Philippe NYC I LLC v. Philippe West Coast, LLC et al

Filing 47

MEMORANDUM AND ORDER: denying 20 Motion to Dismiss. For the foregoing reasons, the Court concludes that there is no basis for defendants' motion to dismiss on service of process, personal jurisdiction, and venue grounds. Therefore defendants' motion to dismiss, ECF No. 20, is denied. SO ORDERED. (Signed by Judge Naomi Reice Buchwald on 3/23/2016) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
PHILIPPE NYC I LLC and
PHILIPPE IP LLC,
Plaintiffs,

MEMORANDUM AND ORDER

- against -

14 Civ. 9858 (NRB)

PHILIPPE WEST COAST, LLC, IMANI
RESTAURANT GROUP, INC., IMANI HALLEY
and YOLANDA HALLEY,
Defendants.
----------------------------------------X
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE

In this trademark case, plaintiffs, the owners of a New
York City restaurant, complain that defendants’ restaurant in
Beverly Hills, California, infringes upon their trademark, trade
dress,

and

other

intellectual

property.

Defendants

move

pursuant to Rules 12(b)(2), (3), and (5) to dismiss all claims,
arguing

defective

service

of

jurisdiction, and improper venue.
the motion is denied.

process,

lack

of

personal

For the reasons that follow,

I. BACKGROUND1
Philippe by Philippe Chow (“Philippe Restaurant”) is a New
York City restaurant that “offers haute Chinese cuisine in a
refined atmosphere.”

Compl. ¶ 1.

Upon its opening in 2005,

Philippe Restaurant was owned and operated by Dave 60 NYC, Inc.
(“Dave 60”), a New York corporation formed by Chef Philippe Chow
and several investors.
plaintiff

Philippe

Id. ¶¶ 6, 20.

NYC

I

LLC

Around January of 2014,

(“Philippe

NYC”),

a

New

York

limited liability company, was formed to be the new owner and
operator of Philippe Restaurant.
interest

in

Philippe

NYC.

Id. ¶ 5.

The

remaining

Dave 60 owns a 67%
33%

is

owned

by

Philippe Equities LLC, a New York limited liability company and
affiliate of Merchants Hospitality Inc. (“MHI”), a restaurant
management company that assumed management responsibility for
Philippe Restaurant in October of 2013.
In

2009,

the

then-four

Id. ¶¶ 6, 43.

shareholders

of

Dave

60

and

defendant Imani “Manny” Halley, a California citizen, opened a
Philippe

Restaurant

West Hollywood”).
Philippe

West

located
Id. ¶ 31.

Coast,

LLC

in

West

Hollywood,

CA

(“Philippe

Together, they formed defendant

(“Philippe

a

California

company, to own and operate Philippe West Hollywood.

Id. ¶¶ 8,

1

West

LLC”)

This factual background is drawn from plaintiffs’ complaint and the
exhibits attached thereto as well as plaintiffs’ papers filed in opposition
to defendants’ motion to dismiss. In particular, we refer to the Declaration
of Abraham Merchant in Opposition to Defendants’ Motion to Dismiss (“Merchant
Decl.”), ECF No. 26, and the exhibits attached thereto. For the purposes of
evaluating this motion, all unrebutted factual claims are presumed true.

2

31.

However,

financially.

Philippe

Id. ¶ 33.

West

Hollywood

did

not

succeed

In April of 2010, the other owners of

Philippe West LLC sold their entire member interests to Mr.
Halley.2

Id. ¶ 34.

Thus, Mr. Halley came to own and operate the

Philippe West Hollywood restaurant.
Contemporaneously with the sale of Philippe West LLC to Mr.
Halley, Dave 60 and Philippe West LLC entered into a written
licensing agreement.
“West

Hollywood

Id. ¶ 35; see Merchant Decl. Ex. A (the

Licensing

Agreement”).

The

West

Hollywood

Licensing Agreement granted Philippe West LLC license to operate
Philippe West Hollywood, using the Philippe Restaurant brand,
trademarks, recipes, menu, trade dress, and business practices.
Compl. ¶ 35.
The West Hollywood Licensing Agreement had three provisions
that

are

relevant

location-specific,
operating
else.

the

here.

First,

allowing

restaurant

in

the

Philippe
West

license
West

Hollywood,

it

LLC
CA,

West Hollywood Licensing Agreement § 1.01.

granted
to
and

was

continue
nowhere

If Philippe

West LLC at any time ceased to operate Philippe West Hollywood,
Dave 60 could terminate the agreement.

2

Id. § 13.02.

In actuality, Mr. Halley retained only a 98% ownership interest in
Philippe West LLC, with 2% to be owned by Mr. Halley’s associate, identified
only as “DJ Mormile.” Compl. ¶ 34; Decl. of Richard Cohn in Further Opp’n To
Defs.’ Mot. to Dismiss Ex. A (“Sale Addendum”), ECF No. 37.
DJ Mormile’s
signature does not appear on the Sale Addendum, see Sale Addendum at 2, nor
is he or she a party to this case.
For ease of reference, we refer to
Philippe West LLC as being “purchased” by Mr. Halley in April 2010, and
“owned” by him thereafter, despite the likely presence of another 2% owner.

3

Second, the West Hollywood Licensing Agreement contained a
forum selection clause, which stated that any action brought by
one party against the other
in any court, whether federal or state, shall be
brought in either the Supreme Court for the State of
New York, County of New York or in the United States
District Court for the Southern District of New York.
Licensee hereby consents to personal jurisdiction and
venue in the state and federal courts of New York.
Id.

§

19.02.

Third,

the

licensing

agreement

contained

a

survival clause, by which
upon termination of this Agreement for any reason
whatsoever . . . any provisions of this Agreement
which, by their nature, extend beyond the expiration
or termination of this Agreement, shall survive
termination or expiration and be fully binding and
enforceable as though such termination or expiration
had not occurred.
Id. § 18.02.
Philippe West Hollywood continued to face financial issues,
and Philippe West LLC, as licensee, closed the restaurant in the
summer of 2012.

Compl. ¶ 38.

Subsequently, Mr. Halley sought

permission from Dave 60 (then sole owner of Philippe Restaurant
and its intellectual property) to open a new Philippe Restaurant
location in Beverly Hills, CA.

Id. ¶ 40.

Specifically, Mr.

Halley requested that the West Hollywood Licensing Agreement be
transferred to the new restaurant he planned to open in Beverly
Hills.

Id. ¶ 41.

However, he was informed that a new licensing

agreement would be necessary, as the prior licensing agreement

4

had terminated by its terms upon the closing of Philippe West
Hollywood.
By

Id.
October

2013,

MHI

had

responsibilities for Philippe Restaurant.

assumed
Id. ¶ 43.

management
Therefore,

MHI’s president, Abraham Merchant, negotiated with Mr. Halley
with

respect

to

the

terms

Beverly Hills location.
person

on

or

around

Id.

October

of

operation

of

the

prospective

Merchant and Mr. Halley met in
30,

2013,

and

reached

an

oral

agreement on the terms of the proposed new licensing agreement.
Id. ¶ 44.
On October 31, 2013, Merchant wrote to Mr. Halley by email
asking him to confirm the terms they had agreed:
Many [sic] it was good to see you last night. I am
glad we were able to reach an amicable agreement.
Let’s get all the documentation done ASAP, however, in
good faith we will proceed as if the agreement is in
place. For the sake of 100% clarity, we agreed to the
following royalty and marketing terms, kindly confirm
via return email that we have an understanding.
Merchant Decl. Ex. B, at 2.

Among the terms Merchant asked

Halley to confirm was that “[a]ll other terms and conditions
remain the same.”

Id. at 3.

On November 1, Merchant wrote by

email: “Manny. Please confirm that we are in agreement on the
terms below. All I [] need per our conversation is in one word
“YES.”

Id. at 1.

Sorry forgot.”

Two minutes later, Halley responded, “Yes!

Id.

5

On or about November 1, 2013, the Philippe Restaurant at
8620

Wilshire

Boulevard

Hills”) was opened.

in

Beverly

Compl. ¶ 42.

Hills

(“Philippe

Beverly

Plaintiffs allege Mr. Halley

and his wife, defendant Yolanda Halley, a California citizen,
formed defendant Imani Restaurant Group, Inc. (“Imani Group”), a
California

corporation,

Hills.

Id.

¶¶

Halleys

10,

together

to

42.

own

own

operate

Plaintiffs

and

Philippe Beverly Hills.

and

control

Philippe

further

Imani

claim

Group

and

Beverly
that

the

operate

Id. ¶¶ 11–12.

The parties dispute what happened next.

Plaintiffs claim

that, relying on Halley’s repeated representations that he would
sign a written licensing agreement, they allowed defendants to
continue operating Philippe Beverly Hills.

Id. ¶ 45.

However,

the Halleys refused to execute a written licensing agreement,
despite being sent various drafts.

Id. ¶ 46.

Plaintiffs assert

that in February of 2014, they became aware Philippe Beverly
Hills

was

quality.

facing
Id.

¶

difficulties
47.

regarding

Specifically,

Mrs.

food
Halley

and

service

conducted

a

“series of urgent phone conversations” with Merchant, in which
she asked for assistance in training the kitchen and service
personnel at the restaurant.

Id.

MHI offered assistance but

insisted upon payment for such services and the execution of a
definitive
licensing

licensing
agreement

agreement.
similar

to

6

Id.
the

West

MHI

sent

a

Hollywood

proposed
Licensing

agreement on February 18, 2014.

Id. ¶ 48.

When defendants

failed to sign the proposed licensing agreement, plaintiffs sent
a cease a desist notice to defendants, and later instigated the
instant lawsuit.3

Id. ¶ 52.

Plaintiffs bring claims under the

Lanham Act, 15 U.S.C. §§ 1051 et seq., and various provisions of
New

York

State

law,

seeking

injunctive

relief

and

Defendants continue to operate Philippe Beverly Hills.

damages.
Id. ¶

54.
II.

DISCUSSION

Defendants move to dismiss the complaint pursuant to Rules
12(b)(2), (3), and (5) of the Federal Rules of Civil Procedure.
They argue that service of process was defective, that the Court
lacks personal jurisdiction, and that venue in this district is
improper.
A.

Service of Process
First, defendants move to dismiss the complaint under Rule

12(b)(5) for ineffective service of process.

Their principal

argument is that service was improper because the affidavits of
service sworn by plaintiffs’ process server incorrectly describe
Mr. Halley’s physical appearance.

3

We conclude, however, that

Defendants, on the other hand, claim they had previously received
permission to operate the restaurant, and that signing a new licensing
agreement was never necessary. See Aff. of Imani Halley for Defs.’ Response
¶¶ 21, 34 (“Second Imani Aff.”), ECF No. 36.
It is undisputed that the
proposed licensing agreement for the Beverly Hills restaurant was never
executed.

7

plaintiffs have sufficiently made out a prima facie case of
proper service.
1.

Governing Law

“Before a federal court may exercise personal jurisdiction
over

a

defendant,

the

procedural

summons must be satisfied.”

requirement

of

service

of

Omni Capital Int'l v. Rudolf Wolff

& Co., 484 U.S. 97, 104 (1987).

On a motion to dismiss under

Rule 12(b)(5) of the Federal Rules of Civil Procedure, “the
plaintiff

bears

sufficient.”

the

burden

of

establishing

that

service

was

Khan v. Khan, 360 F. App'x 202, 203 (2d Cir. 2010)

(citing Burda Media, Inc. v. Viertel, 417 F.3d 292, 298 (2d Cir.
2005)).
overcome
improper.

Mere
a

conclusory

defendant’s

statements
sworn

are

affidavit

not
that

sufficient

to

service

was

Darden v. DaimlerChrysler N. Am. Holding Corp., 191

F. Supp. 2d 382, 387 (S.D.N.Y. 2002).

Instead, a plaintiff must

establish a prima facie case of proper service through specific
factual allegations and other supporting materials.

Sikhs for

Justice v. Nath, 850 F. Supp. 2d 435, 440 (S.D.N.Y. 2012).

In

resolving the motion to dismiss, “a Court must look to matters
outside the complaint to determine whether it has jurisdiction.”
Id. (quoting Mende v. Milestone Tech., Inc., 269 F. Supp. 2d
246, 251 (S.D.N.Y. 2003)).

8

Rule 4 of the Federal Rules of Civil Procedure sets out
the requirements for service of process upon individuals and
corporations.

An individual may be served by:

(1) following state law for serving a summons in an
action brought in courts of general jurisdiction in
the state where the district court is located or where
service is made; or
(2) doing any of the following:
(A) delivering a copy of the summons and of
the complaint to the individual personally;
(B)
leaving
a
copy
of
each
at
the
individual's dwelling or usual place of
abode with someone of suitable age and
discretion who resides there; or
(C) delivering a copy of each to an agent
authorized by appointment or by law to
receive service of process.
Fed. R. Civ. P. 4(e).

Corporations within the United States

must be served either:
(A) in the manner prescribed
serving an individual; or

by

Rule

4(e)(1)

for

(B) by delivering a copy of the summons and of the
complaint to an officer, a managing or general agent,
or any other agent authorized by appointment or by law
to receive service of process and -- if the agent is
one authorized by statute and the statute so requires
-- by also mailing a copy of each to the defendant. .
. .
Fed. R. Civ. P. 4(h)(1).
made

by

However,

the

server’s

“[f]ailure

Rule 4 requires proof of service to be

affidavit.

to

prove

Fed.

service

9

R.
does

Civ.
not

P.

4(l)(1).

affect

the

validity

of

service”

and

service to be amended.”

“[t]he

court

may

permit

proof

of

Fed. R. Civ. P. 4(l)(3).

Finally, even if service of process is found to have been
insufficient, dismissal is not mandatory but rather within the
court’s discretion.

Rankel v. Town of Somers, 999 F. Supp. 2d

527, 536 (S.D.N.Y. 2014); see Darden, 191 F. Supp. 2d at 387–88
(concluding service of process was not effected but permitting
the

filing

of

an

amended

complaint

and

a

second

attempt

at

service).
2.

Analysis of Service of Process

Although

Mr.

Halley

denies

being

served

in

his

first

affidavit filed in connection with his motion, see Aff. of Imani
Halley for Mot. to Dismiss ¶ 12 (“First Imani Aff.”), this claim
is notably absent from plaintiffs’ two legal memoranda and Mr.
Halley’s

subsequent

affidavit,

defendants’ reply papers.

submitted

in

support

of

Instead, defendants argue service was

improper because the affidavits of service sworn by plaintiff’s
process server contain an incorrect physical description of Mr.
Halley.
Halley

Specifically, the affidavits of service describe Mr.
as

stand[ing]

a

“black

male,

approximately

approximately

170

pounds

5

approximately
feet

with

9

black

50

inches
hair.”

years
tall,
ECF

of

age,

weigh[ing]
Nos.

3-7.

Defendants urge that, instead, “Mr. Halley appears as a dark
brown male, approximately 25 years of age, standing five feet 11

10

inches tall, and weighing approximately 125 pounds with black
hair.”
alleged

Defs.’ Mem. 2–3 (emphasis added).
discrepancy,

defendants

cite

In support of the

to

almost

identical

sentences appearing in affidavits of Mr. and Mrs. Halley.
First Imani Aff. ¶ 11 (“My complexion is dark brown.

See

Due to my

physical appearance and disposition, I give off the impression
that

I

am

25

years

old,

five

feet

11

inches

tall,

and

an

approximate weight of 125 pounds.”); Aff. of Yolanda Halley for
Mot.

to

Dismiss

husband.

(“Yolanda

Aff.”)

¶

5

(“Imani

Halley

is

my

Due to his physical appearance and disposition, he

gives off the impression that he is 25 years old, five feet 11
inches

tall,

and

an

approximate

weight

of

125

pounds.”).

Curiously, or perhaps not, defendants never allege Mr. Halley’s
true

age,

height,

or

weight.4

But

based

on

the

allegedly

inaccurate physical description, defendants contend, Mr. Halley
and the other three defendants (whom plaintiffs say they served
through Mr. Halley) were improperly served.
In

response,

plaintiffs

defendant was in fact served.

present

evidence

that

each

They submit the declaration of

the process server John Gonzalez, which recounts in detail his
service of copies of the summons and complaint upon Mr. Halley

4

Plaintiffs submit a magazine article indicating that Mr. Halley’s true
age is approximately 40, see Merchant Decl. Ex. E, and assert that
defendants’ statements are intentionally misleading.
Mr. Halley responds
that “as is apparent from its plaining meaning, my affidavit never made any
representation about my real age.” Second Imani Aff. ¶ 92.

11

in person at his apartment in Los Angeles at approximately 11:53
a.m. on December 13, 2014.

See Decl. of John Gonzalez ¶¶ 2–8

(“Gonzales Decl.”), ECF No. 27.
Gonzalez’s

contemporaneous

account.5

See

Gonzalez

work

Decl.

Plaintiffs additionally submit
logs,
Ex.

C.

which

corroborate

Finally,

his

plaintiffs’

counsel sent photographs of Mr. Halley to Gonzalez, and Gonzalez
confirmed that this was the man he had served.
Decl. ¶ 9 & Ex. B.

See Gonzalez

Defendants make no serious efforts to

dispute these allegations, which are more than sufficient to
meet plaintiffs’ burden.

See Old Republic Ins. Co. V. Pac. Fin.

Servs. of Am., Inc., 301 F.3d 54, 57 (2d Cir. 2002) (“In New
York,

a

process

server’s

affidavit

of

service

establishes

a

prima facie case of the account of the method of service, and
thus, in the absence of contrary facts, we presume that Pacific
was properly served with the complaint.”).
Moreover, defendants offer no explanation of how Mr. Halley
learned about this suit and hired a lawyer to oppose it.
more

glaringly,

clients’
Court

previous

that

Mr.

in

the

course

defaults,
and

Mrs.

of

defense
Halley

5

moving
counsel
received

to

set

aside

admitted
the

to

summons

Even
his
this
and

Spaces in Gonzalez’s work orders were filled to describe Mr. Halley as
a black male of age “40+,” height of “5-11,” and weight of “150,” with brown
eyes and black hair. Gonzalez Decl. Ex. C.

12

complaint

in

this

case.6

Plaintiffs

have

clearly

met

their

burden to show Mr. Halley was in fact served, and we do not
credit Mr. Halley’s conclusory statement to the contrary.
We

also

reject

defendants’

claim

that

the

service

was

ineffective because the affidavits of service contain a physical
description

of

Mr.

Halley

“impression” he “gives off.”

that

is

different

from

the

While a youthful appearance may be

enviable, even presuming that the affidavits of service contain
objectively inaccurate statements of his age, height, and weight
–- an inference which Mr. and Mrs. Halley’s hedged language does
not fully permit -- defendants’ argument is advanced without the
benefit of any support for the notion that a technical defect in
proof of service vitiates service of process.
in fact true.
service

does

The opposite is

See Fed. R. Civ. P. 4(l)(3) (“Failure to prove
not

affect

the

validity

of

service.”);

Dow

v.

Jones, 232 F. Supp. 2d 491, 497 (D. Md. 2002) (defendant who
claimed

affidavit

of

service

contains

inaccurate

physical

description but had actual notice of action not entitled to
quash service of process).

6

“[N]either Mr. Halley nor Mrs. Halley is an attorney, so neither
immediately understood the legal ramifications of the Summons and Complaint.
In fact, Mr. and Mrs. Halley are restaurant managers. Moreover, Mr. and Mrs.
Halley did not believe that taking any action with regard to the Summons and
Complaint was necessary because Mr. and Mrs. Halley had every intention of
resolving the alleged issues asserted by Plaintiffs in their Complaint.”
Mem. of Law to Set Aside Entry of Default at 5, ECF No. 13.

13

Having concluded plaintiffs have made a prima facie case
that Mr. Halley was properly served, it is clear they have made
the

same

Service
Halley

showing

was

with

proper

denies

that

at

the

on

being

Yolanda Aff. ¶ 9.
same

respect
Mrs.

served

to

the

remaining

Halley.

Like

with

summons

the

her

defendants.

husband,
and

Mrs.

complaint.

However, plaintiff’s process server states
time

he

personally

served

Mr.

Halley,

Mr.

Halley accepted a copy of the summons and complaint on behalf of
his wife.

Gonzalez Decl. ¶ 4.

It is undisputed that the

Halleys live together, and that Mr. Halley is an adult.
First Imani Aff. ¶¶ 3, 5.

See

Plaintiffs have therefore met the

requirements of Rule 4(e)(2)(B).
Finally,
proper.

service

upon

the

two

corporate

defendants

was

Plaintiffs allege Imani Halley owns and controls both

Philippe West LLC and Imani Group, and that he is the designated
agent for service of process for both entities.

Pls.’ Mem. 10.

Defendants do not dispute that Mr. Halley serves in these roles.
The sworn statement from plaintiffs’ process server -- that he
delivered to Mr. Halley, and Halley accepted, service on behalf
of both entities, Gonzalez Decl. ¶ 3 -- is sufficient to make
out a prima facie case of proper service.
4(h)(1)(B);

Cal

Civ.

Proc.

Code

311(a)(1).

14

§

See Fed. R. Civ. P.

416.10;

N.Y.

C.P.L.R.

§

B.

Personal Jurisdiction
Second,

defendants

move

to

dismiss

pursuant

to

Rule

12(b)(2) for lack of personal jurisdiction based solely on the
same insufficient service of process argument rejected above.
Defs.’

Mem.

7.

Accordingly,

the

challenge

to

personal

jurisdiction is likewise rejected.7
C.

Venue
Third, defendants move to dismiss pursuant to Federal Rule

of Civil Procedure 12(b)(3), contending that venue is improper
in

this

district.

selection

clause

While

in

the

defendants

West

acknowledge

Hollywood

Licensing

the

forum

Agreement,

which selects this district as the venue for any action brought
by

the

clause

licensor,
is

defendants

inapplicable

and

argue
that

that

venue

the

does

forum
not

lie

selection
in

this

district pursuant to 28 U.S.C. § 1391.8

7

We note additionally that plaintiffs allege two unrefuted theories of
personal jurisdiction.
First, plaintiffs say personal jurisdiction lies
under New York’s long-arm statute, specifically N.Y. C.P.L.R §§ 302(a)(1) and
(3), because defendants’ allegedly tortious conduct damaged plaintiffs’
intellectual property in New York.
See Compl. ¶ 14; Pls.’ Mem. 15–17.
Second, the contractually agreed forum selection clause, which we discuss in
detail below, also contains a provision consenting to personal jurisdiction
in this Court. See Compl. ¶ 14; Pls.’ Mem. 13–15. “Parties can consent to
personal
jurisdiction
through
forum-selection
clauses
in
contractual
agreements.”
D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 103 (2d Cir.
2006).
8

Defendants do not analyze the issue of whether, upon a finding of
improper venue, this Court should dismiss the action or transfer it pursuant
to 28 U.S.C. §§ 1404(a) or 1406(a). Instead, they simply ask for dismissal
of all claims.
We do not reach this issue because we conclude plaintiffs
have met their burden to demonstrate that the parties are bound by the forum
selection clause.

15

1. Standard of Review
When
pursuant

a

motion

to

Rule

pleading venue.

to

dismiss

12(b)(3),

for

the

“improper

plaintiff

venue”

has

the

is

made

burden

of

Person v. Google Inc., 456 F. Supp. 2d 488, 493

(S.D.N.Y. 2006).

However, “the Court accepts facts alleged in

the complaint as true and draws all reasonable inferences in
plaintiff's favor.”
Therapeutic

Servs.

(S.D.N.Y. 2005)).
make

a

Id. (brackets removed) (quoting Caremark

prima

v.

Leavitt,

405

F.

Supp.

2d

454,

457

To defeat the motion, plaintiffs need only

facie

showing

of

venue.

Gulf

Ins.

Co.

v.

Glasbrenner, 417 F.3d 353, 355 (2d Cir. 2005); New Moon Shipping
Co. v. MAN B & W Diesel AG, 121 F.3d 24, 29 (2d Cir. 1997).
2. Governing Law
Forum selection clauses have long enjoyed a presumption of
enforceability.

See M/S Bremen v. Zapata Off-Shore Co., 407

U.S. 1, 15 (1972) (“the forum clause should control absent a
strong

showing

that

it

should

be

set

aside”);

Bense

v.

Interstate Battery Sys. of Am., Inc., 683 F.2d 718, 721–22 (2d
Cir.

1982)

clauses

(highlighting

post

Bremen).

deference
Courts

use

shown
a

to

forum

four-part

selection

analysis

to

determine the enforceability of a forum selection clause in the
face of a motion to dismiss:
The first inquiry is whether the clause was reasonably
communicated to the party resisting enforcement.
The
second step requires us to classify the clause as

16

mandatory or permissive, i.e., to decide whether the
parties are required to bring any dispute to the
designated forum or simply permitted to do so. Part
three asks whether the claims and parties involved in
the suit are subject to the forum selection clause.
If the forum clause was communicated to the resisting
party, has mandatory force and covers the claims and
parties involved in the dispute, it is presumptively
enforceable.
The fourth, and final, step is to
ascertain whether the resisting party has rebutted the
presumption of enforceability by making a sufficiently
strong showing that enforcement would be unreasonable
or unjust, or that the clause was invalid for such
reasons as fraud or overreaching.
Phillips v. Audio Active Ltd., 494 F.3d 378, 383-84 (2d Cir.
2007) (emphasis in original) (internal citations and quotation
marks omitted).

The parties agree that the four-prong Phillips

framework applies.
3.

Analysis of the Forum Selection Clause
a.

The
Forum
Selection
Communicated

Clause

was

Reasonably

The forum selection clause was reasonably communicated to
Mr.

Halley.

Licensing
Philippe

The

Agreement,
West

LLC

provision
which
after

appears

Mr.

in

Halley

purchasing

it

the

West

signed
in

on

April

Hollywood
behalf
of

of

2010.

Defendants’ contention that the forum selection clause was not
reasonably communicated to Mr. Halley because he neither read it
nor was informed of it when he signed the agreement, Defs.’ Mem.
9–10, is meritless.

It is basic contract law that a person who

signs a contract is presumed to know its terms and consents to

17

be bound, and that failure to read a contract is no excuse.

See

Pimpinello v. Swift & Co., 253 N.Y. 159, 162–63, 170 N.E. 530
(1930) (“If the signer could read the instrument, not to have
read it was gross negligence; if he could not read it, not to
procure it to be read was equally negligent; in either case the
writing binds him.”).
selection clauses.

This principle applies equally to forum

See Weingrad v. Telepathy, Inc., No. 05 Civ.

2024 (MBM), 2005 WL 2990645, at *4 (S.D.N.Y. Nov. 7, 2005); Sun
Forest Corp. v. Shvili, 152 F. Supp. 2d 367, 382 (S.D.N.Y. 2001)
(“[A]

signatory

to

a

contract

is

presumed

to

have

read,

understood and agreed to be bound by all terms, including the
forum selection clauses, in the documents he or she signed.”
(internal quotation marks omitted)).
Defendants’ further excuses -- that Mr. Halley “is not a
sophisticated businessman” and was not represented by counsel
when signing the West Hollywood Licensing agreement, Defs.’ Mem.
10

--

are

also

unavailing.

First,

Mr.

Halley’s

alleged

unsophistication is belied by the extensive business experience
he claims to have in the entertainment industry, including that
he

owns

and

controls

multiple

companies

and

manages

“approximately 30 employees and . . . the day-to-day operations
of all of [his] companies.”

First Manny Aff. ¶¶ 6–10.

Second,

plaintiffs have made a prima facie showing (which defendants
dispute) that Mr. Halley was represented in his negotiation of

18

the West Hollywood Licensing Agreement by a business management
firm called Larkin Business Management, and an attorney named
Alan Hall.

See Merchant Decl. ¶¶ 11–12 & Ex. D.

For these

reasons, we conclude that the forum selection clause in the West
Hollywood Licensing Agreement was reasonably communicated to Mr.
Halley, and, therefore, the business entities he controls.
b.
The

The Forum Selection Clause is Mandatory

West

Hollywood

Licensing

Agreement

states

that

“any

action . . . shall be brought in either the Supreme Court of the
State of New York, County of New York or in the United States
District Court for the Southern District of New York.” (emphasis
added).

The parties agree that this language is mandatory, not

permissive.

Defs.’ Mem. 10; Pls.’ Mem. 21.

c.

The Instant Claims and Parties are Subject to the
Forum Selection Clause

Defendants correctly note that many of the parties to this
case -- the defendants Mr. Halley, Mrs. Halley, and Imani Group,
as well as both plaintiffs -- are not signatories to the West
Hollywood Licensing Agreement between Dave 60 and Philippe West
LLC.

Additionally, defendants claim that the license, by its

terms, terminated upon the closing of Philippe West Hollywood.
Therefore,

defendants

applies

to

neither

Beverly

Hills

--

conclude,

the

which

the

instant
opened

19

forum

claims

after

selection

related

Philippe

to

West

clause
Philippe

Hollywood

closed -- nor any of the parties that did not sign the West
Hollywood Licensing Agreement.

Defs.’ Mem. 10–11.

However, defendants’ position does not withstand a closer
examination of the law and the facts alleged.

First, the forum

selection clause remains in force pursuant to the West Hollywood
Licensing

Agreement’s

survival

clause.

Second,

the

record

submitted to us indicates that there was an agreement relating
to

Philippe

Beverly

Hills

that

reincorporated

the

terms

and

conditions of the previous license. Prior to opening Philippe
Beverly

Hills,

permission

from

Mr.

and

Abraham

Mrs.

Halley

Merchant,

the

sought

and

President

received

of

MHI

(the

corporation that was then operating and managing Philippe NYC)
to

use

Philippe

restaurant.

Mr.

NYC’s

intellectual

Halley

sought

to

property

transfer

in

the

the

license

new
he

obtained in the West Hollywood License Agreement to his new
restaurant, but that proposal was rejected because Philippe West
Hollywood had closed and the license had expired.
Mr.

Halley

negotiated

a

new

license

to

the

Therefore,

same

effect.

Specifically, on October 30, 2013, MHI and Mr. Halley reached an
oral

agreement

as

to

the

economic

terms

of

the

license.

Merchant asked Halley to “confirm that we are in agreement on
the

terms

below”

including

conditions remain the same.”

that

“[a]ll

other

terms

Halley wrote back and confirmed.

20

and

By this agreement, Merchant and Halley reincorporated their
previous licensing agreement: allowing Halley to once again use
Philippe NYC’s intellectual property, in a different restaurant
location but under the same terms and conditions.

These terms

and conditions included the forum selection clause.

Thus Imani

Halley, negotiating on behalf of Imani Group, subjected himself
to the same forum selection clause with respect to Philippe
Beverly Hills.

Other documents support this conclusion.

For

example, the proposed written licensing agreement for Philippe
Beverly Hills (which was never executed) contained non-economic
terms

that

Licensing
clause.

appear

nearly

Agreement,

identical

including

an

to

the

identical

West

Hollywood

forum

selection

See Compl. ¶ 48; Merchant Decl. Ex. C. § 19.02.

Moreover, the fact that a person did not sign the contract
containing a forum selection clause “is insufficient, standing
alone, to preclude enforcement of [the] forum selection clause.”
Aguas Lenders Recovery Grp. v. Suez, S.A., 585 F.3d 696, 701 (2d
Cir. 2009); see Weingrad, 2005 WL 2990645, at *5 (“[I]t is well
established that a range of transaction participants, parties
and non-parties, should benefit from and be subject to forum
selection clauses.”) (internal quotation marks omitted).

“‘In

order to bind a non-party to a forum selection clause, the party
must be “closely related” to the dispute such that it becomes
“foreseeable”

that

it

will

be

21

bound.’”

Weingrad,

2005

WL

2990645, at *5 (quoting Nanopierce Techs., Inc. v. Southridge
Capital Mgmt. LLC, No. 02 Civ. 0767 (LBS), 2003 WL 22882137, at
*5 (S.D.N.Y. Dec. 4, 2003)).
Thus, forum selection clauses have been enforced against
non-signatories
corporations
Recurrent

in

that

various
are

Capital

contexts,

successors

Bridge

Fund

in

I,

including:
interest

LLC

v.

ISR

to

non-signatory
signatories,

Sys.

&

Sensors

Corp., 875 F. Supp. 2d 297, 306 (S.D.N.Y. 2012); non-signatory
individuals
corporation,

who

are

id.

officers

at

or

307;

principals

non-signatories

of

a

that

signatory
“directly

benefit[]” from the contract containing the provision, LaRoss
Partners, LLC v. Contact 911 Inc., 874 F. Supp. 2d 147, 155–56
(E.D.N.Y. 2012); and non-signatories with interests “directly
related to, if not predicated upon” those of the signatories,
Lipcon v. Underwriters at Lloyd's, London, 148 F.3d 1285, 1299
(11th

Cir.

Recurrent

1998)

Capital,

(internal
875

F.

quotation
Supp.

2d

marks
at

omitted).

306–08

&

nn.

See
73–84

(collecting cases).
To the extent that certain parties in this action were not
signatories to the West Hollywood Licensing Agreement or parties
the Halley-Merchant agreement (formed between Imani Group and
Philippe NYC) for the interim Beverly Hills license, they are
“closely related” such that it is foreseeable they will be bound
to the forum selection clause.

22

Philippe NYC, for example, is

the successor in interest to Dave 60, the former sole owner and
current co-owner of Philippe Restaurant.

Similarly, plaintiffs

credibly allege that Mr. Halley (in his individual capacity) and
Mrs. Halley are the principals who own and control Imani Group.
We

therefore

conclude

that

plaintiffs

have

made

the

required prima facie showing that the instant parties and claims
are

subject

to

the

forum

selection

clause.

When

the

same

principal strikes a second agreement with the same counterparty
for the same intellectual property under the same terms and
conditions -- albeit on behalf of a different business entity -that principal and business entity are fairly and foreseeably
subject to the same forum selection provision present in the
prior agreement.
d.

Enforcement of the Forum Selection
Neither Unreasonable nor Unjust

Clause

is

Having satisfied the first three prongs of the test in
Phillips, the plaintiffs enjoy a presumption that their forum
selection clause is enforceable.

In this context, the forum

provision applies unless:
(1) its incorporation was the result of fraud or
overreaching; (2) the law to be applied in the
selected
forum
is
fundamentally
unfair;
(3)
enforcement contravenes a strong public policy of the
forum state; or (4) trial in the selected forum will
be so difficult and inconvenient that the plaintiff
effectively will be deprived of his day in court.

23

Phillips, 494 F.3d at 392.

Defendants argue that Mr. and Mrs.

Halley’s financial and health conditions would make trial in New
York so difficult and inconvenient that they would effectively
be deprived of their day in court.

Defs.’ Mem. 11–13.

To make

this showing, a party must demonstrate that litigation in the
selected

forum

will

nearly impossible.

be

not

merely

difficult

or

costly,

but

Exp.-Imp. Bank of U.S. v. Hi-Films S.A. de

C.V., No. 09 Civ. 3573 (PGG), 2010 WL 3743826, at *9 (S.D.N.Y.
Sept. 24, 2010).
The time and cost of travel to New York -- including missed
time at work -- is surely significant, particularly for parties
“stretched to their financial limits.”

Defs. Mem. 11.

However,

such hardships, without more, have been found insufficient to
escape the presumption of enforceability.

See Phillips, 494

F.3d at 393 (enforcing forum selection clause requiring U.S.
citizen to litigate in England, in part because plaintiff “has
not declared any of his claimed hardships are other than the
obvious

concomitants

of

litigation

abroad.

.

.

or

were

not

foreseeable when he agreed to litigate in England.”); Effron v.
Sun Line Cruises, Inc., 67 F.3d 7, 11 (2d Cir. 1995) (“Although
appellee would prefer the relative comfort of a court in New
York or Florida, she agreed to have her claim adjudicated in
Greece.

This agreement should not be negated unilaterally by

plaintiff's

conclusory

assertions

24

that

she

cannot

afford

to

travel to Greece, that she would be afraid to stay at a strange
city,

that

Unsupported

she

does

statements

not
such

know
as

any

these

Greek
do

not

lawyers,
meet

the

etc.
heavy

burden of proof required to set aside a forum-selection clause
on

the

ground

of

inconvenience.”

(internal

quotation

marks

omitted)); Zuckerman ex rel. Zuckerman v. Camp Laurel, No. 08
Civ. 3913 (NRB), 2008 WL 4386837, at *2 (S.D.N.Y. Sept. 24,
2008) (“Although a trial in Maine would be more difficult for
plaintiffs [who reside in New York City], it certainly would not
effectively deprive them of their day in court.”).

We also

empathize with Mrs. Halley’s medical condition, which defendants
say requires constant supervision from her husband.9

It appears,

however, that these difficulties exist regardless of whether the
case is litigated in California or New York, and defendants
advance no argument as to why -- other than the time and cost of
travel

to

effectively

New

York

deprive

their day in court.

for
the

trial
Halleys

-and

a

New
their

York

forum

business

would

entities

See Carnival Cruise Lines, Inc. v. Shute,

499 U.S. 585, 594–95 (1991).

9

“Mrs. Halley suffers from epilepsy . . . .
It is likely that Mrs.
Halley will experience a seizure because lawsuits are stressful and she will
be forced to travel across the country while medically unstable. . . . Mrs.
Halley cannot be left alone or travel by herself because of her medical
condition. . . . Mr. Halley is the only person who can assist her because he
is always with her and knows how to properly care for her in the event of a
seizure.” Defs.’ Mem. 13.

25

Significantly,
accommodate

the

electronically,
counsel,
24.

and

and

mitigating
however,

Halleys,

will

is

the

have

expressed

includlng

by

burden

to
of

willingness

considering
litigation

to

these

any
ln

New

New York

Pls.'

commitments

other

Mem.
golng

suggestion

York.

to

discovery

defendants'

in California.

hold plaintiffs

open

defendants

depositions

a

exchanging

interfacing prlmarily with

conducting

The Court

forward

plaintiffs

for

Ultimately,

are not entltled to avoid litigating in New

York on the basis of the grounds asserted.

III. CONCLUSION
For
IS

no

the

basis

process,

foregoing
for

personal

reasons,

defendants'

the

motion

jurisdiction,

defendants' motion to dismiss,

and

ECF No.

Court
to

concludes

dismiss

venue
20,

on

grounds.
IS

that

there

service

of

Therefore

denied.

SO ORDERED.

Dated:

New York, New York
MarchV, 2016

LrL~cl
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE

26