Opinion
08 Civ. 2222 (WCC).
June 15, 2009
Andrew S. Langsam, Esq., Plaintiffs Pro Se , Pryor Cashman, LLP, New York, NY.
LAW OFFICES OF NELSON M. STERN, Attorneys for Defendants, New York, NY, NELSON M. STERN, ESQ., Of Counsel.
OPINION AND ORDER
Plaintiffs, Robin Langsam and Andrew Langsam, bring this action against Vallarta Gardens; Arrendadora e Inmobiliara La Paz, S. de R.L. de C.V. ("Arrendadora"); Fejo, S.A. de C.V. ("Fejo"); and Carlos Humberto Rivera Miramontes ("Rivera," and, together with Vallarta Gardens, Arrendadora and Fejo, "defendants") for breach of contract, conversion and fraud in connection with plaintiffs' purchase of a home in Mexico. Defendants now move to dismiss the Amended Complaint for lack of personal jurisdiction pursuant to FED. R. CIV. P. 12(b)(2) or, in the alternative, under the doctrine of forum non conveniens. For the reasons stated herein, defendants' motion is granted pursuant to the doctrine of forum non conveniens.
Accordingly, we need not address defendants' other possible basis for dismissal, lack of personal jurisdiction.
BACKGROUND
Plaintiffs allege the following in their Amended Complaint.Plaintiffs reside in Armonk, New York. (Am. Complt. ¶ 1.) Arrendadora is a company formed under the laws of the state of Jalisco, Mexico; it operates and does business as Vallarta Gardens, a condominium property in the state of Nayarit, Mexico. ( Id. ¶ 2.) Fejo is a company formed under the laws of the state of Jalisco, Mexico; it also does business as Vallarta Gardens. ( Id. ¶ 3.) Rivera is a citizen of Mexico; he has a personal residence in San Antonio, Texas. ( Id. ¶ 4.) Rivera is the representative, owner and manager of Arrendadora and Fejo; he "established" Vallarta Gardens. ( Id. ¶¶ 5-6.) Vallarta Gardens has sold and is currently offering for sale, in the United States and in Mexico, fractional shares in and full ownership of vacation homes and retirement residences. ( Id. ¶¶ 8-9.)
Gregory John Bloom ("Bloom") is a key individual who was not named as a defendant. ( Id. ¶ 24.) Bloom, a citizen of the United States, was the Director of Sales, Project Director and Legal Representative of Vallarta Gardens, Arrendadora and Fejo; he also owned a 5% interest in the profitability of the fractional share sales in Vallarta Gardens. ( Id. ¶¶ 24-25.) Bloom was authorized to "sell, to offer to sell, [and] to act as the Sales Representative and the Legal Representative for the fractional shares of homes in Vallarta Gardens" as well as for the "full ownership homes in Vallarta Gardens." ( Id. ¶¶ 27-28(a).) Bloom had authority to negotiate on behalf of and contractually bind Arrendadora and Fejo and had "express and apparent authority to act for [d]efendants." ( Id. ¶¶ 28(a)-(b).)
In December 2006, plaintiffs traveled to Puerto Vallarta, Mexico for an annual vacation. ( Id. ¶ 30.) During that vacation, plaintiffs visited property developments in Punta Mita, Mexico to explore the possibility of "future retirement and home ownership" in that area. ( Id.) One property that plaintiffs visited was Vallarta Gardens. ( Id.) Charles Dunlop ("Dunlop") greeted plaintiffs upon their arrival at Vallarta Gardens and provided a tour of the premises and various model homes. ( Id. ¶ 31.) Dunlop discussed fractional share home ownership in Vallarta Gardens. ( Id. ¶ 32.) When plaintiffs inquired about the pricing and availability of full ownership homes in Vallarta Gardens, Dunlop introduced plaintiffs to Bloom, who provided plaintiffs with a business card that reflected his position as Vallarta Garden's Director of Sales. ( Id. ¶¶ 33-35.)
Plaintiffs visited Vallarta Gardens twice more during their December 2006 vacation. ( Id. ¶ 36.) During both visits, plaintiffs "passed through gated security and were directed to [] Bloom, Director of Sales." ( Id.) Plaintiffs and Bloom "negotiated the possibility of the purchase and sale of a new home in Vallarta Gardens," which negotiations included the requests for "certain changes to be made to the new home to be built for [plaintiffs] in comparison to the model homes." ( Id. ¶ 37.) Pursuant to these negotiations, plaintiffs "left a check, payable to Arrendadora[,] in the amount of $40,000, as a potential partial down payment in the event [that] the parties reached a formal written contract for the purchase of a full ownership home in Vallarta Gardens." ( Id. ¶ 38.) Plaintiffs and Bloom agreed that, if no written agreement was reached within "a short period of time," the check would be destroyed or returned and that if a written agreement was reached, the check would be endorsed and deposited as a partial down payment for the home. ( Id. ¶ 39.)
Following plaintiffs' return to New York, they continued to negotiate with Bloom through emails and "[f]inally, agreement was reached." ( Id. ¶¶ 40-41.) Plaintiffs "signed and emailed pdf copies of the executed contract to Bloom at Vallarta Gardens and [sent] the originals by mail[;] Bloom also signed the contract and sent the same in pdf form by email to [plaintiffs] in New York and sent the original to [plaintiffs] by mail." ( Id. ¶¶ 41-42.) The subject of the contract was Vallarta Gardens Casa #34 ("Casa 34"). ( Id. ¶ 43.) Following the execution of the contract, Rivera personally endorsed and deposited the $40,000 check that plaintiffs had left with Bloom into an account in Guadalajara, Mexico. ( Id. ¶ 44(a).)
The Amended Complaint does not specify the date on which plaintiffs and Bloom reached their agreement.
The executed contract for Casa 34 provided, in part: (1) that a down payment in the amount of $168,000 was due at signing, which included the initial $40,000 check and a wire transfer of funds in the amount of $128,000; (2) that certain stylistic changes would be made to Casa 34 in comparison to the model homes; (3) for liquidated damages in case of Vallarta Gardens' failure to deliver Casa 34 by December 1, 2007; and (4) for financing terms for ten years at 10% interest, provided by Vallarta Gardens, Arrendadora and Fejo. ( Id. ¶ 45.)
At the same time that plaintiffs received the executed contract, they also received "`Alternative Wiring Instructions' directing them to wire transfer the balance or $128,000 of the down payment" into a bank located in Nuevo Vallarta ("Nuevo Vallarta Bank"), which was closer to the property than the original bank that had been identified in the contract. ( Id. ¶ 46) (emphasis omitted.) Plaintiffs then wired $128,000 to Nuevo Vallarta Bank, which was not the bank named in the contract. ( Id. ¶ 46.)
In February 2007, plaintiffs visited Vallarta Gardens, were granted entry by security guards on the premises and met with Bloom several times on the Vallarta Gardens grounds to discuss the progress of the construction of Casa 34. ( Id. ¶¶ 48, 50.) During that visit, plaintiffs learned that Bloom had become the "Project Director for Vallarta Gardens." ( Id. ¶ 49.) Upon plaintiffs' return to New York following their February 2007 visit, plaintiffs "frequently requested and were provided with digital photographs showing the ground breaking, pouring of foundation, preliminary work etc. on . . . [Casa] 34 at Vallarta Gardens." ( Id. ¶ 51.) Bloom assured plaintiffs that, "while the project got off to a slow start," Casa 34 would be ready by December 1, 2007. ( Id. ¶ 52.)
Plaintiffs again visited Vallarta Gardens in April 2007 and late summer 2007, both times passing through security, meeting with Bloom on the property and discussing the progress of Casa 34, including the implementation of "suggestions and changes" requested by plaintiffs. ( Id. ¶¶ 53-54.) During a September 2007 trip to Vallarta Gardens, plaintiffs "discussed completion of the home on time[] and selected tile, granite, cabinets, etc., all with Bloom, all while on the premises of Vallarta Gardens." ( Id. ¶ 55.)
In September 2007, Bloom informed plaintiffs, via email, that Arrendadora would be unable to provide the financing that it had originally offered to the purchasers of homes at Vallarta Gardens. ( Id. ¶ 57.) Bloom represented that, as a result of Arrendadora's failure to offer the financing that it had intended to offer, it "would offer an 8% discount ($33,600) off of the purchase price ($420,000) for the home in exchange for a release of the Seller's financing obligation set forth in the [contract], but conditioned on [plaintiffs] then paying another 20% of the purchase price." ( Id. ¶ 58.) Plaintiffs agreed to these terms, signed an amendment to the original contract reflecting the new terms and "wire transferred [20% of the purchase price of Casa 34] from New York to the account identified by . . . Bloom," at Nuevo Vallarta Bank, which was not the bank identified in the contract. ( Id. ¶ 59.)
In October 2007, Bloom sent an email to plaintiffs indicating that Casa 34 was "75% structurally complete and thus another 20% payment of the reduced purchase price was due." ( Id. ¶ 60.) "As a consequence, [plaintiffs] wired another 20% (80% was now cumulatively paid or $309,000 of the reduced purchase price of $386,400; comprised of the original check for $40,000 and three separate wire transfers totaling $269,000)." ( Id. ¶ 61.)
In the late fall 2007, "Rivera, for the first time, called to speak to [plaintiffs]." ( Id. ¶ 62.) Rivera advised that plaintiffs "had no contract on the home; that [Rivera] had not received any of the funds for payment of the same; that Bloom was not authorized to act for him [or] for Vallarta Gardens [or] . . . Fejo; that Bloom was not a [l]egal [r]epresenative for anyone." ( Id.) Rivera refused to deliver any home at Vallarta Gardens to plaintiffs and requested that plaintiffs provide him with copies of the contract and any evidence of payments made by plaintiffs. ( Id. ¶¶ 62-63.) Plaintiffs provided Rivera with a copy of the $40,000 check "personally endorsed by Rivera and deposited into his entity's account" and, after reviewing that, Rivera "acknowledge[d] receipt and deposit of the same into Arrendadora's bank account." ( Id. ¶ 64.) To date, defendants have not returned the $40,000 partial down payment on Casa 34, have refused to return the plaintiffs' wire payments of $269,000 and have refused to tender delivery of Casa 34. ( Id. ¶ 65.)
Casa 34, now in construction, "has the very stylistic changes requested by [plaintiffs]." ( Id. ¶ 70.) Rivera maintains that the changes to which plaintiffs refer "were implemented by him because he liked to include the good ideas of others." ( Id.) "Defendants have recommended that [plaintiffs] pursue recovery directly from Bloom." ( Id. ¶ 73.)
DISCUSSION
I. Forum Non Conveniens Standard
The doctrine of forum non-conveniens permits a court, in its discretion, to "resist imposition upon its jurisdiction," even though the court's jurisdiction may be lawfully exercised and the venue technically proper, where the convenience of the parties and the interests of justice favor dismissal. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507 (1947). Dismissal on this ground is appropriate where "trial in the plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting his choice." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249 (1981). "In exercising its discretion, a court is steered by the guideposts established by the Supreme Court in Gilbert, 330 U.S. at 508-09 . . . and reinforced in Piper, 454 U.S. at 241 n. 6, . . . that direct a court to examine the `private interest factors' relating to the convenience of the litigants, as well as the `public interest factors' relating to the convenience of the forum and the ends of justice." BFI Group Divino Corp. v. JSC Russian Aluminum, 481 F. Supp. 2d 274, 279 (S.D.N.Y. 2007) (Conner, J.), aff'd, BFI Group Divino Corp. v. JSC Russian Aluminum, 298 F. App'x 87, 88 (2d Cir. 2008). Application of the factors set out in Gilbert varies depending on the unique facts presented in each case; "the inquiry is intended to be flexible, with no particular emphasis on any single factor." Id.
Defendants bear the overall burden of establishing that dismissal is proper under the circumstances of the case. Schertenleib v. Traum, 589 F.2d 1156, 1160 (2d Cir. 1978).
II. Forum Selection Clause
The contract at issue in this case contains a forum selection clause, which states, in pertinent part, "[f]or everything related to the interpretation and execution of this contract the parties agree to expressly submit to the court of Guadalajara City, Jalisco [in Mexico]. . . ." (Rivera Aff., Ex. 1 at 11.) Where a contract contains a "mandatory forum selection clause, that clause controls unless the party seeking to escape its enforcement `clearly show[s] that [its] enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.'" Argonaut P'ship L.P. v. Bankers Tr. Co., 1997 WL 45521, at *12 (S.D.N.Y. Feb. 4, 1997) (alterations in original), quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). If a forum selection clause is mandatory, a court need not perform the usual forum non-conveniens analysis. Id. If, however, a forum selection clause is permissive, a court should perform the forum non-conveniens analysis. Id. Thus, we must first resolve whether the clause at issue here is mandatory or permissive.
We note that the contract provided to us by defendants was not signed by plaintiffs. However, plaintiffs have stated that they signed the contract (Am. Complt. ¶¶ 41-42), of which they now seek specific performance, and they do not dispute that the contract provided by defendants is the same contract that they signed. Plaintiffs also acknowledge that the contract contains a forum selection clause and that this clause is a "factor[] in `favor'" of transferring the case to Mexico. (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 5.) Therefore, while the copy of the contract that defendants have provided to us is not signed by plaintiffs, it seems clear that plaintiffs did sign this contract. Likewise, while no defendant signed the contract, it was signed by Bloom, who plaintiffs aver "was authorized to sell, . . . negotiate [on behalf of], contract [on behalf of] and bind Arrendodora [and] Fejo" and who had "express and apparent authority to act for [d]efendants." (Am. Complt. ¶¶ 28(a)-(b).) Thus, according to plaintiffs' allegations in the Amended Complaint, both plaintiffs and defendants are bound by the terms of the contract.
Plaintiffs improperly rely on Stewart Organization, Incorporated v. Ricoh Corporation for the proposition that the forum selection clause is relevant, but not outcome-determinative and but one factor in the forum non-conveniens analysis. 487 U.S. 22, 23 (1988). In Stewart, the Supreme Court held that, where 28 U.S.C. § 1404(a) "controls [a party's] request to give effect to the contractual choice of venue . . . the presence of a forum-selection clause will figure centrally in the calculus," though it should not be given "dispositive consideration." Id. Section 1404(a) governs forum non-conveniens transfers in domestic suits; it does not govern dismissals "premised on the jurisdiction of courts of a foreign country." Higgins v. SPX Corp., 2006 WL 1008677, at *2 (W.D. Mich. Apr. 18, 2006), citing Schertenleib, 589 F.2d at 1165; Ford v. Brown, 319 F.3d 1302, 1310-11 (11th Cir. 2003); and Stewart v. Dow Chem. Co., 865 F.2d 103, 106-07 (6th Cir. 1989); see also Hartford Fire Ins. Co. v. Westinghouse Elec. Corp., 725 F. Supp. 317, 321 (S.D. Miss. 1989) ("Following the enactment in 1948 of Section 1404(a), . . . `the doctrine of forum non conveniens, as set out in Gilbert, remains good law so long as the possible alternative forum is a state or foreign court.'") (internal citation omitted). Here, defendants seek dismissal based upon the jurisdiction of Mexico, a foreign country and, therefore, § 1404(a) does not apply.
First, as discussed below, Mexican law is likely to govern the breach of contract cause of action. ( See infra Section V.A.3.) Where, as here, the parties fail to submit evidence regarding the content of the applicable foreign law, courts in this Circuit apply the law of the forum in which they are located to fill in the gaps. See, e.g., Indep. Order of Foresters v. Donaldson, Lufkin Jenrette Inc., 919 F. Supp. 149, 152 (S.D.N.Y. 1996). Under New York law, a forum selection clause is mandatory if it indicates that the parties intend to make jurisdiction exclusive. John Boutari Son, Wines Spirits, S.A. v. Attiki Imps. Distribs. Inc., 22 F.3d 51, 52 (2d Cir. 1994). "Words such as `exclusively' or `only' are not required. `Any language that reasonably conveys the parties' intention to select an exclusive forum will do.'" Argonaut P'ship, 1997 WL 45521, at *12. By contrast, a permissive forum selection clause "uses permissive terms ( i.e., `have the right', `may', `come within') that would still permit the exercise of jurisdiction in other fora." Baosteel Am., Inc. v. M/V "Ocean Lord", 257 F. Supp. 2d 687, 690 (S.D.N.Y. 2003) (emphasis in original).
The language of the clause at issue here, "[f]or everything related to the interpretation and execution of this contract the parties agree to expressly submit to the court of Guadalajara City, Jalisco," (Rivera Aff., Ex. 1 at 11), clearly conveys an intent to confer jurisdiction upon Mexico and does not, by its terms, appear broad or general enough to contemplate alternative venues. Wells Fargo Century, Inc. v. Brown, 475 F. Supp. 2d 368, 371 (S.D.N.Y. 2007) (finding that "the forum selection clause . . . [was] mandatory rather than permissive because the clause plainly and explicitly provides for a single jurisdiction . . . and indicates that consent to this jurisdiction was given `expressly'"). Therefore, we conclude that the forum selection clause at issue here is mandatory. Because plaintiffs do not allege that the forum selection clause resulted from fraud or overreaching on the part of defendants and because nothing presented to the Court indicates that enforcement of the clause would be manifestly unjust, we need not proceed with a forum non-conveniens analysis as to the breach of contract cause of action. Instead, it is proper to dismiss that claim on the basis of the forum selection clause in the contract. Moreover, even if the forum selection clause were permissive and we were to apply a forum non-conveniens analysis to the breach of contract claim, as we do below, we would still find it proper to dismiss this cause of action.
The forum selection clause in Wells Fargo stated: "the undersigned expressly submits and consents to the jurisdiction of the supreme court of the State of New York, in the county of New York, with respect to any claim or demand upon the undersigned based upon this instrument of guaranty. . . ." 475 F. Supp. 2d at 370 (emphasis omitted).
Plaintiffs state that it would be unfair "for [d]efendants to now seek to rely upon a single provision of the [c]ontract (forum selection) and yet to disavow all other provisions" of the contract. (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 1.) But it would be equally unfair to award plaintiffs specific performance of a contract while disregarding its forum selection clause in favor of Mexico.
Plaintiffs' other causes of action, fraud, wire fraud and conversion, are outside the scope of the forum selection clause and, therefore, we perform a forum non-conveniens analysis as to those causes of action.
III. Degree of Deference Afforded to Plaintiffs' Chosen Forum
Ordinarily, an American citizen's choice of a United States forum is entitled to significant deference. Iragorri v. United Techs. Corp., 274 F.3d 65, 72 (2d Cir. 2001). However, "`[w]here an American plaintiff chooses to invest in a foreign country and then complains of fraudulent acts occurring primarily in that country, the plaintiff's ability to rely upon citizenship as a talisman against forum non-conveniens dismissal is diminished.'" Base Metal Trading SA v. Russian Aluminum, 253 F. Supp. 2d 681, 696 (S.D.N.Y. 2003) (internal citation omitted). Therefore, in weighing the fact of plaintiffs' United States citizenship against the fact that plaintiffs chose to invest in Mexico, we find that plaintiffs' choice of a United States forum is not entitled to significant deference. See BFI, 298 F. App'x at 91.
IV. Existence of an Adequate Alternative Forum
A. Whether Defendants Are Subject to Service of Process in Mexico
Defendants have not addressed the question of whether they would be amenable to service of process in Mexico. However, this dismissal is conditioned upon, among other things, defendants' agreement to submit to jurisdiction in Mexico and to waive service of process there. Therefore, if defendants challenge jurisdiction in Mexico or decline to waive service of process, either action will render our dismissal of this action ineffective and we will hear this case in our Court.
B. Whether Mexican Law Permits Litigation of the Subject Matter of the Dispute
Plaintiffs' Amended Complaint states three causes of action against defendants: (1) breach of contract; (2) conversion; and (3) fraud and wire fraud. (Am. Complt. ¶¶ 75-92.) Defendants aver that "all of plaintiff[s'] claims are recognized by Mexican courts." (Defs. Sur-reply Mem. Supp. Mot. Dismiss at 4.) In support of this statement, defendants submit the affidavit of Jorge Robles-Madrigal, an attorney who is admitted to practice in Mexico and in New York. (Madrigal Aff. ¶ 2.) Mr. Madrigal states that "Mexican law[] recognizes the causes of action brought by [p]laintiff[s]" and that "[t]he claims advanced by [p]laintiff[s] can be duly tried in the competent state courts in Mexico, subject to applicable state laws." (Madrigal Aff. ¶¶ 4, 6.) Defendants further explain that the definition of fraud under Mexican law, "`Article 386 — A person commits the crime of fraud when he cheats or takes advantage of an error, taking or gaining something unlawfully' . . . [is] very general and covers the concept of wire fraud." (Defs. Final Sur-reply Mem. Supp. Mot. Dismiss at 3.)
Plaintiffs argue that Mr. Madrigal does not appear to be a member of the New York State Bar, as plaintiffs' "three separate internet-based searches within the data base of the State Bar of the State of New York" yielded no results indicating Mr. Madrigal's membership in that bar. (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 4.) Defendants have since submitted paperwork indicating Mr. Madrigal's current membership in the New York State Bar, (Defs. Final Sur-reply Mem. Supp. Mot. Dismiss, Ex. 1), and, therefore, we consider this issue moot. We have no reason to question the veracity of the statements made by Mr. Madrigal in his affidavit.
We have no reason to believe that plaintiffs have raised the issue of Mr. Madrigal's bar membership merely because of his "ethnic name," as defendants suggest. ( Id. at 2.)
Plaintiffs argue that Mr. Madrigal's analysis is flawed because it "glosses over, even ignores [] Rivera's frequently stated position that no action in Mexico can be brought for breach of a contract . . . related to real estate unless the signing party has first had his authority expressly recorded with a Notario Publico in Mexico." (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 4.) We decline to credit plaintiffs' representation of Mexican law, supported only by a statement allegedly made to him by a defendant, where that defendant is a party without any apparent legal training and the statement is unsupported by a citation to any legal authority, when contradicted by the sworn declaration of an attorney admitted to practice in Mexico. Further, even assuming that the legal opinion reportedly expressed to plaintiffs by Rivera was accurate, it does not answer the question of whether Mexico recognizes breach of contract as a cause of action. That opinion means only that Mexican courts might find that the contract that Bloom signed did not bind defendants, in other words, that plaintiffs might not win on the merits of their case — not that breach of contract is a cause of action unrecognized in Mexico.
Plaintiffs request that this Court consider "whether a local [c]ourt in Mexico . . . would understand and/or apply a [U.S.] Law relating to international wire fraud." ( Id. at 4-5.) Again, at this stage, our inquiry is limited to whether Mexican law provides for litigation of the subject matter of this dispute. Plaintiffs do not argue that Mexican courts do not recognize wire fraud as a cause of action but rather that Mexican courts may not properly apply the law related to that cause of action. Thus, in light of the submissions of both plaintiffs and defendants, it seems clear that Mexican courts recognize the causes of action brought by plaintiffs. To the extent plaintiffs request that we judge Mexican courts' abilities to understand or apply certain laws, absent any evidence on this issue, we decline to do so. C. Other Considerations
We turn now to plaintiffs' "comment upon the integrity of the Mexican system of justice." (Pls. Mem. Opp. Mot. Dismiss at 27.) Plaintiffs concede that, "on paper, the Mexican courts clearly have a judicial system with substantial merit," however, plaintiffs inform the Court that defendants encouraged them to bring cash to Mexico for "`gratuities' to Mexican administrators in the judicial system." ( Id. at 27-28.) Plaintiffs argue that the Mexican system is corrupt and that they "want no part of that type of justice." ( Id. at 28.)
This argument is flawed for several reasons. First, the Second Circuit is "reluctant to find foreign courts corrupt or biased," unless presented with some particularized showing of wrongdoing. Monegasque De Reassurances S.A.M. (Monde Re) v. Nak Naftogaz of Ukraine, 311 F.3d 488, 499 (2d Cir. 2002) (internal quotation marks omitted). Here, plaintiffs have shown no particularized indications of wrongdoing by any officers of Mexican courts. Rather, plaintiffs suggest wrongdoing only on the part of defendants, and that wrongdoing was limited to defendants' encouragement of plaintiffs to break the law. Plaintiffs also argue that Bloom was improperly incarcerated by the "public prosecutor" in Mexico, however, plaintiffs offer no details surrounding this incident, and this contention alone is not a particularized showing of wrongdoing. (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 7.) Further, to the extent plaintiffs rely on speculation that officers of Mexican courts would violate their oaths of office, it would indeed be "a black day for comity among sovereign nations when a court of one country, because of a perceived `negative predisposition,' declares the incompetence or worse of another nation's judicial system." Flores v. S. Peru Copper Corp., 253 F. Supp. 2d 510, 539 (S.D.N.Y. 2002) (internal quotation marks and citation omitted). Finally, while plaintiffs now complain about the lack of justice in Mexican courts, we note that plaintiffs entered into a contract by which they "expressly submit[ted] to the court of Guadalajara, Jalisco" and that they now seek specific performance of that contract. (Rivera Aff., Ex. 1 at 11.) If plaintiffs "want no part of" the Mexican judicial system, it is surprising that they seek specific performance in Mexico where the value of such relief will necessarily depend on the fair application of Mexico's laws.
For all of these reasons, we find that Mexico is an adequate forum for litigation of this controversy. We turn now to the public and private interest factors, to determine whether those factors weigh in favor of dismissing this action.
V. Public and Private Interest Factors
In Gilbert, 330 U.S. at 508-09, and Piper, 454 U.S. at 241 n. 6, the Supreme Court set forth several public and private factors relevant to a court's ruling on a motion to dismiss for forum non conveniens. The public factors include: "[(1)] the administrative difficulties flowing from court congestion; [(2)] the local interest in having localized controversies decided at home; [(3)] the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; [(4)] the avoidance of unnecessary problems in conflicts of law, or in the application of foreign law; and [(5)] the unfairness of burdening citizens in an unrelated forum with jury duty." Piper, 454 U.S. at 241 n. 6 (internal quotation marks and citations omitted). The factors relating to the private interests of the litigants, as enunciated by the Supreme Court, include: "[(1)] the relative ease of access to sources of proof; [(2)] availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; [(3)] possibility of view of premises, if view would be appropriate to the action; [(4)] and all other practical problems that make trial of a case easy, expeditious and inexpensive." Id. A. Public Interest Factors 1. Administrative Difficulties From Court Congestion
While courts in the Southern District of New York generally have very busy dockets, the Second Circuit has expressed reluctance at finding that the Southern District's "`heavily overburdened'" docket is of any significance in a forum non-conveniens analysis. Guidi v. Inter-Continental Hotels Corp., 224 F.3d 142, 147 n. 5 (2d Cir. 2000). Moreover, this Court's own docket is not so burdened as to prevent us from trying this case almost as soon as the parties and their counsel are ready for trial. We have no information regarding the congestion of Mexican courts' dockets which would permit a comparison of our docket with their docket. For these reasons, we cannot find that there are any administrative difficulties from court congestion and, therefore, we find that the first factor is neutral.
2. Local Interest in Deciding Local Controversies at Home
The second public interest factor is also neutral, as both Mexico and the United States have a reasonable interest in adjudicating this controversy. The home that is the subject of the contract dispute is located in Mexico. During plaintiffs' initial visit to Vallarta Gardens in Mexico, they engaged in negotiations with Bloom, culminating in plaintiffs leaving a $40,000 check as a partial down payment, to be deposited by defendants if a written agreement was reached within a "short period of time." (Am. Complt. ¶¶ 37-39.) All in-person meetings, of which there were many, occurred in Mexico; none occurred in the United States. Defendants are citizens of or incorporated in Mexico, the counter-party signed the contract in Mexico and received in Mexico the mail, emails and wire payments sent by plaintiffs from New York. For all these reasons, Mexico has an interest in the litigation of this case.
This district also has an interest in the instant litigation. Plaintiffs are United States citizens and residents of New York. They signed the contract at issue in and sent mail, email and wire payments to defendants from this district. In short, this district has an interest in the litigation of cases involving its citizens and allegations of international fraud. However, we cannot say that this controversy is more local to the Southern District of New York than it is to Mexico. Therefore, the second factor is neutral.
3. Interest in Deciding a Diversity Case in a Forum at Home With the Governing Law; and Avoidance of Unnecessary Problems in Application of Foreign Law
Evaluation of the third and fourth factors requires a brief examination of which substantive law would be applicable to this dispute under the appropriate choice of law rules. While we need not definitively resolve choice of law questions at this stage, a likelihood that a foreign law will apply weighs in favor of dismissing this action. Cavlam Bus. Ltd. v. Certain Underwriters at Lloyd's, London, 2009 WL 667272, at *8 (S.D.N.Y. Mar. 16, 2009); see also Ioannides v. Marika Mar. Corp., 928 F. Supp. 374, 379 (S.D.N.Y. 1996). Accordingly, we now analyze whether a foreign law would be likely to govern plaintiffs' claims of breach of contract, conversion, fraud and wire fraud.
Neither plaintiffs' nor defendants' submissions to this Court set forth a choice of law analysis of any claim in this case.
A federal court sitting in diversity, as we would if we were to adjudicate this case, applies the substantive law of the forum state, here, New York, including that state's choice of law rules. Lazard Freres Co. v. Protective Life Ins. Co., 108 F.3d 1531, 1538 (2d Cir. 1997). In a breach of contract case, New York courts follow the "`center of gravity'" approach to resolve choice of law issues. Id. at 1539. Under that approach, "courts may consider a spectrum of significant contacts, including the place of contracting, the places of negotiation and performance, the location of the subject matter, and the domicile or place of business of the contracting parties." Id. Traditional choice of law factors, that is, the places of contracting and performance, are given the heaviest weight in the analysis. Id.
Where a contract contains a choice of law clause and where a court concludes that the clause is valid, the law selected in that clause will generally dictate the interpretation of the contract. Gerritsen v. Glob Trading, Inc., 2009 WL 262057, at *3 (E.D.N.Y. Feb. 4, 2009). The contract at issue here states, in pertinent part, that "[f]or everything related to the interpretation and execution of this contract the parties agree to expressly submit to the court of Guadalajara City, Jalisco modifying this contract to any other code of laws that could correspond in the present or the future for reason of its addresses." (Rivera Aff., Ex. 1 at 11.) The first half of this clause is properly characterized as a choice of forum clause, designating Mexico as the parties' chosen forum for resolution of a contract dispute. The second half of this clause is very unclear and offers no explicit direction regarding applicable law. As neither this clause nor any other clause in the contract indicates which law should be applied to the dispute, there is no choice of law clause to govern our inquiry.
In this case, the Amended Complaint indicates that the original location for negotiating and contracting was in Mexico, with subsequent communications occurring between plaintiffs in New York and Bloom in Mexico. The place of performance, that is, delivery of Casa 34, was to take place in Mexico and, likewise, the location of the subject matter of the contract, Casa 34, is in Mexico. The domicile of plaintiffs is New York and the domicile or place of business of all defendants is Mexico. In light of these facts, giving particular weight to the place of contracting and the place of performance, it appears that Mexican law will be likely to apply to the breach of contract cause of action.
In tort actions, including claims of conversion and fraud, New York courts apply an "`interests analysis,' under which the law of the jurisdiction having the greatest interest in the litigation is applied." Curley v. AMR Corp., 153 F.3d 5, 12 (2d Cir. 1998). "If conflicting conduct-regulating laws are at issue, the law of the jurisdiction where the tort occurred will generally apply because that jurisdiction has the greatest interest in regulating behavior within its borders." Id. (internal quotation marks and citation omitted). While we have no specific information as to Mexico's law regarding fraud, wire fraud or conversion, if there were a conflict of laws and the interests analysis were applied, it is likely that Mexican law would govern these tort claims because the alleged torts of fraud and conversion occurred in Mexico. Thus, Mexico would have the greatest interest in regulating this conduct.
Because Mexican law is likely to govern plaintiffs' claims, the interest of deciding this case in a forum at home with the governing law (the third factor) and the avoidance of unnecessary problems in the application of foreign law (the fourth factor) both favor dismissal of this action.
4. Unfairness of Burdening Citizens in Unrelated Forum With Jury Duty
In analyzing this factor, we ask whether it would be unfair to ask jury members in the Southern District of New York to "be called upon to find facts pertaining to a case that has no relation to their community." Cavlam, 2009 WL 667272, at *9. While we have noted that this controversy has more ties to Mexico than it does to the United States, plaintiffs are United States citizens and New York residents and, therefore, we cannot say that it would be unfair to ask a jury in this district to resolve this conflict. We recognize that while Mexican jurors have an interest in determining this dispute based on defendants' ties to and the subject house's location in their community, New York jurors also have an interest in determining this dispute based on plaintiffs' ties with their community. Thus, this factor is neutral.
B. Private Interest Factors 1. Relative Ease of Access to Sources of Proof
Upon review of the Amended Complaint, it appears that much of the evidence in this case consists of documentary evidence. Plaintiffs argue that, if forced to litigate in Mexico, "[i]t would be cost prohibitive for all papers . . . to be translated into Spanish." (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 9.) We agree that the cost of document translation from English to Spanish and the potential for the delay of proceedings during the translation favor retention of this case. See Blanco v. Banco Indus. de Venezuela, S.A., 997 F.2d 974, 983 (2d Cir. 1993); see also Nationsbank of Fl. v. Banco Exterior de Espana, 867 F. Supp. 167, 171-72 (S.D.N.Y. 1994). 2. Availability of Compulsory Process For Unwilling Witnesses
Plaintiffs request that "[t]o the extent that the Court decides to dismiss for forum non-conveniens, it is respectfully requested that it be conditioned that all proceedings be in English and that there be no necessity for translations of the documents nor the testimony into Spanish." (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 9 n. 2 (emphasis added).) But this Court has no power to direct a court in another sovereign nation to conduct its proceedings in a language foreign to that nation.
Plaintiffs argue that this factor favors retention of the case because "[s]ubstantially all of the non-party witnesses are citizens of the [United States]," including "Sutker[,] of Chicago," "[t]he Liras [who] are residents of San Antonio, Texas," "Dunlop [who] is Canadian," "Bloom" and "Ocana." (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 8-9.) This Court does not, however, have plenary power to compel unwilling witnesses to appear to testify merely because they are citizens of the United States; rather, we can only compel witnesses "within 100 miles of the place specified for . . . trial." FED. R. CIV. P. 45(b)(2)(B). None of the witnesses named by plaintiffs, perhaps with the exception of Ocana, whose location is not provided, and Bloom, whose whereabouts are unknown, are located within one hundred miles of this Court. ( See Pls. Sur-reply Mem. Opp. Mot. Dismiss at 8-9.) Based on plaintiffs' submissions, we cannot say that we would be able to compel the attendance of any unwilling witness. See Guimond v. Wyndham Hotels Resorts, 1996 WL 281959, at *4 (S.D.N.Y. May 29, 1996) ("Although there may be non-party witnesses in the United States who will not be subject to compulsory process in Jamaica, neither [p]laintiff nor [d]efendant has identified even one witness who is within the 100-mile radius subpoena power of [that] [c]ourt."); see also Becker v. Club Las Velas, 1995 WL 267025, at *3-4 (S.D.N.Y. May 8, 1995) (finding that compulsory process for unwilling witnesses favors Mexico where several "non-party witnesses" are located in Mexico and "many of the United States non-party witnesses appear to be outside of the 100-mile radius subpoena power of [that] [c]ourt").
However, we cannot say that this factor favors dismissal because no evidence presented suggests that a Mexican court would be better able to compel the presence of unwilling witnesses and because defendants have not identified any witnesses whom they plan to call to testify who would be subject to the subpoena power of a Mexican court. Therefore, we find that this factor is neutral. 3. Possibility of View of the Premises
Plaintiffs, in the Amended Complaint, discuss the premises of Vallarta Gardens and the fact that they were permitted entrance during each visit through gated security and directed to Bloom. (Am. Complt. ¶ 36.) To the extent viewing the premises would be helpful, this factor would tend towards dismissal as the premises are located in Mexico. However, based on the evidence before us, we cannot say that a view of the premises will be helpful in resolving this case and, therefore, we find that this factor is of minor significance in our resolution of the present issue.
4. Other Practical Problems
This factor requires consideration of "all other practical problems that make trial of a case easy, expeditious and inexpensive." Piper, 454 U.S. at 241 n. 6. As discussed above, the contract at issue contains a forum selection clause. As we have found this clause to be mandatory, plaintiffs' breach of contract claim can be properly brought only in Mexico. It would be highly impractical to litigate plaintiffs' conversion, fraud and wire fraud claims in this Court while the breach of contract claim, arising out of the same operative facts, was litigated in Mexico. Presumably, much if not all of the evidence and many if not all of the witnesses would be duplicative and, thus, to separate the claims and permit trial of one in Mexico and two in New York would result in tremendous expense. In the interest of judicial economy and efficiency, this factor strongly supports dismissal.
Plaintiffs also add that, if this case is litigated in Mexico, "attorney's fees and disbursements could range up to $50-75,000" due to "the need for translations, translators, travel, accommodations" and that these costs are a financial hardship to plaintiffs. (Pls. Sur-reply Mem. Opp. Mot. Dismiss at 9.) We have considered the cost of translating the evidence in this case from English to Spanish in our discussion of private interest factor one, ( see supra Section V.B.1.), the relative ease of access to sources of proof, and therefore do not address it again here. The other principal cost to plaintiffs is the expense of travel and accommodations associated with litigating a case in Mexico. We do not, however, find that this favors retention of this case. Whether this case is litigated here or in Mexico, it will be expensive for one party to travel to the forum in which these causes of action are litigated. Although plaintiffs have submitted no particularized information as to their own financial situation that would allow us to determine whether litigation in Mexico would be unduly burdensome to them, we note that they have repeatedly traveled to Mexico for vacations and even contracted to buy a home there for vacation use. Cf. Murray v. British Broad. Corp., 81 F.3d 287, 294 (2d Cir. 1996) (comparing one party's "total pre-tax personal income, after business expenses, of 46,066 pounds sterling" with those of plaintiffs who have been "found to be unable to litigate in a foreign forum" and determining that plaintiff was not "`of such limited means'" as to prevent him from pursuing his claims in a foreign forum).
Thus, the public and private factors, viewed in their totality, favor dismissal of plaintiffs' causes of action. The cost of translation from English to Spanish is the only factor that favors retention of this case. That factor is insufficient to overcome the weight of the mandatory forum selection clause that governs the breach of contract cause of action. Further, even if the balance weighed slightly in favor of retaining the fraud, wire fraud and conversion causes of action, and we do not think it does, the prospect of litigating this dispute in two different forums weighs against retention of those causes of action that are not controlled by the forum selection clause. Because we have found that Mexico is an adequate alternative forum and the forum designated under the contract and because the public and private factors favor dismissal, we conclude that the entire action should be dismissed on the basis of forum non-conveniens, in favor of the Mexican courts.
CONCLUSION
For all of the foregoing reasons, defendants' motion to dismiss (Doc. #7) is granted. In order to prevent prejudice to plaintiffs, this dismissal is conditioned upon defendants' submission to this Court, within fourteen days of this Opinion and Order, of an irrevocable commitment by defendants to: (1) submit to the jurisdiction of and waive service of process in a Mexican court; and (2) waive any statute or other law of limitations that would otherwise apply under Mexican law to any action hereafter brought in a Mexican court by plaintiffs against defendants on any claim asserted in this action. This dismissal is without prejudice and without costs or attorneys' fees.
SO ORDERED.