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BORUMAND v. ASSAR

December 19, 2001

MIRIAM BORUMAND, PLAINTIFF, VS. BIJAN ASSAR AND ZAHAR ASSAR, DEFENDANTS.


The opinion of the court was delivered by: Charles J. Siragusa, United States District Judge.

DECISION and ORDER

This is a diversity action, alleging conversion, fraud, and breach of fiduciary duty.

Now before the Court is defendants' motion [#3] to dismiss for lack of subject matter jurisdiction, lack of personal jurisdiction, improper venue, and failure to state a claim, pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(3), and 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons that follow, the motion to dismiss is granted as to Zahar Assar, but is denied as to Bijan Assar.

BACKGROUND

The plaintiff, Miriam Borumand, is a resident of Rochester, New York. The defendants, Bijan Assar and Zahar Assar, are residents of Massachusetts. Bijan Assar is the plaintiff's ex-brother-in-law, and Zahar Assar is Bijan's sister. Plaintiff commenced the subject action on May 22, 2001. The Complaint alleges that, in August and October, 1994, while Bijan Assar was still married to plaintiff's sister, he told plaintiff that if she would provide $13,400.00, he would use the money to purchase stock in the company at which he was employed, Helix Technology Corporation. The complaint further alleges that both defendants told plaintiff that they would keep possession of the stock, but would provide her with the stock upon demand. On or about July 2000, plaintiff demanded possession of the stock, which at that time was worth approximately $85,800.00, but defendants refused to provide her with the stock. As a result, plaintiff alleges claims for conversion, fraud, and breach of fiduciary duty, and demands judgment in the amount of $85,800.00, as well as punitive damages and costs.

In lieu of answering the complaint, on July 19, 2001, defendants filed the subject motion to dismiss. The motion contends, first, that subject matter jurisdiction is lacking, because, although there is complete diversity between the parties, the amount in controversy does not exceed $75,000. In support of this ground, defendants allege that in February 2001, plaintiff's former counsel indicated that plaintiff was owed only $19,000.00, plus five years' interest. (See, Defendants' Motion, Exhibit B). As for personal jurisdiction, defendants contend that they have "minimal contact with the State of New York, and no contact with the plaintiff in the State of New York concerning the substance of her complaint sufficient to give rise to any personal jurisdiction." (Lenweaver Affidavit, ¶ 6). For example, Bijan Assar contends that he only received money from plaintiff in Rhode Island, and that "[n]one of the transactions took place in the State of New York." (Bijan Assar Affidavit, ¶ 7). He further alleges that he had only two contacts with New York State involving the plaintiff: 1) he attended plaintiff's wedding in Rochester, New York, in 1992 or 1993; and 2) he paid a social visit to plaintiff at her home "around the end of 1994." (Id., ¶ 13). Zahar Assar contends that she also attended plaintiff's wedding, but otherwise has no contacts with the State of New York. (Zahar Assar Affidavit, ¶ 9). She further alleges that she has "never resided in the State of New York, and [has] never conducted any business in the State of New York." (Id., ¶ 7). Defendants further allege that venue in the Western District of New York is improper, because they do not reside in the judicial district, and because none of the events alleged in the complaint occurred here. Finally, defendants allege that plaintiff has failed to state a claim upon which relief can be granted, because, in 1995, she signed a release, releasing Bijan Assar from any liability as to claims involving the "investment of any funds." (See, Bijan Assar Affidavit, Exhibit A).

In response to defendants' motion, plaintiff has submitted affidavits and various exhibits. As to the amount in controversy, plaintiff maintains that, at the time she demanded possession of the stock, it was worth approximately $85,800.00. (Plaintiff's Affidavit, ¶ 31). With regard to defendants' contacts with New York State, plaintiff contends that it was at her home in Rochester, New York, that, on two separate occasions, Bijan Assar made the alleged fraudulent misrepresentations, and that it was there that she gave him $13,400.00 with which to buy the stock. (Id., ¶¶ 4-5). As for Zahar Assar, plaintiff indicates only that she had several conversations with her regarding the stock, but does not indicate where those conversations took place. (Id., ¶¶ 28-29). Finally, plaintiff denies that she released Bijan Assar from liability, and contends that the purported release which defendants have submitted to the court is merely a photocopy, and that the original was never delivered. More specifically, plaintiff has provided evidence that, as part of a divorce settlement agreement between her sister and Bijan Assar, she agreed to provide a release, if he conveyed his ownership in certain real estate to plaintiff's sister. At that time, her sister's attorney provided Bijan Assar's attorney with a copy of a release, stamped "COPY FOR YOUR INFORMATION," with a letter in which he stated, "I am sending you copies of the releases you sent to me, which have been signed by the parties involved. I will deliver these original releases to you in exchange for the quitclaim deeds." (Plaintiff's Affidavit, Exhibit F; D'Addario Affidavit). However, plaintiff, as well as her sister's counsel, indicate that, since Bijan Assar subsequently became the subject of a criminal prosecution, he could not convey the real property as required under the settlement agreement, and the release was never delivered. Moreover, plaintiff and her sister's former counsel state that Bijan Assar and plaintiff's sister subsequently executed an amended settlement agreement, under which the former agreement became null and void. (Plaintiff's Affidavit, ¶¶ 10, 23-24 & Exhibit H; D'Addario Affidavit).

Defendants' counsel subsequently submitted a reply affidavit, in which he does not challenge plaintiff's version of events surrounding the release, but instead, contends that the photocopy of the release, even though it was given to Bijan Assar's attorney for information purposes only, nonetheless bars this action, since it recites that it was being given "for $1.00 and other consideration, the receipt of whereof is hereby acknowledged." (Lenweaver Reply Affidavit, ¶ 2). Defendants also take the fallback position that, even if the release were ineffective, dismissal is nonetheless appropriate on the grounds of subject matter jurisdiction, personal jurisdiction, and venue.*fn1

Counsel for the parties appeared before the undersigned for oral argument on November 29, 2001. The Court has thoroughly considered the parties' submissions and the arguments of counsel.

ANALYSIS

Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(1)

As noted above, plaintiff's complaint asserts that this court has diversity subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332(a)(1), which pertains to actions between citizens of different states, where the amount in controversy exceeds $75,000.00. It is settled that, "[t]he burden of proving jurisdiction is on the party asserting it. Where, however, the district court relies solely on the pleadings and supporting affidavits, the plaintiff need only make a prima facie showing of jurisdiction." Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994) (citations omitted). A plaintiff's damages in an action for conversion is the value of the property converted: "A person who receives possession of the property of another and thereafter, without authority, intentionally exercises control over it in such a manner as to interfere with the other's right of possession has converted that property and is liable for its value." New York Pattern Jury Instructions — Civil 3:11 (1968) (emphasis added). Here, the Court finds that plaintiff has established, prima facie, that the amount in controversy exceeds $75,000.00., since, in the complaint and in her affidavit, she indicates that defendants converted her stock, which was worth $85,800.00. (Complaint, ¶ 12; Plaintiff's Affidavit, ¶ 31). The fact that plaintiff's former attorney demanded less money to settle the action does not defeat this prima facie showing. Accordingly, defendants' motion under Fed.R.Civ.P. 12(b)(1) is denied.

Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2)

In order to defeat a motion to dismiss for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), where, as here, the Court is relying solely upon pleadings and affidavits, a plaintiff need only make a prima facie showing of facts which establish the Court's jurisdiction over the defendant. Cutco Industries, Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir. 1986); Metropolitan Life Insurance Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996) ("Prior to discovery, a plaintiff may defeat a [Rule 12(b)(2)] motion to dismiss based on legally sufficient allegations of jurisdiction.") (citations omitted), cert. denied, 519 U.S. 1006 (1996). All ...


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