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Dave Donachy, et al v. Intrawest U.S. Holdings

July 21, 2011


The opinion of the court was delivered by: Bumb, United States District Judge:

NOT FOR PUBLICATION [Dkt. Ent. 17, 22]


This matter comes before the Court upon the motion of Defendants, Intrawest U.S. Holdings, Inc. ("Intrawest") and Playground Destination Properties, Inc. ("Playground") (collectively "Defendants"), to dismiss various claims filed by Plaintiffs Dave and Carol Donachy, Anthony and Susan DiMeglio, Andrew and Charlene Wingfield, Richard and Suzanne Kucharski, Vincent and Donna LaRocca and Ali Imtiaz ("Plaintiffs"). Defendants argue for dismissal based on a contractual forum selection clause or, in the alternative, on the doctrine of forum non conveniens. Plaintiffs seek leave to file a sur reply. For the following reasons, Defendants' motion to dismiss and Plaintiffs' request to file a sur reply are both denied.

I. Background*fn1

Plaintiffs,*fn2 eleven individuals from New Jersey, New York and Connecticut, purchased condominium units in a luxury resort called "Veranda" on the island of Turks and Caicos ("TCI"). See Plaintiffs' First Amended Complaint ("FAC") ¶¶ 21-25. Defendants'*fn3 role was to market and sell the units to individuals by directly contacting its clientele via telephone and e-mail. (FAC at ¶ 23.) Plaintiffs allege, in part, that they purchased units based upon representatons made by Defendants. Specifically, Plaintiffs allege that Defendants represented the following in their brochure: "Veranda will require only a 20% down payment and these funds will be held in an interest bearing trust account, ensuring you are protected from any unforseen circumstances, right through the construction period." (FAC ¶ 27; see Pl. Ex. A. to Compl.)*fn4 Further, Defendants' representatives repeatedly assured Plaintiffs over the telephone and by e-mail "that their deposits would be safe in all circumstances." Id.

Each of the Plaintiffs signed a contract with the condominium developer, Cherokee Limited ("Cherokee"), for the purchase of a Veranda unit. This contract, known as an Offer and Purchase Agreement (the "Agreement," or collectively, "Agreements"), contained what Defendants characterize as a mandatory forum selection clause. (See Pl. Ex. B to FAC.) The clause provides:

This Agreement shall be interpreted and governed in all respects according to law of the Turks & Caicos Islands whose courts shall have exclusive jurisdiction of any matters arising relative to this Agreement. (Id. at ¶ 15.8.)

Thereafter, numerous problems arose with the construction of the Veranda condominiums, ending in Cherokee's bankruptcy. (FAC at ¶¶ 28-29.) Ultimately, Plaintiffs' deposits were not safe in all circumstances, as allegedly promised by Defendants, and Plaintiffs lost approximately $10 million in total. (Id. at ¶ 30.) Plaintiffs filed suit in this Court seeking to recover their deposits and other related out-of- pocket losses. (See Dkt. Ent. 1.) Defendants now move to dismiss.

III. Standard

To survive a motion to dismiss,*fn5 "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Sheridan v. NGK Metals Corp., 609 F.3d 239, 263 n.27 (3d Cir. 2010) (quoting Ashcroft v. Iqbal, --- U.S. ---, 129 S.Ct. 1937, 1949 (2009) (internal quotation marks omitted)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Iqbal, 129 S.Ct. at 1949).

The Court conducts a three-part analysis when reviewing a claim:

First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Iqbal, 129 S.Ct. at 1947. Second, the court should identify allegations that, "because they are no more than conclusions are not entitled to the assumption of truth." Id. at 1950. Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." Id.

Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010); see also Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009)(" . . . [A] complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to 'show' such an entitlement with its facts.").

IV. Discussion

As noted, Defendants raise two arguments for dismissal. The Court addresses each in turn.

A. Improper Venue

Defendants argue that the forum selection clause in the Agreement between Plaintiffs and Cherokee is enforceable by Defendants, non-signatories, and mandates litigation in Turks & Caicos ("TCI"). See Pl. Ex. B to FAC at ΒΆ 15.8. "It is widely accepted that 'non-signatory third-parties who are "closely related to [a] contractual relationship"' are bound by forum selection clauses contained in the contracts underlying the relevant contractual relationships." Sahara Sam's Oasis, LLC v. Adams Companies, Inc., No. 10-0881, 2010 WL 3199886, at *6 (D.N.J. Aug. 12, 2010)(quoting Four River Exploration, LLC v. Bird Res., Inc., No. 09-3158, 2010 WL 216369, at *6 (D.N.J. Jan. 15, 2010)). Forum selection clauses may also bind third parties where the third party "should have foreseen governance by the clause." Jordan v. SEI Corp., No. 96-1616, 1996 WL 296540, at *6 (E.D. Pa. June 4, 1996)(citing Hugel v. Corporation of Lloyd's, 999 F.2d 206, 209-10 (7th Cir. 1993) (corporations owned and controlled by the contracting party bound by forum selection clause); Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 514 n.5 (9th Cir. 1988) (parent companies of contracting parties, as well ...

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