Bech v. Bech

Filing 183

WRITTEN Opinion entered by the Honorable Virginia M. Kendall on 6/9/2011:For these reasons, the Court grants in part and denies in part Plaintiffs Motion to Compel. Entered by the Honorable Virginia M. Kendall on 6/9/2011.Mailed notice(tsa, )

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Virginia M. Kendall

CASE NUMBER

10 C 3264

CASE
TITLE

Sitting Judge if Other
than Assigned Judge

DATE

6/9/2011

Adams et al vs. Raintree Vacation Exchange, LLC et al

DOCKET ENTRY TEXT

For these reasons, the Court grants in part and denies in part Plaintiffs’ Motion to Compel.

O[ For further details see text below.]

Docketing to mail notices.

STATEMENT
Plaintiffs assert that Raintree (“RT”) and Starwood (“SW”), the developers of a failed real estate venture
in Mexico, committed fraud by soliciting money for fractional ownership shares even though they never intended
to build the resort. RT filed a motion to dismiss based on lack of personal jurisdiction and improper venue and
SW moved to dismiss only for improper venue. RT and SW claim that a forum selection clause signed by
Plaintiffs and DTR require litigation of these claims in Mexico.
The Court’s April 28, 2011 order denied RT’s motion to dismiss based on personal jurisdiction. It also
took under advisement the motions to dismiss for improper venue pending an evidentiary hearing on the nature
of the corporate relationship between DTR, the signatory to the forum selection clause, and RT and SW, who seek
to step into DTR’s shoes and enforce the clause. At the April 28 status, the Court gave the parties “30 days to
issue subpoenas and get whatever information that you need regarding that relationship [between DTR, SW, and
RT] since it is critical to my understanding whether [it] is the proper venue here.” The parties have the
opportunity to present documentation evidence or testimony at the June 13, 2011 evidentiary hearing setting forth
the relationship that DTR has with RT and SW. Plaintiffs now seek to compel certain documents in preparation
for the evidentiary hearing.
First, Plaintiffs seek the December 2006 settlement document between RT and SW as a result of litigation
in the U.S. District Court for the Southern District of Texas. This document, which Plaintiffs describe as “newly
discovered evidence,” allegedly shows that SW purchased the land and development rights in the resort project
from a RT entity (but not DTR), but SW was not able to purchase the contracts that Plaintiffs and DTR had
entered into. If true, this is relevant to the improper venue issue. But to protect the confidentiality of RT and SW
the Court orders that they provide the controlling document for the December 2006 settlement to the Court for
ex parte review.

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STATEMENT
Second, Plaintiffs want a protective order to review the “Roos” documents, which are from a related case
in Texas. This Court is preserving these documents under seal. Plaintiffs seek these documents because they are
relevant to the “fraudulent scheme.” Pending before the Court is the Motion to Dismiss for Improper Venue,
which will ultimately hinge on the validity and application of the forum selection clause. But what is not an issue
before the Court at this time is the merits of Plaintiffs’ fraud claim. Documents that show the mechanics of the
alleged scheme and the harm the scheme caused Plaintiffs are not relevant to deciding the improper venue
motions. Moreover, Plaintiffs seek “all documents related to the Villas Project and Defendants’ SEC filings,”
which is overly broad and burdensome, especially given the limited scope of the improper venue issue. The
Court therefore denies the motion to compel these documents.
For these reasons, the Court grants in part and denies in part Plaintiffs’ Motion to Compel.

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