Mohr v. Allen

• Decision Date: 28 January 1976
• Docket Number: No. 75 Civ. 2039 (MP).,75 Civ. 2039 (MP).
• Parties: Fred N. MOHR, Plaintiff, v. Marshall B. ALLEN, Defendant.
• Court: U.S. District Court — Southern District of New York

407 F. Supp. 483

Fred N. MOHR, Plaintiff, v. Marshall B. ALLEN, Defendant.

No. 75 Civ. 2039 (MP).

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

January 28, 1976.

COPYRIGHT MATERIAL OMITTED

C. Donald Mohr, New York City, for plaintiff.

Robert W. Adler, New York City, for defendant.

MEMORANDUM

POLLACK, District Judge.

Defendant moves to dismiss the complaint pursuant to Rules 12(b)(1), (3), (6), (7) Fed.R.Civ.P. on the grounds that (1) the Court lacks diversity jurisdiction on which the claims rest because the plaintiff, although he is a United States Citizen, is not a resident of any state, (2) this is an inappropriate and inconvenient forum under the doctrine of forum non conveniens, (3) plaintiff failed to join and the Court lacks jurisdiction over necessary Mexican parties who should be parties defendant to this litigation, (4) the Court lacks jurisdiction over the subject matter of the suit, namely, Mexican land, and (5) one of the joint ventures alleged in the complaint is impossible to perform and illegal.

Defendant also moves for summary judgment pursuant to Rule 56 on the grounds that plaintiff has failed to state a claim upon which relief may be granted and that the evidence shows that recovery is barred.

For the reasons shown hereafter under all the facts and circumstances, the motions to dismiss the complaint for lack of diversity jurisdiction or in the alternative under the doctrine of forum non conveniens are granted.

In this diversity action, plaintiff seeks an accounting of three alleged oral joint ventures (one involving a Mexican hotel project and the others involving two boats) and the sale of alleged joint venture Mexican property by a receiver to be appointed by the Court. He also sues for damages in fraud and unjust enrichment with respect to the Mexican hotel joint venture and in fraud and conversion with respect to the other two alleged oral joint ventures.

The complaint describes an involved series of Mexican transactions in Counts One through Three. The plaintiff describes therein an alleged oral joint venture to construct a resort hotel facility in Zihuatenjo, Mexico. Plaintiff asks that defendant be decreed a trustee of this foreign hotel facility, that the venture be dissolved, and that defendant be ordered to deliver books and records of Promotora de Guerrero, S.A. (the Mexican corporation formed to facilitate the construction of and to hold the land for the hotel) to a receiver to be appointed by the Court to sell the Mexican hotel and pay the funds into Court for distribution.

Plaintiff contends that his work in supervising the construction and design of the Mexican hotel was intended as a contribution of capital to the alleged joint venture. Defendant denies that these services were made in pursuance of any joint venture with him. Defendant claims to have paid plaintiff $1,000 a month salary as an employee principally for his usefulness as an interpreter of the Spanish language.

The Promotora corporation leased the land for the Mexican hotel from one Verboonem, a Mexican citizen who is now deceased. Under Mexican law, the shore land in question was communal, government-owned property (called "Ejido" land) and neither it nor the stock in the owner corporation could be held by a non-Mexican.

Therefore, according to defendant, he was to provide funds to the Mexican corporation to build a hotel on the Mexican land and he would be repaid out of the eventual profits from the operation of the hotel.

The lease of the "Ejido" land was premised on Verboonem's control over the land and ability to make the lease, a premise which defendant contends is faulty absent a specific presidential authorization to subdivide the land. Copies of a Mexican government decree expropriating the land have been submitted to the Court, but neither party claims that any subdivision was authorized. Accordingly, defendant contends that the attempt to lease was a nullity.

However, plaintiff asserts that representatives of the Mexican government agreed that when and if the land was expropriated Promotora would obtain absolute title to it. He further asserts that defendant's Mexican attorney is holding the agreement.

Whatever the status of the land, the planning and construction apparently proceeded until December 1970 when Cervera, the Mexican architect and builder of the project and Promotora's principal officer and shareholder, was discharged. It is charged that he improperly issued 2,350 shares of stock to himself and also failed to complete construction on time or to pay off debts to workers and suppliers.

Upon his discharge, a trust agreement was worked out for the surrender of the Cervera stock through the Banco de Comercio. Defendant was to deposit $269,983 in the Bank and Cervera was to deliver his shares to the Bank and the books and documents of Promotora to the Mexican firm of Mancera Hnos y Cia, and to resign. Defendant then was to have the right to designate persons to whom the shares could be sold and Mexican law was to govern the terms of the trust.

Defendant claims that Cervera delivered the stock only and then resigned, and that defendant recovered the escrow money but not the shares, which the Bank still holds.

It now appears that 150 non-bearer shares of Promotora are being held by plaintiff and most, if not all, the remaining shares are in the Bank's possession.

Counts Four through Six of the complaint describe an alleged oral joint venture in each of two boats, the "Leoflada" and the "El Viego," and through these counts plaintiff seeks an accounting plus damages in fraud and conversion.

As the first of the two joint ventures, plaintiff describes a plan whereby he was to search out and buy a boat, pay for work done on the interior of the boat and supervise operations and maintenance of the vessel, while defendant was to supply capital to purchase and maintain the boat and to pay the crew's salary.

According to plaintiff, both he and defendant were to attempt to find customers to charter the boat and to share equally in any proceeds from rental or sale of the boat. Plaintiff alleges and defendant denies that this oral joint venture contemplated the application of New York law.

In 1960 a remodeled Thames barge named the "Leoflada" was purchased for $16,000 and plaintiff put $8,000 into work on the interior of the boat. It was transported from Spain to California and operated by plaintiff from 1966 to 1969 when it sank in a severe storm.

A sum of $50,000 was apparently collected in insurance on the boat and invested (according to plaintiff without his permission) in a new boat, the "Althea" (subsequently renamed "El Viego"), which cost around $100,000. Plaintiff alleges a second oral joint venture involving the "El Viego," pursuant to which plaintiff would allow his portion of the $50,000 insurance proceeds to be invested in the second boat and defendant would pay the remaining cost of the boat. Otherwise, the alleged agreement was the same as the first.

The papers submitted on these motions indicate that the second boat was sailed in and around Mexico and that the parties contemplated using it in connection with the planned hotel resort.

Plaintiff claims to have operated the second boat and fulfilled his other obligations from July 1971 through August 1972 when defendant stopped paying for the operations of the boat. He also claims to have paid crew salaries of $4,767.52 in August 1971 when defendant failed to do so.

None of the above-described alleged transactions and understandings, with the exception of the trust agreement and the lease of the Ejido land, were reduced to writing. The alleged business relationship between the parties was broken off in August 1972 as the result of a personal, apparently non-business-related, squabble.

Subject Matter Jurisdiction

Defendant argues that at the time of the institution of this suit plaintiff, a domiciliary of Mexico for 14 years, had not taken up a domicile in the United States and that as a non-resident American citizen plaintiff fails to provide this Court with the requisite diversity jurisdiction over the non-federal questions he raises.

On April 7, 1975 plaintiff arrived in New Jersey (where he was born) after 15 years abroad. He claims to have abandoned his admitted Mexican domicile of well over 14 years and asserts that he moved into a room in his sister's home in Glen Ridge, New Jersey. Just a few weeks after this move the complaint herein was filed.

A few weeks later, in June, plaintiff left Glen Ridge to spend the summer in Vermont; he had not found a job, he did not file a tax return on April 15th and he did not register to vote in New Jersey at any time. In September he was hired by the Playboy Hotel in Lake Geneva, Wisconsin where he is now employed.

In order to find that subject matter jurisdiction over this case exists the Court would have to be satisfied that plaintiff had abandoned his Mexican domicile and adopted a domicile in New Jersey. See Yonofsky v. Wernick, 362 F.Supp. 1005, 1016 (S.D.N.Y.1973); Spanos v. Skouras Theatres Corp., 235 F.Supp. 1 (S.D.N.Y.1964), aff'd in part, rev'd in part on other grounds, 364 F.2d 161 (2d Cir.), cert. denied, 385 U.S. 987, 87 S.Ct. 597, 17 L.Ed.2d 448 (1966).^* A nonresident United States citizen does not satisfy the jurisdictional requirements set out for a diversity action in Article III of the Constitution and 28 U.S.C. § 1332(a)(2). Haggerty v. Pratt Institute, 372 F.Supp. 760 (E.D.N.Y. 1974); Van Der Schelling v. U. S. News & World Report, Inc., 213 F.Supp. 756 (E.D.Pa.), aff'd per curiam, 324 F.2d 956 (3d Cir. 1963), cert. denied, 377 U.S. 906, 84 S.Ct. 1166, 12 L.Ed.2d 177 (1964).

The facts evinced on this motion do not show that plaintiff had abandoned his Mexican domicile or that he adopted a domicile in New Jersey. The Glen Ridge stopover was not plaintiff's adoption of a fixed, true and permanent home to which he had the intention of returning...