United States District Court, S.D. New York
PLAINTIFF BAHRAM KHANKHANIAN: Jeffrey Lichtstein, Esq. COHEN,
TAUBER, SPIEVACK & WAGNER, P.C.
DEFENDANT SOHEIL KHANIAN: Stuart Sanders, Esq. KAZLOW &
OPINION & ORDER
F. KEENAN, United States District Judge
the Court is Defendant Soheil Khanian's
(“Defendant”) motion to dismiss Plaintiff Bahram
Khankhanian's (“Plaintiff”) complaint for
lack of personal jurisdiction, failure to state claims for an
accounting and conversion, and under the doctrine of
forum non conveniens. For the reasons that follow,
Defendant's motion to dismiss is denied in its entirety.
The Clerk of the Court is respectfully directed to transfer
this case to the Central District of California.
otherwise noted, the following facts are drawn from the
complaint and the affidavits and declarations submitted by
both parties in relation to this motion. Plaintiff is a
resident of Roslyn Heights, New York who at one time owned a
business in Bronx, New York. (Compl. ¶ 1; Khankhanian
Decl. ¶ 7.) Defendant, Plaintiff's cousin, is a
resident of Los Angeles, California. (Compl. ¶ 2.)
in 2003, Defendant called Plaintiff to ask Plaintiff to join
him in purchasing a parcel of commercial real property
located at 4601 S. Broadway, Los Angeles, CA 90037 (the
“Premises”). (Id. ¶ 5.) Defendant
subsequently made multiple trips to the Plaintiff's Bronx
business in 2003 to persuade him to invest in the purchase of
the Premises. (Id. ¶ 6.)
finalizing their agreement, on January 16, 2004, Plaintiff
and Defendant purchased the Premises and took title in their
own names as joint tenants and equal partners. (Id.
¶ 7.) Plaintiff contributed approximately $250, 000 to
the purchase price, Defendant contributed “a lesser
amount” in consideration for finding the Premises and
for performing property manager duties thereafter, and the
remaining funds came from a mortgage loan of $537, 000.
(Id. ¶ 8.)
March 22, 2004, Defendant formed Golden Star, LLC
(“Golden Star”) under California law, and the
parties became equal members in Golden Star. (Id.
¶¶ 9-10.) Defendant served as Golden Star's
manager and exercised sole control over its books and
records. (Id. ¶¶ 10, 12.) The parties
transferred ownership of the Premises to Golden Star on July
9, 2004, and Golden Star owned the Premises until it sold the
Premises to Central, LLC on November 21, 2014. (Id.
¶ 11.) During this time, Defendant continued to
communicate with Plaintiff about the Premises via telephone
calls, text messages, and occasional in-person meetings at
Plaintiff's place of business. (Id. ¶ 17.)
November 21, 2014, Golden Star sold the Premises for $1.75
million, resulting in net proceeds of $1, 123, 320.69 after
payment of the mortgage balance and other costs and fees.
(Id. ¶ 18.) The sale of the Premises also ended
Golden Star's business, which entitled Plaintiff to a
distribution of half its assets, totaling $561, 660.35.
(Id. ¶¶ 19, 21.)
December 17, 2015, Defendant wired $470, 000 to the
Plaintiff's TD Bank account, leaving a $91, 660.35
shortfall. (Id. ¶ 22.) After repeated requests
for an accounting of Golden Star's assets, Defendant sent
Golden Star's 2014 tax return. (Id. ¶¶
23-24.) The 2014 tax return provided more questions than it
did answers. First, it listed the gross sales price of the
Premises as $1, 067, 500 ($55, 820.69 less than the $1, 123,
320.69 actual net sales proceeds). (Id. ¶ 25.)
Second, it listed Golden Star's remaining assets to be
$1, 028, 535 in cash, which would have made Plaintiff's
share $514, 267.50 ($44, 267.50 greater than the $470, 000
distribution he received). (Id. ¶ 26.) Third,
it listed Plaintiff's ending capital account for 2014 as
$526, 082 ($56, 000 greater than the $470, 000 distribution
and $35, 578.85 less than Plaintiff's share of the net
sales proceeds). (Id. ¶ 29.) Finally, it listed
$49, 486 in unexplained “Legal and other professional
fees” and an unexplained $23, 949 distribution to
Defendant. (Id. ¶¶ 27, 30.)
5, 2016, Plaintiff's counsel requested a detailed
accounting of monies received and disbursed by Golden Star
since its creation. (Id. ¶ 31.) To date,
Defendant has provided only Golden Star's tax returns for
2004-2008 and 2010-2014. (Id.)
seeks to recover against Defendant for breach of fiduciary
duty and conversion of the $91, 660.35 shortfall, and demands
a full accounting of the revenues and assets of Golden Star.
(Id. ¶¶ 35-49.) On February 1, 2017,
Defendant moved to dismiss Plaintiff's complaint for lack
of personal jurisdiction, failure to state claims for an
accounting and conversion, and under the doctrine of
forum non conveniens. (Def.'s Mem. of L. in
Support of Mot. to Dismiss at 1-2.)
Lack of Personal Jurisdiction
showing a plaintiff must make to defeat a motion to dismiss
for lack of personal jurisdiction varies depending on the
procedural posture of the litigation. Dorchester Fin.
Sec., Inv. v. Banco BRJ, S.A., 722 F.3d 81, 84 (2d Cir.
2013). When, as here, the motion is to be decided on
affidavits, a plaintiff only needs to make a prima facie
showing of jurisdiction, and the court construes the
jurisdictional facts in favor of the plaintiff. S. New
Eng. Tel. Co. v. Global NAPs, Inc., 624 F.3d 123, 138
(2d Cir. 2010).
diversity case before this Court, personal jurisdiction is
determined by New York law. DiStefano v. Carozzi N.
Am., 286 F.3d 81, 84 (2d Cir. 2001). Under New York law,
a court may exercise general jurisdiction over a defendant
under N.Y. C.P.L.R. § 301 or specific jurisdiction under
New York's long arm statute, N.Y. C.P.L.R. § 302.
New Asia Enters. Ltd. v. Fabrique, Ltd., No. 13 CIV.
5271 (JFK), 2014 WL 3950901, at *2 (S.D.N.Y. Aug. 13, 2014).
Plaintiff asserts that this Court has personal jurisdiction
over Defendant under § 302(a)(1). (Pl.'s Mem. of L.
in Opp. to Def.'s Mot. to Dismiss at 5.)
§ 302(a)(1), a non-domiciliary may be subject to
specific jurisdiction when (1) the non-domiciliary transacts
any business in New York and (2) the cause of action arises
from a New York business transaction. See Licci ex rel.
Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 168
(2d Cir. 2013). Whether a company transacts business in New
York is evaluated by the totality of the circumstances, with
relevant factors including “(i) whether the defendant
has an on-going contractual relationship with a New York
corporation; [and] (ii) whether the contract was negotiated
or executed in New York and whether, after executing a
contract with a New York business, the defendant has visited
New York for the purpose of meeting with parties to the
contract regarding the relationship.” Sunward
Elecs., Inc. v. McDonald, 362 F.3d 17, 22 (2d Cir. 2004)
(internal quotations marks omitted). A plaintiff's claim
arises from a business transaction ...