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J Ohanna M Aria A Nna V An v. J Ohn F Rederick V An B

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK


December 29, 2010

J OHANNA M ARIA A NNA V AN B OURGONDIEN-L ANGEVELD, ET. AL., PLAINTIFFS,
v.
J OHN F REDERICK V AN B OURGONDIEN, ET. AL., DEFENDANTS.

MEMORANDUM AND ORDER

JOSEPH F. BIANCO, District Judge: the case. Following oral argument, defendants consented to a conditional Plaintiffs Johanna Maria Anna Van dismissal. In particular, defendants have (1) Bourgondien-Langeveld ("Johanna"), Petrus consented to the personal jurisdiction of the Karolus Van Bourgondien ("Petrus"), Mark courts of the Netherlands in connection with Philip Van Bourgondien ("Mark"), and Marie- the adjudication of the claims in this litigation, Jose Van Bourgondien ("Marie-Jose") and (2) agreed that, "if the courts of the (collectively "plaintiffs") bring this action Netherlands were to refuse to take jurisdiction against defendants John Frederick Van over the claims alleged by Plaintiffs herein, Bourgondien ("John") and Joseph Peter Van and such refusal were to become final and not Bourgondien ("Joseph") (collectively subject to appeal, then the statute of "defendants"). Plaintiffs allege that limitations shall be tolled with respect to the defendants violated the terms of a promissory claims that were timely asserted in the above note signed by them by failing to repay their captioned action, provided that the claims loan debt. Defendants have moved to dismiss asserted in this action are reinstated in this this case under Federal Rule of Civil Court within 90 (ninety) days after the date Procedure 12(b)(6) on grounds of forum non the refusal of the Netherlands courts to hear conveniens. For the reasons stated below, the case were to become final and not subject defendants' motion is granted. to further appeal." (See Defs.' Consent to Conditional Dismissal, filed November 16, However, in an abundance of caution, the 2010.) Thus, if the courts of the Netherlands Court conditions the dismissal on the courts of refuse to accept jurisdiction over the case, the Netherlands accepting jurisdiction over plaintiffs can reinstate this lawsuit.

I. BACKGROUND and this transfer shall be settled and decided by the competent

A. The Facts judge in the Arrondissement ( = Country Court) of The Hague (the For purposes of this motion to dismiss, the Netherlands). . . .

Court has taken the facts described below from the plaintiffs' Complaint and from the (Decl. of Marielle Hartman dated June 11, deed of transfer (the "Deed"), which is 2010 ("Hartman Decl.") Annex 2 at 18.) The integral to, and incorporated by reference in, Deed did not include choice of law provisions, the Complaint. (Compl. ¶ 6.) These facts are nor did it explicitly make reference to the not findings of fact by the Court, but rather Note. (Id. at 14-19.) The Note did not are assumed to be true for the purpose of include a forum selection clause, nor did it deciding this motion and are construed in a include a choice of law clause. (Compl. Ex. light most favorable to plaintiffs. See LaFaro A.). v. N.Y. Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d Cir. 2009). Philips passed away before defendants finished paying off their debt on the Note. On February 27, 1998, defendants entered (Compl. ¶¶ 9-10.) Plaintiffs are his legal into an agreement with Philips Van heirs. (Id. ¶9.)Plaintiffs allege that Bourgondien ("Philips") to purchase 400 defendants failed to fully pay off their loan. shares in the Dutch limited liability company Defendants argue that they repaid the loan by K. Van Bourgondien & Zonen B.V. (the transferring funds into Phillips's shareholder "B.V.") (Compl. ¶ 6.) Title and legal rights to account at the B.V., by allowing Philips the shares were transferred to defendants in preferential withdrawal rights from the the Deed, signed by defendants and Philips, shareholder account to cover his personal for a purchase price of NLG 1,250,000. (Id.) expenses, and by continuing the Each defendant received 200 shares in the aforementioned practices after Philips's death company. (Id.) Defendants paid Philips a when Johanna gained legal rights to Philips's portion of the purchase price upon signing the account. (Decl. of John Van Bourgondien Deed and executed a loan document (the ("Van Bourgondien Decl.") ¶¶ 8-11.) "Note") for the remaining NLG 925,000 that were owed. (Id. ¶¶ 6-7.) The defendants Defendants are residents of the United signed the Note and each agreed to pay States. Currently, John resides in Babylon, Philips NLG 462,500 by "not later than 10 New York, while Joseph resides in (ten) years" after the signing of the Note. (Id. Chesapeake, Virginia. (Compl. ¶¶ 2-3.)

¶ 7.) The Note and Deed were both signed on When defendants executed the Deed, both the same day-February 27, 1998. (Id. ¶¶ 6- listed addresses in Babylon, New York, 7.) though declaring their domicile in Hillegom, the Netherlands. (Hartman Decl. Annex 2 at The Deed included a forum selection 17-18, Clauses 2 & 12.) In the Note, clause, which states in Clause 11 as follows: defendants' place of residence is designated as Babylon, New York. (Compl. Ex. A.)

Any and all disputes in the matter Johanna is a citizen and resident of the of this purchase/sale agreement Netherlands; Marie-Jose is a citizen of the Netherlands, but a resident of the United appropriately made under Rule 12(b)(6). See Kingdom; Mark is a citizen of the Netherlands Evolution Online Sys., Inc. v. Koninklijke PTT residing in Florida; Petrus is a United States Nederland N.V., 145 F.3d 505, 509-10 (2d citizen residing in California. (Compl. ¶ 1.) Cir. 1998). In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the court must

B. Procedural History accept the factual allegations set forth in the complaint as true and draw all reasonable

Plaintiffs filed the complaint in this action inferences in favor of the plaintiff. See on January 8, 2010. Defendants moved to Cleveland v. Caplaw Enters., 448 F.3d 518, dismiss the case on June 14, 2010. Plaintiffs' 521 (2d Cir. 2006); Nechis v. Oxford Health opposition brief was filed on August 10, 2010. Plans, Inc., 421 F.3d 96, 100 (2d Cir. 2005). Defendants filed their reply on September 14, 2010. The Court heard oral argument on The Court notes that in adjudicating this November 9, 2010, and has fully considered motion, it is entitled to consider: "(1) facts the parties' arguments and submissions. alleged in the complaint and documents attached to it or incorporated in it by

II. STANDARD reference, (2) documents 'integral' to the complaint and relied upon in it, even if not Defendants moved to dismiss this action attached or incorporated by reference, (3) for forum non conveniens pursuant to Federal documents or information contained in Rule of Civil Procedure 12(b)(6).*fn1 The defendant's motion papers if plaintiff has Second Circuit has concluded that a motion to knowledge or possession of the material and dismiss on forum non conveniens grounds is relied on it in framing the complaint, (4) public disclosure documents required by law to be, and that have been, filed with the

III. DISCUSSION choice to litigate in the United States." Pollux Holding Ltd., 329 F.3d at 73. The degree of The doctrine of forum non deference owed to a plaintiff who is a resident conveniens "affords a trial court discretion in or citizen of the United States, but who did a case over which it has jurisdiction to decline not choose his home forum to litigate the to exercise it, whenever it appears that such dispute, requires an analysis of the apparent case may be more appropriately tried in reasons for the choice of forum. Iragorri, 274 another forum, either for the convenience of F.3d at 72-73. The more it appears that the the parties or to serve the ends of justice." choice of forum was motivated by "forum Pollux Holding Ltd. v. Chase Manhattan shopping reasons - such as attempts to win a Bank, 329 F.3d 64, 67 (2d Cir. 2003). The tactical advantage resulting from local laws Court must perform a three-pronged analysis that favor the plaintiff's case, the habitual to determine if this action should be dismissed generosity of juries in the . . . forum district, under the doctrine of forum non conveniens. the plaintiff's popularity or the defendant's First, the Court must assess the level of unpopularity in the region, or the deference owed to plaintiffs' choice of forum. inconvenience and expense to the defendant See id. at 70; accord Iragorri v. United resulting from litigation in that forum - the Technologies Corp., 274 F.3d 65, 70-73 (2d less deference the plaintiff's choice Cir. 2001). Second, the Court must determine commands. . . ." Id. at 72. if there is an "adequate alternative forum" where the dispute may be tried. Id.at 73; Aside from considering the plaintiffs' accord Pollux Holding Ltd., 329 F.3d at 74- residence and citizenship, the Court must also 75. If an adequate alternative forum exists, consider the choice of forum in light of its then the Court must balance competing connection to the dispute and also to the private interests of the litigants and public defendants' place of residence. The "weight interest factors. See Iragorri, 274 F.3d at 73- to be given plaintiff's choice of forum is . . . 75; accord Pollux Holding Ltd., 329 F.3d at diminished where the operative facts 74-75. underlying the action have no material connection with the chosen forum." Chubb A. Plaintiffs' Choice of Forum Ins. Co. of Eur. S.A. v. M/V Humboldt Express, No. 09 CV 1294, 2003 U.S. Dist. The degree of deference owed to a LEXIS 19085, at *5 (S.D.N.Y. Oct. 22, 2003); plaintiff's choice of forum varies, moving on see also Iragorri, 274 F.3d at 71-74 a "sliding scale." Iragorri, 274 F.3d at 71. (discussing availability of witnesses and When a plaintiff is a resident or citizen of the evidence relevant to the litigation). On the United States and chooses his home forum to other hand, a plaintiff's choice of forum litigate the suit, that choice is "entitled to receives more deference if the defendant great deference" because the likelihood that resides there, in particular where the the forum was chosen for forum shopping defendant may not be amenable to suit in the reasons is low. Id. On the other hand, "the plaintiff's home forum. See Id.at 73;

Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, operative events in this action-namely, the 46 (2d Cir. 1996); Schertenleib v. Traum, 589 signing of and performance under the

F.2d 1156, 1164-65 (2d Cir. 1978). Note-took place in the Netherlands. (See Id. ¶¶ 6-8.) The parties agree that one key Based on these factors, the Court witness is located in the Netherlands though concludes that little deference is owed to there is a dispute as to whether other key plaintiffs' choice of forum. In this case, witnesses are residing there. (Powell Reply Johanna is a citizen and resident of the Decl. ¶¶ 6-7, Ex. C; Pls.' Mem. at 13, ¶ 38.) Netherlands, Marie-Jose is a citizen of the Taken together, the residence of the parties Netherlands but a resident of the United and the fact that the operative facts in the Kingdom, Mark is a citizen of the Netherlands dispute have no connection to New York residing in Florida, and Petrus is a United indicate that the Court owes plaintiffs' choice States citizen residing in California. (Compl. of forum little deference.

¶ 1.) Thus, only two of the four plaintiffs reside in the United States and this particular B. Adequate Alternate Forum forum is not home to any of the plaintiffs.*fn2 Further, only one of the two defendants is a "An alternative forum is generally resident of New York; the other is a resident adequate if: (1) the defendants are subject to of Virginia. (Id. ¶¶ 2-3.) To the extent service of process there; and (2) the forum plaintiffs argue that they had to bring this suit permits litigation of the subject matter of the in New York because defendants are not dispute." Bank of Credit and Commerce Int'l amenable to suit in a Dutch court as a result of (Overseas) Ltd. v. State Bank of Pak., 273 their residence in the United States both F.3d 241, 246 (2d Cir. 2001) (quotation marks currently and at the time the Note was signed, omitted). the Court concludes that under Dutch law, as presented by the parties' experts, a Dutch Defendants have consented to jurisdiction court would exercise jurisdiction over the in the Netherlands. (See Van Bourgondien defendants. See infra Section III.B. The Decl. ¶ 1; Defs.' Consent to Conditional Dismissal, filed November 16, 2010.) That is sufficient to demonstrate that defendants are dispute in question arises from performance of the proposed alternate forum would exercise a contract in the Netherlands. (See Van Der jurisdiction over the dispute, conditional Hout Decl. ¶ 11; Supplemental Decl. of dismissal was appropriate where defendant Marielle Hartman dated September 9, 2010 consented to jurisdiction). More specifically, ("Supplemental Hartman Decl.") at 2; see also in a stipulation submitted to this Court on Hartman Decl. at 2.) Plaintiffs' expert quoted November 16, 2010, defendants have the relevant provision of Dutch law: consented to conditional dismissal of this action, agreeing to toll the statute of Dutch courts have also jurisdiction in limitations in the event that plaintiffs have to matters concerning: resubmit their claims before this Court and (a) obligations from agreements, if the consenting to jurisdiction of the courts of the obligation that is the basis for a claim Netherlands. Pursuant to the stipulation, or a request, is performed, or had to defendants (1) consent to the personal be performed in the Netherlands. jurisdiction of the courts of the Netherlands in connection with the adjudication of the claims (Van Der Hout Decl. ¶ 11 (emphasis added).) in this litigation, and (2) agree that, "if the Defendants' expert noted that performance courts of the Netherlands were to refuse to under the Note was made in the Netherlands, take jurisdiction over the claims alleged by and thus a Dutch court would be able to Plaintiffs herein, and such refusal were to exercise jurisdiction over this dispute. become final and not subject to appeal, then (Supplemental Hartman Decl. at 2.) the statute of limitations shall be tolled with Plaintiffs' expert does not directly address the respect to the claims that were timely asserted fact that performance was made in the in the above captioned action, provided that Netherlands, simply noting that a Dutch court the claims asserted in this action are reinstated "could decide" that the Note "had to be in this Court within 90 (ninety) days after the performed in the Netherlands." (Van Der date the refusal of the Netherlands courts to Hout Decl. ¶ 12.) Based on the evidence hear the case were to become final and not presented by the parties, the Court concludes subject to further appeal." (Defs.' Consent to that Dutch law clearly permits litigation of Conditional Dismissal, filed November 16, this dispute in the Netherlands and, therefore, 2010.) Thus, plaintiffs can bring this action that the Netherlands is an adequate alternative again before this Court should the Dutch forum. courts fail to exercise jurisdiction over this dispute.

Neither party has addressed the cost of Iragorri, 274 F.3d at 73-74 (quotation marks bringing witnesses to the United States and do omitted); see also Carey v. Bayerische Hypo- not point out other practical problems in Und Vereinsbank AG, 370 F.3d 234, 237 (2d litigating the dispute before this Court. As a Cir. 2004). In analyzing these factors the result, the private interest factors addressed Court is essentially "engaged in a comparison above favor dismissal of this litigation. between the hardships defendant would suffer through the retention of jurisdiction and the D. Public Interest Factors hardships the plaintiff would suffer as the result of dismissal and the obligation to bring The Court must also consider public suit in another country." Iragorri, 274 F.3d. interest factors in its analysis, which include: at 74.

Administrative difficulties . . . for Defendants point out that accounting courts when litigation is piled up in records critical to the dispute are located in congested centers instead of being the Netherlands. This "weighs significantly in handled at its origin. Jury duty is a favor" of dismissal of the case. Evolution burden that ought not to be imposed Online Sys., Inc. v. Koninklijke Nederland upon the people of a community N.V., 41 F. Supp. 2d 447, 452 (S.D.N.Y. which has no relation to the litigation. 1999) (dismissing the case in favor of In cases which touch the affairs of litigation in the Netherlands where many persons, there is reason for documentary sources of proof were located holding the trial in their view and there). However, "technological advances reach rather than in remote parts of the have minimized the burden of transporting country where they can learn of it by documentary evidence," Pollux Holding Ltd., report only. There is a local interest in 329 F.3d at 75, and so this factor does not having localized controversies decided weigh heavily in favor of defendants. at home. There is an appropriateness, too, in having the trial of a diversity There is disagreement about which case in a forum that is at home with witnesses are key to the dispute and whose the state law that must govern the testimony would therefore be necessary. The case, rather than having a court in parties do agree, however, that there is one some other forum untangle problems material witness in the case--Wim Driebergen, in conflict of laws, and in law foreign an accountant for John, Johanna, and the B.V. to itself. --whose testimony would be critical. (See Powell Reply Decl. ¶ 6; Pls.' Mem. at 13, ¶ Iragorri, 274 F.3d at 74 (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09 (1947)); see York choice of law analysis for contract also Pollux Holding Ltd., 329 F.3d at 75-76; disputes, the Court must evaluate the "center Carey, 370 F.3d at 237. The most relevant of gravity" or the "grouping of contacts" to public factors in this case are litigating the determine which jurisdiction has "the most dispute in a forum with a strong local interest significant relationship to the transaction and in the litigation and in a forum that is home to the parties." Fieger, 251 F.3d at 394 the applicable substantive law. (discussing choice of law analysis for contract claims). Factors to be considered in The Netherlands has a "stronger local determining "the most significant interest" in the dispute because the Note was relationship" include "the places of signed there and performance under it also negotiation and performance; the location of occurred in the Netherlands. See, e.g., Pollux the subject matter; and the domicile or place Holding Ltd., 329 F.3d at 76 (London has a of business of the contracting parties." Id.at stronger local interest than New York because 394 (citing Zurich Ins. Co. v. Shearson the derivative instruments in question were Lehman Hutton, Inc., 642 N.E.2d 1065 purchased there and the alleged fraud arose (1994)). Based on these factors, Dutch law out of "contracts entered into in London"); would govern this dispute. The Note was Evolution Online Sys., Inc., 41 F. Supp. 2d at negotiated and signed in the Netherlands and 452 ("[T]he interest of the Netherlands in this performance under the Note took place in the case is greater than that of the United States, Netherlands. Further, two of the plaintiffs are as the whole purpose of this transaction was to Dutch residents and none are residents of New provide services in the Netherlands, all events York. Only one defendant is a resident of of substance occurred there . . . ."). New York while the other is a resident of Virginia. The Netherlands is, therefore, the The parties dispute whether Dutch or New center of gravity of this litigation. While "the York law applies to the substantive claim in need to apply foreign law is not in itself a this dispute-namely, whether defendants reason to apply the doctrine of forum non fulfilled their obligations under the Note. The conveniens," see Seales v. Panamanian Note does not have governing choice of law Aviation Co. Ltd. , No. CV-07-provisions. As a result, the Court must apply 2901(CPS)(CLP), 2008 U.S. Dist. LEXIS New York choice of law rules to determine 14429, at *22 (E.D.N.Y. Feb. 26, 2008) the applicable substantive law.*fn3 See Fieger v. (citing Manu Int'l, S.A.. v. Avon Prods., Inc., Pitney Bowes Credit Corp., 251 F.3d 386, 393 641 F.2d 62, 67-68 (2d Cir. 1981)), having a (2d Cir. 2001) (A "federal trial court sitting in Dutch court apply Dutch law to this dispute diversity jurisdiction must apply the law of mitigates in favor of dismissal. In short, the the forum state to determine the choice-of- Court concludes that public interest factors law.") (citing Klaxon Co. v. Stentor Elec. Mfg. weigh in favor of dismissal.

Co., 313 U.S. 487, 497 (1941)). Under New dispute, and the balance of private and public SO ORDERED. interest factors, the Court concludes, in its discretion, that dismissal on forum non conviens grounds is warranted. Moreover, although the Court concludes that the courts JOSEPH F. BIANCO in the Netherlands are clearly an adequate United States District Judge alternative forum because the defendants are subject to service of process there and the Dated: December 29, 2010 forum permits litigation of the subject matter Central Islip, New York of the dispute, the Court, in an abundance of caution, will grant defendants' motion to * * * dismiss with the condition that plaintiffs may refile their complaint in the event that the Counsel for plaintiffs is Martin F. Gusy, Gusy courts of the Netherlands refuse to exercise Van der Zandt LLP, 500 Fifth Avenue, Suite jurisdiction over this dispute. 1410, New York, New York 10110. Counsel for defendants is Jeffrey D. Powell, Bracken IV. CONCLUSION & Margolin, LLP, One Suffolk Square, Suite 300, 1601 Veterans Memorial Highway, For the reasons set forth above, Islandia, New York, 11749. defendants' motion to dismiss on forum non conviens grounds is granted. However, such motion is granted on the condition that the courts in the Netherlands accept jurisdiction over the claims that are the subject of this lawsuit. Thus, if the courts of the Netherlands were to refuse to take jurisdiction over the claims alleged by Plaintiffs herein, and such refusal were to become final and not subject to appeal, plaintiff may reinstate this lawsuit.


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