David Benrimon Fine Art LLC v. Durazzo et al
OPINION & ORDER. For the reasons stated above, Plaintiff's motion for ananti-suit injunction is DENIED. SO ORDERED. (Signed by Judge John F. Keenan on 10/26/2017) (anc)
Case 1:09-md-02013-PAC Document 57
Filed 09/30/10 Page 1 of 45
DOC #: _________________
DATE FILED: 10/26/2017
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DAVID BENRIMON FINE ART COURT :
UNITED STATES DISTRICT LLC,
SOUTHERN DISTRICT OF NEW YORK :
In re FANNIE MAE 2008 SECURITIES :
08 Civ. 7831 (PAC)
No. 17 Civ. 6382 (JFK)
09 MD 2013 (PAC)
OPINION & ORDER
RAPHAEL DURAZZO and TORRELIONE :
OPINION & ORDER
HONORABLE PAUL A. CROTTY, United States District Judge:
FOR PLAINTIFF DAVID BENRIMON FINE ART LLC:1
Nathan Andrew Holcomb, Esq.
Luke William Nikas,decade saw a boom in home financing which was fueled, among
The early years of this Esq.
BOIES, SCHILLER & FLEXNER LLP
other things, by low interest rates and lax credit conditions. New lending instruments, such as
FOR DEFENDANTS RAPHAEL DURAZZO and TORRELIONE SAS:
Giorgio Adib Sassine, Esq.
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 Plaintiff David Benrimon Fine Art LLC’s
assumption that the market would continue to rise and that refinancing options would always be
(“Plaintiff”) motion for a preliminary anti-suit injunction to
available in the future. Lending discipline was lacking in the system. Mortgage originators did
enjoin a suit between Defendant Torrelione SAS (“Torrelione”)
not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the
and Plaintiff in Paris Commercial Court. For the reasons
originators sold their loans into the secondary mortgage market, often as securitized packages
discussed below, Plaintiff’s motion is denied.
known as mortgage-backed securities (“MBSs”). MBS markets grew almost exponentially.
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly
Unless otherwise noted, the following facts are drawn from
and home prices began to fall. In light of the changing housing market, banks modified their
the amended complaint. Plaintiff is a New York limited
lending practices and became unwilling to refinance home mortgages without refinancing.
liability company located at 730 Fifth Avenue, New York, NY
10019. (Am. Compl. ¶ 13.)
Defendant Raphael Durazzo (“Durazzo”)
Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,
dated June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.
is a citizen of France and the chairperson of Torrelione. (Id. ¶
Torrelione is a single-shareholder limited liability
company with a registered office at 7 Rue Boileau, 75016 Paris,
France. (Id. ¶ 15.)
This action involves a dispute over a painting by Josef
Albers, titled Study for Homage to the Square:
dated 1962 (the “Painting”). (Id. ¶ 1.)
On February 21, 2017,
Plaintiff and Durazzo agreed that Plaintiff would transfer the
Painting to Durazzo in exchange for payment of $347,500. (Id. ¶
Plaintiff claims that the parties agreed that the
transaction would be cancelled if Durazzo failed to pay
Plaintiff before March 1, 2017. (Id. ¶ 19.)
On February 21,
2017, Plaintiff sent Torrelione an invoice for the Painting.
(Durazzo Decl. Ex. 1 at 9.)
The only terms provided in the
invoice were the purchase price and that the payment would be
made by wire transfer to Plaintiff’s JP Morgan Chase bank
account in the United States. (See id.)
No provisions were
included regarding the payment due date, forum selection, or
choice of law that governed the parties’ agreement. (See id.)
Durazzo did not pay $347,500 to Plaintiff before March 1,
2017. (Am. Compl. ¶ 21.)
Nevertheless, on March 5, 2017,
Durazzo asked Plaintiff for reprieve, explaining that the funds
would be in his account within one or two days and he would
immediately wire the money to Plaintiff at that time. (Id. ¶
On March 7 at 8:55 A.M., Durazzo represented to Plaintiff
that the money had been wired to Plaintiff’s account. (Id. ¶
By the end of the morning on March 7, the money still had
not arrived. (Id.)
Plaintiff called Durazzo on March 7 to
explain that Durazzo had breached the parties’ agreement and
that Plaintiff was cancelling the parties’ deal pursuant to the
original terms if the money did not arrive by the end of day on
March 7. (Id.)
On March 8, Durazzo sent Plaintiff a wire
confirmation stating the wire would be settled on March 10,
which was inconsistent with Durazzo’s statement that he wired
the funds to Benrimon on March 7. (Id. ¶ 25.)
Torrelione’s wire transfer of the full payment amount, (Defs.’
Counterclaims ¶ 27), Plaintiff informed Durazzo that they did
not have an agreement to complete the sale and sent Durazzo a
voided invoice. (Id. ¶ 27.)
On July 3, 2017, Plaintiff received a copy of a Writ of
Summons to appear before the Paris Commercial Court (the “Paris
Action”). (Id. ¶ 41.)
Torrelione’s lawsuit in Paris alleges
breach of contract and seeks damages against Plaintiff. (Id.)
Durazzo is not a party to the Paris Action. (Pl.’s Mem. of L. in
Supp. of Order to Show Cause at 5.)
On August 22, 2017,
Plaintiff filed an amended complaint1 with this Court seeking a
declaratory judgment that Plaintiff did not breach the parties’
contract and an anti-suit injunction enjoining Durazzo’s suit in
Paris, and included a claim for tortious interference with
prospective economic advantage against Torrelione and Durazzo
On September 28, 2017, the Court
issued an order to show cause as to why an order for a
preliminary anti-suit injunction should not be issued. (See
Order to Show Cause, ECF No. 14 (filed Sept. 29, 2017).)
Court heard arguments on October 24, 2017.
A district court may enjoin a party from pursuing
litigation in a foreign jurisdiction. Paramedics Electromedicina
Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d
645, 652 (2d Cir. 2004).
While parallel actions are ordinarily
permitted, “an anti-suit injunction may be appropriate when used
to protect the jurisdiction and judgment of the enjoining
court.” Eastman Kodak Co. v. Asia Optical Co., 118 F. Supp. 3d
581, 586 (S.D.N.Y. 2015).
However, “principles of comity
counsel that injunctions restraining foreign litigation be used
On the same day, Plaintiff filed the original complaint and a
seemingly-identical amended complaint that includes a demand for jury
sparingly and granted only with care and great restraint.”
Paramedics, 368 F.3d at 652 (internal quotations and citation
The Court may enjoin a party from pursuing a foreign action
provided “two threshold requirements are met:
parties must be the same in both proceedings, and second,
resolution of the case before the enjoining court must be
dispositive of the action to be enjoined.” Eastman Kodak, 118 F.
Supp. 3d at 586.
If these threshold requirements are met,
courts weigh five additional factors identified in China Trade &
Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33 (2d Cir. 1987):
the threat to the enjoining court’s jurisdiction posed by the
foreign action; (2) the potential frustration of strong public
policies in the enjoining forum; (3) the vexatiousness of the
foreign litigation; (4) the possibility of delay, inconvenience,
expense, inconsistency, or a race to judgment; and (5) other
equitable considerations. Id.
While a court must consider each
of these factors, the first two—whether the foreign action
threatens the enjoining forum’s jurisdiction or its strong
public policies—are given greater weight. Id. at 587.
discretionary factors will tend to weigh in favor of an antiforeign-suit injunction “that is sought to protect a federal
judgment.” Id. (citation omitted).
The threshold requirements for an anti-suit injunction are
To satisfy the first requirement, the parties need
not be identical. See Paramedics, 369 F.3d at 652–53.
requirement is met if the parties are “sufficiently similar.”
See id. at 652.
Although Durazzo is not a party to the Paris
Action, he is the chairperson of Torrelione and was named in
this action on “the basis of [his] corporate relationship with
[Torrelione],” thus, “the China Trade ‘same party’ requirement
is satisfied.” Stolt Tankers BV v. Allianz Seguros, S.A., No. 11
CIV. 2331 SAS, 2011 WL 2436662, at *5 (S.D.N.Y. June 16, 2011).
Under the second threshold factor, the resolution of the
case before this Court must be dispositive of the Paris Action.
In determining whether the action before this Court will be
dispositive, the Court “must determine the substance of the case
before the enjoining court.” Eastman Kodak, 118 F. Supp. 3d at
The issues in both proceedings are the same, namely
whether Plaintiff breached the parties’ agreement.
the resolution of this action will be dispositive of the Paris
Thus, the second threshold requirement is met.
However, the China Trade factors do not weigh in favor of
enjoining the Paris Action.
First, the Paris Action does not
pose a threat to this Court’s jurisdiction.
that the Paris Action is a “parallel proceeding addressing the
same issue before this Court” and the Paris Commercial Court
could reach the merits of the claims first, resulting in a
judgment with potential res judicata effects. (Pl.’s Mem. at 7.)
However, “the initiation before a foreign court of a suit
concerning the same parties and issues as a suit already pending
in a United States court does not, without more, justify
enjoining a party from proceeding in the foreign forum.” China
Trade, 837 F.2d at 36; see also Hamilton Bank, N.A. v. Kookmin
Bank, 999 F. Supp. 586, 588 (S.D.N.Y. 1998) (“[P]arallel
proceedings on the same in personam claim should ordinarily be
allowed to proceed simultaneously.”).
A threat to the enjoining
court’s jurisdiction is greatest when “a foreign court is not
merely proceeding in parallel but is attempting to carve out
exclusive jurisdiction over the action.” Bank Leumi USA v.
Ehrlich, No. 12-CV-4423 (AJN), 2015 WL 12591663, at *6 (S.D.N.Y.
Sept. 23, 2015) (quoting China Trade, 837 F.2d at 36).
enjoining court’s jurisdiction is also threatened “when a
foreign suit threatens to undermine [a] federal judgment.” Id.
(internal quotation marks omitted).
circumstances applies here.
Neither of those
There has been no judgment in this
action, and although the Paris Commercial Court may determine
the same liability issues before this Court, the Paris
Commercial Court “has not attempted to enjoin the proceedings in
New York . . . nor . . .
sought to prevent the southern
district from exercising its jurisdiction over this case.” China
Trade, 837 F.2d at 37.
Plaintiff also argues that the Paris Action is a threat to
this Court’s jurisdiction because personal jurisdiction over
Plaintiff in the Paris Action is predicated on Article 14 of the
French Civil Code, under which the French nationality of the
plaintiff is a sufficient ground for jurisdiction. (Pl.’s Reply
Mem. at 4.)
Plaintiff contends that this theory of jurisdiction
is incompatible with due process in the United States. (Id. at
Although the Court acknowledges that there is nothing in
U.S. law comparable to Article 14, “there is no evidence from
which to infer that [Torrelione] filed its suit in [Paris] in an
attempt to evade our Constitution’s notions of due process.”
Hamilton Bank, 999 F. Supp. at 589–90 (no evidence that
defendant in U.S. action filed its foreign suit to evade due
process where defendant filed its foreign action “more than
three months before” plaintiff filed U.S. action).
although Plaintiff claims to have no contacts with France,
(Benrimon Decl. ¶ 15), Plaintiff contracted with a French
company and agreed to transfer the Painting to a French citizen,
(Am. Compl. ¶ 3), as part of the parties’ agreement.
cannot be said that Plaintiff has no ties to France in
connection with this action.
If Plaintiff wishes to contest
personal jurisdiction in the Paris Action, it can default and
resist enforcement of a judgment in New York under N.Y. C.P.L.R.
§ 5304(a), under which foreign judgments will be recognized only
if the foreign court had personal jurisdiction over the
defendant.2 See, e.g., Hamilton Bank, 999 F. Supp. at 589-90
(denying an anti-suit injunction where plaintiff argued that the
foreign court did not have personal jurisdiction and noting that
the plaintiff could default in the foreign action and contest
enforcement of the judgment in U.S. court).
“One way or the
other, [Plaintiff] would have its day in court on the
jurisdictional issue.”3 Id. at 590.
Second, no public policy is frustrated by allowing the
Paris Action to continue.
Plaintiff argues that there exists a
policy interest in having a New York court apply New York law,
Plaintiff’s counsel suggested at oral argument that Plaintiff may
have property in Europe against which a judgment in Paris Commercial
Court could be enforced. However, nowhere in Plaintiff’s briefs or
accompanying declaration does it describe any such property, or the
laws of the European nation that would allow the property to be
claimed to satisfy a judgment in Paris Commercial Court. The Court
will not rely on the hypothetical possibility that Plaintiff owns
property in a European country that would recognize a judgment in the
Paris Action regardless of whether the Paris Commercial Court has
personal jurisdiction over Plaintiff.
At oral argument, Plaintiff’s counsel also suggested that Defendants’
counterclaims, filed on October 19, 2017, should change the Court’s
analysis because there is now a “res” at issue. Although Defendants
in their answer request—in the alternative to their preferred relief
of money damages—specific performance that Plaintiff deliver the
Painting to Torrelione, the question under China Trade is whether the
Paris Action threatens this Court’s jurisdiction. Defendants’
counterclaims in this action do not threaten any aspect of this
which Plaintiff contends governs the parties’ contract because
the transaction concerned the sale of a work held in New York.
(Pl.’s Mem. at 7.)
Courts have found a general policy interest
in having New York law interpreted by a U.S. court where the
parties agreed that New York law would govern their agreement.
See Software AG, Inc. v. Consist Software Sols., Inc., No. 08
CIV. 389CMFM, 2008 WL 563449, at *25 (S.D.N.Y. Feb. 21, 2008).
However, the parties’ agreement does not contain a choice of law
provision or a forum selection clause and Plaintiff does not
claim that the parties agreed to litigate under New York law.
Plaintiff has not established that New York law should govern
the parties’ agreement.
Thus, there is no potential for
frustration of Plaintiff’s cited public policy interest.
Third, the Paris Action is not vexatious because it was not
brought by Defendants to “undermine this Court’s jurisdiction .
. . but to enforce the [parties’] [a]greement.” C.D.S., Inc. v.
Bradley Zetler, CDS, LLC, 213 F. Supp. 3d 620, 629 (S.D.N.Y.
Defendants brought the action in Paris Commercial Court
before Plaintiff filed its action in this Court.
contract did not contain a forum selection or choice of law
Accordingly, Defendants were within their rights to
bring the action in France. See Hamilton Bank, 999 F. Supp. at
590 (finding that there was nothing vexatious about defendant’s
foreign suit filed before U.S. action where the defendant “quite
sought relief from its own courts" and
"[could] not even be accused of having filed a duplicative
lawsuit in its quest for a preferred forum").
Finally, the remaining China Trade factors do not weigh in
favor of an anti-suit injunction.
Allowing the Paris Action-
which was filed first-to continue will not cause undue expense
and delay, and even if there were a race to judgment, "it is not
clear that this favors
[Plaintiff], which filed the duplicative
action; even assuming that it does, it does not do so
sufficiently to overcome the other factors counseling against an
Plaintiff's arguments that equitable
considerations, including Defendants' "forum shopping" and the
potential for punitive remedies in the amount of €5,000, are
For the reasons stated above,
Plaintiff's motion for an
anti-suit injunction is DENIED.
New York, New York
octoberz /, , 2017
~ John F. Keenan
United States District Judge
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