Claim had no substantial nexus with New York

New York Miscellaneous Reports

SILVESTRE v. DE LOAIZA, 12 Misc.3d 492 (2006) 2006 NY Slip
Op 26127, 820 N.Y.S.2d 440 CLAUDIA SILVESTRE, Plaintiff, v.
ESTHER BIGOTT DE LOAIZA et al., Defendants. 600903/06.
Supreme Court of the State of New York. NEW YORK COUNTY.
March 23, 2006.

Holland & Knight, LLP, New York City, for plaintiff. Page
493

OPINION OF THE COURT

DORIS LING-COHAN, J.

By order to show cause, plaintiff seeks (1) a temporary
restraining order and a preliminary injunction enjoining
the payment, transfer or alienation of funds by defendants
from a certain account held at Smith Barney, a division of
Citigroup Global Markets, Inc., which is located in New
York; and (2) a further order granting an attachment of
those funds in the amount of $2,592,000. For the reasons
set forth below, the court declines to sign this order to
show cause.

Temporary Restraining Order/Preliminary Injunction

CPLR 6301 and 6313 (a) allow for the granting of a
temporary restraining order pending the hearing for a
preliminary injunction where it appears that immediate and
irreparable injury, loss or damage will result unless the
defendant is restrained before the hearing can be had. To
be entitled to temporary injunctive relief, movant must
show: (1) the likelihood of success on the merits; (2)
irreparable injury absent granting the injunction; and (3)
a balancing of the equities. (W.T. Grant Co. v. Srogi, 52
NY2d 496, 517 [1981].) Irreparable injury has been held to
mean an injury for which monetary damages are insufficient.
(See James v. Gottlieb, 85 AD2d 572 [1st Dept 1981]; Klein,
Wagner & Morris v. Lawrence A. Klein, P.C., 186 AD2d 631,
633 [2d Dept 1992].)

To be successful, a plaintiff must establish a showing of
urgency that the requested temporary relief is needed to
protect the status quo, lest the defendant act in such a
way as to render the desired final outcome an
impossibility. (Building Mgt. Assoc., Inc. v. Rivera, NYLJ,
Oct. 23, 2002, at 22, col 2 [Sup Ct, Bronx County].)
Temporary restraining orders are drastic remedies and
should be used sparingly. (67A NY Jur 2d, Injunctions
§ 57; Grumet v. Cuomo, 162 Misc 2d 913, 929 [Sup Ct,
Albany County 1994]; Bisca v. Bisca, 108 Misc 2d 227 [Sup
Ct, Nassau County 1981].)

Here, as further detailed below, plaintiff has failed in
the moving papers to meet the standard for injunctive
relief. Additionally, as detailed below, this court lacks
jurisdiction to grant the requested relief.

Order of Attachment

“The provisional remedy of attachment is, in part, a device
to secure the payment of a money judgment.” (Cooper v.
Ateliers de la Motobecane, 57 NY2d 408, 413 [1982]
[citation omitted].) The Page 494 grounds for the issuance
of an attachment order are set forth in CPLR 6201, which
provides in pertinent part as follows:

“An order of attachment may be granted in any action . .
. where the plaintiff has demanded and would be entitled,
in whole or in part, or in the alternative, to a money
judgment against one or more defendants, when:

“1. The defendant is a nondomiciliary residing without
the state, or is a foreign corporation not qualified to do
business in the state. . . .”

A plaintiff seeking an order of attachment must demonstrate
(1) the existence of one or more grounds of attachment
under CPLR 6201; (2) a cause of action; and (3) a
probability of success on the merits. (Considar, Inc. v.
Redi Corp. Establishment, 238 AD2d 111 [1st Dept 1997].) As
stated by Professor Siegel, in a motion for an attachment:

“The proof must establish to the court’s satisfaction
that . . . the plaintiff will succeed on the merits . . .

“When CPLR 6212 (a) requires the plaintiff to show that
it is `probable’ that the action will succeed on the
merits, it means that there must be something in the proof
stronger than the mere prima facie case that could satisfy
as a pleading . . . `What is sufficient for a pleading may
be insufficient for attachment’ said Judge Cardozo in
Zenith Bathing Pavilion, Inc. v. Fair Oaks S.S. Corp [240
NY 307 (1925)], which well illustrates the point that for
an attachment there must be evidentiary detail stronger
than the summary and conclusory allegations that suffice
today in a pleading.” (NY Prac § 316, at 504-505
[4th ed].)

In addition, where the only basis of jurisdiction is the
property sought to be attached, such property must have a
relationship to the cause of action, in order to provide
the court with quasi-in-rem jurisdiction. (See Shaffer v.
Heitner, 433 US 186 [1977].)

As set forth in detail below, plaintiff has failed to
sustain her burden of proof for an order of attachment and
has failed to establish sufficient ties with the State of
New York for this court to exercise quasi-in-rem
jurisdiction. (Cf. Banco Ambrosiano v. Artoc Bank & Trust,
62 NY2d 65 [1984].)

Plaintiff and defendants are all nondomiciliaries of New
York. Plaintiff is an attorney authorized to practice law
in Venezuela Page 495 and resides in Florida. Defendant
Loaiza Bigott & Associates is a law firm with offices in
Venezuela. Defendant Esther Bigott De Loaiza is alleged to
be the vice-president of the law firm, a resident and
citizen of Venezuela, and authorized to practice law in
Venezuela.

Plaintiff claims to have entered into an agreement with
defendants, pursuant to which she agreed to provide
defendants with professional legal services in connection
with matters being handled by defendants on behalf of the
Venezuelan Government in Ohio, Switzerland and other
foreign courts, for which defendants were to pay her 14.4%
of the fees received by defendants from the Venezuelan
Government. Plaintiff asserts that the Venezuelan
Government paid defendants $18,000,000. Plaintiff alleges
that, although she provided services pursuant to the
contract, she was not paid the full amount owed, which she
calculates to be approximately $2,592,000.

Plaintiff asserts that the only connection the parties have
to New York is the account she seeks to have attached.
Plaintiff fails, however, to establish that such account is
in fact property within the State of New York and that such
account is related to plaintiff’s underlying claims, in
order for this court to obtain quasi-in-rem jurisdiction.
(See Shaffer v. Heitner, 433 US at 213.)

Plaintiff claims that she provided assistance in setting up
the account so that the Venezuelan Government could
directly deposit payments for the legal services provided
by defendants in connection with the foreign actions and
that she arranged payment to United States counsel from the
account. There is no claim that plaintiff or defendants
ever traveled to New York as part of the contract. Beyond a
mere conclusory claim that she assisted setting up the
account, plaintiff has provided no specific details; nor
has she provided any documents to show that she set up the
account as part of the services she has rendered or,
indeed, that such account is even owned by defendants or
related to any underlying action in any way. The agreement
entered into by the parties does not refer to the subject
account, nor any other account. Additionally, no
documentation has been provided to show that the branch at
which the account is maintained is in New York, or
elsewhere.

It is notable that, while plaintiff describes the account
as a “New York account,” and lists a specific address, 590
Madison Avenue, New York, New York 10022, she fails to
explain whether the account was specifically opened up at
that New York branch Page 496 by her and defendants. The
court notes that the Smith Barney Web site lists 54 Smith
Barney branches in plaintiff’s resident state,
Florida.[fn1] Additionally, the Smith Barney branch at 590
Madison Avenue is not Smith Barney’s or its parent
company’s (Citigroup Global Markets, Inc.) corporate
headquarters.[fn2] Presumably, Smith Barney accounts can be
opened at any branch and accessed from anywhere. The fact
that plaintiff is ambiguous about why 590 Madison Avenue is
the listed “address” for the account raises questions as to
the appropriateness of this court exercising jurisdiction.
Based on the cursory facts presented to the court and the
complete absence of substantiation through any
documentation, there is no basis for this court to exercise
quasi-in-rem jurisdiction.

Plaintiff’s reliance on Banco Ambrosiano v. Artoc Bank &
Trust (62 NY2d 65 [1984]) as a basis for this court to
exercise quasi-in-rem jurisdiction is misplaced. In Banco,
which involved a loan between foreign banks, the Court of
Appeals stated that “[t]he dictates of due process are not
offended by requiring [defendant] to defend this claim in
New York, as it has maintained a significant connection
with the State and undertaken purposeful activity here.”
(Id. at 73 [citations omitted].) Unlike the defendants
herein, Banco involved a defendant who “maintained a
significant connection to the State” and had “undertaken
purposeful activity” in New York, including using the New
York account at issue regularly to accomplish its
international banking business, issuing memoranda directing
plaintiff to deposit sums it had been loaned to defendant’s
New York account, and which required repayment to be made
to plaintiff’s account with its New York correspondent
bank. (Id.) “[W]ith respect to performance of the agreement
which forms the basis for [plaintiff’s] claim, [defendant]
not only directed that the funds be deposited in its New
York account, but it also agreed to repay these amounts . .
. to [plaintiff’s] New York account.” (Id.) Thus, the
subject account was the very account through which
defendant effectuated the transaction at issue, and was
sufficient to provide quasi-in-rem jurisdiction in the
action. Moreover, the account at issue was with defendant’s
“New York correspondent bank.” (Id. at 69.) Page 497

Here, the agreement which forms the basis for plaintiff
Silvestre’s claim does not direct that the funds be
deposited in a New York account owned by defendants; nor
does the agreement evidence that defendants agreed to pay
sums into a New York account. Indeed, the words “New York”
are not even in the agreement. In fact, based on the record
before this court, there appears to be no purposeful
activity by defendants related to New York and a
questionable connection of an alleged “New York” account
belonging to defendants, with no documentation provided to
support such conclusory claim. “These factors — the
relationship between the cause of action and the property,
the activities to be performed in New York under the
parties’ agreement and [defendant’s] other ties with New
York — combine to render the exercise of
quasi-in-rem jurisdiction appropriate in this case.”
(Banco, 62 NY2d at 73.) The factors deemed relevant by the
court in Banco are absent here. Thus, the exercise of
quasi-in-rem jurisdiction would be inappropriate in this
case as it would offend the “dictates of due process” to
require defendants to defend this case in New York. (Id.)

Furthermore, in the case at bar, it is undisputed by
plaintiff that the agreement between the parties has a
forum selection clause (agreement in Spanish attached as
exhibit 1, agreement translated in English attached as
exhibit 2; attached to affidavit of plaintiff Claudia
Silvestre). The relevant clause provides:

“THIRTEEN CLAUSE: JURISDICTION

“The present contract will be governed and interpreted
pursuant to the regulatory and normative and legislation
of the Bolivarian Republic [of] Venezuela. Any deviation
or controversy that could arise concerning the
interpretation or execution of the present contract, will
be decided by the Tribunals of the Bolivarian Republic of
Venezuela, pursuant to its legislation and other normative
in force.”

The use of the words “will be decided” indicates that such
forum selection clause is mandatory rather than permissive.
In fact, plaintiff concedes: “The Agreement is governed by
Venezuelan law, and the parties have agreed to the
jurisdiction of the courts of Venezuela to resolve disputes
arising from the Agreement.” (Affidavit of plaintiff para
7.)

By attempting to bring this proceeding in this court,
plaintiff seeks to avoid the forum selection clause, agreed
to by both sides, and force defendants to litigate this
matter in New York, merely because defendants allegedly
have an account at Smith Page 498 Barney, which may or may
not have been opened in the State of New York.

As stated by the Appellate Division, First Department, in
British W. Indies Guar. Trust Co. v. Banque Internationale
A Luxembourg (172 AD2d 234, 234 [1st Dept 1991]):

“It is well-accepted policy that forum-selection clauses
are prima facie valid. In order to set aside such a
clause, a party must show that enforcement would be
unreasonable and unjust or that the clause is invalid
because of fraud or overreaching, such that a trial in the
contractual forum would be so gravely difficult and
inconvenient that the challenging party would, for all
practical purposes, be deprived of his or her day in
court. (The Bremen v. Zapata Off-Shore Co., 407 US 1,
12-18; Rokeby-Johnson v. Kentucky Agric. Energy Corp., 108
AD2d 336, 339-341; Di Ruocco v. Flamingo Beach Hotel &
Casino, 163 AD2d 270.)”

Here, the contractual provision designating Venezuela as
the venue for any disputes is clear and unambiguous.
Plaintiff and defendants are lawyers, presumed to know the
contents of what they signed, and there is no allegation of
any fraud with respect to the jurisdictional provision.

The cases cited by plaintiff do not support the drastic
relief sought in that none involve a forum selection
clause, as is the case herein. Furthermore, even absent the
mandatory forum selection clause, as explained previously,
this court is not persuaded that quasi-in-rem jurisdiction
exists, and that an order of attachment should be provided
to plaintiff, particularly on the limited record before
this court.

Moreover, even if there were sufficient contacts for this
court to exercise quasi-in-rem jurisdiction, this would be
an appropriate case to decline to retain jurisdiction based
on forum non conveniens. Although a New York court may have
jurisdiction, it is not compelled to retain jurisdiction if
the claim has no substantial nexus with New York. (Silver
v. Great Am. Ins. Co., 29 NY2d 356 [1972].) The question of
whether jurisdiction should be retained involves a
balancing of factors including the difficulties for
defendant in litigating the claim in this state, the burden
on the New York courts in entertaining the suit and the
availability of another more convenient forum in which
plaintiff may obtain redress. (Id. at 361.) Indeed, here,
there is another forum “which will best serve the ends of
justice and the convenience Page 499 of the parties”
(id.); the parties have already chosen such forum,
Venezuela, pursuant to the express terms of their
agreement.

Accordingly, the relief sought is denied in its entirety,
given that plaintiff has failed to show a likelihood of
success, much less the higher standard of “a probability of
success” pursuant to CPLR 6201, of her action prevailing in
New York, given the lack of jurisdiction and the mandatory
forum selection clause provided in the parties’ agreement.
Plaintiff can seek redress in Venezuela, as contemplated by
the parties in their agreement.

[fn1] See
http://www.fa.smithbarney.com/locate/branch_results.cfm?
page=branches&state=FL.

[fn2] See
http://www.fa.smithbarney.com/locate/branch_results.cfm?
page=branches&state=NY
http://www.en.wikipedia.org/wiki/Citigroup.

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