Barak v. Zeff

289 F. App'x 907
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 19, 2008
Docket07-1821
StatusUnpublished
Cited by6 cases

This text of 289 F. App'x 907 (Barak v. Zeff) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barak v. Zeff, 289 F. App'x 907 (6th Cir. 2008).

Opinion

KAREN NELSON MOORE, Circuit Judge.

Plaintiff-Appellant Moe Barak (“Barak”) appeals the dismissal of his suit in *908 the United States District Court for the Eastern District of Michigan on the ground of forum non conveniens, as well as the district court’s denial of his motion for reconsideration without first granting a hearing and without implementing his request for discovery-related conditions on the dismissal. We conclude that the district court did not abuse its discretion in dismissing the case and in denying Barak’s motion for reconsideration without a hearing and without imposing Barak’s requested conditions. We therefore AFFIRM the judgment of the district court.

I. FACTS AND PROCEDURE

A. Factual Background

Barak is a citizen of Michigan, and Defendant-Appellee A. Robert Zeff (“Zeff’) is a citizen of Connecticut and also maintains a residence in Florida.

This action arises out of personal and financial disputes between two former brothers-in-law who entered into an ill-fated business partnership with the aim of developing a jai alai complex in Torrejon, Spain. In 1984, Barak and Zeff incorporated Madrid Torrejon Jai Alai, S.A. (“Madrid”); the activities involved in forming the corporation took place in Michigan and in Spain. That same year, Madrid purchased land in Torrejon, Spain. In 1986, Barak and Zeff signed an agreement acknowledging that Zeff would advance $425,000 for expenses related to the Torrejon land, that this outlay would entitle Zeff to the first $425,000 in proceeds from the development of the land, and that profit in excess of that amount would be divided fifty-fifty between Barak and Zeff.

Unfortunately for the brothers-in-law, interest in the sport of jai alai waned in the late 1980s, forcing Madrid to hire Spanish accountants, attorneys, and brokers to evaluate the tax and regulatory implications of selling the Torrejon property. A 1992 agreement provided for the distribution of net profits from the sale of the land in the following manner: forty-nine percent to Zeff, forty-nine percent to Barak, and two percent to a third shareholder, architect Antonio Alonso de la Riva Conde (“Riva”). The 1992 agreement stated that Madrid would “return to the shareholders all the credits and advance payments of any kind that they had advanced to the company, in accordance with the existing agreement between the parties.” Joint Appendix (“J.A.”) at 18 (1992 Agreement at 2).

After navigating a complex process to rezone the Torrejon property, in mid-2006 Madrid entertained two offers from Spanish investment groups. Barak favored the offer from a company called La Quinta. A majority of shareholders (Zeff and Riva) at a noticed general-shareholder meeting in Spain, however, decided to end negotiations with La Quinta because of concerns about the company’s sincerity and ability to meet financial commitments in a timely manner. By the end of December 2006, Madrid closed the sale of the Torrejon property to a second company called Grupo Lar, thereby allegedly avoiding burdensome tax increases and regulatory liabilities. Madrid deposited Grupo Lar’s first installment of 1.43 million euros in a “corporate, international bank account” located in London, England and discounted and then deposited in the same account the net total of three subsequent installments amounting to 9.41 million euros. J.A. at 120 (Zeff Decl. at 1113); J.A. at 351 (Silvia Escartin Decl. at 115).

B. Procedural Background

Before the close of the Torrejon property’s sale to Grupo Lar, on October 4, 2006, *909 Barak filed a complaint in the United States District Court for the Eastern District of Michigan, suing Zeff, alone, for common-law fraud and misrepresentation and for intentional infliction of emotional harm, and suing Zeff and Madrid, together, for deprivation of shareholder rights. On December 21, Barak filed an amended complaint that named Zeff but not Madrid as the defendant. The amended complaint alleged several acts of misconduct by Zeff, including: (1) Zeffs effort in August 2006 to persuade Barak to sign a document that would entitle Zeff to payment for various expenditures purportedly made on behalf of Madrid, which Barak believed included many personal expenses; (2) Zeffs wrongly holding himself out as the authorized representative of Madrid and decisionmaking contrary to the “best interests of all the shareholders,” J.A. at 25 (Am. Compl. at 1111); (3) Zeffs instruction to a real estate agent not to provide Barak with information about the sale of the Torrejon property; (4) the failure of Zeffs representatives to return a file of personal information that Barak had loaned them; (5) Zeffs acceptance of an offer of sale providing a lesser amount to the shareholders than another offer; (6) Zeffs dismissal of Ernst & Young of Spain as Madrid’s accounting firm and Zeffs substitution with his own personal accounting firm, done with the purpose of advancing Zeffs “efforts to claim illegitimate expenses as owing to him for either return of capital contributions or return of allowable expenses,” J.A. at 27 (Am. Compl. at H 18); and (7) Zeffs conduct of Madrid’s business “without giving Barak adequate notice of meetings,” J.A. at 27 (Am. Compl. at 1119).

Zeff filed a motion to dismiss for forum non conveniens, or in the alternative, failure to join indispensable parties. After Barak filed a brief in opposition, and Zeff filed a reply brief, the district court dismissed the case on the basis that Spain is a more convenient forum to resolve Barak’s claims. The district court concluded: “Despite Barak’s characterization] of his dispute with Zeff as one between individuals, this lawsuit really concerns a shareholder’s conduct with respect to a corporation and the claim[s] of the corporation’s shareholders to certain corporate profits.” Barak v. Zeff No. 06-14424, 2007 WL 1098530, at *3 (E.D.Mieh. Apr.12, 2007). The district court determined that the majority of relevant witnesses resided in Spain and that it would be easier for the witnesses to testify in them native Spanish, even if they spoke English, and that it would be expensive to transport the witnesses to Michigan. Id. at *4. The district court further determined that most of the documents relevant to the suit were located in Spain. Id. In weighing the public interests in the suit, the district court concluded that “there can be no doubt that Spain has a greater interest in the parties’ dispute as it centers around a Spanish corporation and the sale of Spanish property to a Spanish investment group.” Id. Lastly, the district court concluded that “Barak specifically claims that Zeff violated Spanish law and a judge in Spain is in a better position than this Court to evaluate that country’s laws.” Id.

Barak filed a motion for rehearing or reconsideration, requesting that, notwithstanding the dismissal, the district court temporarily stay the case to allow Barak to depose four witnesses residing in the United States under the court’s subpoena power and to compel Zeff to file answers to the discovery requests already served upon him. The district court denied Barak’s motion for reconsideration without conducting a prior hearing.

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