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Alphonse Hotel Corporation v. Tran

United States District Court, S.D. New York

February 10, 2014

NAM T. TRAN, Defendant.


DENISE COTE, District Judge.

Defendant Tran has moved the Court to reconsider its Order of January 24, 2014 denying Tran's December 10, 2013 motion to dismiss, transfer, or stay this action in favor of a later-filed suit pending in the Eastern District of Pennsylvania concerning the same dispute, Tran v. Alphonse Hotel Corp., 13 Civ. 6515 (E.D. Pa.) (WY) (the "Pennsylvania action"). In the alternative, Tran requests certification for interlocutory appeal of the Order pursuant to 28 U.S.C. § 1292(b). For the reasons set forth below, Tran's motion is denied.


On October 10, 2013, plaintiff Alphonse Hotel Corporation ("Alphonse"), a New York corporation with principal place of business in New York, brought this declaratory judgment action in the Supreme Court of the State of New York. Alphonse seeks a judgment that a commercial lease of real property in Philadelphia (the "Chocolate Factory") purportedly entered into between Alphonse and defendant Tran (the "Lease") is invalid and unenforceable, as well as money damages for defendant's use and occupancy of the Chocolate Factory since October 18, 2010.

On October 22, 2013, defendant Tran, a resident of Pennsylvania who works in New York during the week, filed a declaratory judgment action concerning the same dispute in the Court of Common Pleas of Philadelphia County. Among other remedies, Tran seeks a judgment that he and Alphonse entered into a valid and enforceable joint venture agreement for the redevelopment of the Chocolate Factory (the "Joint Venture Agreement") and that the Lease is valid.

On November 4, 2013, Tran removed this action to federal court. On November 6, Alphonse removed the Pennsylvania action.

On December 10, 2013, defendant moved to dismiss, transfer, or stay this action in favor of the later-filed Pennsylvania action. The parties submitted briefing, and the Court heard argument on the motion at a pretrial conference held pursuant to Rule 16, Fed. R. Civ. P., on January 24, 2014. For the reasons stated on the record at that conference, the Court denied defendant's motion by Order of January 24 and stayed the Pennsylvania action.

At that conference, the Court explained that it was applying the "first-filed" rule, which provides that, "[w]here there are two competing lawsuits, the first suit should have priority." New York Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc. , 599 F.3d 102, 112 (2d Cir. 2010) (citation omitted). The Court recognized that the rule admits to two exceptions:

(1) when "special circumstances" exist, and (2) when "the balance of convenience favors the second-filed action." Id . (citation omitted); accord Emp'rs Ins. of Wausau v. Fox Entm't Grp., Inc. , 522 F.3d 271, 275 (2d Cir. 2008). The Court found no "special circumstances, " noting that the first-filing plaintiff had not "engage[d] in some manipulative or deceptive behavior" and that the first-filed suit was not "filed in response to a direct threat of litigation that gives specific warnings as to deadlines and subsequent legal action." Wausau , 522 F.3d at 276 (citation omitted).

To determine whether the balance of convenience favored the later-filed action, the Court looked to the factors considered in connection with a motion to transfer venue pursuant to 28 U.S.C. § 1404(a), which include the following:

Factors relating to the parties' private interests include relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses;... and all other practical problems that make trial of a case easy, expeditious and inexpensive.
Public-interest factors may include the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; and the interest in having the trial of a diversity case in a forum that is at home with the law.

Atlantic Marine Constr. Co., Inc. v. U.S. Dist. Ct. for W.D. Tex. , 134 S.Ct. 568, 581 n.6 (citation omitted). The Court also noted that, in connection with the related doctrine of forum non conveniens, the plaintiff's choice of forum will be given greater deference when there is a bona fide connection to the forum chosen. See Iragorri v. United Techs. Corp. , 274 F.3d 65, 71-72 (2d Cir. 2001) (en banc).

Applying these factors, the Court found that the balance of convenience does not favor the Pennsylvania action and the plaintiff's choice of forum is entitled to significant deference. With respect to the private-interest factors, the Court noted that sources of proof would include people who live and work in New York - including the defendant - and that there had been no showing that that was outweighed, with respect to the Joint Venture Agreement, by more relevant witnesses beyond the subpoena power of this Court.[1] The Court also noted that trains between Philadelphia and New York mitigate the difficulty of travel. With respect to the public interest, the Court held that, while this dispute does concern Pennsylvania real estate and management of the Chocolate Factory may implicate Pennsylvania real property law, the Court expects that the dispute concerning the validity of the Joint Venture Agreement and the Lease will be governed by New York law. Finally, the Court found plaintiff's choice of forum is entitled to significant ...

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