Link & Associates, Inc. v. Darlene Ivany

• Court: Court of Appeals for the Eleventh Circuit
• Decided: March 23, 2020
• Docket: 19-13117
• Status: Unpublished

Opinion

Case: 19-13117 Date Filed: 03/23/2020 Page: 1 of 11

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 19-13117 Non-Argument Calendar ________________________

D.C. Docket No. 6:17-cv-00214-PGB, Bkcy No. 3:14-bkc-00158-JAF

In re: SCHONFELD, INC., (a foreign proceeding), Debtor. _______________________________________________________________

LINK & ASSOCIATES, INC.,

Plaintiff-Appellant,

versus

DARLENE IVANY, BACKCOVE COMPANY, et al., Defendants-Appellees.

Appeal from the United States District Court for the Middle District of Florida ________________________

(March 23, 2020) Case: 19-13117 Date Filed: 03/23/2020 Page: 2 of 11

Before JORDAN, LUCK, and HULL, Circuit Judges.

PER CURIAM:

In this bankruptcy appeal, Link & Associates, Inc., as trustee and foreign

representative for the bankruptcy estate of Howard Paul Ivany, challenges the order

of the bankruptcy court, later affirmed by the district court, dismissing its claim for

relief under the doctrine of forum non conveniens. After review, we affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

In 2012, Howard Ivany’s creditors filed a petition for bankruptcy in the

Ontario Superior Court of Justice. The Canadian court entered an order deeming

Howard Ivany bankrupt. The Canadian court then initiated insolvency proceedings,

appointing Schonfeld, Inc. as the corporate trustee and Robert Link of Link &

Associates as the individual trustee.1

Schonfeld learned that Howard Ivany had assets in Florida. Acting upon this

information, it filed a petition in the Middle District of Florida, seeking recognition

of the Canadian insolvency proceedings as a “foreign main proceeding” under

chapter 15 of the U.S. Bankruptcy Code, which the bankruptcy court granted. The

recognition order entrusted to Schonfeld, as the foreign representative, the

administration or realization of Howard Ivany’s assets within the territorial

1 For ease of reading, we’ll refer to Link & Associates, Inc. as “Link” and to Robert Link as “Robert Link.” 2 Case: 19-13117 Date Filed: 03/23/2020 Page: 3 of 11

jurisdiction of the United States. Link later replaced Schonfeld as the corporate

trustee and foreign representative. Link then sought to uncover Howard Ivany’s

assets in Florida.

Link determined that Howard Ivany, either individually or through his

ownership interest in Mi Lee, Inc., transferred a substantial part of his assets in

Florida to his wife, Darlene Ivany, and Backcove Company. Specifically, during the

four-year period prior to the petition, Howard Ivany transferred money and assets

valued at $172,000 to Darlene Ivany. Howard Ivany also transferred his thirty-

percent stake in Mi Lee, Inc., a Florida-based real estate investment company, to

Darlene Ivany. Darlene Ivany is Mi Lee’s registered agent and director. Howard

Ivany was the company’s officer, director, managing agent, and control person.

Howard Ivany also transferred money and assets valued at $505,000 to Backcove

Company and transferred $379,000 of his interest in eight properties, through his

ownership interest in Mi Lee, to Backcove. Backcove is a Florida corporation with

its principal place of business in Florida. Darlene Ivany was Backcove’s officer,

director, managing agent, and control person.

Claiming that these transfers were fraudulent, Link filed an adversary

complaint against the defendants, Darlene Ivany, Mi Lee, and Backcove, in the

bankruptcy court for the Middle District of Florida seeking, among other things, to

recover the transferred assets under chapter 726, Florida Statutes.

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The defendants moved to dismiss the complaint on the basis of forum non

conveniens. The bankruptcy court granted the motion, finding that (1) Canada was

an adequate and available alternative forum, (2) private and public interest factors

weighed in favor of dismissal, and (3) Link could reinstate its suit in Canada without

undue inconvenience or prejudice. Link then moved for reconsideration, which the

bankruptcy court denied. So Link appealed to the district court. The district court

affirmed, substantially deferring to the bankruptcy court’s findings. This second

appeal follows.

STANDARD OF REVIEW

“In appeals from bankruptcy judgments, this Court functions ‘[a]s the second

court of review.’” Schlein v. Mills (In re Schlein), 8 F.3d 745, 747 (11th Cir. 1993)

(quoting Equitable Life Assurance Soc. v. Sublett (In re Sublett), 895 F.2d 1381,

1384 (11th Cir. 1990)). We review a bankruptcy court’s dismissal order under the

doctrine of forum non conveniens for an abuse of discretion. See Aldana v. Del

Monte Fresh Produce N.A., Inc., 578 F.3d 1283, 1288 (11th Cir. 2009). “A

bankruptcy court abuses its discretion when it ‘applies the wrong principle of law or

makes clearly erroneous findings of fact.’” Kulakowski v. Walton (In re

Kulakowski), 735 F.3d 1296, 1299 (11th Cir. 2013) (quoting Piazza v. Nueterra

Healthcare Physical Therapy, LLC (In re Piazza), 719 F.3d 1253, 1271 (11th Cir.

2013)).

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DISCUSSION

Forum non conveniens is a discretionary tool that permits a court to dismiss a

civil action when an alternative forum is better suited to adjudicate the dispute––

even where venue is proper and jurisdiction exists. See Gulf Oil Corp. v. Gilbert,

330 U.S. 501, 507 (1947). For the doctrine to apply, a defendant must demonstrate

that “(1) an adequate alternative forum is available, (2) the public and private factors

weigh in favor of dismissal, and (3) the plaintiff can reinstate [its] suit in the

alternative forum without undue inconvenience or prejudice.” Tazoe v. Airbus

S.A.S., 631 F.3d 1321, 1330 (11th Cir. 2011); see also Piper Aircraft Co. v. Reyno,

454 U.S. 235, 257 (1981).

Link makes four arguments on appeal: (1) the bankruptcy court erred in

finding that Canada was an adequate alternative forum; (2) the bankruptcy court and

district court erred in failing to consider, as two private interest factors, that it would

be easier to compel the attendance of witnesses in Florida and that the parties had

undergone substantial discovery in Florida; (3) the bankruptcy court and district

court erred in failing to consider, as two public interest factors, that this was a chapter

15 cross-border proceeding and that a Canadian court would have to undergo a

choice-of-law analysis in determining if Florida law applied to Link’s claims; and

(4) the district court erred in making improper independent factual findings. We

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agree with the district court that the bankruptcy court did not abuse its discretion in

dismissing the suit based on forum non conveniens.

Adequacy of the Canadian Forum

Link argues that the bankruptcy court erred in finding that Canada was an

adequate alternative forum because the defendants in their motion to dismiss never

established that it was. We disagree.

The Supreme Court in Piper Aircraft stated that the adequate and available

alternative forum prong is “[o]rdinarily . . . satisfied when the defendant is ‘amenable

to process’ in the other jurisdiction.” 454 U.S. at 254 n.22. Here, as stated in the

bankruptcy court’s order, the defendants became amenable to process in Canada

when they consented to Link bringing this action in Canada and to the Canadian

court’s jurisdiction over them. Because the defendants were amenable to process in

Canada, we agree with the bankruptcy court that the defendants had sufficiently

proven that Canada was an adequate alternative forum. See Satz v. McDonnell, 244

F.3d 1279, 1283 (11th Cir. 2001) (finding that an alternative forum was adequate in

part because “the district court conditioned its order of dismissal on [the defendant]

consenting to any Argentine judgment against it”); see also Republic of Pan. v. BCCI

Holdings (Luxembourg) S.A., 119 F.3d 935, 951 (11th Cir. 1997) (“Generally, a

defendant satisfies the [adequate and available alternative forum] prong of the

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analysis by showing that it is ‘amenable to process in the other jurisdiction.’”

(quoting Piper Aircraft, 454 U.S. at 254 n.22)).

The Private Interest Factors

Link next contends that the bankruptcy court and district court erroneously

failed to consider, as to two private interest factors, that: (1) it would be easier to

compel the attendance of witnesses in Florida; and (2) the parties had undergone

substantial discovery in Florida. The record says otherwise.

As to Link’s argument concerning witnesses, the record is unrefuted that

many of the witnesses, especially the most critical ones, are in Canada. See Aldana,

578 F.3d at 1293-94 (concluding that the dismissal for forum non conveniens was

warranted where most witnesses were in Guatemala). Link, in its initial disclosures,

revealed the names and addresses of nine witnesses whom it believed would be

necessary for trial. These witnesses included Robert Link, Darlene Ivany, Howard

Ivany, family members of Darlene and Howard Ivany, and the designated

representatives of Backcove and Mi Lee. All of these material witnesses are either

permanent Canadian residents or have a strong affiliation with Canada. For

example, Darlene Ivany is a permanent resident of Canada. And although Backcove

and Mi Lee are Florida corporations, Darlene Ivany is the sole officer, director, and

managing agent for Backcove and the managing agent and director for Mi Lee. We

agree with the district court that given the location of material witnesses, the

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bankruptcy court did not abuse its discretion in finding that this private factor weighs

in favor of dismissal.

As to Link’s argument concerning the substantial discovery conducted in

Florida, the only discovery conducted in this adversary proceeding was the initial

required disclosures, as the bankruptcy court stayed discovery pending the outcome

of the motion to dismiss. 2 See Fed. R. Civ. P. 26(a). A cursory review of the docket

demonstrates that hardly any discovery had been conducted. See Aldana, 578 F.3d

at 1297 (determining that the private interest factors weighed in favor of dismissal

in part because discovery “ha[d] been relatively limited”). In sharp contrast, Howard

Ivany’s bankruptcy case has been pending for three years in a Canadian court. We

agree with the district court that given the minimal amount of discovery the parties

had undergone in the Middle District of Florida, the bankruptcy court did not abuse

its discretion in finding that this private factor weighs in favor of dismissal.

The Public Interest Factors

Link next argues that the bankruptcy court and district court erroneously failed

to consider, as two public interest factors, that: (1) this was a chapter 15 cross-border

proceeding; and (2) a Canadian court would have to undergo a choice-of-law

2 Link framed this issue as a public interest factor. But we have analyzed amount of discovery conducted in a case as a private interest factor. See Aldana, 578 F.3d at 1297.

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analysis in determining if Florida law applied to Link’s claims. Both arguments are

contradicted by the record.

As to Link’s argument concerning chapter 15, the district court and the

bankruptcy court considered the underlying policies of a chapter 15 cross-border

proceeding in their rulings. In its reconsideration order, the bankruptcy court

considered the policy reasons for a chapter 15 cross-border proceeding, but found

that “such consideration would not have changed [its] ruling.” The district court,

agreeing with the bankruptcy court, determined that, because the underlying

proceedings occurred in Canada, Canada had a stronger interest in hearing this

matter before its courts.

Link also contends that the bankruptcy court and district court wrongfully

assumed that a Canadian court would apply Florida law to Link’s claims. But Link

argued in its response to the motion to dismiss “that all of its claims arise under

Florida law” and that “[a]ll claims are based upon Florida law and no Canadian law

is implicated or relevant.” The bankruptcy court found that a Canadian court would

apply Florida law because, as Link conceded, the claims arose exclusively under

Florida law. No choice-of-law analysis was required.

The District Court’s “Factual Findings”

Finally, Link argues that the district court, acting in its appellate capacity,

improperly made certain independent factual findings. Link points to two comments

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the district court made in its decision: (1) “many of the necessary witnesses––

including all of the parties to this appeal and the underlying bankruptcy––are located

in Canada”; and (2) Link has “filed suit in Canada.”

While, in a bankruptcy appeal, a district court cannot make independent

factual findings, see Fed. Land Bank of Jackson v. Cornelison (In re Cornelison),

901 F.2d 1073, 1075 (11th Cir. 1990) (noting that in a bankruptcy appeal “[n]either

the district court (which functions in an appellate capacity in a bankruptcy appeal)

nor this Court may make independent factual findings”), the district court in this case

did not make any such findings. As to the comment about witnesses, the bankruptcy

court found that “the three defendants in this adversary proceeding are Mrs. Ivany,

a Canadian citizen, and two Florida corporations for both of whom Mrs. Ivany is the

alleged registered agent and director and for one of whom (Backcove) Mrs. Ivany

was the alleged officer, director, managing agent, control person, and alter ego. . . .

Additionally and importantly [Link] itself is located in Canada.” The district court,

in its own words, merely recited the bankruptcy court’s findings that many of the

necessary witnesses are in Canada. As to the district court’s comment that Link has

“filed suit in Canada,” the court merely repeated Link’s appellate brief, which stated

that Link “file[d] a proceeding in Canada in accordance with the Dismissal Order.”

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CONCLUSION

For these reasons, we, in line with the district court, affirm the bankruptcy

court’s decision to dismiss the case based on forum non conveniens.

AFFIRMED.