The opinion of the court was delivered by: ROBERT W. SWEET
Defendants Martin E. Bruetman ("Bruetman"), Douglas Keill ("Keill"), Mauricio Agudelo ("Agudelo") High Tech Medical Parks Development Corp. ("High Tech") and Alta Tecnologia Medica, S.A. ("Alta-2"), have moved jointly for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure. Agudelo, Keill, and pro se Defendant Ronald Tash ("Tash") have separately moved for summary judgment. Bruetman, Keill, Agudelo, High Tech, and Alta-2 have also filed a separate motion for summary judgment based on a proceeding in Argentina (the "Collateral Estoppel Motion"). Finally, Plaintiff Diego J. Herbstein ("Herbstein") has moved for the entry of a default judgment against the Defendants pursuant to Rule 37 of the Federal Rules of Civil Procedure. For the reasons set forth below, the motions are denied.
Herbstein is a citizen of Argentina who currently is a permanent United States resident domiciled in the State of New York. He is an officer, director, and 50% shareholder in Imagenes Por Computacion ("IxC"), and is listed as a director and 8% shareholder of Altec-2.
Bruetman is a citizen and a resident of Illinois. He is president, chief executive officer, and chairman of the board of IxC, and is a member of the board of directors of Altec-2. Bruetman also is the majority shareholder in High Tech.
High Tech is an Illinois corporation with its principal place of business in Illinois. It specializes in the scientific and technical advising of medical establishments. High Tech owns 49% of Altec-2 stock.
Tash is a citizen of Illinois and is a 12.25% shareholder in High Tech. He serves as secretary and legal counsel for High Tech.
Keill was a citizen of Connecticut and, at all relevant times, owned 12.25% of High Tech stock. Until January 1989, he was the president, chief financial officer, and a director of High Tech. He presently is a citizen of North Carolina.
Altec-2 is an Argentine corporation with its headquarters in Buenos Aires, Argentina. It is engaged in the development of diagnostic centers in Argentina and other South American countries.
In 1989, Herbstein initiated a suit in Argentina against Bruetman and Amerigo Pescio. At approximately the same time, Bruetman initiated a suit on behalf of himself and IxC, requesting an investigation of "accounting irregularities" at IxC. These proceedings are generally discussed in this Court's opinion of July 11, 1990, familiarity with which is presumed. See 743 F. Supp. 184, 186-87 (S.D.N.Y. 1990) ("Herbstein I"). Both Herbstein and Bruetman sought to have themselves declared "victims" of the alleged fraud in the resulting action. Their requests were denied, and IxC declared to be the victim of the alleged fraud being investigated. On October 10, 1990, the Honorable Emilio Garcia-Mendez issued an order temporarily dismissing the action awaiting further evidence.
On October 16, 1989, Herbstein filed his Complaint in this action. In it, he seeks damages for the Defendants' alleged fraud, racketeering, conversion, and breach of fiduciary duty.
On January 17, 1990, the Bruetman Defendants filed a motion to dismiss this action on the grounds of comity or forum non conveniens, or alternatively, to stay it until the resolution of the proceedings in Argentina. The motion was denied. See id. at 190.
On January 10, 1991, Altec-2 moved to dismiss the complaint against it for lack of personal jurisdiction. Its motion was denied in an opinion dated June 28, 1991. See 768 F. Supp. 79, 82 (S.D.N.Y. 1991).
In July 1991, Herbstein moved for Rule 11 sanctions against Bruetman for having allegedly submitted a fraudulent affidavit in support of the forum non conveniens motion. On October 3, 1991, the motion was denied with leave granted to renew, and a request for an order granting Herbstein discovery of the current net worth of certain of the Defendants was granted.
The Defendants filed a motion for a protective order pursuant to Rule 26(c) of the Federal Rules of Civil Procedure on October 3. It was disposed of in open court on October 8, 1991.
In February 1992, a default judgment for $ 18,000,000 against certain of the Defendants was entered in the United States District Court for the Northern District of Illinois. See Philips Medical Systems International v. Bruetman, 91 C 4385 (N.D. Ill. Feb. 1992) (the "Chicago Action"). This judgment was entered in part due to Bruetman's failure to comply with that court's discovery orders. It currently is on appeal to the United States Court of Appeals for the Seventh Circuit.
In a letter dated February 27, 1992, Herbstein requested, among other things, that the Defendants be ordered to comply fully with the October 3 discovery order. The letter was treated as a motion and heard on March 4, 1992. The motion was granted and an order entered March 10, 1992, directing the Defendants to comply by March 14.
The Defendants filed the first four summary judgment motions on February 21, 1992. To protect Herbstein's interests in light of the Illinois judgment before he expended any effort in responding to the Defendants' motions, the Defendants were ordered on March 13, 1992, to post a $ 75,000 security bond. See 141 F.R.D. 246 (S.D.N.Y. 1992). They complied by paying $ 75,000 into the Court on March 25, 1992. In the meantime, the Defendants filed the Collateral Estoppel motion on March 23.
Herbstein sought entry of a default judgment based on the Defendants' alleged failure to comply with the March 10, 1992, discovery order by a letter dated March 26, 1992. Oral argument on all six motions was consolidated and heard on April 1, 1992. Additional submissions were received ...