INDEX NO. 518372/2017
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`-------------------------------------------------------x
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`WADE ROBERTSON.
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`Plaintiff,
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`-v-
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`WILLIAM C. CARTINHOURet a1.,
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`Defendants.
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`-------------------------------------------------------x
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`No. 10 Civ. 8442 (LTS)(HBP)
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`MEMORANDUM ORDER GRANTING MOTIONS TO TRANSFER
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`Plaintiff Wade Robertson ("Plaintiff' or "Robertson") brings this action against
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`Defendants William C. Cartinhour, Jr. ("CartinhoLlr"), Albert Schibani, Patrick J. Kearney.
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`Michael Bramnick, Robert S. Selzer, Carlton T. Obecny, James G. Dattaro. Neil Gurvitch,
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`Andrew R. Polott, H. Mark Rabin, Elyse L. Strickland (collectively, the "Attorney Defendants").
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`Vesna Kustudic, Tanja Milicevic (a.k.a. Taqja Popovic), and Aleksander Popovic. Plaintiff
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`asserts RICO claims under 18 U.S.c. §§ 1962(c) and (d), as well as claims for fraud, defamation,
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`and tortious interference. The Court has jurisdiction of the action pursuant to 28 U.s.c. 9§ 1
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`and 1367. Defendants have moved to dismiss Plaintiffs claims or, in the alternative, to transfer
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`this action to the United States District COUl1 for the District of Columbia (the "D.C. Court"), or
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`to stay this action pending a determination of the related case before the D.C. Court. After
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`Defendants filed their motion to dismiss, the D.C. Court entered ajudgment in favor of
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`Defendant Cartinhour in the related case. Subsequently, Plaintiff moved Cor, inter
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`a stay of
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`RoncRTSO~ \'. ('ARTINHOl,'R\\'PD
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`the instant action and an order authorizing alternate service on Defendant Milicevic. For the
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`following reasons, Defendants' motion is granted to the extent that this case is transferred to the
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`D.C. Court. Plaintiffs motion for a stay and for authorization of alternative service is denied. l
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`BACKGROUND
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`Unless otherwise noted, the following facts are alleged in the complaint and taken
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`as true for purposes of this motion practice. Plaintiff Wade Robertson is an attorney and resident
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`of Tennessee. (Compl. ':'13,20.) Defendant William C. Cartinhour lives and operates
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`businesses in the Washington. D.C. - Maryland - Virginia metropolitan area. (CompI. ~I 25.) In
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`September 2004, Robertson and Cartinhour formed a partnership, W.A.R. LLP ("W.A.R." or the
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`"Partnership"), in the District of Columbia, through which Robertson was to work as an attomey
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`in connection with securities class actions, while Cartinhour was to develop a related consulting
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`business ancillary to Robertson's legal servlces. (Compl. ~['I 30, 35.) In particular, Robertson
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`was to focus on a securities class action, the "Liu Action", that had been fi led in the Southern
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`District of Florida, then transferred to the Southern District of New York. (Compl. ~I'[ 20-24.)
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`Robertson and Cartinhour agreed to contribute services and cash to the partnership, and that any
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`profits from Robertson's legal work or Cartinhour's consulting work would be reinvested in the
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`partnership. (Compl. ~I 31.) Between September 2004 and April 2006, Cartinhour contributed
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`$3.5 million in cash to the Partnership and, between September 2004 and August 2009.
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`Robertson contributed $3.83 million in services. (CompL'1 84.) As part of the partnership
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`agreement, Cartinhour signed an "Indemnification, Hold Hannless, and Agreement to Waive All
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`Plaintiffs motion also sought certificates of default with respect to certain defendants
`who have not appeared. The Clerk of Court has issued the requested certificates.
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`Rom:RTSO~ v Cc\RTI~HOUR WI'D
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`Vr~RSl(H'< 10
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`1 J
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`Claims" document (the "Indemnification Agreement"), stating that he would not "make any
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`claims or demands, or file any legal proceedings against [plaintiffJ Wade A. Robertson,"
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`including claims conceming "any future injuries, losses, and damages not not known or
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`anticipated, but which may letter develop or be discovered." (Compl.~' 66: Affirmation of Petcr
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`C. Contino in Support re: Motion to Dismiss, Exh. D, .Ian. 13,2011, ECF No. 21.)
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`By February 2008, Robertson had exhausted all efforts in the "Liu Action" which
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`yielded no profit for the Partnership. (Compl. ~,169.) He then began investigating another
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`securities class action matter, on which he continued working until August 2009. (Compl.~' 71 )
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`On January 9,2009, and February 6,2009, Cartinhour, through his attorney, Defendant Albert
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`Schibani, contacted Robertson demanding the return of all the money that Cartinhour had
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`invested in the Partnership. (CompI. ~'I 72, 74.) Robertson did not retum any money to
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`Cartinhour. On August 14, 2009, and August 21, 2009, Cartinhour, through his attorney,
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`Defendant Carlton Obecny, served additional demand Ictters on Robertson and informed him
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`that Cartinhour would file sLlit if the moncy \\as not rClLIlllcd. (Compl.'l 7(J.)
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`The D.C. Action
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`Tn response to these demand letters, on August 28,2009, Robertson filed a
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`complaint in the United States District Court for the District of Columbia (the "D.C. Action")
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`seeking a declaratory judgment enforcing the Indemnification Agreement that Cartinhour had
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`signed. (Compl. '179.) Cartinhour, through his attorneys, Selzer Gurvitch Rabin & Obecny,
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`filed an answer and co Linter-complaint on October 28,2009, and later filed an amended counter­
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`complaint. (Compl. '1'1 80.) The amended counter-complaint asserted several claims against
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`Robertson, including fraud, breach of fiduciary duty, breach of partnership agreement, and
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`negligent misrepresentation.
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`Compl. ~! 81.) Robertson proceeded to file numcrous motions
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`in the D.C Court as well as in the United States Court of Appeals for the D.C Circuit.
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`Robertson v. Cartinhour, 691 F.Supp. 2d 65,68-74 (D.D.C 2010); Robertson v. Cartinhour, 711
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`F.Supp.2d 136 (D.D.C 2010).
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`On November 9,201 0, Robertson filed the instant action in this Court, alleging
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`that Cartinhour and the Attorney Defendants had violated varioLls federal laws, including RICO,
`during the course of the D.C Action. (Compl. ,;,1 109-149.) Shortly thereafter, Detendants filed
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`motions to dismiss or, in the alternative, to transfer this action to the D.C. Court. While
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`Defendants' motions were pending, the D.C. Action went to trial and, on February 18. 2011, the
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`jury in that action rendered a verdict, finding that Robertson was liable for breach of fiduciary
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`duty and for legal malpractice and awarding Cartinhour $7 million in compensatory and punitive
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`damages.
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`Robertson v. Cartinhour, No. 09-1642, 2011 U.S. Dist. LEXIS 31959 (D.D.C.
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`Mar. 28, 2011). On March 16,2011, Plaintiff Robertson moved in this Court to stay this action,
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`Partnership Bankruptcy Proceedings
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`An involuntary Chapter 11 bankruptcy petition was filed against the Partnership
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`in November 2010. Thereafter, issues were raised, and decided against Robertson and the
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`Partnership in the bankruptcy and district courts, as to whether Cartinhour's continued pursuit of
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`his counterclaims in the D.C Action violated the automatic stay imposed by section 362 of the
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`Bankruptcy Code, 11 U.S.c. ~ 362,
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`Memorandum Decision re Ray Connolly's Motion lor
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`Order of Civil Contempt and for Sanctions for Violating Bankruptcy Stay, filed as docket entry
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`no. 164inlnreW.A.R. LLP, Chap. 11 CaseNo.11-00044(BankLD.D.CJune 15,2(11).
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`DISCUSSION
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`28 U.S.C. ~ 1404(a) provides that, "[fJorthe convenience of the parties and
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`witnesses, in the interest of justice, a district court may transfer any civil action to any other
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`district or division where it might have been brought." A district court has broad discretion to
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`transfer venue. In re Cuvaho!.!a Equipment Coq)., 980 F.2d 110, 117 (2d Cir. 1992). In deciding
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`a motion to transfer, the Court conducts a two-pronged analysis: whether the action could 11<1\ e
`been brought in the transferee district and, i ryes. whether transfer would be an appropnate
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`exercise ofthe Court's discretion. MatteI, Inc. v. Robarb's, Inc., 139 F. Supp. 2d 487, 490
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`(S.D.N.Y. 2001).
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`This Action Could Have Been Brought in the Transferee District
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`A court may only transfer an action pursuant to ~ 1404(a) if the transferee district
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`has personal jurisdiction over the defendants and the transferee district is an appropriate venue.
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`The District of Columbia meets both of these criteria.
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`Defendants Appear to be Subject to Personal Jurisdiction in the District of Columbia
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`Plaintiff argues that this Court has personal jurisdiction over Cartinhour and the
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`Attomey Defendants pursuant to 18 U.S.c. ~~ I 965(a) and (b). 18 USc. 9 \965(a) provides
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`that "any civil action or proceeding under [RICO] against any person may be instituted in the
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`district comi of the United States for any district in which such person resides, is found, has an
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`agent, or transacts his affairs." 18 U.S.c. § 1965(b) further provides that if"the ends ofjustice
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`require that other parties residing in any other district be brought before the court," the court may
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`exercise personal jurisdiction over those parties as well. Therefore, "a civil RICO action can ...
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`be brought in a district court where personal jurisdiction based on minimum contacts is
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`established as to at least one defendant." PT United Can Co. v. Crown Corp & Seal Co.. Inc.,
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`138 F.3d 65,71 (2d Cil'. 1998).
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`Plaintiffs assertion of the propriety of this Court's exercise of personal
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`\1
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`II)
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`II
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`jurisdiction over all defendants named in this action is premised on his allegations that
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`Defendants Kustudic, Milicevic and Popovic reside, and/or may be found, in New York. The
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`active litigation of the D.C. Action in the D.C. COllli against Cartinhour, with no issue raised by
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`Cartinhour as to the propriety of that court's exercise ofjurisdiction over him, indicates,
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`particularly in light of Defendants' altemative request for transfer of the litigation to the D.C.
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`Court, that the D.C. Court has personal jUrIsdiction over Cartinhour at a minimum. On the basis
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`of that court's jurisdiction over Cartinhour, Plaintiff is at least as well poised to invoke 18 U.s.c.
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`§ 1965(b) as the basis for the exercise ofjurisdiction over the other Defendants as he is to do so
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`in this C01l11 based on the alleged presence or residence ofKustidic, Milicevic and Popovic.
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`The District oCColul11bia is an Appropriate Venue ror this Action
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`Under 28 U.s.c. § 1391(b)(2), venue is proper in ajudicial district "in which a
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`substantial part of the events or omissions giving rise to the claim occurrcd, or a substantial part
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`of property that is the subject of thc action is situated." Plaintiff argues that the Southem District
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`of New York is the appropriate venue for this action because the "Li u Action," the securities
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`class action brought in this district, was "the genesis. epicenter, and foundation of the
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`relationship and business bctween Defendant Cartinhour and Robertson from which Robertson's
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`claims flow." (Plaintiffs Response in Opposition to Defendants' Motions to Dismiss Mar. 7.
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`2011. ECF 1\0.34.) Without addressing the merits of that argument, the Court finds that the
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`District of Columbia is also an appropriate venue 1'01' this action. Plaintiffs claims stem from
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`In his complaint. Plaintiff states that Vcsna Kustudic "may be IOllnt! alllLor resides in
`New York County. New York"; that Tanja Milicevic "is a citizen of Serbia \vho ...
`may be found in Nc\v York County. Ncw York. and also transacts her affairs andior
`has an agent in New York County, New York"; and that Aleksandar Popovic "is a
`citizen of Serbia who ... may be found in New York County, ","ew York. and also
`transacts his affairs and/or has an agcnt in New York County, New York." (Comp!. ~I~I
`14-16. )
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`the partnership between himself and Cartinhour, which was allegedly formed in the District of
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`Columbia, and the subsequent litigation surrounding that partnership, which took place in the
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`D.C. Court. These circumstances are sufficient to demonstrate that a substantial part of the
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`events or omissions giving rise to this action occurred in the District of Columbia.
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`Transfer to the District of Columbia is an Appropriate Exercise of this Court's Discretion
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`When determining whether transfer is an appropriate exercise of discretion, courts
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`consider several factors, including: (1) the convenience of witnesses; (2) the convenience of the
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`parties; (3) the location of relevant documents and the relative ease of access to sources of proof;
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`(4) the locus of operative facts; (5) the availability of process to compel the attendance of
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`ullwilling witnesses; (6) the relative means ofthe parties; (7) the forum's fami liarity with the
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`governing law; (8) the weight accorded the plaintiff's choice of forum; and (9) trial efficiency
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`and the interests ofjustice, based on the totality of the circumstances. Reliance Insurance Co. v.
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`Six Star, Inc., 155 F. Supp. 2d 49,56-57 (S.D.N.Y. 2001); In re Nematron COUJ. Sees. Litig., 30
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`F. Supp. 2d 397, 400 (S.D.N.Y. 1998). Even a brief review of these factors leans in favor of
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`transfer to the District of Columbia.
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`With the exception of the three Serbian defendants, Popovic, Kustudic, and
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`Milicevic, all other defendants and witnesses are 111 the D.C. metropolitan area. All relevant
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`documents are in the District of Columbia, and such documents that were actually used in the
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`trial of the D.C. Action are part of the record in that Court. The operative events relevant to
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`Plaintiffs claims - the formation of the pat1nership between Plaintiff and Defendant CartinhoLlr,
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`and the subsequent litigation brought on Cartinhour's behalf by the Attorney Defendants
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`took
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`place in the District of Columbia, which is thus the locus of operative facts.
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`Most importantly, trial efficiency and the interests of justice are best served by
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`having the D.C. Court decide Plaintiffs current claims. Both this action and the D,C Action
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`arise from the same underlying issue CaItinhour's alleged breach of the Indemnification
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`Agreement by threatening to sue Robertson and pursuing claims in the subsequent litigation ­
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`meaning that the D. C. Court is uniquely famil iar with the facts and legal theories asselied by
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`both Plaintiff and Defendants. Additionally, in the time since Defendants initially filed their
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`motions to dismiss in this COllli, a jury reached a verdict and judgment was entered for
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`Defendant Cmtinhour in the related D.C. Action. Because Defendants' motions to dismiss the
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`instant Complaint were substantially briefed prior to that verdict, Defendants raised the issue of
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`res judicata before this Court only in their Reply Memoranda, to which PlaintilJhas, to date, not
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`responded. The D.C. Court, having entered the judgment in the underlying D.C. Action and
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`having presided over that jury triaL is in the best position to review any further briefing and
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`make res judicata determinations.
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`Finally, while COUltS generally defer to a plaintiffs choice of forum, a plaintiffs
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`chOIce of forum will be given less deference "where the connection between the case and the
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`chosen forum is minimal," or where plaintiffs choice of forum is motivated primarily by tactical
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`considerations. ='-'-"'-'-=' Chiste v. Hotels.com L.P., 756 F. Supp. 2e1 382, 401 (S.D,N.Y. 2010);
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`Terra Securities ASA Konkursbo v. Citigroup, 688 F. Supp. 2d 303, 315 (S.D.N.Y, 2010), Here,
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`Robertson's decision to file suit in the Southern District of New York appears to have been
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`principally a tactical maneuver to avoid the jurisdiction of the D.C. Court, and so should be
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`accorded little deference.
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`For the above stated reasons, the Defendants' motion to transfer this action to the
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`United States District Court for the District of Columbia is granted. The Defendants' motions to
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`dismiss the Complaint are tern1inated without prejudice to renewal in that Court.
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`IWIlI:Rl.'ON \: (",\1( II"HOLi< \I'P[)
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`VERSION I (t2X! I I
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`Plaintiffs Motion for a Stav, and for Alternative Service
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`Plaintiff Robertson's motion for a stay is denied. Plaintiff asserts that a stay is
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`warranted in this proceeding because be has moved in the bankruptcy court for a detenTiination
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`that the judgment of the U.S. District Court for the District of Columbia ("D.C. JUdgment") is
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`void ab initio, as obtained in violation of an automatic bankruptcy stay. Similarly. Plaintiff also
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`asserts that an appeal of the D.C. Judgment is pending before the U.S. Court of Appeals for the
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`District of Columbia, such that it would be a waste ofjudicial resources for this court to proceed
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`in the present action until the appeal is resolved. Neither argument is availing. First. on .June 15.
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`2011, Bankruptcy Judge Teel decisively rejected as "frivolous" the argument that the D.C.
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`Judgment was void ab initio, noting that "the automatic stay did not bar the actions [Defendants]
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`took after the commencement of this bankruptcy case, and. in any event, Cartinhour obtained
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`relief from the automatic stay to pursue his claims." Memorandum Decision re Ray Connolly's
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`Motion for Order of Civil Contempt and for Sanctions for Violating Bankruptcy Stay. filed as
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`docket entry no. 164 in In re W.A.R. LLP, Chap. I I Case No. 11-00044 (Bankr. D. D.C June
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`15,2011). A pending appeal is not automatic grounds for a stay of a related action. The factors
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`that courts consider in determining whether to stay their own orders pending appeal are
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`instructive in this connection. Those factors are: "( I ) whether the stay applicant has made a
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`strong showing that he is likely to succeed on the merits; (2) whether the applicant will be
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`irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the
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`other parties interested in the proceeding; and (4) where the public interest lies." In re World
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`Tracie Center Disaster Site Litigation, 503 F.3d 167, 170 (2d CiL 2007) (internal quotations
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`omitted). None of these factors favors a stay of the instant motion.
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`CONCLLSION
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`For the foregoing reasons, Defendants' motions to dismiss the Complaint or, in the
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`alternative, to transfer the action to the United States District Court for the District of Columbia,
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`are granted insofar as they seek transfer, and are terminated without prejudice in all other respects.
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`Plaintiffs Illotion for a stay is denied, and his request for approval of alternative sen· Ice on
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`Defendant Milicevic is denied without prejudice.
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`This Memorandum Order resolves docket entry nos. 20, 24, and 38. The Clerk of
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`Court is respectfully requested promptly to effectuate the transfer of this case and to close the
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`matter in this Court.
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`Dated: New York, New York
`October 28, 2011
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`United States District Judge
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`iO
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