Aguiar v. Natbony et al
Filing
40
MEMORANDUM OPINION AND ORDER: For the reasons stated above, Defendants' motion to transfer to the Southern District of Florida (Docket No. 23) is GRANTED, and the remaining motions to dismiss or stay are denied as moot. The Clerk of the Court is directed to terminate Defendants' motions and to transfer this action to the Southern District of Florida. (Signed by Judge Paul G. Gardephe on 5/16/2011) (jfe)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ELLEN AGUIAR,
Plaintiff,
- against -
MEMORANDUM OPINION
& ORDER
WILLIAM NATBONY, individually and as
trustee of the THOMAS S. KAPLAN 2004
QUALIFIED TEN YEAR ANNUITY
TRUST AGREEMENT and the DAFNA
KAPLAN 2003 EIGHT YEAR ANNUITY
TRUST AGREEMENT, THOMAS
KAPLAN, and DAFNA KAPLAN,
10 Civ. 6531 (PGG)
Defendants.
PAUL G. GARDEPHE, U.S.D.J.:
This is a suit for breach of fiduciary duty. Plaintiff Ellen Aguiar alleges that the
trustee of two irrevocable Grantor Retained Annuity Trusts breached his fiduciary duty by failing
to exercise independent judgment and not acting as a neutral and disinterested trustee. As a
result, the trusts’ assets were allegedly diminished and Aguiar was removed as beneficiary.
Defendants have moved to transfer, to dismiss, or to stay the case. For the
reasons stated below, Defendants’ motion to transfer this action to the Southern District of
Florida will be granted, and Defendants’ remaining motions will be denied as moot.
BACKGROUND
Plaintiff is the mother of Guma Aguiar (“Guma”) and is a resident of Florida.
(Cmplt. ¶¶ 1, 4) Guma is a party to several lawsuits in Florida involving Thomas Kaplan
(“Kaplan”), who is Guma’s uncle and Plaintiff’s brother. (Id.; see Leor Exploration &
Production LLC, et al. v. Guma Aguiar, Case No. 09-60136-CIV-Seitz/O’Sullivan (S.D. Fla.);
Guma Aguiar v. William Natbony, Thomas Kaplan, Katten Muchin Rosenman LLP, and Pardus
Petroleum, LP, Case No. 09-60683-CIV-Seitz/O’Sullivan (S.D. Fla.); Thomas Kaplan v. Guma
Aguiar and The Lillian Jean Kaplan Foundation, Case No. 09-001509 CA (07) (Fla. Cir. Ct. 17th
Jud. Cir.)) According to the Complaint, the present suit
arises from actions taken by defendant Thomas Kaplan (“Kaplan”) as a result of a
bitter business dispute with his nephew, Guma Aguiar (“Guma”), a non-party to
this action. As a result of this business dispute with Guma, Kaplan launched what
he termed an “offensive” across “the broadest front imaginable” which included
the wrongful acts against plaintiff Aguiar – Kaplan’s sister and Guma’s mother –
that give rise to this action.
(Cmplt. ¶ 1)
In 2003, Kaplan and Guma founded Leor Exploration and Production LLC, an oil
and gas company, and Guma became CEO of Leor. (Cmplt. ¶ 16) In 2007, Leor sold its assets
for $2.55 billion. (Id. ¶ 11) Almost all of these proceeds were placed in two irrevocable Grantor
Retained Annuity Trusts (“GRATs”) that had been formed several years earlier: the Thomas S.
Kaplan 2004 Qualified Ten Year Grantor Retained Annuity Trust Agreement (the “Thomas
Trust”) and the Dafna Kaplan 2003 Eight Year Grantor Retained Annuity Trust Agreement (the
“Dafna Trust”). (Id.) Plaintiff and her issue were named beneficiaries of the Thomas Trust and
remainder beneficiaries of the Dafna Trust. (Id. ¶¶ 13, 14) Plaintiff was entitled to receive
income and principal after the expiration of the original trust terms, which would occur in 2014
for the Thomas Trust and 2011 for the Dafna Trust, and during the lifetimes of Kaplan or his
wife, Dafna. (Id.) William Natbony is the trustee of the Trusts, and allegedly “derives all or
substantially all of his income from entities controlled or owned by Kaplan.” (Id. ¶ 15) The
Trusts obligate Natbony to be a disinterested trustee and prohibit Kaplan and his wife from
controlling the actions of the trustee. (Id. ¶¶ 20, 21)
After Leor was sold in 2007, Kaplan and Guma could not reach agreement as to
how the proceeds of the sale should be divided, and this dispute resulted in Guma’s termination
2
as CEO. (Id. ¶ 16) Guma then filed a lawsuit in Texas state court against Pardus LLP, an entity
owned by Kaplan that had an equity interest in Leor, and against Natbony as trustee of the
Trusts. 1 (Id. ¶ 17) In response, Kaplan allegedly threatened to damage Guma’s reputation if
Guma further pursued the litigation, “including by taking action against Guma’s family,
including his mother, plaintiff Aguiar.” (Id. ¶ 18) Leor then filed a suit alleging that Guma’s
sister (a beneficiary of the Trusts) and brother-in-law defrauded Leor while employed by the
company. (Id. ¶ 19; see Leor Exploration & Production LLC v. Angelika Aguiar, et al., Case No.
09-014890 CACE (12)) Plaintiff and her issue were removed as beneficiaries of the Trusts by
January 7, 2009 amendments to the Trusts. (Id. ¶ 3)
Plaintiff claims that Natbony is financially dependent on the Kaplans (id. ¶ 15),
and that – acting at the Kaplans’ volition – Natbony abused his discretion, breached his fiduciary
duties, and acted in bad faith by: (1) removing Plaintiff and her issue as beneficiaries of the
Trusts (Count I); (2) dissipating the assets of the Trusts (Count II); and (3) wrongfully obtaining
the consent of Plaintiff and her children to a “Unitrust Election” which provides for larger
distributions to the Kaplans than to the other beneficiaries (Count III). The Unitrust Elections
were made in 2006 and 2007 pursuant to New York Estate Powers and Trusts Law, Section 112.4, and “allowed Natbony to make larger distributions to the Kaplans, as Settlors of the Trusts,
than were provided for when the Trusts were created.” (Id. ¶ 26) Plaintiff and her issue
1
This suit, which sought an accounting of the Trusts, was later re-filed in the Southern District
of Florida as Guma Aguiar v. William Natbony, Thomas Kaplan, and Katten Muchin Rosenman
LLP, Case No. 09-60683 (S.D. Fla.). (Cmplt. ¶ 17 n.4) Guma’s claims in that case were later
stricken, because the Court found that he had “violated [court] orders regarding witness
tampering and intimidation,” and had “acted with bad faith when he hacked into Kaplan’s
email.” Leor Exploration & Prod., LLC v. Aguiar and Guma Aguiar v. William Natbony et al.,
Nos. 09-60136-CIV, 09-60683-CIV, 2010 WL 3782195, at *14 (S.D. Fla. Sept. 28, 2010). For
these same reasons, Guma’s Answer and Defenses in Leor Exploration & Prod., LLC v. Aguiar
were stricken. Id.
3
consented to the Unitrust Elections based on Natbony’s allegedly misleading and incomplete
representations. (Id. ¶ 27) Plaintiff further alleges that the Kaplans aided and abetted Natbony’s
breach of fiduciary duty by directing Natbony to manage the trusts for their benefit (Count IV).
The Defendants are all residents of New York, and Plaintiff contends that Defendants’ allegedly
tortious acts were committed in New York. (Id. ¶¶ 5-7; Pltf. Br. 21)
DISCUSSION
I.
LEGAL STANDARD
Defendants have moved to transfer this action to the Southern District of Florida
pursuant to 28 U.S.C. § 1404(a). Section 1404(a) provides that “[f]or the convenience of parties
and witnesses, in the interest of justice, a district court may transfer any civil action to any other
district or division where it might have been brought.” 28 U.S.C. § 1404(a). “The purpose of
§ 1404(a) is ‘to prevent waste of time, energy and money and to protect litigants, witnesses and
the public against unnecessary inconvenience and expense.’” In re Stillwater Min. Co. Sec.
Litig., No. 02 Civ. 2806(DC), 2003 WL 21087953, at *2 (S.D.N.Y. May 12, 2003) (quoting
Trehern v. OMI Corp., No. 98 Civ. 0242(RWS), 1999 WL 47303, at *1 (S.D.N.Y. Feb. 1, 1999)
(internal quotations omitted)).
“A court performs a two-part inquiry to determine whether transfer is appropriate.
First, the court must determine whether the action sought to be transferred is one that ‘might
have been brought’ in the transferee court.” In re Collins & Aikman Corp. Sec. Litig., 438 F.
Supp. 2d 392, 394 (S.D.N.Y. 2006). Second, “the court must evaluate whether transfer is
warranted using several factors relating to the convenience of transfer and the interests of
justice.” Id.
4
Accordingly, the initial question under § 1404(a) is whether the court in the
proposed transferee jurisdiction had personal jurisdiction over the defendant when the action was
filed:
“The threshold question for a court considering a [transfer] under §
1404(a) is whether the action could have been brought in the district to
which the moving party seeks to transfer the action.” Alexander Ins. Ltd.
v. Executive Life Ins. Co., No. 90 Civ. 8268, 1991 WL 150224, at *2
(S.D.N.Y. July 29, 1991). “[A]n action might have been brought in
another forum if, at the time the action was originally filed, the transferee
court would have had subject matter jurisdiction and personal jurisdiction
over the defendants, and if venue would have been proper in the transferee
court.” Posven, C.A. v. Liberty Mut. Ins. Co., No. 02 Civ. 0623, 2004 WL
63497, at *7 (S.D.N.Y. Jan. 12, 2004).
Grace v. Bank Leumi Trust Co. of N.Y., No. 02 Civ. 6612 (RMB), 2004 WL 639468, at *3
(S.D.N.Y. Mar. 31, 2004) (alterations in original).
In determining whether a proposed transferee court has personal jurisdiction over
a defendant, courts must look to the “state of affairs” when the action was filed:
In Hoffman v. Blaski, 363 U.S. 335, 342 (1960), the Supreme Court ruled
that in considering where an action “might have been brought,” the district
court must look to the state of affairs “at the time of the bringing of the
action.” That is, subject matter jurisdiction, personal jurisdiction, and
venue would have had to have been proper in the transferee court at the
time the action was filed.
Ivy Soc’y Sports Group, LLC v. Baloncesto Superior Nacional, No. 08 Civ. 8106 (PGG), 2009
WL 2252116, at *3 (S.D.N.Y. July 28, 2009). Because § 1404(a) requires personal jurisdiction
at the time the action was filed, a defendant’s waiver or consent to personal jurisdiction is not
sufficient. See Bayer Schera Pharma AG v. Sandoz, Inc., 08 Civ. 03710 (PGG), 2009 WL
440381, at *4 (S.D.N.Y. Feb. 18, 2009) (“[A] defendant’s consent to submit to jurisdiction of a
proposed transferee court after an action is filed will not satisfy Section 1404(a).”); Kenwin
Shops, Inc. v. Bank of Louisiana, No. 97 Civ. 907, 1999 WL 294800 (LMM), at *2 (S.D.N.Y.
5
May 11, 1999) (explaining that the “might have been brought” analysis in §1404(a) “focuses on
the time at which the action was commenced, not on subsequent events”); Alexander &
Alexander, Inc. v. Donald F. Muldoon & Co., 685 F. Supp. 346, 349 (S.D.N.Y. 1988) (“28
U.S.C. §§ 1404(a) and 1406(a) provide that a district court may transfer an action only to a
district or division where the action might have been brought initially. Venue must be proper
and the defendants must be amenable to process in the transferee forum. These requirements
cannot be waived by the party seeking the transfer.” (citing Hoffman , 363 U.S. at 335)); see also
Schertenleib v. Traum, 589 F.2d 1156, 1161 (2d Cir. 1978) (noting that § 1404(a) “authorize[s]
transfer only to an alternative forum in which jurisdiction over the defendant could have been
obtained at the time suit was brought regardless of his consent”); PI, Inc. v. Ogle, 932 F. Supp.
80, 85 (S.D.N.Y. 1996) (denying a motion to transfer where the defendant had failed to
demonstrate that he was subject to personal jurisdiction in the transferee district at the time the
suit was filed).
Under § 1404, the party seeking transfer has the burden of demonstrating that
transfer is appropriate. See New York Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d
102, 114 (2d Cir. 2010) (“[T]he party requesting transfer [under § 1404(a)] carries the ‘burden of
making out a strong case for transfer.’”) (quoting Filmline (Cross-Country) Prods., Inc. v. United
Artists Corp., 865 F.2d 513, 521 (2d Cir. 1989)); Volkswagen De Mexico, S.A. v. Germanischer
Lloyd, 768 F. Supp. 1023, 1028-29 (“An action may be transferred only to a district where it
might have been brought initially. 28 U.S.C. §§ 1404(a), 1406(a). Venue must be proper and
the defendants must be subject to personal jurisdiction in the transferee forum. The party
seeking transfer bears the burden of establishing personal jurisdiction over the defendants in the
transferee forum.” (citing Alexander & Alexander, Inc., 685 F. Supp. at 349, 350)).
6
Accordingly, the threshold question here is whether a court sitting in the Southern
District of Florida would have had personal jurisdiction over the defendants at the time this
action was filed.
II.
ANALYSIS
A.
This Action Might Have Been Brought in the Southern District of Florida
Whether a district court in the Southern District of Florida has personal
jurisdiction over Defendants depends on (1) whether jurisdiction exists under Florida’s long-arm
statute; and (2) whether a Florida court’s exercise of personal jurisdiction over Defendants
comports with federal due process. United Technologies Corp. v. Mazer, 556 F.3d 1260, 1274
(11th Cir. 2009).
1.
Florida’s Long-Arm Statute
Florida’s long-arm statute authorizes the exercise of personal jurisdiction over a
defendant “who personally or through an agent . . . commit[s] a tortious act within th[e] state.”
Fla. Stat. § 48.193(1)(b) (2010). Defendants argue that the “alleged commission of a tortious act
– breach of fiduciary duty and aiding and abetting that breach – causing injury to Plaintiff, an instate resident, satisfies Florida’s long-arm statute.” (Def. Br. 2) 2
2
The relevant portions of Florida’s long-arm statute are as follows:
(1) Any person, whether or not a citizen or resident of this state, who personally or
through an agent does any of the acts enumerated in this subsection thereby submits
himself or herself and, if he or she is a natural person, his or her personal representative
to the jurisdiction of the courts of this state for any cause of action arising from the doing
of any of the following acts:
...
(b) Committing a tortious act within this state.
...
(f) Causing injury to persons or property within this state arising out of an act or omission
by the defendant outside this state, if, at or about the time of the injury, either:
7
There are two lines of authority in Florida’s intermediate appellate courts
regarding whether injury alone satisfies the “tortious act within the state” prong of Florida’s
long-arm statute. A number of Florida state courts have held that “the existence of an injury
within Florida, standing alone, is insufficient to support jurisdiction over an out-of-state
tortfeasor.” Kountze v. Kountze, 996 So.2d 246, 252 (Fla. 2d Dist. Ct. App. 2008); see also
Consol. Energy Inc. v. Strumor, 920 So.2d 829, 832 (Fla. 4th Dist. Ct. App. 2006) (holding that
injury to a Florida plaintiff caused by a tortious act committed outside the state is insufficient to
provide a basis for jurisdiction under Florida’s long-arm statute). Other decisions of Florida
intermediate appellate courts have reached the opposite conclusion. See, e.g., Wood v. Wall,
666 So.2d 984, 986 (Fla. 3d Dist. Ct. App. 1996) (acts of out-of-state tortfeasors can provide a
basis for the exercise of jurisdiction under Florida’s long-arm statute where tortious acts were
calculated to cause injury in Florida); Allerton v. State Dep’t of Ins., 635 So.2d 36, 40 (Fla. 1st
Dist. Ct. App. 1994) (jurisdiction proper under long-arm statute where Florida plaintiff was
“injured by the intentional misconduct of a nonresident corporate employee expressly aimed at
him”). The Florida Supreme Court has refused to resolve the issue, most recently in Internet
Solutions Corp. v. Marshall, 39 So.3d 1201, 1206 n.6 (Fla. 2010) (“We do not decide the broader
issue of whether injury alone satisfies the requirement of section 48.193(1)(b).”).
While the issue is unresolved in the Florida Supreme Court, the Eleventh Circuit
“has consistently held that an out-of-state tort resulting in injury in Florida subjects the actor to
jurisdiction under Florida’s long-arm statute.” Estate of Scutieri v. Chambers, No. 09-13562,
1. The defendant was engaged in solicitation or service activities within this state;
or
2. Products, materials, or things processed, serviced, or manufactured by the
defendant anywhere were used or consumed within this state in the ordinary
course of commerce, trade, or use. . . .
Fla. Stat. § 48.193.
8
2010 WL 2836613, at *3 (11th Cir. July 20, 2010) (citing Posner v. Essex Ins. Co., 178 F.3d
1209, 1216 (11th Cir. 1999)); see also Brennan v. Roman Catholic Diocese of Syracuse N.Y.,
Inc., 322 F. App’x 852, 854 (11th Cir. 2009) (“Section 48.193(1)(b) of the Florida Long-Arm
Statute permits jurisdiction over the nonresident defendant who commits a tort outside of the
state that causes injury inside the state.”); Licciardello v. Lovelady, 544 F.3d 1280, 1283 (11th
Cir. 2008) (“the Florida long-arm statute permits jurisdiction over the nonresident defendant who
commits a tort outside of the state that causes injury inside the state”); Posner, 178 F.3d at 1217
(“we are bound in this case to follow this court’s firmly established precedent, which interprets
[Florida’s long-arm statute] to apply to defendants committing tortious acts outside the state that
cause injury in Florida”); Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 257 (11th Cir. 1996)
(“‘[J]urisdiction under § 48.193(1)(b) [is] not limited to a situation where an act in Florida
cause[s] an injury in Florida but also . . . reache[s] the situation where a foreign tortious act
cause[s] injury in Florida.’” (quoting Sun Bank, N.A. v. E.F. Hutton & Co., 926 F.2d 1030, 1033
(11th Cir. 1991) (internal citations omitted))).
Given the split in Florida’s intermediate appellate court case law and the failure of
the Florida Supreme Court to address the issue, this Court will follow the ample Eleventh Circuit
authority holding that Florida’s long-arm statute provides a basis for personal jurisdiction where
an out-of-state tortfeasor allegedly causes injury in Florida. Because Defendants’ alleged breach
of fiduciary duty in removing Plaintiff as a beneficiary, misuse of Trust assets, and misconduct
in connection with the Unitrust Election caused Plaintiff harm in Florida where she resides (see
Cmplt. ¶¶ 36, 41, 48), Plaintiff has pleaded facts that would justify the exercise of personal
jurisdiction over Defendants pursuant to Florida’s long-arm statute.
9
2.
Due Process
“Even though a long-arm statute may permit a state to assert jurisdiction over a
nonresident defendant, the due process clause of the United States Constitution protects an
individual’s liberty interest in not being subject to the binding judgments of a forum with which
he has established no meaningful ‘contacts, ties, or relations.’” Licciardello, 544 F.3d at 1284
(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). Accordingly, this Court must
determine whether Defendants have “minimum contacts” with Florida such that the exercise of
jurisdiction over them would not “offend traditional notions of fair play and substantial justice.”
Int’l Shoe Co., 326 U.S. at 316 (internal citations omitted).
Defendants assert that they have sufficient minimum contacts to satisfy the
constitutional inquiry because they are alleged to have committed an intentional tort against a
Florida resident. In support of their jurisdiction argument, they cite Brennan v. Roman Catholic
Diocese of Syracuse, New York, Inc., which notes that
so long as the purposeful conduct creates a “substantial connection” with the
forum, even a single act can support jurisdiction. Burger King Corp. [v.
Rudzewicz, 471 U.S. 462, 475 (1985)]. Intentional torts are such acts and may
support the exercise of personal jurisdiction over the non-resident defendant who
has no other contacts with the forum. Licciardello [v. Lovelady, 544 F.3d 1280,
1285 (11th Cir. 2008)]. In Licciardello, we held that the commission of an
intentional tort by a nonresident expressly aimed at a resident, the effects of which
were suffered by the resident in the forum, satisfied the “effects” test established
in Calder v. Jones, 465 U.S. 783, 789-90, 104 S.Ct. 1482, 1486-87, 79 L.Ed.2d
804 (1984). 544 F.3d at 1288. The “effects” test provides that due process is
satisfied when the plaintiff brings suit in the forum where the “effects” or “brunt
of the harm” caused by the defendant’s intentional tortious activity was suffered.
Licciardello, 544 F.3d at 1285-87. Therefore, personal jurisdiction is proper over
a defendant who commits an intentional and allegedly tortious act expressly
aimed at the plaintiff in the forum state. Id. at 1288.
Brennan, 322 Fed. App’x at 856. In addressing whether personal jurisdiction over an out-ofstate tortfeasor complies with International Shoe’s requirements of “fair play and substantial
10
justice,” 3 the Licciardello court found that “Florida has a very strong interest in affording its
residents a forum to obtain relief from intentional misconduct by nonresidents causing injury in
Florida.” Licciardello, 544 F.3d at 1288.
The Complaint asserts that Defendants’ alleged tortious acts were intentional and
that the effects of these acts were felt by Plaintiff in Florida. (See Cmplt. ¶¶ 36, 41, 48) This is
sufficient to meet the minimum contacts requirement and to establish that a Florida court’s
exercise of personal jurisdiction over Defendants comports with federal due process.
B.
Transfer is Appropriate Based On Discretionary Factors
Having determined that “the action sought to be transferred is one that ‘might
have been brought’ in the transferee court,” this Court “must determine whether, considering the
‘convenience of parties and witnesses’ and the ‘interest of justice,’ a transfer is appropriate.”
Berman v. Informix Corp., 30 F. Supp. 2d 653, 656 (S.D.N.Y. 1998) (quoting Wilshire Credit
Corp. v. Barrett Capital Management Corp., 976 F. Supp. 174, 180 (W.D.N.Y. 1997)).
Defendants have the burden of demonstrating that transfer is appropriate. See New York Marine
& Gen. Ins. Co., 599 F.3d at 114 (“[T]he party requesting transfer [under § 1404(a)] carries the
‘burden of making out a strong case for transfer.’”) (quoting Filmline (Cross-Country) Prods.,
Inc., 865 F.2d at 521). “In making this determination, the Court has ‘considerable discretion in
adjudicating a motion for transfer according to an individualized, case-by-case consideration of
convenience and fairness.’” Williams v. City of New York, No. 03 Civ. 5342(RWS), 2006 WL
399456, at *3 (S.D.N.Y. Feb. 21, 2006) (quoting In re Cuyahoga Equip. Corp., 980 F.2d 110,
117 (2d Cir. 1992)).
3
“These factors include the burden on the defendant of litigating in the forum, the forum’s
interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective
relief and the judicial system’s interest in resolving the dispute.” World-Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 292 (1980).
11
In ruling on motions to transfer, district courts consider several factors, including:
(1) the plaintiff’s choice of forum, (2) the convenience of witnesses, (3) the
location of relevant documents and relative ease of access to sources of proof, (4)
the convenience of parties, (5) the locus of operative facts, (6) the availability of
process to compel the attendance of unwilling witnesses, (7) the relative means of
the parties, (8) the forum’s familiarity with the governing law, and (9) trial
efficiency and the interests of justice, based on the totality of the circumstances.
Albert Fadem Trust v. Duke Energy Corp., 214 F. Supp. 2d 341, 343 (S.D.N.Y. 2002).
1.
Plaintiff’s Choice of Forum
“A plaintiff’s choice of forum ‘is entitled to significant consideration and will not
be disturbed unless other factors weigh strongly in favor of transfer.’” Hershman v.
UnumProvident Corp., 658 F. Supp. 2d 598, 601 (S.D.N.Y. 2007) (quoting Royal & Sunalliance
v. British Airways, 167 F. Supp. 2d 573, 576 (S.D.N.Y. 2001)); see also DiRienzo v. Philip
Servs. Corp., 294 F.3d 21, 28 (2d Cir. 2002). However,
[t]he Second Circuit has clarified the amount of deference a plaintiff is entitled
when he files a lawsuit outside of his home forum; the more such a decision is
“dictated by reasons that the law recognizes as valid, the greater the deference that
will be given to” it; the more it appears the decision is “motivated by forum
shopping reasons,” the less deference will be accorded to it.
Hershman, 658 F. Supp. 2d at 601 (quoting Iragorri v. United Technologies Corp., 274 F.3d 65,
73 (2d Cir. 2001)).
Here, Defendants argue that Plaintiff’s choice of forum should be afforded less
deference because the Southern District of New York is not Plaintiff’s home forum and her
“commencement of this suit in this Court is transparent forum shopping in an effort to avoid the
litigation ongoing in the Florida courts.” (Def. Br. 23) Plaintiff asserts, however, that “the
Southern District of New York is strongly connected to the dispute. All of the defendants reside
in New York, the GRATs and Unitrust Elections were filed in New York, and the GRATs are
governed by New York law. And it is likely that Natbony’s decisions to breach his fiduciary
12
duties to plaintiff, as well as the Kaplans’ aiding and abetting in those breaches, occurred in New
York.” (Pltf. Br. 21) These facts, Plaintiff argues, also demonstrate that the filing of this case
was not motivated by forum shopping. (Id. at 22)
While this action has connections to New York, because of the related actions
pending in the Southern District of Florida and Plaintiff’s residence in Florida, the choice of
forum here appears to have been influenced by a desire to escape the taint of the unfavorable
rulings in the Florida actions, in which Guma was found to have violated court orders and acted
in bad faith in hacking into Defendant Kaplan’s email. See Leor Exploration & Prod., LLC v.
Aguiar and Guma Aguiar v. William Natbony et al., Nos. 09-60136-CIV, 09-60683-CIV, 2010
WL 3782195, at *14 (S.D. Fla. Sept. 28, 2010). Because Plaintiff’s selection of a New York
forum appears to have been “‘motivated by forum shopping reasons,’ . . . less deference will be
accorded to [Plaintiff’s choice of forum].” Hershman, 658 F. Supp. 2d at 601 (quoting Iragorri,
274 F.3d at 73). Accordingly, the Court views this factor as neutral here.
2.
Convenience of Witnesses
“The convenience of the forum for witnesses ‘is probably considered the single
most important factor in the analysis of whether a transfer should be granted.’” Beatie & Osborn
LLP v. Patriot Sci. Corp., 431 F. Supp. 2d 367, 396 (S.D.N.Y. 2006) (quoting Schnabel v.
Ramsey Quantitative Sys., Inc., 322 F. Supp. 2d 505, 516 (S.D.N.Y. 2004)). “When weighing
this factor, courts must consider the materiality, nature, and quality of each witness, in addition
to the mere number of witnesses in each district.” Id. “The moving party must specify the
witnesses to be called and provide general information as to what their testimony will cover.”
Age Group Ltd. v. Regal Logistics, Corp., No. 06 Civ. 4328(PKL), 2007 WL 2274024, at *4
(S.D.N.Y. Aug. 8, 2007) (citing Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir.
13
1978), abrogated on other grounds by Pirone v. MacMillan, Inc., 894 F.2d 579, 581 (2d Cir.
1990)).
Defendants argue that several key witnesses, including Plaintiff, her children, and
other family members whose interests in the Trusts are at issue in this litigation, all reside in
Florida or spend substantial time in Florida. (Def. Br. 21) Plaintiff contends, however, that
Defendants have not met their burden of providing “‘reliable information identifying the
witnesses involved and specifically describing their testimony.’” (Pltf. Br. 22 (quoting Board of
Trustees v. Baylor Heating & Air Conditioning, Inc., 702 F. Supp. 1253, 1258 (E.D. Va. 1988))
Plaintiff also argues that the “key witnesses” reside in New York, and states that her children, if
required to testify, will travel to New York as needed. (Id.)
This Court concludes that Florida is a more convenient forum for witnesses,
particularly non-party witnesses. Defendants have identified numerous witnesses located in
Florida and submitted a declaration stating that all but two of the “key witnesses” cited by
Plaintiff are either Defendants or employed by Defendants (and of these two, one is a resident of
Israel, not New York). (See Dec. 6, 2010 Ronzetti Decl. ¶ 4) Both sides contend that their
witnesses would be willing to travel to the other state, and both have identified at least some
witnesses who may be inconvenienced by a forum in the other state. However, the ongoing
litigation in the Southern District of Florida will likely require the non-party “key witnesses”
identified by Plaintiff to travel to Florida, so the inconvenience for these witnesses will be
minimized if this action proceeds in the same forum as the earlier-filed cases. Accordingly, this
factor supports transfer.
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3.
Location of Relevant Documents
The location of documentary evidence is typically considered a neutral factor in
the transfer analysis. See Am. S.S. Owners Mut. Prot. & Indem. Ass’n v. Lafarge N. Am., Inc.,
474 F. Supp. 2d 474, 484 (S.D.N.Y. 2007) (“The location of relevant documents is largely a
neutral factor in today’s world of faxing, scanning, and emailing documents.”).
Plaintiff argues that the necessary documents are located in New York. (Pltf. Br.
23) However, Defendants argue that most of the relevant documents “have already been
produced in the Florida litigation and are maintained in Florida.” (Def. Br. 22) Given the fact
that many relevant documents are already before the Southern District of Florida, and the ease
with which any remaining documents can be produced there, this factor is neutral.
4.
Convenience of Parties
Plaintiff argues that although she resides in Florida, she can easily travel to New
York. (Pltf. Br. 24) Although Defendants reside in New York, they must travel to Florida for
the ongoing litigation in the related cases. Therefore, this factor weighs in favor of a Florida
forum.
5.
Locus of Operative Facts
“The locus of operative facts is an ‘important factor to be considered in deciding
where a case should be tried.’” Age Group Ltd. v. Regal Logistics, Corp., No. 06 Civ.
4328(PKL), 2007 WL 2274024, at *3 (S.D.N.Y. Aug. 8, 2007) (quoting 800-Flowers, Inc. v.
Intercontinental Florist, Inc., 860 F. Supp. 128, 134 (S.D.N.Y. 1992)). “To determine where the
locus of operative facts lies, courts look to ‘the site of events from which the claim arises.’” Id.
(quoting 800-Flowers, 860 F. Supp. at 134).
15
Defendants argue that the locus of operative facts is Florida, because “[t]he
alleged misrepresentations to Plaintiff and her alleged injury occurred in Florida. Natbony
traveled to Florida and met with attorneys in Florida regarding the Aguiars’ interest in the
GRATS. Additionally, the lawsuits that Plaintiff alleges are part of Thomas Kaplan’s vendetta
against the Aguiars were filed and are currently pending in Florida.” (Def. Br. 22)
Plaintiff asserts that the locus of operative facts is New York “because the trusts
were created in New York and all of the decisions relating to the trusts were made in New York
by New York residents, including defendants.” (Pltf. Br. 24) Furthermore, New York law
governs the trusts and the trusts and Unitrust Elections were filed in New York. (Id.)
Although the Florida lawsuits are part of the “‘offensive’ across ‘the broadest
front imaginable’” that Kaplan allegedly launched against Guma and his family (Cmplt. ¶ 1), the
actual breaches of fiduciary duty – which are what the claims in this suit are based on – allegedly
occurred primarily in New York. This factor therefore weighs against the motion to transfer.
6.
Availability of Process to Compel Attendance of Unwilling Witnesses
“‘The availability of process to compel the testimony of important witnesses is an
important consideration in transfer motions.’” Billing v. Commerce One, Inc., 186 F. Supp. 2d
375, 378 (S.D.N.Y. 2002) (quoting Arrow Electronics v. Ducommun, Inc., 724 F. Supp. 264, 266
(S.D.N.Y. 1989)). Under Federal Rule of Civil Procedure 45, a district court can enforce a trial
subpoena served on a witness within the state or within 100 miles of the court. However, “even
if [a party’s] witnesses do refuse to testify, deposition testimony is an acceptable alternative.”
Farberware Licensing Co. LLC v. Meyer Mktg. Co., No. 09 Civ. 2570(HB), 2009 WL 1357956,
at *2 (S.D.N.Y. May 14, 2009).
16
Defendants argue that several non-party witnesses who are Florida residents – and
thus outside the subpoena power of this Court – may be required to testify. (Def. Br. 22)
Plaintiff, however, asserts that all key witnesses reside in New York and those that do not can be
deposed in Florida and their testimony used in New York. (Pltf. Br. 24)
Defendants have not produced affidavits or other evidence indicating that any of
their anticipated witnesses are unwilling to testify, and – in the event that out-of-state witnesses
refuse to testify – deposition testimony is an acceptable alternative. Therefore, this factor is
neutral.
7.
The Forum’s Familiarity With The Governing Law
Although the parties do not dispute that New York law applies to this dispute (see
Def. Br. 24), “‘[t]his Court has routinely held that the ‘governing law’ factor is to be accorded
little weight on a motion to transfer venue . . . because federal courts are deemed capable of
applying the substantive law of other states.’” Ivy Soc’y Sports Group, LLC v. Baloncesto
Superior Nacional, No. 08 Civ. 8106(PGG), 2009 WL 2252116, at *8 (S.D.N.Y. July 28, 2009)
(quoting Prudential Sec. Inc. v. Norcom Development, Inc., No. 97 Civ. 6308(DC), 1998 WL
397889, at *6 (S.D.N.Y. July 16, 1998)). Accordingly, this factor is neutral.
8.
Trial Efficiency And The Interests Of Justice,
Based On The Totality Of The Circumstances
“[T]he Supreme Court has held that the consideration of the ‘interest of justice’
factor encompasses the private and public economy of avoiding multiple cases on the same
issues.” Williams, 2006 WL 399456, at *3 (citing Continental Grain Co. v. Barge FBL-585, 364
U.S. 19, 26 (1960)). “[C]ourts consistently recognize that the existence of a related action in the
transferee district is a strong factor to be weighed with regard to judicial economy, and may be
determinative.” Id.
17
Defendants argue that trial efficiency supports a transfer to Florida because
“[r]elated cases are already pending there, and the court in Florida is already familiar with the
facts and issues in those related cases and the substantial discovery conducted.” (Def. Br. 23-24)
Plaintiff argues that the cases in Florida do not share the same claims, parties, and facts, and
therefore this factor does not support transfer. (Pltf. Br. 25)
This Court concludes that this factor strongly supports transfer to the Southern
District of Florida. The cases pending in Florida involve the same issues as here. Indeed, the
Complaint in this action begins by alluding to the dispute between Defendant Thomas Kaplan
and Guma which is the backdrop for the two Southern District of Florida actions: “This lawsuit
arises from actions taken by defendant Thomas Kaplan (‘Kaplan’) as a result of a bitter business
dispute with his nephew, Guma Aguiar (‘Guma’), a non-party to this action. As a result of this
business dispute with Guma, Kaplan launched what he termed an ‘offensive’ across ‘the broadest
front imaginable’ which included the wrongful acts against plaintiff Aguiar – Kaplan’s sister and
Guma’s mother – that give rise to this action.” (Cmplt. ¶ 1)
Similarly, in the New York action, Plaintiff alleges that Guma was told he would
receive “a portion of his share of the proceeds of the Leor sale as a beneficiary of Kaplan’s
GRAT” (Cmplt. ¶ 16), while in Guma’s Florida action, Guma alleges that the Trusts “were
created for the benefit of Kaplan and his family, as well as [Guma] and his family, including
[Guma’s] mother.” (Ronzetti Decl., Ex. E (Guma Aguiar v. William Natbony et al., Case No.
09-60683-CIV-Seitz/O’Sullivan (S.D. Fla.)) ¶ 23) Leor’s Florida suit against Guma seeks a
declaratory judgment that Guma is not entitled to a share of the trusts. (Ronzetti Decl., Ex. D
(Leor Exploration & Production LLC, et al. v. Guma Aguiar, Case No. 09-60136-CIVSeitz/O’Sullivan (S.D. Fla.)) ¶ 60)
18
In the New York action, Plaintiff alleges that Natbony improperly removed
Plaintiff and her issue as a contingent beneficiary of the Trusts in a 2009 Amendment, while in
Guma’s Florida suit he claims that “Natbony – acting as trustee of the family trusts – chose that
time to follow through on his long-held intent to completely remove [Guma] and his family
members as beneficiaries of both trusts . . . [by] caus[ing] the family trust instruments to be
amended so as to eliminate [Guma’s] interest in the trusts, as well as the interests of his family
members.” (Ronzetti Decl., Ex. E (Guma Aguiar v. William Natbony et al.) ¶ 44)
In the Complaint before this Court, Plaintiff alleges that “Natbony failed to fully
inform the beneficiaries of their rights related to the Unitrust Election . . . [and] intentionally
concealed from the beneficiaries the facts necessary for plaintiff Aguiar to make an informed
decision. . . .” (Cmplt. ¶¶ 45, 47) Guma’s Florida suit includes a similar allegation: Guma
claims that Natbony “undertook efforts to convert the trusts to ‘unitrusts.’ . . . This again favored
Kaplan and the Kaplan-related entities over [Guma] and his family, who also were beneficiaries
of the family trusts. However, contrary to his obligations as [Guma’s] lawyer and as trustee of
the trusts, Natbony failed to fully inform [Guma] of the consequences of the unitrust conversion,
and did not give [Guma] a full opportunity to learn about or approve of this conversion.”
(Ronzetti Decl., Ex. E (Guma Aguiar v. William Natbony et al.) ¶¶ 30-31) Both the New York
action and Guma’s lawsuit allege that Natbony’s omission of material information about the
consequences of the Unitrust conversion induced the Aguiars to approve the conversion, which
they would not have done had they been fully informed. (See Cmplt. ¶ 48; Ronzetti Decl., Ex. E
(Guma Aguiar v. William Natbony et al.) ¶ 31)
19
Because the issues that would be litigated in the New York action are similar or
identical to the issues that have been litigated in the Florida lawsuits for some time, this factor
strongly favors transfer to the Southern District of Florida.
*
*
*
*
Most of the factors which this Court must consider in conducting a § 1404(a)
analysis are neutral here. 4 The convenience of witnesses and the parties factors weigh slightly in
favor of transfer, while the locus of operative facts suggests that New York is the appropriate
forum. The most compelling factor here, however, is judicial efficiency and the interests of
justice. The same issues are presently before the Southern District of Florida in two separate
lawsuits. In this bitterly and hotly contested maelstrom of litigation, it makes no sense for a
court in New York to consider the same issues that have been and will be litigated in two
separate actions in the Southern District of Florida. Moreover, given the findings of litigation
misconduct made in the Southern District of Florida, and the fact that Plaintiff is a Florida
resident, the New York action is tainted by forum-shopping.
4
The litigants have made no arguments concerning the relative means of the parties.
20
CONCLUSION
For the reasons stated above, Defendants' motion to transfer to the Southern
District of Florida (Docket No. 23) is GRANTED, and the remaining motions to dismiss or stay
are denied as moot. The Clerk of the Court is directed to terminate Defendants' motions and to
transfer this action to the Southern District of Florida.
Dated: New York, New York
May 16,2011
SO ORDERED.
paulff:1~ep~
United States District Judge
21
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