REPORT AND RECOMMENDATION SARAH NETBURN, United States Magistrate Judge.
TO THE HONORABLE VALERIE E. CAPRONI:
This case centers on whether the parties orally agreed in July 2010 to open a dialysis center together in Trinidad and Tobago. On May 19, 2016, the Honorable Valerie E. Caproni referred this matter to me for general pretrial supervision and to report and recommend on any dispositive motions. ECF No. 3. On February 19, 2018, Defendant Andy Ramgoolie filed a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. ECF No. 111. On February 20, 2018, Plaintiff Jenny Ramgoolie filed a motion for partial summary judgment pursuant to Rule 56 and for sanctions pursuant to Rule 37. ECF No. 113. I recommend DENYING the parties' cross-motions for summary judgment in their entirety. In addition, I recommend instructing the jury at trial that it may draw an adverse inference based on Defendant's failure to produce certain documents during discovery. Finally, Defendant is required to pay the reasonable attorneys' fees and costs that Plaintiff incurred in bringing her motion to compel and motion for sanctions.
RULE 56.1 STATEMENTS
Local Civil Rule 56.1(a) provides that any motion for summary judgment must be accompanied by "a separate, short and concise statement, in numbered paragraphs, of the material facts as to which the moving party contends there is no genuine issue to be tried." Likewise, any party opposing the motion must file a counterstatement that includes "a correspondingly numbered paragraph responding to each numbered paragraph in the statement of the moving party." Local Civil Rule 56.1(b). "Statements in [a] Rule 56.1 statement are inappropriate if they are not based on personal knowledge, contain inadmissible hearsay, are conclusory or argumentative, or do not cite to supporting evidence." Epstein v. Kemper Ins., 210 F. Supp. 2d 308, 314 (S.D.N.Y. 2002). A Rule 56.1 submission "is not itself a vehicle for making factual assertions that are otherwise unsupported in the record." Holtz v. Rockefeller & Co., 258 F.3d 62, 74 (2d Cir. 2001). Thus, each statement of material fact in a party's Rule 56.1 submission "must be followed by citation to evidence which would be admissible." Local Civil Rule 56.1(d).
A party's "failure to comply with Local Rule 56.1 is grounds for deeming admitted the facts contained in [the opposing party's] Rule 56.1 statement." Prunella v. Carlshire Tenants, Inc., 94 F. Supp. 2d 512, 513 n.1 (S.D.N.Y. 2000). But see Balut v. Loral Elec. Sys., 988 F. Supp. 339, 343 (S.D.N.Y. 1997) (noting that the Court "may overlook the 'technical deficiency' of a party's submission"), aff'd, 166 F.3d 1199 (2d Cir. 1998). Each paragraph in the moving party's Rule 56.1 statement "will be deemed to be admitted for purposes of the motion unless specifically controverted by a correspondingly numbered paragraph" in the opposing party's counterstatement. Local Civil Rule 56.1(c). In addition, because the facts in the statement and counterstatement must be material, "'[f]actual disputes which are irrelevant or unnecessary' to the claims at issue 'will not be counted.'" Congregation Rabbinical Coll. of Tartikov, Inc. v. Vill. of Pomona, 138 F. Supp. 3d 352, 395 (S.D.N.Y. 2015) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). "Similarly, the Court can also disregard legal conclusions or unsubstantiated opinions in a Local Rule 56.1 statement." Id. at 394.
Plaintiff's Rule 56.1 statement is essentially a recitation of her case-in-chief, rather than a short statement of the undisputed material facts. Pl.'s Rule 56.1 Stmt., ECF No. 124. Although she alleges that certain material facts are undisputed and supports them with admissible evidence, many facts in her Rule 56.1 statement are immaterial and do not help the Court in narrowing the issues for trial. Other statements are opinions or legal conclusions that have no place in a Rule 56.1 statement. For example, she writes, "Counter to Plaintiff's claim that, pursuant to her agreement with Defendant, she was an owner of Aandco, Defendant contends Plaintiff was merely an Aandco employee and acted as Defendant's 'assistant.'" Id. ¶ 45. These type of statements are entitled to little weight and should not be deemed undisputed facts.
Defendant's Rule 56.1 statement and counterstatement are wholly inadequate. To begin with, Defendant failed to file both his Rule 56.1 statement and counterstatement on time. See ECF Nos. 111-12, 128. Defendant did not file these statements until April 2, 2018, two days before Plaintiff's reply brief was due, thereby denying Plaintiff an adequate opportunity to respond. See ECF Nos. 108, 129, 130. At that point, instead of seeking the Court's permission to file the Rule 56.1 submissions after the applicable deadlines, Defendant simply filed a letter informing the Court that he "inadvertently" failed to file the statements on time because his cocounsel was "sick and on trial," which required him to "tak[e] on more in regards to the summary judgment motions." ECF No. 131. These explanations do not excuse defense counsel's failure to file the Rule 56.1 statement and counterstatement in a timely fashion. See Gadsden v. Jones Lang Lasalle Americas, Inc., 210 F. Supp. 2d 430, 434-37 (S.D.N.Y. 2002) (noting that "[p]reoccupation with another trial and mere oversight are not reasons for delay that are sufficient to satisfy the standard for excusable neglect" (quoting Mason v. Schriver, No. 96-CV-6942 (LAP), 1999 WL 498221, at *3 (S.D.N.Y. July 13, 1999))).
Defendant's 56.1 statement, for which he claims "there is no genuine issue to be tried," includes that he "disputes that he had a conversation with plaintiff in or about July 2010 that she would be in any way an owner" of the dialysis business. Def.'s Rule 56.1 Stmt. ¶ 9, ECF No. 130 (emphasis added). Defendant's counterstatement falls still further short of the Rule's requirements. Defendant ignores many paragraphs in Plaintiff's 56.1 statement entirely and responds to others with argument and without citing evidence. For example, after noting that the emails in the record "speak for themselves," Defendant opines without any evidentiary support "that plaintiff has a habit of trying to reinterpret emails, or add[ing] her opinion or personal spin of e-mails." Id. ¶ 10. Defendant disputes only six of the 144 paragraphs in Plaintiff's Rule 56.1 statement with citations to evidence. Id. ¶¶ 8-10, 23-25. These relate to the core issue of whether the parties made an oral agreement.
On this record, I recommend finding that the key question of whether the parties entered into an oral agreement is a disputed material fact. I further recommend finding that whether Plaintiff was an owner, employee, or administrator of the dialysis business is a disputed material fact. However, defendant has failed to challenge plaintiff's material statements about what work she performed before and during the existence of the company and that she was never compensated for any work she performed or reimbursed for any expenses she incurred. Accordingly, I recommend finding that the statements regarding plaintiff's contributions (through research, work, investment, or otherwise) are undisputed and deemed admitted.
FACTUAL AND PROCEDURAL BACKGROUND
I. Factual History
Plaintiff is a registered nurse with a Master's Degree in Health Administration. Pl.'s Rule 56.1 Stmt. ¶ 4. She is originally from Trinidad and Tobago but now resides in Texas. Id. ¶¶ 1, 6. Defendant is a businessman who owns and operates a bar in New York. Id. ¶ 5. Plaintiff and Defendant are siblings. Id. ¶ 3.
According to Plaintiff, in July 2010, the parties spoke on the phone and agreed to open a dialysis center together in Trinidad and Tobago. Id. ¶ 8. Plaintiff claims that she came up with this business idea after researching dialysis treatment for their mother, Annie Ramgoolie, and discovering that dialysis centers were in short supply in Trinidad and Tobago. Id. ¶¶ 6-7. During the phone conversation, the parties allegedly agreed that Defendant would finance the venture and that Plaintiff would conduct research, assist in starting the business, and assist in managing its operations. Id. ¶ 9. Plaintiff also asserts that the parties agreed they would each be 50% owners of the venture, and any profits the business generated would first be paid to Defendant to compensate him for his initial investment, after which Plaintiff and Defendant would share profits and losses equally. Id. Plaintiff claims that the parties planned to form a corporate entity to operate the business. Id. Defendant, for his part, denies that the July 2010 phone call ever occurred and denies ever agreeing to give Plaintiff a 50% ownership interest in the dialysis business. Def.'s Rule 56.1 Counterstatement ¶¶ 8-9.
Over the next year and a half, Plaintiff conducted extensive research on the dialysis industry, retained a third-party consultant with expertise in opening international medical facilities, and began preparing a business plan. Pl.'s Rule 56.1 Stmt. ¶¶ 18-22. On December 5, 2012, Plaintiff sent Defendant an email referencing "the business plan for Dialysis" and a "50/50 business deal." ECF No. 116-8. The email also seemed to ask whether Defendant was ready to start the business. Id. Defendant did not respond to this email in writing. Pl.'s Rule 56.1 Stmt. ¶ 24. Nonetheless, Plaintiff continued to work on developing the business during the months that followed. Id. ¶ 18. She visited Trinidad and Tobago to look for office space, prepared a project management status report, prepared a drawing of the physical layout of the dialysis center, and began hiring staff. Id. ¶ 18.
On April 3, 2013, Aandco Health Care Ltd. ("Aandco") was incorporated in Trinidad and Tobago. ECF No. 116-16. Defendant and Kevin Ramgoolie, the parties' nephew, were listed as directors. Id. At the time, Plaintiff's son was facing murder charges in Florida. Pl.'s Rule 56.1 Stmt. ¶ 27. Plaintiff contends that the parties agreed her name should be omitted from Aandco's corporate documents because of the potential negative publicity associated with her son's case. Id. Despite this arrangement, however, Plaintiff continued to play an active role in developing and managing Aandco after its incorporation. Plaintiff secured licensures for the business, procured supplies and equipment, retained an architect and accountants, hired additional staff, oversaw the creation of company policies and procedures, and managed the business's finances. Id. ¶ 18. Plaintiff never received a salary or other monetary compensation for her work. Id. ¶ 46, 48. Although Defendant neither confirms nor denies that Plaintiff carried out all of these tasks from 2010 to 2014, Defendant claims that Plaintiff was simply an "administrator and employee" of Aandco, not an owner of the business. Def.'s Rule 56.1 Counterstatement ¶ 18.
In April 2014, Aandco filed an annual return showing that Defendant and Kevin Ramgoolie were Aandco's only shareholders, each owning one ordinary share. ECF No. 116-17. On October 4, 2014, however, Aandco's board of directors passed a resolution issuing 599 additional shares to Defendant, 2,899 additional shares to Kevin Ramgoolie, 2,000 shares to Jeremy Ramgoolie (another nephew), and 4,500 shares to Annie Ramgoolie. ECF No. 123-19. Plaintiff claims that she reviewed Aandco's documents of incorporation for the first time in December 2014 and was surprised to discover that the documents listed Kevin Ramgoolie as a 50% owner of the company. Pl.'s Rule 56.1 Stmt. ¶¶ 89-90. Plaintiff was also unaware of the October 2014 issuance of shares until after she filed this action against Defendant. Id. ¶ 91.
The documents of incorporation that are included in the record do not list Aandco's shareholders at all. ECF No. 116-16. Thus, it seems possible that Plaintiff actually reviewed Aandco's April 2014 annual return. ECF No. 116-17.
The criminal case against Plaintiff's son was resolved in December 2014. Id. ¶ 14. On January 19, 2015, Plaintiff sent Defendant an email stating, "I hope you are ready to give me my salary and $60,000 per month for my expertise." ECF No. 123-12. She went on to write, "I don't know what is your plan if any for any shares for me as there is not even a business card in my name." Id. A couple weeks later, on February 2, 2015, Defendant sent Plaintiff an email indicating that he planned to establish "a separate company to supply Aandco and other facilities with [dialysis] supplies." ECF No. 126-29. Later that day, Plaintiff responded that she was "not sure" if Aandco should buy supplies from Defendant's new company because she feared that the company would "charge too much" and siphon off profits from Aandco. ECF No. 123-13. Her email later said, "Our deal was 50 percent shared profits after u get paid back ur funds." Id. She also stated:
U need ur money any which way
So i am also putting my bill together
Consulting idea for business for over 2 years
Working salary from last july
Shared profits 50 percent from July
On February 10, 2015, Plaintiff sent Defendant an email, which stated, "Go ahead run your company you and Kevin . . . . I am no longer involved with Aandco healthcare." ECF No. 123-14. Similarly, in March 2015, Plaintiff sent Defendant another email stating, "Now that you have decided you will not negotiate my salary, my shares, (which you don't remember) . . . I am officially DEAD." ECF No. 123-15. She also wrote, "The company currently earns over $600,000 dollars, more than enough to pay my salary and soon to go up to a million per month . . . but since my value is Zilch I leave you to your decisions. I expect to be paid TT$60,000 per month." Id. A few weeks later, on April 15, 2015, Plaintiff emailed Defendant and Kevin Ramgoolie yet again, this time stating, "Over the past 6-7 months I have spent some money on Aandco. I would like to replace these expenses . . . . It's a total of $78,525 TT dollars. . . . Let me know if you all are going to make this payment . . . so I can move on from this subject." ECF No. 116-12.
Approximately one month later, on May 18, 2015, Defendant sent Plaintiff an email that said, "You are still a part of Aandco [whether] U like it or not." ECF No. 116-33. On May 24, 2015, Defendant sent Plaintiff another email stating, "I have nothing for you!!! Nothing!!!! U would have gotten so much!!!!" ECF No. 116-34. Several months later, on October 20, 2015, Plaintiff emailed Defendant stating:
It is really sad to see that you are not honoring your side of the bargain as it pertains to aandco. You know I created the company and you refuse to do your part.
You leave me no choice but to file legal proceedings. I realize that this is not the best time but I have given you months to think and do the right thing per our agreement in the past several years.
You continue to refuse to handle, discuss or talk about the matter. You refused my many emails. You leave me no alternatives. I never thought you of all people will cheat me my share of the business . . . .
ECF No. 116-24.
In January 2016, Kevin Ramgoolie filed documents of incorporation for a business called KDR Medical Care Ltd. ("KDR"). ECF No. 116-25. The address listed for KDR was the same as the one listed on Aandco's corporate documents. Compare ECF No. 116-16, with ECF No. 116-25. On January 15, 2016, Aandco and KDR entered into an agreement for KDR to purchase Aandco's assets. ECF No. 115-19. Plaintiff contends that KDR is an alter ego or successor corporation of Aandco created to prevent Plaintiff from benefiting from the July 2010 oral agreement between Plaintiff and Defendant. ECF No. 118 at 17, 22.
II. Procedural History
On May 5, 2016, Plaintiff filed this diversity action against Aandco, KDR, Andy Ramgoolie, Kevin Ramgoolie, Annie Ramgoolie, and Jeremy Ramgoolie alleging breach of contract, quantum meruit, unjust enrichment, fraud, breach of fiduciary duties, and intentional infliction of emotional distress. ECF No. 1. On February 10, 2017, the Court granted Aandco and KDR's motion to dismiss for lack of personal jurisdiction. ECF No. 67 at 3, 5. And on August 18, 2017, the Court granted Kevin Ramgoolie, Annie Ramgoolie, and Jeremy Ramgoolie's motion to dismiss for lack of personal jurisdiction. ECF No. 88 at 2, 6. But in that same order, the Court denied Andy Ramgoolie's motion to dismiss for failure to state a claim, concluding that the alleged oral agreement was not void under New York's Statute of Frauds. Id. at 4-6. After all of the defendants except Andy Ramgoolie had been dismissed from this action, on December 7, 2017, Plaintiff filed a separate action in Trinidad and Tobago's High Court of Justice asserting claims against Aandco, KDR, Direct Med Company Ltd., Andy Ramgoolie, Kevin Ramgoolie, and Jeremy Ramgoolie. ECF No. 123-8.
Meanwhile, on October 4, 2017, the Court held a conference to discuss Plaintiff's requests that Defendant produce certain documents. ECF No. 100. Based on the information provided by the parties, the Court found that Defendant has access to the corporate records of Aandco. Id. at 11. The Court also concluded that Aandco's corporate records are relevant to Plaintiff's claims that Defendant issued Aandco shares to other family members and later transferred Aandco's assets to KDR to prevent Plaintiff from exercising control over the business. Id. at 4, 6. The Court ordered Defendant to produce copies of all documents relating to the creation and corporate structure of Aandco, any changes in Aandco's ownership, any transfers of assets from Aandco to KDR, the value of Aandco shares at the time of any transfers, and the values of any assets transferred from Aandco to KDR. Id. at 10-13. Defendant was ordered to produce the documents by November 1, 2017. Id. at 14.
On November 8, 2017, Plaintiff informed the Court that Defendant had failed to produce documents in accordance with the Court's orders during the October 4, 2017 conference. ECF No. 95. The Court held another conference on November 14, 2017, to discuss the outstanding discovery issues. ECF No. 102. Defense counsel stated that he had spoken on several occasions with an attorney in Trinidad and Tobago named "Nadine" who indicated that she would try to send relevant corporate records to defense counsel. Id. at 5-6. Defense counsel also spoke with Kevin Ramgoolie, who purportedly refused to send Defendant corporate documents. Id. at 6. Finally, defense counsel stated that he had not responded to Plaintiff's discovery demands in a form that complied with the Federal Rules of Civil Procedure. Id. at 23-24. The Court ordered Defendant to serve full discovery responses on Plaintiff by the end of the week. Id. at 24. The Court also stated that Plaintiff could file an application for appropriate relief if Defendant's responses to the discovery demands continued to be inadequate. Id.
On November 17, 2017, Defendant produced several records relating to Plaintiff's requests, but Plaintiff was not satisfied with this production. ECF No. 104. Thus, on November 27, 2017, Plaintiff filed a motion to compel Defendant to produce various additional documents. Id. On December 18, 2017, the Court ruled that Defendant had failed to comply with the Court's October 4, 2017 Order by failing to produce documents in response to Requests 2, 4, 5, 12, and 15 of Plaintiff's August 23, 2017 document requests. ECF No. 108 at 6-7. Accordingly, the Court invited Plaintiff to "make an application for any appropriate relief in connection with her motion for summary judgment." Id. at 7. Approximately one month later, on the morning of his deposition, Defendant produced two additional documents that listed Aandco's shareholders and creditors and the amounts of their purported contributions to the company. Pl.'s Rule 56.1 Stmt. ¶ 144; ECF No. 123-21.
On February 19, 2018, Defendant moved for summary judgment, contending that the case should be dismissed in its entirety under the doctrine of forum non conveniens. ECF No. 123 at 2-9. In the alternative, Defendant argued that Plaintiff's breach of contract claim should be dismissed. Id. at 9-23. On February 20, 2018, Plaintiff moved for summary judgment with respect to her breach of contract and breach of fiduciary duty claims. ECF No. 118. Plaintiff argues that the evidence in the record confirms that the parties made an oral agreement in July 2010, and she contends that Defendant has failed to produce any credible evidence to the contrary. Id. at 4-20. Although Plaintiff moves for summary judgment with respect to her breach of fiduciary duty claim, her briefing does not discuss this claim at all. See id. at 1. Because Plaintiff has failed to explain why summary judgment is appropriate, I recommend denying Plaintiff's motion for summary judgment with respect to her breach of fiduciary duty claim. Finally, Plaintiff requests that the Court impose sanctions on Defendant for failing to comply with the Court's October 4, 2017 orders. Id. at 20-25.
Under Federal Rule of Civil Procedure 56, the Court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The moving party must show that "under the governing law, there can be but one reasonable conclusion as to the verdict." Liberty Lobby, 477 U.S. at 250. "If the movant makes this showing . . . the burden shifts to the nonmovant to point to record evidence creating a genuine issue of material fact." Salahuddin v. Goord, 467 F.3d 263, 273 (2d Cir. 2006). The parties "cannot rest on allegations in the pleadings and must point to specific evidence in the record to carry [their respective] burden[s] on summary judgment." Id. In determining whether there are genuine issues of material fact, the Court must "resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought." Johnson v. Killian, 680 F.3d 234, 236 (2d Cir. 2012) (quoting Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir. 2003)).
I. Forum Non Conveniens
Defendant argues that this case should be dismissed in its entirety because Plaintiff has commenced another action seeking similar relief in Trinidad and Tobago. ECF No. 123 at 3-9. "The doctrine of forum non conveniens permits a court to dismiss a claim even if the court is a permissible venue with proper jurisdiction over the claim. Through a discretionary inquiry, the court determines where litigation will be most convenient and will serve the ends of justice." PT United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 73 (2d Cir. 1998) (citations omitted). In making this determination, a court must consider "the availability of an alternative forum, the private interests of the parties, and the public interest in forum selection." Id. Nonetheless, "there is ordinarily a strong presumption in favor of the plaintiff's choice of forum, which may be overcome only when the private and public interest factors clearly point towards trial in the alternative forum." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981); accord Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 70 (2d Cir. 2003) (noting that "a plaintiff's choice of forum is entitled to substantial deference"). "[U]nless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).
First, "[t]o secure dismissal of an action on grounds of forum non conveniens, a movant must demonstrate the availability of an adequate alternative forum." Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146, 157 (2d Cir. 2005). "An alternative forum is adequate if the defendants are amenable to service of process there, and if it permits litigation of the subject matter of the dispute." Pollux Holding, 329 F.3d at 75. Plaintiff argues that Trinidad and Tobago is not an adequate alternative forum because there is "no guaranty" that Defendant, a resident of New York, "will be subject to jurisdiction in Trinidad & Tobago." ECF No. 127 at 5. In his reply brief, however, Defendant notes that "he is a citizen of Trinidad and Tobago" and "does not intend to raise any jurisdiction defenses" in the action there. ECF No. 136 at 2. Defendant plans to "defend that action on the merits." Id. Thus, I find that Trinidad and Tobago is an adequate alternative forum.
Second, the Court must "weigh defendant's hardships if jurisdiction is retained in the forum of plaintiff's choice against plaintiff's hardships if the motion to dismiss is granted." Pollux Holding, 329 F.3d at 75. A court should consider a variety of "private and public interest factors . . . when balancing the relative hardships and conveniences." Id. "The private factors include the access to sources of proof, cost of obtaining willing witnesses, availability of compulsory process for unwilling witnesses, and other practical concerns." PT United, 138 F.3d at 73-74. "The public factors are court congestion, interest of forums in deciding local disputes, and interest in issues of foreign law being decided by foreign tribunals." Id. at 74.
Defendant notes that he is the only remaining defendant in this case. ECF No. 123 at 8. All of the other defendants have been dismissed from this action, and Plaintiff is proceeding against Defendant and the other previously dismissed defendants in another action that she commenced in Trinidad and Tobago. Id. According to Defendant, the other defendants "are all necessary parties to a full resolution of this dispute," and it is "unfair" for him "to have to proceed solo in this case, while everyone else is being litigated against in Trinidad and Tobago." Id. at 4, 8. But "[t]he existence of related litigation . . . is not listed as a relevant factor in the forum non conveniens analysis." Guidi v. Inter-Cont'l Hotels Corp., 224 F.3d 142, 148 (2d Cir. 2000). Thus, Plaintiff's separate action in Trinidad and Tobago should have little bearing on the Court's determination of whether the case should proceed in this forum.
Defendant also points out that there is a possibility that this Court and the Trinidadian court will issue "two conflicting decisions," raising questions over "which court's decision should ultimately govern." ECF No. 123 at 4. Moreover, as the Court previously stated, "New York has little to no interest in adjudicating an ownership and/or employment dispute brought by a Texas domiciliary regarding a dialysis center operating solely in Trinidad and Tobago." ECF No. 55 at 12. Because Plaintiff "chose voluntarily to engage in a business venture involving defendants in the sovereign nation of Trinidad and Tobago, it should be no surprise that a dispute concerning this business would be handled in that nation's judiciary." Id. On the other hand, the parties appear to agree that New York law governs Plaintiff's claims against Defendant in this matter. See ECF No. 118 at 5-6; ECF No. 123 at 9-23; ECF No. 127 at 8-24. Thus, the case does not involve issues of foreign law that would weigh in favor of allowing a foreign tribunal to decide the dispute. See PT United, 138 F.3d at 74.
In addition, Plaintiff claims that she and Defendant made their oral agreement in the United States and performed many of the tasks involved in carrying out that agreement while in the United States. ECF No. 127 at 7. As a result, many of the sources of proof and most if not all of the relevant witnesses in this matter, including Defendant himself, are located in New York or other parts of this country. Id. at 6-7. Indeed, Plaintiff and Defendant are arguably "the most important witnesses" in this matter, Alnwick v. European Micro Holdings, Inc., 29 F. App'x 781, 783 (2d Cir. 2002), and both of them reside in the United States. Likewise, it appears that all of the other potential witnesses who were deposed in this matter—Camryn Ramgoolie, Munza Ramgoolie, Atiba Frazier, and Deryck Henry—reside in New York or elsewhere in the United States. See ECF No. 107; ECF No. 127 at 6-7.
The parties did not depose Kevin or Jeremy Ramgoolie, even though those individuals appear to be highly relevant to this matter. See ECF No. 107. It is possible that these depositions were never conducted because the individuals reside abroad. Nonetheless, if these individuals refused to be deposed, the parties could have sought relief from the Court and may have been able to utilize the Hague Convention to compel the individuals' cooperation. The parties never sought any such relief.
Furthermore, "whenever discovery in a case has proceeded substantially so that the parties already have invested much of the time and resources they will expend before trial, the presumption against dismissal on the grounds of forum non conveniens greatly increases." Alnwick, 29 F. App'x at 783 (quoting Lony v. E.I. Du Pont de Nemours & Co., 935 F.2d 604, 614 (3d Cir. 1991)). Here, the parties have already completed discovery with respect to liability. To dismiss the case at this stage, after the parties have spent considerable time and resources developing the factual record and preparing for trial, would be inefficient and would further delay resolution of Plaintiff's claims against Defendant. On balance, Defendant has failed to overcome the "strong presumption in favor of the plaintiff's choice of forum." Piper Aircraft, 454 U.S. at 255. I recommend that the Court not dismiss this case pursuant to the doctrine of forum non conveniens.
II. Breach of Contract
"Under New York law, the elements of a breach of contract claim are (1) the existence of an agreement; (2) adequate performance of the contract by the plaintiff; (3) breach of contract by the defendant; and (4) damages." Swan Media Grp., Inc. v. Staub, 841 F. Supp. 2d 804, 807 (S.D.N.Y. 2012). Plaintiff argues that the parties made an oral agreement in July 2010 to establish a dialysis business together and that Defendant subsequently breached that agreement by failing to give Plaintiff her share of the business. ECF No. 118 at 2-3; ECF No. 127 at 8-15. Defendant argues that Plaintiff's breach of contract claim should be dismissed because (A) there is insufficient evidence that an agreement was made, (B) it was impossible for Defendant to perform the alleged contract, (C) any oral agreement is void under New York's Statute of Frauds, and (D) Plaintiff cannot prove damages. ECF No. 123 at 9-23.
A. Existence of an Oral Agreement
"To create a binding contract, there must be a meeting of the minds as to the material terms of the agreement." Metro. Enters. N.Y. v. Khan Enter. Const., Inc., 1 N.Y.S.3d 328, 329 (2d Dep't 2015); accord Express Indus. & Terminal Corp. v. N.Y. State Dep't of Transp., 93 N.Y.2d 584, 588 (1999). In other words, "there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms." Express Indus., 93 N.Y.2d at 589. Still, "parties also should be held to their promises and courts should not be 'pedantic or meticulous' in interpreting contract expressions." Cobble Hill Nursing Home, Inc. v. Henry & Warren Corp., 74 N.Y.2d 475, 483 (1989) (quoting 1 Corbin on Contracts § 95 (1963)). "In determining whether the parties intended to enter a contract, and the nature of the contract's material terms, we look to the 'objective manifestations of the intent of the parties as gathered by their expressed words and deeds.'" Stonehill Capital Mgmt., LLC v. Bank of the W., 28 N.Y.3d 439, 448-49 (2016) (quoting Brown Bros. Elec. Contractors v. Beam Const. Corp., 41 N.Y.2d 397, 399 (1977)). "[D]isproportionate emphasis is not to be put on any single act, phrase or other expression, but, instead, on the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain." Brown Bros., 41 N.Y.2d at 399-400.
Plaintiff attests that she made an oral agreement with Defendant in July 2010 to open a dialysis center in Trinidad and Tobago. ECF No. 116 at 1. Plaintiff argues that this constituted an agreement to form a joint venture. ECF No. 118 at 5-9. In order to form a joint venture under New York law:
(1) two or more persons must enter into a specific agreement to carry on an enterprise for profit; (2) their agreement must evidence their intent to be joint venturers; (3) each must make a contribution of property, financing, skill, knowledge, or effort; (4) each must have some degree of joint control over the venture; and (5) there must be a provision for the sharing of both profits and losses.
Itel Containers Int'l Corp. v. Atlanttrafik Exp. Serv. Ltd., 909 F.2d 698, 701 (2d Cir. 1990). But the crux of the parties' dispute is whether they had a meeting of the minds in July 2010 and actually entered into a specific agreement to establish a dialysis business together. Defendant flatly denies that the parties ever made an oral agreement in July 2010. ECF No. 128-1 ¶ 1. He asserts that Plaintiff was merely "an administrator and employee" of Aandco who was never entitled to any ownership interest in the business. ECF No. 128 at 2. Thus, the Court need not analyze whether all of the elements of a joint venture were met.
Defendant also points out that when Plaintiff was deposed, she did not state that the parties agreed to first repay Defendant for his initial investment before splitting profits and losses evenly. ECF No. 128 at 2-4. But Plaintiff described this term in her complaint. ECF No. 1 ¶ 1. While Plaintiff's failure to mention the term during her deposition may demonstrate that the terms of the agreement were different from what she has alleged, this relatively minor omission does little to undermine her contention that the parties reached an agreement in July 2010 to start a dialysis business together. --------
Plaintiff contends that her actions in the years that followed evince the parties' intent to establish a business together. Plaintiff spent a great deal of time developing and managing the dialysis business beginning long before Aandco was ever incorporated. She conducted research on dialysis facilities, designed the layout of the dialysis center, procured supplies and equipment, retained consultants and accountants, hired staff, established company policies, and managed Aandco's finances. Pl.'s Rule 56.1 Stmt. ¶ 18. Plaintiff never received a salary or other monetary compensation for her work. Id. ¶¶ 46, 48. She also incurred significant expenses on behalf of Aandco and was never paid by the company for those expenses. Id. ¶¶ 47-48. On the one hand, these efforts and contributions might well demonstrate that Plaintiff was a co-owner of the dialysis business and a joint venturer with Defendant. On the other hand, Plaintiff's work could just as easily show that Plaintiff was hired as an employee to assist Defendant in developing and managing his dialysis business and never received compensation for the services she provided.
Plaintiff also asserts that her written correspondence with Defendant demonstrates that the parties agreed to form a joint venture. In a December 2012 email regarding "the business plan for Dialysis," Plaintiff said to Defendant, "You ready[?] [A]ny delay is lost in revenue . . . 50/50 business deal, you get paid back your cash out put with interest \and divide profit." ECF No. 116-8. Defendant did not respond to this email in writing, but Aandco was incorporated a few months later in April 2013. Pl.'s Rule 56.1 Stmt. ¶¶ 17, 24. The content of this December 2012 email and the fact that Plaintiff sent it just a few months before Aandco's incorporation certainly support Plaintiff's contentions that the parties agreed to start the dialysis business together and eventually share its profits.
Yet Plaintiff sent other emails suggesting that the parties never had a meeting of the minds with respect to the dialysis business and its ownership structure. For example, on January 19, 2015, Plaintiff emailed Defendant stating:
I hope you are ready to give me my salary and $60,000 per month for my expertise and when it goes to 6 days it will [be] 100,000 TT / month . . . .
I don't know what is your plan if any for any shares for me as there is not even a business card in my name . . . . I gave the idea[.] I need these things sorted out to move on with my life.
ECF No. 123-12. This email suggests that the parties had agreed that Plaintiff would be paid a salary and what appears to be a monthly consulting fee. Such a compensation arrangement is consistent with Defendant's contentions that Plaintiff was an administrator and employee of Aandco, but not an owner of the business. See ECF No. 128 at 2. In this email, Plaintiff also asks whether Defendant plans to give her any shares, suggesting that the parties had not previously agreed that Plaintiff would receive a 50% ownership stake in the business.
On February 2, 2015, Plaintiff emailed Defendant stating, "Our deal was 50 percent shared profits after u get paid back ur funds." ECF No. 123-13. But she went on to state:
U need ur money any which way
So i am also putting my bill together
Consulting idea for business for over 2 years
Working salary from last july
Shared profits 50 percent from July
Id. Although the first statement suggests that the parties had previously agreed to share profits equally after Defendant's initial investment was repaid, the five lines near the end of the email appear to demand compensation that differs from the alleged July 2010 agreement. These later statements suggest that the parties were still negotiating Plaintiff's compensation package.
In addition, on February 10, 2015, Plaintiff wrote, "Go ahead run your company you and Kevin . . . . I am no longer involved with Aandco healthcare." ECF No. 123-14. By referring to Aandco as Defendant's company, Plaintiff implied that the parties had not in fact reached a consensus in July 2010 regarding the business's ownership structure. Similarly, in March 2015, Plaintiff sent Defendant another email stating, "Now that you have decided you will not negotiate my salary, my shares, (which you don't remember) . . . I am officially DEAD." ECF No. 123-15. She went on, "The company currently earns over $600,000 dollars, more than enough to pay my salary and soon to go up to a million per month . . . but since my value is Zilch I leave you to your decisions. I expect to be paid TT$60,000 per month." Id. Again, these statements suggest that the parties were still negotiating the compensation Plaintiff would receive for her work, including any Aandco shares. Moreover, Plaintiff's specific references to her "salary" imply that Plaintiff was actually an employee of Aandco who expected to receive a salary, rather than a co-owner who would receive a portion of any profits.
In sum, the parties have provided conflicting accounts of what transpired in July 2010. Plaintiff contends that the parties made an oral agreement to establish a dialysis business together and share the business's profits. Defendant asserts that the parties never made any such agreement. Furthermore, in her emails to Defendant, Plaintiff was often inconsistent in describing the arrangement between the parties. Sometimes she stated that the parties had agreed to divide the business's profits, but on other occasions, she demanded a salary and asked whether Defendant planned to give her Aandco shares. Thus, there is a genuine dispute of material fact with respect to whether Plaintiff and Defendant orally agreed to form a joint venture in July 2010, and if so, a genuine dispute likewise exists regarding the material terms of that agreement.
"Impossibility excuses a party's performance only when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible. Moreover, the impossibility must be produced by an unanticipated event that could not have been foreseen or guarded against in the contract." Kel Kim Corp. v. Cent. Markets, Inc., 70 N.Y.2d 900, 902 (1987); Kolodin v. Valenti, 979 N.Y.S.2d 587, 589 (1st Dep't 2014). "The excuse of impossibility is generally 'limited to the destruction of the means of performance by an act of God, vis major, or by law.'" Kolodin, 979 N.Y.S.2d at 589 (quoting 407 E. 61st Garage, Inc. v. Savoy Fifth Ave. Corp., 23 N.Y.2d 275, 281 (1968)). According to Defendant, even if the parties made an oral agreement in July 2010, it was impossible for Defendant to give Plaintiff a 50% ownership interest in Aandco pursuant to the alleged contract because (1) the company had other shareholders and "creditors," precluding Plaintiff and Defendant from each owning 50% of the business, and (2) Defendant was never repaid for his initial investment, which was required before Plaintiff received any portion of the business's profits. ECF No. 123 at 18-20.
But Defendant has not shown that either of these circumstances made performance of the alleged contract objectively impossible. First, if the parties truly agreed that Plaintiff would own 50% of the business, then they could have structured Aandco in a way that would have ensured that Plaintiff held 50% of the company's shares. Indeed, Plaintiff argues that Defendant's transfer of shares to Kevin Ramgoolie was itself a breach of the oral contract between Plaintiff and Defendant because that agreement did not allow for other shareholders. ECF No. 127 at 20. It is also unclear how the existence of "creditors" made it impossible for Plaintiff to own 50% of the business or receive 50% of the profits Aandco generated after Defendant's initial investment was repaid. If those individuals were actually creditors who loaned money or other property to Aandco—and not shareholders who invested in exchange for shares of the company—then any payments to them would be repayments of debt and would not constitute profits at all. Compare Profit, Black's Law Dictionary (10th ed. 2014), with Debt, Black's Law Dictionary.
Second, even if Defendant was never fully repaid for his initial investment, Defendant has still failed to explain how that situation prevented him from granting Plaintiff an ownership interest in the business. When establishing the dialysis business, it appears that Defendant was free to issue Aandco shares to Plaintiff, and such shares presumably would have given her the power to participate in the business's corporate governance. The fact that Plaintiff may have never received any monetary value from her shares does not excuse Defendant from granting them in the first place. Thus, Defendant has failed to demonstrate that it was impossible for him to fulfill his duties under the alleged contract.
C. Statute of Frauds
Defendant also argues that New York's Statute of Frauds bars enforcement of any oral agreement between the parties. ECF No. 123 at 21-22. New York General Obligations Law § 5-701(a) provides that when an agreement "[b]y its terms is not to be performed within one year from the making thereof," then the "agreement . . . is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith." Defendant argues that Plaintiff cannot maintain her breach of contract claim because the parties did not sign a written contract and the oral agreement that the parties allegedly made was not in fact performed within one year. ECF No. 123 at 21-22.
But this is precisely the same argument the Court rejected when it denied Defendant's motion to dismiss. ECF Nos. 76, 88. "The question is not what the probable, or expected, or actual performance of the contract was; but whether the contract, according to the reasonable interpretation of its terms, required that it should not be performed within the year." D & N Boening, Inc. v. Kirsch Beverages, Inc., 63 N.Y.2d 449, 454 (1984) (quoting Warner v. Tex. & P. Ry. Co., 164 U.S. 418, 434 (1896)). In other words, the Statue of Frauds only applies "to those contracts . . . which by their very terms have absolutely no possibility in fact and law of full performance within one year." Id. Moreover, "the statute of frauds is generally inapplicable to an agreement to create a joint venture . . . because, absent any definite term of duration, an oral agreement to form a partnership or joint venture for an indefinite period creates a partnership or joint venture at will." Foster v. Kovner, 840 N.Y.S.2d 328, 331 (1st Dep't 2007) (citations omitted). As the Court previously determined, "the absence of a durational term in the oral agreement alleged by Plaintiff indicates that it is not subject to the Statute of Frauds." ECF No. 76 at 15.
Defendant has not offered any evidence to show that the alleged agreement between the parties contained a definite durational term. (And how could he when he denies that there was ever any oral agreement in the first place?) Instead, Defendant simply notes that Plaintiff claimed to be entitled to Aandco shares in 2015, approximately five years after the parties allegedly made their oral agreement. ECF No. 123 at 21. Defendant seems to contend, without any foundation, that this was somehow a term of the original agreement. Id. But the mere fact that Plaintiff demanded Aandco shares in 2015 does not demonstrate that the parties originally agreed that the joint venture would have a definite term of duration. On the contrary, the parties' testimony and written correspondence suggest that the parties never agreed on how long their business arrangement would last.
As discussed above, if the parties actually made an oral agreement in July 2010, then there is also a genuine dispute regarding the material terms of the parties' oral contract. Thus, Defendant ultimately may be able to prove at trial that the terms of any contract the parties made required performance to occur over the course of more than one year. At this stage, however, Defendant has not shown that the alleged contract contained a definite durational term and has failed to demonstrate that he is entitled to judgment on the basis of the Statute of Frauds.
Finally, Defendant argues in passing that even if Plaintiff can establish that an oral contract existed and was breached by Defendant, Plaintiff still cannot prove that she incurred "ascertainable damages" as a result of the breach. ECF No. 123 at 22-23. But the Court bifurcated discovery on liability and damages, and the parties have not yet conducted discovery regarding damages. ECF Nos. 80, 82, 87. Therefore, Defendant's assertion that Plaintiff has failed to prove damages is premature.
There are genuine disputes of material fact regarding the existence of an oral agreement and the terms of any such agreement. In addition, Defendant has not shown that his breach of the alleged contract was excused by impossibility or that the oral agreement is void pursuant to the Statute of Frauds. Accordingly, I recommend denying the parties' cross-motions for summary judgment with respect to Plaintiff's breach of contract claim.
Under Federal Rule of Civil Procedure 26(b), "[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case." "A party may serve on any other party a request" to produce documents within the scope of Rule 26(b). Fed. R. Civ. P. 34(a). "The responding party must either produce documents sought in each request or 'state an objection to the request, including the reasons.'" Pegoraro v. Marrero, 281 F.R.D. 122, 132 (S.D.N.Y. 2012) (quoting Fed. R. Civ. P. 34(b)(2)). "A party seeking discovery may move for an order compelling an answer, designation, production, or inspection" if "a party fails to produce documents . . . as requested under Rule 34." Fed. R. Civ. P. 37(a)(3)(B). "If a party . . . fails to obey an order to provide or permit discovery . . . the court where the action is pending may issue further just orders." Fed. R. Civ. P. 37(b)(2)(A). In determining the appropriate sanctions to impose, courts generally consider "(1) the willfulness of the non-compliant party or the reason for noncompliance; (2) the efficacy of lesser sanctions; (3) the duration of the period of noncompliance, and (4) whether the non-compliant party had been warned of the consequences of noncompliance." S. New Eng. Tel. Co. v. Glob. NAPs Inc., 624 F.3d 123, 144 (2d Cir. 2010) (quoting Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298, 302 (2d Cir. 2009)).
As the Court previously held, Defendant failed to comply with the Court's October 4, 2017 Order by failing to produce documents in response to Requests 2, 4, 5, 12, and 15 of Plaintiff's August 23, 2017 document requests. ECF No. 108 at 6-7. These requests sought Aandco's governmental filings in Trinidad and Tobago; Aandco's balance sheets, income statements, and profit-and-loss statements; documents evidencing transfers of assets from Aandco to KDR or other third parties; documents evidencing any capital contributions Defendant made to Aandco; and documents evidencing any transfers of money from Aandco to Defendant or to an entity with which he is or was associated. Id. at 3-5.
The only reasons Defendant provided for failing to produce these documents were that the documents were not in his possession and he did not have access to them. See ECF No. 102 at 4-5; ECF No. 106 at 1. But the evidence in the record suggests that Defendant was one of the key people involved in establishing and developing Aandco and was an owner of the company throughout the time that it was operational. In addition, the business's other shareholders were all close family members of Defendant. Therefore, the Court found that Defendant "does have access to these corporate records based on his relationships and his role in the creation and growth of Aandco." ECF No. 100 at 11.
Nevertheless, Defendant refused to produce relevant corporate documents throughout the many months that the parties engaged in fact discovery. Even after the Court ordered him to produce the documents on October 4, 2017, Defendant remained noncompliant through the close of fact discovery on February 16, 2018, more than four months later. In addition, when the Court determined that Defendant had failed to comply with the Court's prior orders in December 2017, the Court invited Plaintiff to file a motion for appropriate relief in connection with her motion for summary judgment. This invitation served as a warning that the Court might impose sanctions on Defendant for failing to comply with the Court's prior orders. Despite this warning, however, the only additional documents Defendant produced were two sheets that purportedly listed Aandco's shareholders and creditors and the amounts they had contributed.
As a sanction for Defendant's noncompliance, Plaintiff requests that the Court issue an order establishing for purposes of the action that Defendant issued Aandco shares to other family members and subsequently sold Aandco's assets to KDR "to prevent Plaintiff from obtaining the benefit of her Agreement with Defendant." ECF No. 118 at 22. Defendant does not respond to the substance of this sanctions request. Instead, Defendant simply retorts that he "has produced whatever documents he has, or could get possession of." ECF No. 128 at 7. The Court has previously considered and rejected this contention. ECF Nos. 100, 108. Still, a lesser sanction than the one Plaintiff has requested is more appropriate here. The Court has discretion to fashion appropriate relief tailored to Defendant's discovery failures. Therefore, I recommend that the Court give the following jury instruction at trial:
Before trial, the Court ruled that the defendant had failed to produce records that were in his possession and control regarding Aandco's issuance of shares to Kevin
Ramgoolie, Jeremy Ramgoolie, and Annie Ramgoolie and Aandco's subsequent transfer of its assets to KDR. If you find that these records would have been material in deciding facts in dispute in this case, then you are permitted, but not required, to infer that this evidence would have been unfavorable to the defendant.
In addition, "the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(b)(2)(C) (emphasis added). Defendant contends that he failed to comply with the Court's orders because he did not have access to Aandco's corporate records. ECF No. 128 at 7. Because the Court has repeatedly rejected this claim, however, Defendant has not shown that his failure to comply with the Court's orders was substantially justified. Moreover, Defendant has not pointed to any other circumstances that would make an award of expenses unjust. Accordingly, Defendant is required to pay the reasonable attorneys' fees and costs that Plaintiff incurred in connection with her motion to compel and motion for sanctions.
I recommend DENYING Plaintiff's motion for partial summary judgment in its entirety, ECF No. 113, and DENYING Defendant's motion for summary judgment in its entirety, ECF No. 111. In addition, as a sanction for Defendant's failure to produce certain documents during discovery, I recommend that the Court instruct the jury at trial that it is permitted, but not required, to infer that this evidence would have been unfavorable to Defendant. Finally, the Court will order Defendant to pay the reasonable attorneys' fees and costs that Plaintiff incurred in bringing her motion to compel and motion for sanctions. The parties are ORDERED to meet and confer and make good faith efforts to reach agreement on the reasonable attorneys' fees and costs. Within 30 days of the date of this Report and Recommendation, the parties shall file a joint status letter indicating whether they have agreed upon the expenses that should be imposed. If the parties have not reached agreement, the status letter should propose a reasonable schedule for briefing on the amount of the attorneys' fees and costs.
United States Magistrate Judge DATED: August 3, 2018
New York, New York
* * *
NOTICE OF PROCEDURE FOR FILING OBJECTIONS
TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen days from the service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed. R. Civ. P. 6(a), (d) (adding three additional days when service is made under Fed. R. Civ. P. 5(b)(2)(C), (D), (E), or (F)). A party may respond to another party's objections within fourteen days after being served with a copy. Fed. R. Civ. P. 72(b)(2). Such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Valerie E. Caproni at the United States Courthouse, 40 Foley Square, New York, New York 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Caproni. The failure to file these timely objections will result in a waiver of those objections for purposes of appeal. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).