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Khankhanian v. Khanian

United States District Court, S.D. New York

April 6, 2017

BAHRAM KHANKHANIAN, Plaintiff,
v.
SOHEIL KHANIAN, Defendant.

          FOR PLAINTIFF BAHRAM KHANKHANIAN: Jeffrey Lichtstein, Esq. COHEN, TAUBER, SPIEVACK & WAGNER, P.C.

          FOR DEFENDANT SOHEIL KHANIAN: Stuart Sanders, Esq. KAZLOW & KAZLOW

          OPINION & ORDER

          JOHN F. KEENAN, United States District Judge

         Before 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.

         I. Background

         Unless 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.)

         Sometime 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.)

         After 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.)

         On 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.)

         On 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.)

         On 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.)

         On May 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.)

         Plaintiff 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.)

         II. Discussion

         A. Lack of Personal Jurisdiction

         1. Legal Standard

         The 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).

         In a 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.)

         Under § 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 ...


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