The opinion of the court was delivered by: JOHN C. LIFLAND
This matter comes before the Court on motion by defendants Eitaro Itoyama ("Itoyama"), Shin Nihon Kanko Kogyo Co., Ltd. ("Shin Nihon Japan") and Shinnihon Kanko Kogyo (USA) Co., Inc. ("Shinnihon USA") to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6) or for transfer pursuant to 28 U.S.C. § 1404(a). Plaintiffs Keiko Ono ("Ono") and Altesse Co., Ltd. ("Altesse") oppose the motion.
This action was commenced by plaintiffs Ono and Altesse on June 28, 1994. Ono is a legal, permanent resident of the United States residing in New York City. (Amended Complaint at P 2.) Altesse is a corporation organized and existing under the laws of the State of New York with its principal place of business in New York City. (P 3.) Defendant Itoyama is a Japanese citizen and resident as well as a member of the Japanese House of Representatives. (P 4.) Defendant Shin Nihon Japan is a French corporation with its principal place of business in Tokyo. (P 5.) Defendant Shinnihon USA is a Delaware corporation with its principal place of business in McAfee, Sussex County, New Jersey. (P 6.) The complaint indicates that Ono is president, 50% shareholder and one of two directors of Altesse. (P 3.) The complaint also indicates that Itoyama is an officer, 50% shareholder and the other director of Altesse. Itoyama is also an officer, director and controlling shareholder of Shin Nihon Japan and Shinnihon USA. (P 5 and 6.)
Plaintiffs allege that Itoyama attempted to ruin Ono and Altesse. Ono was the founder and majority shareholder in Altesse, a business engaged in the import and export of furs and jewelery. Altesse was operating primarily out of a Fifth Avenue boutique. (P 10 and 11.) The events giving rise to this action began in 1990 when Itoyama allegedly approached Ono in New York City, requesting her to re-establish the personal relationship they had shared in Japan prior to 1985. (P 11.) Itoyama also requested that Ono allow him to invest in Altesse. (P 11.)
The complaint alleges that Ono initially refused Itoyama's repeated advances and that she was reluctant to allow Itoyama to invest in Altesse without a long-term commitment. (P 12.) Accordingly to the complaint, Itoyama offered Ono a long-term business partnership which would "take care of her for life" if she would accept his proposal. (P 13.) By September 1990, Itoyama had become a director, officer and fifty percent shareholder of Altesse. (P 14.) Around the same time, Ono and Itoyama recommenced their sexual relationship. (P 16.)
Plaintiffs allege that around the same time, Itoyama advised Ono that Altesse should abandon its import/export business and, instead, promote a golf course he intended to purchase through Shinnihon USA. (P 15.) Altesse was then transformed into a golf equipment retailer and promotional vehicle for the golf course. According to the complaint, Altesse liquidated its inventory of furs and jewelry, terminated certain employees who were involved in these products, hired employees familiar with golf equipment and golfing events, and remodeled its Fifth Avenue boutique. The cost of the remodeling was borne by Altesse. (P 19.) Plaintiffs allege that Ono, having reservations about the change, sought assurances from Itoyama that he and Shinnihon USA would guarantee the salaries of Altesse employees, including that of Ono. According to the complaint, Itoyama, on behalf of himself and Shinnihon USA "promised to pay [these] salaries." (P 20.) Thus, the complaint alleges, Altesse and Ono became financially dependent upon Itoyama and Shinnihon USA.
According to the complaint, Itoyama compensated Ono and other Altesse employees for their work for a certain period of time. (P 20.) However, during this time, plaintiffs allege that Itoyama began to make "perverse and disgusting" sexual demands of Ono and threatened to stop the payments to her and other Altesse employees when she refused. (P 21.) These payments were terminated at the end of 1991. (P 23.) However, Itoyama allegedly suggested that Ono could still receive a salary if she complied with his sexual demands. (P 24.)
The complaint then alleges that "having succeeded in making Plaintiff Ono and Altesse financially dependent on him, Defendant Itoyama completed the misappropriation of Plaintiffs' assets." (P 24.) Itoyama allegedly took over Altesse's lease on the Fifth Avenue boutique; he persuaded Ono to have title to an apartment owned by Altesse, and allegedly worth $ 2.4 million dollars,
transferred to his company Shin Nihon Japan. Ono alleges that "at no time did she understand that she was surrendering her 50% ownership of the apartment as a result of [this transfer]." (P 25.) Itoyama allegedly promised her she could reside in the apartment as long as she wished. (P 25.) However, in December of 1993, Itoyama instituted eviction proceedings. (P 30.) Ultimately, Ono was forced out of the apartment. (P 32.)
In light of the aforementioned allegations, plaintiffs bring this cause of action for fraud, breach of contract, violation of the New Jersey Law Against Discrimination, breach of fiduciary duty, intentional infliction of emotional distress and constructive trust. Defendants now move to dismiss the complaint for lack of subject matter jurisdiction and failure to state a claim upon which relief may be granted or, alternatively, to transfer this action.
Subject Matter Jurisdiction
Defendants argue that the Court should "realign" Altesse as a defendant so that its position reflects its "real interest" in the litigation. If the Court were to so realign Altesse, diversity would be destroyed, requiring dismissal of the entire action, as both Altesse and Ono are New York citizens. Defendants argue, essentially, that an action may not be maintained directly by Altesse against Itoyama. Rather, defendants assert that any claim by ...