Reich et al v. Lopez et al

Filing 174

OPINION AND ORDER re: 126 MOTION for Leave to File Surreply Memorandum Of Law in Further Support of Renewed Motion To Dismiss, filed by Leopoldo Alejandro Betancourt Lopez, 110 MOTION to Dismiss the Third, Fourth, Fifth, and Sixth C laims in Plaintiffs' First Amended Complaint filed by Leopoldo Alejandro Betancourt Lopez, 109 MOTION to Dismiss for Lack of Jurisdiction Counts Third, Fourth, Fifth and Sixth of First Amended Complaint filed by Pedro Jose Treb bau Lopez. For the foregoing reasons, Betancourt's and Trebbau's renewed motions to dismiss are GRANTED, and this action is dismissed as against Defendants Betancourt and Trebbau pursuant to Federal Rule of Civil Procedure 12(b)(2). Betancourt's motion for leave to file a sur-surreply is DENIED as moot. The Clerk of the Court is directed to close the motions at docket numbers 109, 110, and 126. (Signed by Judge J. Paul Oetken on 4/30/2015) (kko)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------------X
:
THE HONORABLE OTTO J. REICH and OTTO :
:
REICH ASSOCIATES, LLC,
Plaintiffs, :
:
-v:
:
:
LEOPOLDO ALEJANDRO BETANCOURT
LOPEZ, PEDRO JOSE TREBBAU LOPEZ, and :
:
FRANCISCO D’AGOSTINO CASADO,
Defendants. :
-------------------------------------------------------------X

13-CV-5307 (JPO)
OPINION AND ORDER

J. PAUL OETKEN, District Judge:
In an opinion and order dated August 18, 2014, the Court allowed jurisdictional
discovery to determine the domicile of Leopoldo Alejandro Betancourt Lopez (“Betancourt”)
and Pedro Jose Trebbau Lopez (“Trebbau”). See Reich v. Lopez, 38 F. Supp. 3d 436, 459
(S.D.N.Y. 2014) (Oetken, J.).1 Jurisdictional discovery is now complete. Betancourt and
Trebbau have renewed their motions to dismiss Plaintiffs’ claims against them under Federal
Rule of Civil Procedure 12(b)(2). For the reasons that follow, their motions are granted. 2
I.

Discussion
Betancourt and Trebbau move to dismiss the Complaint on the ground that the Court

lacks personal jurisdiction over them. In response, Plaintiffs principally argue that Betancourt
and Trebbau are New York domiciliaries and, therefore, are subject to general jurisdiction in
New York. Next, Plaintiffs raise several other arguments, many of which the Court already

1

The Court assumes familiarity with this opinion and order.

2

The Court has reviewed Betancourt’s proposed sur-surreply memorandum of law and
concludes that it would not affect the disposition of the instant motions. As such, Betancourt’s
motion for leave to file a sur-surreply is denied as moot.
1

rejected in its August 18 opinion. To the extent that the Court has already rejected the arguments
pressed by Plaintiffs here, the Court will treat those arguments as a motion to reconsider the
earlier opinion.
A.

Legal Standard

“Personal jurisdiction of a federal court over a non-resident defendant is governed by the
law of the state in which the court sits—subject, of course, to certain constitutional limitations of
due process.” Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 510 (2d Cir. 1994); see
also DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001) (per curiam).
Accordingly, the Court must engage in a “two-part analysis.” Bank Brussels Lambert v. Fiddler
Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). First, the Court must look to the
relevant jurisdictional statute of the state in which it sits: New York. Whitaker v. Am.
Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001) (quoting Bensusan Rest. Corp. v. King, 126
F.3d 25, 27 (2d Cir. 1997)). Then, “[i]f the exercise of jurisdiction is appropriate under that
statute, the [C]ourt must decide whether such exercise comports with the requisites of due
process.” Id.
Plaintiffs have the burden of showing personal jurisdiction over Defendants. Grand
River Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir. 2005). To survive a motion
to dismiss under Rule 12(b)(2), a plaintiff need only make a “prima facie showing” of
jurisdiction. Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998). But where, as
here, “the parties have conducted extensive discovery regarding the defendant’s contacts with the
forum state, but no evidentiary hearing has been held[,] the plaintiff’s prima facie showing . . .
must include an averment of facts that, if credited by the ultimate trier of fact, would suffice to
establish jurisdiction over the defendant.” Bank Brussels Lambert, 171 F.3d at 784 (brackets and
internal quotation marks omitted). Questions of personal jurisdiction are fact intensive. E.g.,
2

PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997). And because the Court has
not held an evidentiary hearing, “the pleadings and any supporting affidavits are to be interpreted
in the light most favorable to the plaintiff.” Rubinbaum LLP v. Related Corporate Partners V,
L.P., 154 F. Supp. 2d 481, 486 (S.D.N.Y. 2001).
The parties agree that if Betancourt and Trebbau are New York domiciliaries, the Court’s
exercise of personal jurisdiction would be consistent with New York law and the due process
clause. Thus, the first question is whether Plaintiffs have made a prima facie showing that
Betancourt and Trebbau are New York domiciliaries. The second question is whether, assuming
Betancourt and Trebbau are not New York domiciliaries, this Court’s jurisdiction is consistent
with New York law and the due process clause.
B.

Domicile

Domicile is the “technically pre-eminent headquarters that every person is compelled to
have in order that by aid of it, certain rights and duties which have attached to it by the law may
be determined.” In re Thorne, 148 N.E. 630, 632 (N.Y. 1925). A person has exactly one
domicile at all times from his birth to his death. Crawford v. Wilson, 4 Barb. 504 (N.Y. Gen.
Term 1848). At birth, he has the domicile of his custodial parent. E.g., In re Webber’s Will, 64
N.Y.S.2d 281, 283 (N.Y. Sur. Ct. 1946). He keeps this domicile until, by choice or operation of
law, he acquires another. Ennis v. Smith, 55 U.S. (14 How.) 400, 422–23 (1853). To acquire a
domicile by choice, the law requires physical presence in the domicile state coincident with the
intent to make that state one’s home—at least for a period of time. In re Newcomb’s Estate, 84
N.E. 950, 954 (N.Y. 1908). The parties do not dispute that Betancourt and Trebbau have been
physically present in New York. So the only question is intent.
Self-serving statements of intent do not alone suffice to prove domicile. Rather, in this
context, actions consistent with the intent to make a place one’s home speak louder than words
3

alone. See, e.g., In re Griswold’s Trust, 99 N.Y.S.2d 420, 425 (N.Y. Sup. 1950) (“The judiciary
has tended to disregard declarations when they are in conflict with conduct.” (citing, inter alia,
Newcomb’s Estate, 84 N.E. at 955)). Intent can be inferred from a wide range of facts, and, as
such, the totality of the circumstances surrounding a person’s residences is relevant to the
question. See, e.g., In re Will of Meyer, 876 N.Y.S.2d 7, 12 (App. Div. 1st Dep’t 2009) (“Intent
is determined by the conduct of the person and all the surrounding circumstances . . .”); see also
Morrison v. Blitz, No. 88 CIV. 5607 (MBM), 1996 WL 403034, at *1 (S.D.N.Y. July 18, 1996)
(holding that courts should consider factors “including, but not limited to, the place of [a
person’s] family ties, voter registration, tax liability, driver’s license and vehicle registration,
business activities, bank accounts, social activities and religious affiliations.”).
Although a person can have only one domicile at a time, many people live—in one sense
of that word or another—in more than one place. See Black v. Black, 968 N.Y.S.2d 722, 723
(App. Div. 3d Dep’t 2013). “An existing domicile, whether of origin or selection, continues until
a new one is acquired, and a party . . . alleging a change in domicile has the burden to prove the
change by clear and convincing evidence.” Hosley v. Curry, 649 N.E.2d 1176, 1178 (N.Y.
1995).
Betancourt and Trebbau were Venezuelan domiciliaries at birth 3 and they both aver that
Venezuela is where they intend their current homes to be. Plaintiffs, then, have the burden to
show by clear and convincing evidence that Betancourt and Trebbau intended to make their New
York residences their preeminent headquarters. Despite the opportunity to conduct fairly
extensive jurisdictional discovery, and even with all factual disputes resolved in their favor,

3

Plaintiffs do not argue that Trebbau and Betancourt established a new domicile when they went
to college in the United States.
4

Plaintiffs have failed to make a prima facie case that Betancourt and Trebbau are New York
domiciliaries.
1.

Betancourt

Plaintiffs offer the following facts 4—which, for the purpose of this motion, are assumed
to be true—in support of jurisdiction over Betancourt.
The first set of facts offered by Plaintiffs concern Betancourt’s residence in New York.
In 2010, Betancourt bought an apartment in midtown Manhattan for $11.75 million. (See
Statement of Facts in Opposition to Betancourt’s Motion to Dismiss ¶ 27.) Since January 2011,
Betancourt has been in the process of renovating the apartment. (Id. ¶ 40.) This process has cost
Betancourt more than $3 million so far. (Id. ¶ 41.) Around the same time, Betancourt acquired
furniture worth more than €100,000 (equivalent to around $109,000 at the time of this writing)
and artwork worth well over $3 million. (Id. ¶¶ 45–47.) He pays for utility services at the
apartment. (Id. ¶¶ 38–39.) He receives some mail at the apartment. (Id. ¶ 52.)
Next, Plaintiffs contend that Betancourt keeps most of his money in accounts with New
York financial institutions. (E.g., id. ¶¶ 70–79.) Betancourt, according to Plaintiffs, keeps $68
million in dollar-denominated accounts in New York banks. And this figure, Plaintiffs contend,
represents “virtually all of Betancourt’s assets in the world.” 5 (Id. ¶¶ 6–8.)

4

Plaintiffs’ statement of facts contains many things other than relevant facts, including—but
hardly limited to—legal conclusions (e.g., ¶ 4 (“At all relevant times, Betancourt was domiciled
for purposes of personal jurisdiction in New York.”), allegations regarding the misdeeds of
Betancourt’s friend and financial advisor (id. ¶¶ 189–94), allegations that Betancourt’s firm is
under investigation by the Manhattan District Attorney’s Office, (id. ¶ 203), and a long list of
irrelevant factual contentions (see generally id.). In this section, the Court considers only those
facts that are plausibly relevant to establishing personal jurisdiction over Betancourt.
5

Betancourt disputes this characterization. According to him, roughly 35% of his net worth, at
most, has been in accounts with New York banks. (Trans. of Betancourt Deposition, at 51:15–
22.) Plaintiffs contend that Betancourt’s valuation of his Venezuelan assets—the majority of
which, he contends, are equity shares of closely held corporations—is not credible and is entitled
5

Similarly, Plaintiffs contend that Betancourt conducts a wide range of business in New
York. He has retained at least four separate New York law firms to provide him legal advice and
assist him in transactions and litigation. (Id. ¶ 9.) He has consented to be sued in New York in
connection with a mortgage on his New York apartment and in several other discrete contexts.
(Id. ¶ 22.) In connection with Derwick Associates, the business that Betancourt runs with
Trebbau, Betancourt has attended many business meetings and social functions in New York
City. (Id. ¶¶ 116–40.)
Finally, Plaintiffs contend that many of Betancourt’s close friends and family members
live in New York. Eduardo Travieso, Betancourt’s personal banker and close friend, lives in
New York. So do two of Betancourt’s cousins and another “relation.” (Id. ¶¶ 197–200.)
In response to these purported New York contacts, Betancourt points to his extensive
contacts with Venezuela to show that he, in fact, intends Venezuela to be his true and permanent
home. Betancourt owns two residential properties in Venezuela. (Trans. of Betancourt
Deposition, at 31.) Betancourt handles the maintenance and pays the bills for his family’s home
in Pica Pica, Venezuela. (Id. at 95.) He visits the home weekly, if not daily. (Id.) Betancourt
votes in Caracas and has a Venezuelan driver’s license. (Declaration of Frank Wohl, Ex. 2, ¶¶ 7,
9 & Exs. A, B.) He belongs to a social club in Caracas, sees doctors in Caracas, has health and
life insurance from companies in Caracas, maintains the headquarters of his business in Caracas,
and files tax returns and pays income tax in Caracas. (Trans. of Betancourt Deposition, at 115–

to no weight because he has not produced documentary evidence of his Venezuelan holdings.
The Court need not, and does not, reach this question because, even assuming that the vast
majority of Betancourt’s net worth is held in New York bank accounts, Plaintiffs have failed to
make a prima facie showing of jurisdiction.
6

16, 123, 149–50.) Betancourt has bank accounts and credit cards in Caracas. (Declaration of
Frank Wohl, Ex. 7.) He owns multiple cars that he keeps in Caracas. (Id., Ex. 8.)
Betancourt spends the overwhelming majority of his time outside of New York. (Id., Ex.
5, at 7–8.) Of the 941 days that passed between January 1, 2011, and July 31, 2013, Betancourt
spent about 42 nights in New York. 6 Although this alone is insufficient to prove that Betancourt
is not domiciled in New York—indeed, one can make a place his home in one day—it is strongly
indicative that Betancourt did not intend to make New York his home. See EUGENE F. SCOLES,
ET AL., CONFLICT OF LAWS

258 (4th ed. 2004) (“Important evidence will be reflected in the

amount of time that is spent at each of the residences and the purpose for which the time is
spent.”). And the New York apartment is not Betancourt’s only non-Venezuela residence. He
owns “vacation homes” in Paris, Madrid, and Florida. (Declaration of Frank Wohl, Ex. 2 ¶ 12.)
Considering all the circumstances of this case, Plaintiffs have failed to make a prima
facie showing that Betancourt is domiciled in New York. Their most persuasive evidence is that,
at least according to them, Betancourt keeps the vast majority of his money in dollardenominated accounts in New York, that he owns an expensive apartment in midtown
Manhattan, and that he does business in New York. But this conduct, standing alone, is not
conclusive of Betancourt’s intent to make his home in New York. See Morrison, 1996 WL
403034, at *3 (rejecting claim of New York domicile where party owned a midtown apartment
and conducted extensive business in Manhattan, but voted, paid taxes, and had his driver’s

6

Plaintiffs contend that Betancourt falsely stated that he did not visit New York in 2013.
(Plaintiffs’ Surreply Memorandum of Law, at 2–3.) In support of this contention, Plaintiffs offer
their unsupported statement that Betancourt was in his apartment when they attempted to serve
him with papers in this suit and copies of emails that, they assert, show he was planning to visit
New York in 2013. (See Declaration of Mark Smith in Support of Plaintiffs’ Surreply.)
Regardless, even assuming that Betancourt spent more time in New York, the totality of the
circumstances is insufficient to overcome the presumption that his domicile remains in
Venezuela.
7

license in another jurisdiction). Considering the totality of the circumstances, the Court
concludes that Defendants have failed to present clear and convincing evidence that Betancourt
intends to be domiciled in New York.
2.

Trebbau

Trebbau says that he has been a domiciliary of Venezuela for his entire life. (Declaration
of Joseph A. DeMaria, Ex. B, ¶ 5-6.) He has submitted evidence demonstrating, among other
things, that he votes and pays taxes in Venezuela, and that he has a Venezuelan driver’s license.
(Id. Ex. B, ¶¶ 7-10 & Exs. A-C.) During the period from January 1, 2011, until July 31, 2013,
Trebbau avers that he spent a total of about 21 days in New York. (Id. Ex. C, at 5, Ex D, at 2.)
Plaintiffs offer essentially the same set of facts in support of jurisdiction over Trebbau,
with one important exception: Trebbau neither owns nor rents any real estate in New York at all.
Instead, Plaintiffs contend, his New York residence is the home of his friend and banker,
Eduardo Travieso. Plaintiffs argue that “given Defendants’ wealth and stature, it is simply
implausible that they could maintain their extravagant lifestyles in Venezuela—a violent, thirdworld country beset by rampant blackouts, food shortages and gross poverty.” (Plaintiffs’
Memorandum of Law in Opposition to Betancourt’s and Trebbau’s Motions to Dismiss, at 10
[Plaintiffs’ Memorandum].) And yet Plaintiffs would have the Court believe that a man of
Trebbau’s estimable “wealth and stature” permanently intends to crash on his friend’s couch.
Plaintiffs’ prima facie case that Trebbau is a New York domiciliary fails because the evidence of
intent is akin to the evidence against Betancourt, but weaker. Although owning or renting
property in a jurisdiction is not a prerequisite to domicile, Plaintiffs have offered insufficient
evidence to support a prima facie case that Trebbau intends to make New York his permanent
home.

8

C.

Plaintiffs’ Other Arguments

Plaintiffs argue in the alternative that the Court has personal jurisdiction over Betancourt
and Trebbau despite the fact that they are not New York domiciliaries. In support of these
alternative arguments, Plaintiffs contend that (1) Betancourt and Trebbau are “doing business” in
New York within the meaning of New York Civil Practice Law and Rules (“CPLR”) § 301;
(2) the Supreme Court’s holding in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), does not
apply to this case; (3) even if Daimler did apply, Betancourt and Trebbau are “essentially at
home” in New York (despite not actually being “at home” in New York); (4) Derwick
Associates’ New York activities should be imputed to Betancourt and Trebbau; and (5) Plaintiffs
cannot sue in Venezuela. (Plaintiffs’ Memorandum at 11–22.) As a preliminary matter, the
Court has already rejected the first four arguments as either incorrect or insufficient. Reich, 38
F. Supp. 3d at 456–57. Plaintiffs do not point to any reason to reconsider these holdings. See
Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995) (“[R]econsideration will generally
be denied unless the moving party can point to controlling decisions or data that the court
overlooked—matters, in other words, that might reasonably be expected to alter the conclusion
reached by the court.”). Thus, the Court treats these first four arguments as a motion to
reconsider, and that motion is denied.
Finally, Plaintiffs contend that Venezuela is not a viable alternative forum for their
claims. The arguments they press in support of this contention rely principally on denigrating
Venezuela’s judicial and political system and accusing Betancourt and Trebbau of being in
“criminal cahoots with the Venezuelan government.” (Plaintiffs’ Memorandum, at 10.) The
Court need not, and does not, decide whether Venezuela is a valid alternative forum for Plaintiffs
claims because, for the purpose of establishing general jurisdiction over Betancourt and Trebbau,
the mere fact that Venezuela may be an inadequate forum is insufficient to confer jurisdiction on
9

this Court. The question in a general jurisdiction case is whether the defendants’ contacts render
them “essentially at home” in the forum state. Daimler, 134 S. Ct. at 754. Because Betancourt’s
and Trebbau’s contacts with New York are insufficient to render them at home in New York, the
contention that Venezuela may not provide Plaintiffs the relief they seek is irrelevant.
II.

Conclusion
For the foregoing reasons, Betancourt’s and Trebbau’s renewed motions to dismiss are

GRANTED, and this action is dismissed as against Defendants Betancourt and Trebbau pursuant
to Federal Rule of Civil Procedure 12(b)(2). Betancourt’s motion for leave to file a sur-surreply
is DENIED as moot.
The Clerk of the Court is directed to close the motions at docket numbers 109, 110, and
126.

SO ORDERED.
Dated: April 30, 2015
New York, New York
____________________________________
J. PAUL OETKEN
United States District Judge

10