Dominican Republic to assert claims against Schumacher arising from some of the events at issue here. (See Compl. ¶ 24.)

As this Court cautioned in Moscovits, American courts should be wary of branding other nations' judicial forums as deficient in the substance or procedures that their laws contain. See 2001 WL 767004, at *4. Such denunciations not only run counter to principles of international comity and could retard efforts to reform foreign tribunals, but also risk imposing on our judicial system the burden of serving as courtroom to the world for the adjudication of essentially foreign disputes with only nominal connections with the United States. See id.; see also Jhirad v. Ferrandina, 536 F.2d 478, 484-85 (2d Cir. 1976) ("It is not the business of our courts to assume the responsibility for supervising the integrity of the judicial system of another sovereign nation."); Monegasque, 158 F.Supp.2d at 384-85.

Responding to the adequate alternative forum standard, Plaintiffs submitted an affidavit of a legal expert contending that in litigating their claims in the Dominican Republic Plaintiffs would be deprived of their ability to rely on New York law, and that the Dominican Republic's Commercial Code is very antiquated and provides little, if any, protection as regards the claims Plaintiffs assert. (See Affidavit of Nelson E spinal Baez, dated January 4, 2006, attached to Affidavit of Dr. Martin Wohr in Opposition to Motion to Dismiss, dated January 10, 2006, at ¶ 4, 5.) These arguments are unavailing.

The first point begs the question, and overlooks that if the instant action were litigated in this District, under New York choice of law rules, the Court is almost certain to find that because the predominant contacts of the parties and the underlying events occurred in the Dominican Republic, which has the greatest interest in the application of its law under these circumstances involving property and events predominantly in the Dominican Republic, the law of the Dominican Republic law probably would govern litigation of this dispute. See Van Der Velde v. Philip Morris, Inc., No. 02 Civ. 783, 2004 WL 48891, at *8 (S.D.N.Y. January 9, 2004) ("New York's choice of law principles require the Court to apply the law of the jurisdiction with the greatest interest in the litigation.") (citing Krock v. Lipsay, 97 F.3d 640, 645 (2d Cir.1996)). Though the Court need not ultimately...