Khankhanian v. Khanian

Filing 22

OPINION & ORDER re: 11 FIRST MOTION to Dismiss for Lack of Jurisdiction FIRST MOTION to Dismiss for Failure to State a Claim and Forum Non Conveniens filed by Soheil Khanian. For the reasons stated above, it is hereby ORDERE D that this case be transferred to the United States District Court for the Central District of California. The Clerk of the Court is respectfully directed to TRANSFER this case accordingly and remove the case from the Court's docket. Defendant's motion to dismiss is DENIED without prejudice with leave to re-file in the Central District of California. SO ORDERED. (Signed by Judge John F. Keenan on 4/6/2017) (anc)

Case 1:09-md-02013-PAC Document 57

Filed 09/30/10 Page 1 of 45
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: 04/06/2017

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------ X
BAHRAM KHANKHANIAN,
UNITED STATES DISTRICT COURT :
:
SOUTHERN DISTRICT OF NEW YORK
Plaintiff,
:
-----------------------------------------------------------x
In re FANNIE MAE 2008 SECURITIES :
: No. 16 08 Civ. 7831 (PAC)
Civ. 8396 (JFK)
-against:
LITIGATION
:
09 MD & ORDER
OPINION 2013 (PAC)
:
:
SOHEIL KHANIAN,
:
:
OPINION & ORDER
:
-----------------------------------------------------------x
Defendant.
:
------------------------------ X
APPEARANCES
HONORABLE PAUL A. CROTTY, United States District Judge:
FOR PLAINTIFF BAHRAM KHANKHANIAN:
Jeffrey Lichtstein, Esq. BACKGROUND1
COHEN, TAUBER, SPIEVACK & WAGNER, P.C.

The early years of this decade saw a boom in home financing which was fueled, among
FOR DEFENDANT SOHEIL KHANIAN:
Stuart Sanders, Esq.
other things, by low interest rates and lax credit conditions. New lending instruments, such as
KAZLOW & KAZLOW
subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans)
JOHN F. KEENAN, United States District Judge:
kept the boom going. Borrowers played a role too; they took on unmanageable risks on the
Before the Court is Defendant Soheil Khanian’s
assumption that the market would continue to rise and that refinancing options would always be
(“Defendant”) motion to dismiss Plaintiff Bahram Khankhanian’s
available in the future. Lending discipline was lacking in the system. Mortgage
(“Plaintiff”) complaint for lack of personal jurisdiction, originators did
not to state claims for an Rather than carry the rising risk on their books, the
failurehold these high-risk mortgage loans.accounting and conversion, and
originators sold their of into the secondary mortgage market, often as securitized
under the doctrine loansforum non conveniens. For the reasons packages
that known as mortgage-backed securities (“MBSs”). MBS markets grew almost its
follow, Defendant’s motion to dismiss is denied in exponentially.
entirety. But thenClerk of bubbleCourt In 2006, the demand for housing dropped abruptly
The the housing the burst. is respectfully directed to
and home prices began to the Central District of California.
transfer this case to fall. In light of the changing housing market, banks modified their
lending practices and became unwilling to refinance home mortgages without refinancing.
I.
Background
Unless otherwise noted, the following facts are drawn from
1

Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,

the complaint2009. Forthe affidavits all allegations in the Amended Complaint are taken as true.
and purposes of this Motion, and declarations submitted by
dated June 22,
1
1

both parties in relation to this motion.

Plaintiff is a

resident of Roslyn Heights, New York who at one time owned a
business in Bronx, New York. (Compl. ¶ 1; Khankhanian Decl. ¶
7.)

Defendant, Plaintiff’s cousin, is a resident of Los

Angeles, California. (Compl. ¶ 2.)
Sometime in 2003, Defendant called Plaintiff to ask
Plaintiff to join him in purchasing a parcel of commercial real
property located at 4601 S. Broadway, Los Angeles, CA 90037 (the
“Premises”). (Id. ¶ 5.)

Defendant subsequently made multiple

trips to the Plaintiff’s Bronx business in 2003 to persuade him
to invest in the purchase of the Premises. (Id. ¶ 6.)
After finalizing their agreement, on January 16, 2004,
Plaintiff and Defendant purchased the Premises and took title in
their own names as joint tenants and equal partners. (Id. ¶ 7.)
Plaintiff contributed approximately $250,000 to the purchase
price, Defendant contributed “a lesser amount” in consideration
for finding the Premises and for performing property manager
duties thereafter, and the remaining funds came from a mortgage
loan of $537,000. (Id. ¶ 8.)
On March 22, 2004, Defendant formed Golden Star, LLC
(“Golden Star”) under California law, and the parties became
equal members in Golden Star. (Id. ¶¶ 9–10.)

Defendant served

as Golden Star’s manager and exercised sole control over its
books and records. (Id. ¶¶ 10, 12.)
2

The parties transferred

ownership of the Premises to Golden Star on July 9, 2004, and
Golden Star owned the Premises until it sold the Premises to
Central, LLC on November 21, 2014. (Id. ¶ 11.)

During this

time, Defendant continued to communicate with Plaintiff about
the Premises via telephone calls, text messages, and occasional
in-person meetings at Plaintiff’s place of business. (Id. ¶ 17.)
On November 21, 2014, Golden Star sold the Premises for
$1.75 million, resulting in net proceeds of $1,123,320.69 after
payment of the mortgage balance and other costs and fees. (Id. ¶
18.)

The sale of the Premises also ended Golden Star’s

business, which entitled Plaintiff to a distribution of half its
assets, totaling $561,660.35. (Id. ¶¶ 19, 21.)
On December 17, 2015, Defendant wired $470,000 to the
Plaintiff’s TD Bank account, leaving a $91,660.35 shortfall.
(Id. ¶ 22.)

After repeated requests for an accounting of Golden

Star’s assets, Defendant sent Golden Star’s 2014 tax return.
(Id. ¶¶ 23–24.)

The 2014 tax return provided more questions

than it did answers.

First, it listed the gross sales price of

the Premises as $1,067,500 ($55,820.69 less than the
$1,123,320.69 actual net sales proceeds). (Id. ¶ 25.)

Second,

it listed Golden Star’s remaining assets to be $1,028,535 in
cash, which would have made Plaintiff’s share $514,267.50
($44,267.50 greater than the $470,000 distribution he received).
(Id. ¶ 26.)

Third, it listed Plaintiff’s ending capital account
3

for 2014 as $526,082 ($56,000 greater than the $470,000
distribution and $35,578.85 less than Plaintiff’s share of the
net sales proceeds). (Id. ¶ 29.) Finally, it listed $49,486 in
unexplained “Legal and other professional fees” and an
unexplained $23,949 distribution to Defendant. (Id. ¶¶ 27, 30.)
On May 5, 2016, Plaintiff’s counsel requested a detailed
accounting of monies received and disbursed by Golden Star since
its creation. (Id. ¶ 31.)

To date, Defendant has provided only

Golden Star’s tax returns for 2004-2008 and 2010-2014. (Id.)
Plaintiff seeks to recover against Defendant for breach of
fiduciary duty and conversion of the $91,660.35 shortfall, and
demands a full accounting of the revenues and assets of Golden
Star. (Id. ¶¶ 35–49.)

On February 1, 2017, Defendant moved to

dismiss Plaintiff’s complaint for lack of personal jurisdiction,
failure to state claims for an accounting and conversion, and
under the doctrine of forum non conveniens. (Def.’s Mem. of L.
in Support of Mot. to Dismiss at 1–2.)
II.
A.

Discussion

Lack of Personal Jurisdiction
1.

Legal Standard

The showing a plaintiff must make to defeat a motion to
dismiss for lack of personal jurisdiction varies depending on
the procedural posture of the litigation. Dorchester Fin. Sec.,
Inv. v. Banco BRJ, S.A., 722 F.3d 81, 84 (2d Cir. 2013).
4

When,

as here, the motion is to be decided on affidavits, a plaintiff
only needs to make a prima facie showing of jurisdiction, and
the court construes the jurisdictional facts in favor of the
plaintiff. S. New Eng. Tel. Co. v. Global NAPs, Inc., 624 F.3d
123, 138 (2d Cir. 2010).
In a diversity case before this Court, personal
jurisdiction is determined by New York law. DiStefano v. Carozzi
N. Am., 286 F.3d 81, 84 (2d Cir. 2001).

Under New York law, a

court may exercise general jurisdiction over a defendant under
N.Y. C.P.L.R. § 301 or specific jurisdiction under New York’s
long arm statute, N.Y. C.P.L.R. § 302. New Asia Enters. Ltd. v.
Fabrique, Ltd., No. 13 CIV. 5271 (JFK), 2014 WL 3950901, at *2
(S.D.N.Y. Aug. 13, 2014).

Plaintiff asserts that this Court has

personal jurisdiction over Defendant under § 302(a)(1). (Pl.’s
Mem. of L. in Opp. to Def.’s Mot. to Dismiss at 5.)
Under § 302(a)(1), a non-domiciliary may be subject to
specific jurisdiction when (1) the non-domiciliary transacts any
business in New York and (2) the cause of action arises from a
New York business transaction. See Licci ex rel. Licci v.
Lebanese Canadian Bank, SAL, 732 F.3d 161, 168 (2d Cir. 2013).
Whether a company transacts business in New York is evaluated by
the totality of the circumstances, with relevant factors
including “(i) whether the defendant has an on-going contractual
relationship with a New York corporation; [and] (ii) whether the
5

contract was negotiated or executed in New York and whether,
after executing a contract with a New York business, the
defendant has visited New York for the purpose of meeting with
parties to the contract regarding the relationship.” Sunward
Elecs., Inc. v. McDonald, 362 F.3d 17, 22 (2d Cir. 2004)
(internal quotations marks omitted).

A plaintiff’s claim arises

from a business transaction if “there is an articulable nexus,
or a substantial relationship, between the claim asserted and
the actions that occurred in New York.” Best Van Lines, Inc. v.
Walker, 490 F.3d 239, 246 (2d Cir. 2007) (internal quotation
marks omitted).
The Court must also determine that the exercise of
jurisdiction is consistent with due process. See Licci, 732 F.3d
at 168.

The due process inquiry has two parts:

(1) whether the

defendant has “certain minimum contacts” with the forum and (2)
whether the exercise of jurisdiction would be reasonable under
the circumstances. In re Terrorist Attacks on Sept. 11, 2001,
714 F.3d 659, 673 (2d Cir. 2013).
2.

Analysis

Plaintiff asserts that “in or about 2003,” Defendant made
multiple trips to Plaintiff’s place of business in the Bronx to
“persuade [P]laintiff to invest money in the purchase of the
Premises.” (Compl. ¶ 6.)

Plaintiff further claims that the

agreement to purchase the Premises “was reached at [his] store
6

in the Bronx” and that certain terms were finalized at
Plaintiff’s place of business including (1) Plaintiff and
Defendant would be equal partners, (2) Plaintiff would
contribute $250,000 towards the price and Defendant would pay a
lesser amount, and (3) Plaintiff and Defendant would take out a
mortgage to pay the balance of the purchase price. (Khankhanian
Decl. ¶ 11.)

Finally, after the purchase of the Premises in

2004, Defendant continued to communicate with Plaintiff about
the Premises and Golden Star via telephone calls and several inperson meetings at Plaintiff’s place of business. (Id. ¶ 14.)
Defendant denies ever discussing or transacting business
related to the Premises in New York and claims he has not
traveled to New York since 2003, at the latest. (Khanian Aff. ¶
14.)

Because at this stage, the Court must view the facts in

the light most favorable to Plaintiff, the factual disputes over
Defendant’s business activities in New York are resolved in
Plaintiff’s favor. See Dorchester Fin. Sec., 722 F.3d at 85–86.
Accordingly, the Court concludes that Plaintiff has
satisfied his jurisdictional burden.

The “overriding criterion

necessary to establish a transaction of business is some act by
which the defendant purposefully avails itself of the privilege
of conducting activities within New York . . . thereby invoking
the benefits and protections of its laws.” Licci ex rel. Licci
v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 61 (2d Cir. 2012)
7

(internal quotation marks omitted).

Purposeful availment occurs

when “the defendant projects itself into New York for the
purpose of creating a business relationship.” Madison Capital
Markets, LLC v. Starneth Europe B.V., No. 15 CIV. 7213 (RWS),
2016 WL 4484251, at *9 (S.D.N.Y. Aug. 23, 2016).

Defendant

purposefully availed himself of the privilege of doing business
in New York when he traveled to Plaintiff’s place of business to
persuade him to invest in the Premises.

Even after the purchase

of the Premises, Defendant continued to communicate with
Plaintiff in New York through text messages and phone calls, and
visited Plaintiff in New York to discuss their joint business—
Golden Star.
Moreover, as this Court has previously held, negotiations
in New York that “substantially advance a business relationship
culminating in a contract are alone sufficient for a prima facie
showing of transacting business.” New Asia Enters., 2014 WL
3950901, at *4; see also Persh v. Petersen, No. 15 CIV. 1414
(LGS), 2016 WL 4766338, at *7 (S.D.N.Y. Sept. 13, 2016)
(plaintiff established specific jurisdiction where defendant and
plaintiff structured and finalized their agreement in New York);
Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 850 N.E.2d
1140, 1143 (N.Y. 2006) (defendant transacted business when he
entered New York to pursue negotiations with New York plaintiff
that culminated in significant sale of bonds).
8

Here, Plaintiff

alleges that over the course of several meetings at his Bronx
business, the parties negotiated key terms—including the amount
each party would pay towards the purchase price and that
Defendant and Plaintiff would be equal partners—and finalized
their agreement to purchase the Premises. (Khankhanian Decl. ¶
11.)

This alone is sufficient to establish that Defendant

transacted business in New York.
Plaintiff has also made a prima facie showing that the
causes of action alleged in his complaint arise from Defendant’s
transaction of business in New York.

Defendant argues that

Plaintiff’s claims arise not from the purchase of the Premises
but from its sale, which took place in California. (Def.’s Mem.
of L. in Support of Mot. to Dismiss at 10.)

However, the

“arising from” prong of 302(a)(1) requires only a “relatedness
between the transaction and legal claim such that the latter is
not completely unmoored from the former.” Licci, 732 F.3d at
168–69 (internal citations omitted).

Defendant’s business

transactions in New York, which culminated in a business
agreement and fiduciary relationship with Plaintiff, are
sufficiently related to Plaintiff’s claims that Defendant
breached his fiduciary duties and converted assets in violation
of the parties’ agreement.

Thus, Defendant’s business

transactions are not “unmoored” from Plaintiff’s claims and
Plaintiff has satisfied both prongs of § 302(a)(1).
9

A separate due process inquiry is required although it is
rare that the New York long-arm statute is satisfied but not due
process. See Licci, 732 F.3d at 170.

There are minimum contacts

necessary to support a finding of specific jurisdiction where
“the defendant purposefully availed [himself] of the privilege
of doing business in the forum and could foresee being haled
into court there.” Id. (internal quotation marks omitted).

As

discussed above, Plaintiff alleges that Defendant traveled to
New York and visited Plaintiff at his Bronx business to
negotiate and finalize their agreement.

Thus Defendant could

foresee be haled into court here. See Grand River Enters. Six
Nations, Ltd. v. Pryor, 425 F.3d 158, 167 (2d Cir. 2005) (party
could foresee being subject to suit where the negotiation and
execution of underlying agreement took place).
As to whether the Court’s exercise of specific jurisdiction
would be reasonable, courts consider several factors, including
“(1) the burden that the exercise of jurisdiction will impose on
the defendant; (2) the interests of the forum state in
adjudicating the case; [and] (3) the plaintiff’s interest in
obtaining convenient and effective relief.” Licci, 732 F.3d at
170 (internal quotation marks omitted).

Where a plaintiff has

sufficiently alleged minimum contacts, the burden is on the
defendant to “present a compelling case that the presence of
some other considerations would render jurisdiction
10

unreasonable.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477
(1985).

The only burden Defendant alludes to is that his health

has deteriorated and traveling to New York would “put a great
deal of stress on [his] physical and emotional state.” (Khanian
Aff. ¶ 17.)

But the inconvenience of traveling to a distant

forum alone “falls short of overcoming the plaintiff’s threshold
showing of minimum contacts.” Metro. Life Ins. Co. v. RobertsonCeco Corp., 84 F.3d 560, 574 (2d Cir. 1996); see also Licci, 732
F.3d at 174 (finding personal jurisdiction over parties in
Lebanon and Israel reasonable because modern communication and
transportation ease the burden of litigating in distant forums).
Thus, the Court finds that the exercise of personal jurisdiction
here is reasonable and comports with the requirements of due
process.
Plaintiff has made a prima facie showing of specific
jurisdiction under N.Y. C.P.L.R. § 302(a)(1).

Defendant’s

motion to dismiss for lack of personal jurisdiction is denied.
B.

Dismissal on Grounds of Forum Non Conveniens

Defendant initially moved to dismiss on the ground of forum
non conveniens, (see Def’s Mem. of L. in Support of Mot. to
Dismiss at 19), but in his reply brief stated that he instead
moved to dismiss this action for improper venue pursuant to
Federal Rule of Civil Procedure 12(b)(3), or in the alternative,
to transfer this case to the Central District of California
11

under 28 U.S.C. § 1404(a). (Def’s Mem. of L. in Further Support
of Mot. to Dismiss at 5–6.)

Because, as discussed below, the

doctrine of forum non conveniens is inapplicable here, the Court
treats Defendant’s motion to dismiss as a motion to transfer
under § 1404(a).
1. Legal Standard
a.

Forum Non Conveniens

Federal courts apply the doctrine of forum non conveniens
to dismiss an action only where the alternative forum is
international, or “perhaps in rare instances where a state or
territorial court serves litigational convenience best.”
Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549
U.S. 422, 430 (2007) (citations omitted).

“Congress has

codified the doctrine and has provided for transfer, rather than
dismissal, when a sister federal court is the more convenient
place for trial of the action.” Id. (citing 28 U.S.C. §
1404(a)); see also Capital Currency Exch., N.V. v. Nat’l
Westminster Bank PLC, 155 F.3d 603, 607 (2d Cir. 1998) (“Section
1404(a) thus supplanted the common law doctrine of forum non
conveniens for transfers between United States district
courts.”); Russell v. Hilton Int’l of Puerto Rico, Inc., No. 93
CIV. 2552 (KMW), 1994 WL 38516, at *4 (S.D.N.Y. Feb. 4, 1994)
(treating Defendant’s motion to dismiss for forum non conveniens

12

as a motion to transfer under § 1404(a) where Defendant argued
that the proper forum was the District of Puerto Rico).
Where, as here, a defendant has moved for dismissal under
forum non conveniens but the proposed alternative forum is a
sister federal court, i.e. the Central District of California,
(See Def.’s Mem. of L. in Further Support of Mot. to Dismiss at
6.), the court may consider whether transfer is appropriate
under § 1404(a).
b.

Transfer under 28 U.S.C. § 1404(a)

“For 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).

Transfer is appropriate

only if “(a) the transferee district would be a proper venue and
would have had personal jurisdiction over the defendant at the
time the plaintiff commenced the action; and (b) transfer is
deemed appropriate after ‘considering the convenience of the
parties and witnesses, and the interest of justice.’” New Asia
Enters. Ltd., 2014 WL 3950901, at *7 (quoting Balance Point
Divorce Funding, LLC v. Scrantom, 978 F. Supp. 2d 341, 355
(S.D.N.Y. 2013)).

A district court has broad discretion in

determining the convenience of the parties. Id. at *8.

The

defendant bears the burden of demonstrating that transfer is

13

appropriate by “clear and convincing evidence.” Id. at *8.
Relevant factors relating to convenience and fairness include:
(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, [and]
(7) the relative means of the parties.
Id. (internal quotation marks omitted).

In addition, “courts in

this district routinely consider judicial economy, the interest
of justice, and ‘the comparative familiarity of each district
with the governing law.’” Rosen v. Ritz-Carlton Hotel Co. LLC,
No. 14-CV-1385 (RJS), 2015 WL 64736, at *2 (S.D.N.Y. Jan. 5,
2015) (quoting CYI, Inc. v. Ja-Ru, Inc., 913 F. Supp. 2d 16, 19
(S.D.N.Y. 2012)).
2.

Analysis

Plaintiff does not dispute that the Central District of
California was an appropriate alternative forum for this action.
(Pl.’s Mem. of L. in Opp. to Def.’s Mot. to Dismiss at 17.)
Thus, the only question is whether transfer is appropriate
considering the factors listed above.
In his reply brief, Defendant argues that transfer is
appropriate under § 1404(a) because (1) nearly all witnesses and
documents are located in California, (2) the center of the
operative events occurred in California, (3) California law
applies to at least one claim, and (4) the interests of justice
14

support litigating the sale of California real estate and
administration of a California LLC in California. (Def.’s Mem.
of L. in Further Support of Mot. to Dismiss at 9.)
As discussed below, the balance of factors weighs towards
transfer to the Central District of California.
a.

Locus of Operative Facts

First and foremost, the locus of operative facts heavily
favors transfer.

The locus of operative facts is a “primary

factor” in determining whether transfer is appropriate under §
1404(a). Mattel, Inc. v. Procount Bus. Servs., No. 03 Civ. 7234
(RWS), 2004 WL 502190, at *3 (S.D.N.Y. Mar. 10, 2004).

“To

determine where the locus of operative facts lies, courts look
to ‘the site of events from which the claim arises.’” Age Grp.
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)).

In actions involving claims for breach of

fiduciary duty and conversion, courts in this Circuit have held
that the locus of operative facts lies the district where the
alleged breach or conversion occurred. See, e.g., Aguiar v.
Natbony, No. 10 CIV. 6531 (PGG), 2011 WL 1873590, at *9
(S.D.N.Y. May 16, 2011) (finding that locus of operative facts
was in New York where the “actual breaches of fiduciary duty”
occurred); Chiste v. Hotels.com L.P., 756 F. Supp. 2d 382, 400
15

(S.D.N.Y. 2010) (granting motion to transfer where alleged
breach of fiduciary duty and conversion occurred in the proposed
alternate forum); Quan v. Computer Scis. Corp., No. CV 06-3927
(CBA)(JO), 2008 WL 89679, at *6 (E.D.N.Y. Jan. 7, 2008) (finding
that California was the locus of operative facts where “to the
extent the defendants breached their fiduciary duties to the
plaintiffs, those breaches occurred in California”).
Here, a substantial portion of the events that gave rise to
Plaintiff’s claims occurred in California.

To the extent that

Defendant, a California resident, breached his fiduciary duty to
Plaintiff and converted Plaintiff’s half of Golden Star’s
assets, those acts occurred in California.

Further, Plaintiff’s

claim for an accounting seeks information regarding the
“revenues and assets” of Golden Star, an LLC formed under
California law whose sole business was managing, renting, and
selling a California property. (See Compl. ¶¶ 13, 19, 44.)
Therefore, the locus of operative facts is clearly California
and this factor weighs heavily in favor of transfer.
b.

Plaintiff’s Choice of Forum

Although a plaintiff’s choice of forum is entitled to
substantial deference, “the weight afforded to a plaintiff’s
choice is diminished ‘where the operative facts lack a
meaningful connection to the [chosen] forum.’” Rosen, 2015 WL
64736, at *2 (quoting GlaxoSmithKline Biologicals, S.A., v.
16

Hospira Worldwide, Inc., No. 13–CV–1395 (PKC), 2013 WL 2244315,
at *3 (S.D.N.Y. May 21, 2013)); see also Kai Wu Lu v. Tong Zheng
Lu, No. 04 CV 1097 (CBA), 2007 WL 2693845, at *6 (E.D.N.Y. Sept.
12, 2007) (plaintiff’s choice of forum is a “far less compelling
factor” where a great majority of the operative facts did not
take place in the chosen forum).

As discussed above,

Plaintiff’s claims concern a California defendant, a California
property, and a California LLC.

Moreover, any alleged

wrongdoing on the part of Defendant took place in California.
Thus, the operative facts in this action lack a meaningful
connection to the Southern District of New York and Plaintiff’s
choice of forum is not entitled to substantial deference.
c.

The Location of Relevant Documents and Ease of Access to
Sources of Proof
The location of relevant documents and ease of access to

sources of proof also points in favor of transfer to California.
Although the “location of relevant documents is largely a
neutral factor in today’s world of faxing, scanning, and
emailing,” Am. Steamship Owners Mut. Prot. & Indent. Ass’n, Inc.
v. Lafarge N. Am., Inc., 474 F. Supp. 2d 474, 484 (S.D.N.Y.
2007), Plaintiff alleges in the complaint that “Defendant is in
sole possession, custody and control of the books and records of
Golden Star, LLC.” (Compl. ¶ 40.)

According to Defendant,

“Golden Star LLC’s financial statements, closing documents

17

related to the purchase . . . [and] sale of the Property,
property tax records, rental income statements, and accounting
records, are located in California.” (Khanian Suppl. Aff. ¶ 14.)
Thus, the location of relevant documents is California and this
factor points towards transfer.
d.

Convenience of the Witnesses

The convenience of the witnesses also tilts in favor of
transfer.

“Courts typically regard the convenience of witnesses

as the most important factor in considering a § 1404(a) motion
to transfer.” Herbert Ltd. P’ship v. Elec. Arts Inc., 325 F.
Supp. 2d 282, 286 (S.D.N.Y. 2004).

The party moving for

transfer “must provide the Court with a detailed list of
probable witnesses who will be inconvenienced if required to
testify in the current forum.” Kiss My Face Corp. v. Bunting,
No. 02 Civ. 2645 (RCC), 2003 WL 22244587, at *2 (S.D.N.Y. Sept.
30, 2003).

In considering the convenience of witnesses, “a

Court should not just tally the various witnesses and their
locations—the materiality of the proposed testimony is what
matters most.” Rosen, 2015 WL 64736, at *3.

Both Plaintiff and

Defendant claim that there are several witnesses who would be
inconvenienced by having to travel to California and New York,
respectively.

Defendant states that “all potential witnesses in

this matter” are located in California, including the building
engineer, individuals from the LLC that purchased the Premises,
18

and Golden Star’s accountant. (Khanian Suppl. Aff. ¶ 15.)
Plaintiff lists several potential witnesses who reside in New
York and witnessed “various meetings with [D]efendant in New
York[,]” including Plaintiff’s wife, father, mother, brothers,
and aunt. (Khankhanian Decl. ¶ 18.)
Although Defendant’s witness list is not remarkably
“detailed,” his list includes individuals that, given their job
titles, would presumably testify about the sale of the Premises
and Golden Star’s business.

Given that the locus of operative

facts is California and any alleged breach of fiduciary duty or
conversion of Golden Star’s assets occurred there, the testimony
of these California witnesses is likely to be the most
significant and the Court’s ease of access to their testimony is
an “important consideration[].” Seltzer v. Omni Hotels, No. 09
CIV. 9115 (BSJ)(JCF), 2010 WL 3910597, at *3 (S.D.N.Y. Sept. 30,
2010).

On the other hand, Plaintiff lists individuals who are

witnesses only to meetings between Plaintiff and Defendant in
New York.

Plaintiff does not claim that these witnesses have

any knowledge of Golden Star’s assets or of the sale of the
Premises.

Accordingly, the probable value of live testimony

from Defendant’s California witnesses outweighs that of
Plaintiff’s New York witnesses. See id. (holding that even
though neither party provided a detailed witness list, the
convenience of the parties weighed in favor of transfer where
19

locus of operative facts was California and “the probable value
of live testimony from California-based witnesses outweighs that
of New York-based witnesses”).

This factor weighs in favor of

transfer.
e.

Convenience of the Parties

Both parties claim that litigating the case in the other
party’s preferred forum would be inconvenient due to health
issues. (See Khankhanian Decl. ¶ 20; Khanian Suppl. Aff. ¶¶ 16–
17).

Although “simply shifting inconvenience from one party to

another does not support transfer, it is clear that when the
convenience of witnesses weighs in one direction, the
convenience of the parties will likely weigh in that direction
as well.” Rosen, 2015 WL 64736, at *3 (citing ESPN, Inc. v.
Quiksilver, Inc., 581 F. Supp. 2d 542, 550 (S.D.N.Y. 2008)).
Because the convenience of the witnesses weighs towards
transfer, this factor likewise favors transfers to the Central
District of California.
f.

Judicial Economy and the Interest of Justice

The usual concern with judicial economy when considering a
transfer motion is whether transfer “would require a new court
to familiarize itself with the facts of the case.” Rosen, 2015
WL 64736, at *5.

Since the only matter the parties have briefed

before this Court is Defendant’s motion to dismiss, this concern

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is not present here and it would not undermine judicial economy
to transfer this action to California.
Transferring this case to the Central District of
California would further the interest of justice.

Where the

“natural focus” of the case is in the transferee forum, transfer
to that district is consistent with the interest of justice. See
Delarosa v. Holiday Inn, No. 99 CIV. 2873 (RWS), 2000 WL 648615,
at *5 (S.D.N.Y. May 19, 2000).

Because the locus of operative

facts, the location of relevant documents and access to sources
of proof, and the convenience of the witnesses all weigh in
favor of transfer, California is clearly the forum with the most
“meaningful connection” to the underlying facts of Plaintiff’s
claims. Rosen, 2015 WL 64736, at *5.

Thus, the interest of

justice weighs in favor of transfer.
g.

Remaining 1404(a) Factors

The remaining factors—relative means of the parties,
availability of process to compel the attendance of unwilling
witnesses, and comparative familiarity with the governing law—
are neutral as to the Court’s analysis under § 1404(a).

First,

neither party has shown evidence that litigating the case in
California or New York would be financially burdensome, thus the
relative means of the parties is neutral.

Second, if neither

party asserts that a witness would be unwilling to testify
voluntarily, “the availability of process to compel testimony is
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irrelevant to the transfer analysis.” Rosen, 2015 WL 64736, at
*4.

Neither Plaintiff nor Defendant has claimed that any

witnesses would not testify voluntarily in New York or
California, thus this factor is also neutral.

Third,

familiarity with the governing law is “generally given little
weight in federal courts.” Am. Eagle Outfitters, Inc. v. Tala
Bros. Corp., 457 F. Supp. 2d 474, 479 (S.D.N.Y. 2006).

Although

this factor becomes more important when the suit is premised on
state law claims, this importance is diminished when those
claims involve only “common causes of action.” Rosen, 2015 WL
64736, at *5.

Plaintiff’s claims for breach of fiduciary duty,

conversion, and an accounting are all common causes of action.
Thus, familiarity with governing law is also neutral.
h.

Transfer is Appropriate under § 1404(a)

Weighing the factors set forth above, the Court determines
that Defendant has met his burden of demonstrating by clear and
convincing evidence that transfer to the Central District of
California is appropriate under § 1404(a).
C.

Failure to State Claims for an Accounting and Conversion
Because this case should be transferred to the Central

District of California, the Court declines to reach the portion
of Defendant’s motion that seeks dismissal of Plaintiff’s
claims. See Age Grp. Ltd., 2007 WL 2274024, at *1 (declining to
consider defendant’s motion to dismiss for failure to state a
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claim under Rule 12(b) (6) because question of transfer under§
1404 (a) was dispositive).
CONCLUSION

For the reasons stated above, it is hereby ORDERED that
this case be transferred to the United States District Court for
the Central District of California;

The Clerk of the Court is

respectfully directed to TRANSFER this case accordingly and
remove the case from the Court's docket.

Defendant's motion to

dismiss is DENIED without prejudice with leave to re-file in the
Central District of California.
SO ORDERED.

Dated:

New York, New York
April {, , 2017

~-::r----~_'John F. Keenan

~

United States District Judge

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