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Yoo v. Kook Bin IM

United States District Court, E.D. Texas, Sherman Division

January 24, 2018




         Pending before the Court is Defendants' Motion to Dismiss, or in the Alternative, to Transfer Venue (Dkt. #11).[1] Having considered the relevant pleadings, the Court finds that Defendants' motion should be denied.


         In January 2011, Plaintiff Dong Sik You a/k/a James Yoo (“Yoo”) and Defendant Kook Bin Im a/k/a Benny Im (“Benny Im”) discussed an investment proposition in Dallas, Texas. In February 2011, Yoo and Benny Im entered into an oral agreement (“AMPM Agreement”) to purchase the ARCO AMPM gas station Store No. 83031 located at 3601 Center Street, Tacoma, Washington, 98409 (“AMPM Business”). The seller of the AMPM Business was Harbor Olympic Land 5911 LLC (“Harbor Olympic”). At the time of these discussions, both Yoo and Benny Im were residents of Dallas, Texas.

         Under the AMPM Agreement, Yoo agreed to invest $250, 000 for the purchase and operation of the AMPM Business and Benny Im agreed to manage the day-to-day operations. Yoo and Benny Im were entitled to equal shares of any profit made from the AMPM Business. Under the AMPM Agreement, Yoo agreed to allow Benny Im to register the AMPM Business in Defendant Benny Tac, Inc.'s (“Benny Tac”) name, because Benny Tac was an authorized ARCO AMPM franchisee.

         On or about April 2011, James Yoo transferred $250, 000 (“2011 Investment”) to Harbor Olympic, on behalf of Benny Im to purchase the AMPM Business in Benny Tac's name pursuant to the AMPM Agreement. Soon after, Benny Im moved to Washington and began to manage the day-to-day operations of the AMPM Business. On or about July 2012, Yoo transferred an additional $100, 000 (“2012 Investment”) to Benny Im to make improvements to the AMPM Business.

         On or about September 2013, Benny Im informed Yoo that the AMPM Business was losing money and not marketable. He also advised Yoo that they should terminate the AMPM Business. Soon thereafter, Yoo agreed to let Benny Im and Benny Tac terminate the AMPM Business. At that time, Yoo did not seek compensation for his 2011 Investment and 2012 Investment in the AMPM Business.

         On or around November 2016, Yoo discovered through an acquaintance that Benny Im had purchased a night club, The Cuff Complex, located at 1533 13th Avenue, Seattle, Washington 98122, allegedly using the proceeds from the AMPM Business (“The Cuff Complex Agreement”). The Cuff Complex Agreement was finalized on or around July 1, 2015. James Yoo was unaware of The Cuff Complex Agreement and did not receive any interest from The Cuff Complex Agreement.

         On June 23, 2017, Plaintiff filed his Complaint against Defendants (Dkt. #1). That same day, Plaintiff filed his Amended Complaint asserting claims for breach of contract, breach of fiduciary duty, fraud, fraud by nondisclosure, conversion, and unjust enrichment (Dkt. #4).

         On October 2, 2017, Defendants filed their Motion to Dismiss (Dkt. #11). On October 16, 2017, Plaintiff filed his response (Dkt. #18). On October 23, 2017, Defendants filed their reply (Dkt. #19). Defendants move, in the alternative, for the Court to transfer venue to the Western District of Washington for the convenience of the parties.


         I. Motion to Dismiss for Lack of Personal Jurisdiction - 12(b)(2)

         A nonresident defendant's minimum contacts with the forum state can establish either specific jurisdiction or general jurisdiction. Specific jurisdiction exists if the Court determines that (1) the foreign defendant purposely directed his activities at residents of the forum state, and (2) the cause of action arose from or is connected with such activities. Burger King v. Rudzewicz, 471 U.S. 462, 472-73 (1985). “General jurisdiction, on the other hand, will attach where the nonresident defendant's contacts with the forum state, although not related to the plaintiff's cause of action, are ‘continuous and systematic.'” Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415- 16 (1984)).

         Specific jurisdiction exists where the plaintiff alleges a cause of action that grows out of or relates to the contacts between the defendant and the forum state. Helicopteros, 466 U.S. at 414 n.8. The Fifth Circuit has concluded that “specific jurisdiction is a claim-specific inquiry: ‘A plaintiff bringing multiple claims that arise out of different forum contacts of the defendant must establish specific jurisdiction for each claim.'” McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009) (quoting Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006)).

         The Fifth Circuit follows a three-step analysis in determining whether a court has specific personal jurisdiction: “(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.” McFadin, 587 F.3d at 759 (quoting Seiferth, 472 F.3d at 271). “The ‘minimum contacts' inquiry is fact intensive and no one element is decisive; rather the touchstone is whether the defendant's conduct shows that it ‘reasonably anticipates being haled into court.'” Id. (quoting Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 470 (5th Cir. 2006)). Even a single act by a defendant may establish specific jurisdiction if the act in the forum state is substantially related to the suit. See Moncrief Oil Int'l v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007).

         Once a plaintiff establishes that the defendant had minimum contacts with the forum state sufficient to permit specific jurisdiction, the burden shifts to the defendant to prove that the exercise of jurisdiction is not fair or reasonable. McFadin, 587 F.3d at 759. In this inquiry, the Court examines five factors: (1) the burden on the nonresident defendant; (2) the forum state's interests; (3) the plaintiff's interest in securing relief; (4) the interest of the interstate judicial system in the efficient administration of justice; and (5) the shared interest of the several states in furthering fundamental social policies. Burger King Corp., 471 U.S. at 477. “It is rare to say the assertion of jurisdiction is unfair after minimum contacts have been shown.” McFadin, 587 F.3d at 760 (quoting Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999)).

         II. Improper Venue - 12(b)(3)

         Federal Rule of Civil Procedure 12(b)(3) allows a party the ability to move the Court to dismiss an action for “improper venue.” Fed.R.Civ.P. 12(b)(3); see Braspetro Oil Servs. Co. v. Modec (USA), Inc., 240 F. App'x 612, 615 (5th Cir. 2007). Once a defendant raises improper venue by motion, “the burden of sustaining venue will be on Plaintiff.” Cincinnati Ins. Co. v. RBP Chem. Tech., Inc., No. 1:07-CV-699, 2008 WL 686156, at *5 (E.D. Tex. Mar. 6, 2008) (citations omitted). “Plaintiff may carry this burden by establishing facts that, if taken to be true, establish proper venue.” Id. (citations omitted). The Court “must accept as true all allegations in the complaint and resolve all conflicts in favor of the plaintiff.” Mayfield v. Sallyport Global Holdings, Inc., No. 6:16-CV-459, 2014 WL 978685, at *1 (E.D. Tex. Mar. 5, 2014) (citing Ambraco, Inc. v. Bossclip, B.V., 570 F.3d 233, 237-38 (5th Cir. 2009)). In determining whether venue is proper, “the Court may look beyond the complaint to evidence submitted by the parties.” Ambraco, 570 F.3d at 238. If venue is improper, the Court must dismiss it, “or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a); Fed.R.Civ.P. 12(b)(3).

         Section 1404 permits a district court to transfer any civil case “[f]or the convenience of parties and witnesses, in the interest of justice . . . to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). “Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.'” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). The purpose of 28 U.S.C. § 1404(a) “is to prevent the waste ‘of time, energy and money' and ‘to protect the litigants, witnesses and the public against unnecessary inconvenience and expense . . .'” Van Dusen, 376 U.S. at 616.

         The threshold inquiry when determining eligibility for transfer is “whether the judicial district to which transfer is sought would have been a district in which the claim could have been filed, ” or whether all parties have consented to a particular jurisdiction. In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (“Volkswagen I”). Once that threshold inquiry is met, the Fifth Circuit has held that “[t]he determination of ‘convenience' turns on a number of public and private interest factors, none of which can be said to be of dispositive weight.” Action Indus., Inc. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 340 (5th Cir. 2004). The private interest factors include (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; (4) all other practical problems that make trial of a case easy, expeditious and inexpensive. In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc) (“Volkswagen II”). The public interest factors include (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws or in the application of foreign law. Id. These factors are not exhaustive or exclusive, and no single factor is dispositive. Id.

         The party seeking transfer of venue must show good cause for the transfer. Volkswagen II, 545 F.3d at 315. The moving party must show that the transferee venue is “clearly more convenient” than the transferor venue. Id. The plaintiff's choice of venue is not a factor in this analysis, but rather contributes to the defendant's burden to show good cause for the transfer. Id. at 315 n.10 (“[W]hile a plaintiff has the privilege of filing his claims in any judicial division appropriate under the general venue statute, § 1404(a) tempers the effects of the exercise of this privilege.”). However, ...

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