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RODIN PROPERTIES-SHORE v. CUSHMAN & WAKEFIELD

May 5, 1999

RODIN PROPERTIES-SHORE MALL, N.V., PLAINTIFF,
v.
CUSHMAN & WAKEFIELD OF PENNSYLVANIA, INC., CUSHMAN & WAKEFIELD, INC., AND NEAL RODIN, DEFENDANTS. NEAL RODIN, THIRD-PARTY PLAINTIFF, V. ABN AMRO BANK, N.V., ABN AMRO HOLDING, N.V., STICHTING BEDRIJFSPENSIOENFONDS VOOR DE METAALINDUSTRIE, STICHTING PENSIOENFONDS RABOBANKORGANISATIE, AMEV LEVENSVERZEKERING, N.V., AND CENTRAAL BEHEER PENSIOENVERZEKERING, N.V., THIRD-PARTY DEFENDANTS. NEAL RODIN, COUNTERCLAIM PLAINTIFF, V. RODIN PROPERTIES-SHORE MALL, N.V., COUNTERCLAIM DEFENDANT. CUSHMAN & WAKEFIELD OF PENNSYLVANIA, INC., AND CUSHMAN & WAKEFIELD, INC., CROSSCLAIM PLAINTIFFS, V. NEAL RODIN, CROSSCLAIM DEFENDANT. CUSHMAN & WAKEFIELD OF PENNSYLVANIA, INC., AND CUSHMAN & WAKEFIELD, INC., THIRD-PARTY PLAINTIFFS, V. SHORE MALL ASSOCIATES, L.P., R.K. REALTY, TWO ASSOCIATES, L.P., LEO ULLMAN, AND REID & PRIEST LLP, THIRD-PARTY DEFENDANTS. SHORE MALL ASSOCIATES, L.P., COUNTERCLAIM PLAINTIFF, V. CUSHMAN & WAKEFIELD OF PENNSYLVANIA, INC., COUNTERCLAIM DEFENDANT. SHORE MALL ASSOCIATES, L.P., CROSSCLAIM PLAINTIFF, V. ABN AMRO BANK, N.V., ABN AMRO HOLDING, N.V., STICHTING BEDRIJFSPENSIOENFONDS WEST PAGE 729 VOOR DE METAALINDUSTRIE, STICHTING PENSIOENFONDS RABOBANKORGANISATIE, AMEV LEVENSVERZEKERING, N.V., AND CENTRAAL BEHEER PENSIOENVERZEKERING, N.V., CROSSCLAIM DEFENDANTS. SHORE MALL ASSOCIATES, L.P., RULE 14(A) PLAINTIFF, V. RODIN PROPERTIES-SHORE MALL, N.V., RULE 14(A) DEFENDANT.



The opinion of the court was delivered by: Brotman, District Judge.

    OPINION ON CHOICE-OF-LAW ISSUES ARISING OUT OF MOTIONS TO DISMISS

OPINIONS ON MOTIONS TO DISMISS

Presently before the Court are the following motions: (1) motion of Rodin Properties-Shore Mall, N.V. ("N.V.") and N.V.'s shareholders, specifically Stichting Bedrijfspensioenfonds Voor De Metaalindustrie, Stichting Pensioenfonds Rabobankorganisatie, Amev Levensverzekering N.V., and Centraal Beheer Pensioenverzekering N.V. (collectively "N.V.'s shareholders"), to dismiss, or in the alternative to sever, the Amended Counterclaim and Amended Third-Party Complaint of defendant Neal Rodin ("Rodin") and the Rule 14 Claim and Crossclaim of third-party defendant Shore Mall Associates ("SMA"); and (2) motion of ABN AMRO Bank N.V. ("ABN Bank") and ABN AMRO Holding N.V. ("ABN Holding") (collectively "AAB") to dismiss, or in the alternative to sever, defendant Rodin's Amended Third-Party Complaint and third-party defendant SMA's Crossclaim.

I. FACT BACKGROUND AND PROCEDURAL HISTORY

In their motions to dismiss, N.V., N.V.'s shareholders, and AAB assume that New Jersey law governs SMA's Crossclaim and Rule 14 Claim and Rodin's Third-Party Complaint. In the briefs submitted to the Court pursuant to its January 27, 1999 order, N.V., N.V.'s shareholders, AAB, Rodin, and SMA all agree that New Jersey law applies to SMA's Rule 14 Claim in its entirety and SMA's Crossclaim for tortious interference with contractual relationship and intentional interference with expectation of economic benefit or advantage. The parties dispute whether New Jersey or Dutch law is applicable to SMA's Crossclaim for contribution and Rodin's Third-Party Complaint for contribution.

II. DISCUSSION

A. TORT CLAIMS

1. Choice-of-Law Standard

In a diversity case, a federal court determines the substantive law to apply by looking to the forum state's choice-of-law rules. See McFarland v. Miller, 14 F.3d 912, 917 (3d Cir. 1994). New Jersey employs a governmental interest analysis for tort claims, applying the law of the jurisdiction with the greatest interest in the claims asserted. See Veazey v. Doremus, 103 N.J. 244, 248, 510 A.2d 1187, 1189 (1986).

The initial step in this analysis is to determine whether a conflict exists between the law of the interested jurisdictions. See id. If an actual conflict extists, the Court must then identify the policies underlying the law of each jurisdiction and determine how those policies are affected by each jurisdiction's contacts to the litigation and to the parties. See id. The contacts to be considered include: (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the domicil, residence, nationality, place of incorporation, and place of business of the parties; and (4) the place where the relationship, if any, between the parties is centered. See Restatement (Second) Conflict of Laws § 145 (1969). If a jurisdiction's contacts are not related to the policies underlying its law, then that jurisdiction does not maintain an interest in the application of its law. It is the qualitative, rather than the quantitative, nature of a jurisdiction's contacts that ultimately determines whether its law should govern. The law "of the state with the greatest interest in governing the particular issue" controls. D'Agostino v. Johnson & Johnson, 133 N.J. 516, 526, 628 A.2d 305, 310 (1993).

The Court finds that a conflict exists between Dutch and New Jersey law with regard to SMA's claims for tortious interference with contract and with prospective economic benefit, Dutch law being more general than New Jersey law. See Matrix Essentials, Inc. v. Cosmetic Gallery, Inc., 870 F. Supp. 1237, 1247 (D.N.J.), aff'd 85 F.3d 612 (3d Cir. 1996) ("To establish [a claim for tortious interference with contract or prospective economic advantage under New Jersey law] a plaintiff must prove: (1) an existing contractual relationship; (2) intentional interference with that relationship; (3) the malicious nature of the interference; and (4) damages resulting from the interference."); Rodin Properties — Shore Mall N.V. v. Cushman & Wakefield of Pennsylvania, Inc., Cushman & Wakefield, Inc. and Neal Rodin, Civil Action No. 95-6541, at 8, 12 (June 17, 1998) ("Liability for damages under a[] [Dutch law] civil wrong claim requires that Plaintiff allege and prove the following elements: (1) an unlawful act; (2) fault; (3) causation; and (4) damages". . . . "Netherlands law does not require a showing of intent to state an unlawful act claim."). It is therefore necessary for the Court to assess each jurisdiction's contacts with the litigation and the parties.

  2. Choosing the Law Applicable to SMA's Rule 14 Claim and
     Crossclaim for Tortious Interference with Contractual
     Relationship and Intentional Interference with Expectation
     of Economic Benefit or Advantage

In SMA's Rule 14 Claim, SMA alleges that N.V. — as a joint venturer in the Shore Mall enterprise — breached the duty of good faith and fair dealing it owed to SMA by attempting to take control of the Shore Mall between 1993 and 1995, thereby decreasing its value. See SMA's Rule 14 Claim, ¶¶ 3-6. In SMA's Crossclaim for tortious interference with contractual relationship, SMA alleges that the Dutch Investors*fn2 tortiously interfered with the contractual relationship existing between SMA and N.V. by denying SMA the opportunity to develop the Shore Mall. See SMA's Crossclaim, ¶¶ 81-84. In SMA's Crossclaim for intentional interference with expectation of economic benefit or advantage, SMA alleges that the Dutch Investors intentionally interfered with the economic benefit it reasonably expected to achieve through its relationship with N.V. by denying SMA the opportunity to develop the Shore Mall. See id., ¶¶ 86-89.

The parties agree that New Jersey law governs SMA's Rule 14 Claim against N.V. and Crossclaim against the Dutch Investors for interference with contract and economic advantage. The Court reaches the same conclusion. The injury which SMA complains of is harm to the value of the Shore Mall; this injury occurred in New Jersey. The conduct causing the injury could have occurred in Holland, New Jersey, or elsewhere. SMA's pleadings do not identify where the Dutch Investors allegedly caused N.V. to reject its proposals for the expansion and improvement of the Shore Mall or where N.V. allegedly did so. SMA is a New Jersey limited partnership; N.V. is a Dutch Corporation; the Dutch Investors are Dutch legal entities. This factor therefore does not favor the application of either jurisdiction's law. It is not clear whether the relationship between SMA and N.V. and between SMA and the Dutch Investors is centered in Holland or in New Jersey. However, the property which provides the basis for the relationship between these parties is located in New Jersey, a fact which suggests that New Jersey is also the center of the parties' relationship. The sum of these factors weighs in favor of applying New Jersey law to SMA's tort claims against N.V. and the Dutch Investors.

3. Motions to Dismiss SMA's Rule 14 Claim and Crossclaim

a. Standard for Dismissal

In considering whether a complain should be dismissed for failure to state claim upon which relief can be granted, the Court must consider only those facts alleged in the complaint and accept all of the allegations as true. See ALA v. CCAIR, Inc., 29 F.3d 855, 859 (3rd Cir. 1994). The Court cannot dismiss a plaintiff's complaint for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); see also D.P. Enterprises, Inc. v. Bucks County Community College, 725 F.2d 943, 944 (3d Cir. 1984). While the rules do not dictate that a claim set forth an intricately detailed description of the asserted basis for relief, they do require that the pleadings give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests. See Schanzer v. Rutgers Univ., 934 F. Supp. 669, 673 (D.N.J. 1996).

b. SMA's Rule 14 Claim Against N.V.

The first count of SMA's Rule 14 Claim against N.V. contains an allegation of lender liability; SMA alleges that N.V. had a duty to act in good faith with respect to the Shore Mall property and that N.V. breached this duty by attempting to take over the Shore Mall. See SMA's Rule 14 Claim, ¶¶ 3-5. N.V. claims that its actions with regard to the Shore Mall were consistent with its rights under the Mortgage and that it therefore did not breach its duty to act in good faith. See Memorandum of Law in Support of N.V. and N.V.'s Shareholders' Motion to Dismiss at 10.

New Jersey's law regarding the duty of good faith and fair dealing has been articulated ...


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