Pomerantz v. International Hotel Company, LLC

CourtDistrict Court, N.D. Illinois
DecidedNovember 3, 2020
Docket1:18-cv-05470
StatusUnknown

This text of Pomerantz v. International Hotel Company, LLC (Pomerantz v. International Hotel Company, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pomerantz v. International Hotel Company, LLC, (N.D. Ill. 2020).

Opinion

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

MICHAEL S. POMERANTZ.,

Plaintiff, No. 18 CV 5470 v. Magistrate Judge McShain HARD ROCK CAFÉ FRANCHISE GROUP, LLC, ET AL.,

Defendants.

Memorandum Opinion and Order Plaintiff Michael Pomerantz entered into a timeshare contract with International Hotel Company, LLC (IHC) that entitled him to certain benefits at a group of hotels in Mexico. After IHC turned over the management of the hotels to defendants Hard Rock Café Franchise Group, LLC and Hard Rock Café International (USA), Inc. (collectively Hard Rock), Hard Rock allegedly denied Pomerantz many of these benefits and forced him to pay more money for services that were already included in the contract. Pomerantz sued Hard Rock for tortious interference with contract, fraud, and civil conspiracy. Pending is Hard Rock’s motion to dismiss under the doctrine of forum non conveniens, for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2), and for failure to state a claim under Fed. R. Civ. P. 12(b)(6). [104].1

1 Bracketed numbers refer to entries on the district court docket. Referenced page numbers are taken from the CM/ECF header placed at the top of filings. For the following reasons, the motion is granted and the case is dismissed on forum non conveniens grounds. Background

In 2009, Pomerantz executed a “Membership Agreement” with an entity called Palace Premier, S.A. de C.V., which allegedly does business under the name IHC. [94] 1 at ¶ 2. Pomerantz paid a membership fee in exchange for “a 25-year membership entitling him to stay at fourteen Mexican resorts[.]” Pomerantz v. Int’l Hotel Co., LLC, 359 F. Supp. 3d 570, 576 (N.D. Ill. 2019). The Membership Agreement also entitled Pomerantz to: 1) spend 200 “Premier Weeks” at the hotels; 2) “VIP founding member” privileges – the highest, most exclusive membership tier – at the hotels; and 3) other

miscellaneous benefits. Pomerantz availed himself of the contract benefits without issue from 2009 through 2011. [94] 1 at ¶ 2, 2 at ¶ 1. The Membership Agreement also contained a “jurisdiction” clause, which states that “[t]he parties agree to submit to the jurisdiction of the courts and tribunals of the City of Cancun, Quintana Roo, in the event of any controversy over the interpretation or execution of this Agreement[.]” [94] 4 at ¶ 4.

Pomerantz alleges that, in October 2011, IHC entered into a licensing and management agreement with Hard Rock. Under this agreement, some of the hotels covered by the timeshare agreement were rebranded as Hard Rock hotels, and Hard Rock obtained “ultimate management/control” of these hotels. [Id.] 4 at ¶ 13. Hard Rock “maintained a significant amount of control over the operations of the re- branded ‘Hard Rock Hotels,’” and required that they be operated according to Hard Rock’s procedures, standards, and systems. [Id.] 4 at ¶ 14. After the licensing and management agreement was executed, Pomerantz

claims, “many of the membership rights of VIP founding members” and Premier Level members were disallowed, the Membership Agreement’s “Preferential Rate” was increased beyond the rate permitted by the contract, and a new membership tier was created above the VIP Founding membership, with “rights and privileges greater than the VIP and Premier Levels, in violation of the Membership Agreement.” [Id.] 2 at ¶ 3. In March 2018, Pomerantz sued IHC and Hard Rock in the Circuit Court of

Cook County. IHC removed the case to this Court on the basis of diversity jurisdiction.2 [1]. IHC then filed a motion to dismiss under Civil Rule 12(b)(1), (3) and

2 Pomerantz’s second amended complaint did not adequately allege that complete diversity existed between the parties when this case was removed from state court. It failed to allege Pomerantz’s domicile, it did not identify the members of Hard Rock Cafe Franchise Group, LLC or the citizenship of those members, and it did not identify Hard Rock Cafe International's state of incorporation or principal place of business. [96]. Although the Court found that other materials in the record supplied some of this information [7, 21], the Court directed the parties to file a joint jurisdictional statement supplying the three pieces of information missing from the second amended complaint, as well as the citizenship of all members of IHC. [96]. The parties' joint jurisdictional statement once again failed to identify plaintiff's domicile, and it did not identify the citizenship of the members of IHC. Regarding the latter omission, the Court had explained that, while IHC was “no longer a defendant in this case, the existence of complete diversity is measured at the time of removal” and thus the Court needed to know the citizenship of IHC’s members. [102]. The Court therefore ordered the parties to file an amended jurisdictional statement to cure the two omissions. Although that statement finally identified plaintiff’s domicile, the parties claimed to be unable to determine the citizenship of IHC’s members–notwithstanding that IHC’s counsel's name and contact information is listed on the docket. [103] 2. The parties then pointed the Court to a statement in IHC’s notice of removal that IHC’s “sole manager” is “a resident” of Florida. [Id.] (citing [1] 2). But it was the doubly problematic nature of that statement–which wrongly assumed that IHC’s citizenship turns on the citizenship of an undefined “manager” position rather than the citizenship of its members, and that an individual’s citizenship turns (6), while Hard Rock moved to dismiss under Civil Rules 9(b) and 12(b)(2) and (6). In an earlier decision, the Court granted IHC’s motion on the basis of forum non conveniens and Hard Rock’s motion for failure to state a claim on which relief may be

granted. [54]; Pomerantz, 359 F. Supp. 3d 570. As to IHC’s motion, the Court found that the Membership Agreement’s forum selection clause was valid, and that it required Pomerantz to litigate his claims against IHC in Cancun, Mexico. Pomerantz, 359 F. Supp. 3d at 580, 581-83. Regarding Hard Rock’s motion, the Court found that Pomerantz had not plausibly alleged that Hard Rock was engaged in a civil conspiracy with IHC because he failed to allege a tortious act in furtherance of the alleged conspiracy. Id. at 584. Although the dismissal of the claims against Hard Rock

was without prejudice to filing an amended complaint, the Court advised Pomerantz to “be mindful of two additional issues” should he try to replead: First, the Court is not ruling here on the Hard Rock defendants’ motion to dismiss for lack of personal jurisdiction. The parties have raised multiple disputes over material facts on this issue, and ruling on the pleadings at this point would be premature. Second, although the Hard Rock defendants did not raise the issue of the forum-selection clause in

on his residence rather than his domicile–that prompted the Court to ask the parties to correct the jurisdictional record in the first place. Despite the parties’ inability or unwillingness to ensure that the Court has subject matter jurisdiction to adjudicate their dispute, the Court finds that it has diversity jurisdiction over this case. Plaintiff is an Illinois citizen, and the Hard Rock defendants are Florida citizens. [103] 2.

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