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Overseas Ventures, LLC v. Row Management

October 26, 2012

OVERSEAS VENTURES, LLC,
PLAINTIFF,
v.
ROW MANAGEMENT, LTD., INC. D/B/A
RESIDENSEA MANAGEMENT, LTD., THE WORLD OF RESIDENSEA II, LTD., AND SHETLAND INTERNATIONAL INVESTMENTS, LTD.,
DEFENDANTS.



The opinion of the court was delivered by: Paul A. Engelmayer, District Judge

OPINION & ORDER

Defendant ROW Management, Ltd., d/b/a ResidenSea Management, Ltd., ("ROW") moves to dismiss the claims against it for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2). Plaintiff Overseas Ventures, LLC ("Overseas Ventures") opposes that motion. For the reasons that follow, the motion to dismiss is denied as to Count Three and granted as to Counts Four and Five against ROW.

I. Background*fn1

A. The Sale of Apartments 601 and 603

This case involves a dispute over two apartments aboard a private yacht, named "The World." In 2004, Overseas Ventures, a Michigan LLC, bought two apartments, Apartment 601 and Apartment 603, on The World. Compl. ¶¶ 1, 7. In 2008, Overseas Ventures sought to sell the apartments, either together or separately. Id. ¶ 10. Overseas Ventures engaged ROW, a Florida corporation, as its sales and marketing representative. Id. ¶¶ 2, 11.

On August 25, 2008, Overseas Ventures and ROW entered into a Marketing Agreement, contemplating the sale of both apartments together. Id. ¶ 11. The 2008 Marketing Agreement gave ROW the "exclusive right to market for sale the Residency Rights to Apartment 601/603." 2008 Marketing Agreement ¶ 1.

On October 6, 2011, after failing to sell the two apartments for three years, Overseas Ventures and ROW entered into a second Marketing Agreement, this time, to "market for sale the Residency Rights to Apartment 603." 2011 Marketing Agreement ¶ 1. The 2011 Marketing Agreement contains largely the same terms as the 2008 Marketing Agreement, save that it refers only to Apartment 603, and that ROW's right to market the apartment was non-exclusive. Id.

By their terms, both Marketing Agreements are governed by Florida law. Each also contains a forum selection clause that provides for exclusive venue for any action thereunder in Florida: The 2008 Marketing Agreement provides that "[e]xclusive venue for any action brought hereunder shall lie in Miami, Dade County [sic], Florida," 2008 Marketing Agreement ¶ 12; the 2011 Marketing Agreement provides that "[e]xclusive venue for any action brought hereunder shall lie in Broward County, Florida." 2011 Marketing Agreement ¶ 12.

In November 2011, ROW advised Overseas Ventures that it had found a buyer for Apartment 603. Compl. ¶ 16. On November 30, 2011, Overseas Ventures, as the seller, entered into the Residence Agreement with the buyer, Shetland International Investments, Ltd. ("Shetland"), a Switzerland company; the ship owner, The World of ResidenSea II, Ltd. ("TWOR"), consented to the sale. The Residence Agreement transferred to Shetland the residency rights for the "Apartment," defined as Apartment 603, for $1 million. Residence Agreement ¶ 1; Compl. ¶ 21. The Residence Agreement also contains a forum selection clause. In it, the parties "irrevocably agree[] to submit to the exclusive jurisdiction of the Supreme Court of the State of New York, New York County, of the United States of America, or of the United States District Court for the Southern District of New York." Residence Agreement ¶ 8. ROW drafted the Residence Agreement, but was not a named party to it. Compl. ¶¶ 17--18.

On December 1, 2011, one day after the closing, Overseas Ventures sent a letter to TWOR, asking for details about how to board the ship in order to clean out Apartment 603 for Shetland. Id. ¶ 23. In the letter, Overseas Ventures stated that its principals planned to stay in Apartment 601 while preparing Apartment 603 for Shetland. Id. An attorney for ROW and TWOR, however, thereupon notified Overseas Ventures that Shetland and TWOR believed that Shetland now owned both Apartment 603 and Apartment 601. Id. ¶ 24. In support, TWOR cited, inter alia, marketing materials that described Apartment 603 as consisting of the space assigned to both apartments. Leghorn Decl. Ex. B. As a result, TWOR denied Overseas Ventures access to Apartment 601 and to the yacht. Compl. ¶ 25.

B. Overseas Ventures' Complaint

On February 7, 2012, Overseas Ventures filed its complaint in this diversity action. It seeks to clarify that it is the owner of Apartment 601 and that it sold only Apartment 603, and also seeks monetary damages from Shetland, TWOR, and ROW, including for lost rental income. Compl. ¶¶ 33, 76. The Complaint relies on the forum selection clause in the Residence Agreement as its basis for asserting that venue is proper in this District. Id. ¶ 6.

The Complaint contains five counts. Counts One and Two are against Shetland and TWOR, respectively, and are not at issue in this motion.*fn2 Counts Three through Five are against ROW. Count Three accuses ROW of aiding and abetting in Shetland's conversion of Apartment 601, based on ROW's refusal to notify TWOR that only Apartment 603 had been sold under the Residence Agreement. Id. ¶ 56. Count Four is a breach of contract claim. It alleges that ROW breached the 2008 and 2011 Marketing Agreements by giving inaccurate and misleading information to potential buyers, including Shetland, as to the nature of property being sold, and by failing to use best efforts to market and sell the two apartments. Id. ¶ 64. Finally, in Count Five, Overseas Ventures claims that ROW, as its broker under the Marketing Agreements, breached the fiduciary duties it held towards Overseas Ventures under Florida law. Id. ¶¶ 67--70.

C. ROW's Motion to Dismiss

On April 23, 2012, ROW moved to dismiss. It argues that it is not subject to personal jurisdiction in New York because (1) it is not bound by the forum selection clause in the Residence Agreement, and (2) Overseas Ventures has not alleged or shown that ROW engages in sufficient business activities in New York to support personal jurisdiction. Def. Br. 1. TWOR and Shetland have not objected to personal jurisdiction, or moved to dismiss on any other ground, but have instead answered the ...


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