Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Tierra Verde Escape, LLC v. The Brittingham Group, LLC

United States District Court, W.D. Michigan, Southern Division

August 28, 2017

TIERRA VERDE ESCAPE, LLC, TOW DEVELOPMENT, LLC, and AMI INVESTMENT HOLDINGS, LLC, Plaintiffs,
v.
THE BRITTINGHAM GROUP, LLC, CHARLES T. NOCK, JOHN C. NOCK, and BRIAN D. BRITTSAN, Defendants.

          OPINION

          GORDON J. QUIST UNITED STATES DISTRICT JUDGE.

         Plaintiffs sued Defendants claiming a violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1964, conversion, fraud, breach of fiduciary duty, and civil conspiracy. (ECF No. 1.) Defendants filed a motion to dismiss, which the Court construes as a motion to compel arbitration in Hong Kong under the Federal Arbitration Act (FAA) and a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 37.) For the following reasons, the Court will grant Defendants' motion to compel arbitration, deny Defendants' motion to dismiss as moot, and stay the case pending arbitration.

         I. BACKGROUND

         The three Plaintiffs' claims stem from a transaction in which Defendants allegedly used several misrepresentations to induce Plaintiffs to enter into three substantively identical Memoranda of Understanding (collectively MOU) with Defendant The Brittingham Group, LLC. Plaintiff Tierra Verde Escape, LLC is a Florida limited liability company organized in November of 2014. (ECF No. 38-3.) Plaintiff TOW Development Company, LLC is a Delaware LLC organized and activated in March of 2015. (ECF No. 38-5.) TOW is licensed to conduct business in Michigan. (ECF No. 38-6.) Plaintiff AMI Investment Holdings, LLC is a Nevada LLC organized in August of 2015. (ECF No. 38-8.) AMI is licensed to do business in Arizona. (ECF No. 38-9.)

         Defendant Brittingham Group, LLC is an Arkansas limited liability company organized by Defendant Charles Nock. (ECF No. 38-2.) Defendant Brian Brittsan worked for Brittingham Group and entered into negotiations with employees of Bankers Capital, LLC and Northwind Financial Corporation in June 2015.[1] Bankers Capital and Northwind Financial, in turn, advised Plaintiffs to invest their money with Brittingham.

         The MOU provided that Plaintiffs would transfer money to Defendants, who would invest that money; the parties would share equally in net profits, which were apparently expected, at least by Plaintiffs, to be as high as 100% per week. (ECF No. 41-8 at PageID.333.) Tierra Verde agreed to transfer $550, 000 to a HSBC account at a Hong Kong bank held by Gold Express Holdings Limited. (ECF No. 38-1 at PageID.203.) TOW agreed to transfer $550, 000 to a HSBC account in Hong Kong held by Smart Jobs Limited. (ECF No. 38-4 at PageID.218.) AMI agreed to transfer $550, 000 to the same account in Hong Kong held by Smart Jobs Limited. (ECF No. 38-7 at PageID.237.) The MOU contained a clause stipulating that “any dispute arising under this MOU shall be decided by arbitration conducted in Hong Kong.” (ECF No. 38-1 at PageID.205; ECF No. 38-4 at PageID.220; ECF No. 38-7 at PageID.238.)

         As agreed, Plaintiffs transferred their combined total of $1, 650, 000 to a Hong Kong bank. Plaintiffs have seen zero return on or of their investments. Receiving nothing, Plaintiffs alleged fraud and sued Defendants in federal court. Defendants, as stated, have moved to dismiss- arguing that any dispute between Plaintiffs and Defendants is subject to arbitration in Hong Kong.

         II. DISCUSSION A. Jurisdiction

         There is a question as to this Court's jurisdiction to compel arbitration in Hong Kong. Section 4 of the FAA, upon which Defendants initially relied, “prevents federal courts from compelling arbitration outside of their own district.” Inland Bulk Transfer Co. v. Cummins Engine Co., 332 F.3d 1007, 1018 (6th Cir. 2003) (citing 9 U.S.C. § 4). But “[t]he Convention on the Recognition and Enforcement of Foreign Arbitral Awards does allow federal courts to order arbitration abroad in international commercial disputes in some circumstances.” Id. at 1018 (citing 9 U.S.C. § 201 et seq.). Section 202 of the FAA provides:

An arbitration agreement or arbitral award arising out of a legal relationship, whether contractual or not, which is considered as commercial, including a transaction, contract, or agreement described in section 2 of this title, falls under the Convention. An agreement or award arising out of such a relationship which is entirely between citizens of the United States shall be deemed not to fall under the Convention unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states. For the purpose of this section a corporation is a citizen of the United States if it is incorporated or has its principal place of business in the United States.

9 U.S.C. § 202.

         Circuit courts have formulated various tests, but all courts to address § 202 have held the statute grants jurisdiction to compel arbitration when:

[1] there is an agreement in writing within the meaning of the Convention.
[2] the agreement provides for arbitration in the territory of a signatory ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.