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Db Mexican Franchising LLC, A Delaware Limited Liability Company v. Lorenzo Cue

January 26, 2012

DB MEXICAN FRANCHISING LLC, A DELAWARE LIMITED LIABILITY COMPANY,
PLAINTIFF,
v.
LORENZO CUE, AN INDIVIDUAL AND DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: John A. Houston United States District Judge

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [DOC. # 7]

INTRODUCTION

Currently pending before this Court is the motion to dismiss, or in the alternative, to stay proceedings on forum non conveniens grounds filed by defendant Lorenzo Cue ("Cue" or "defendant"). The motion has been fully briefed by the parties. After a careful consideration of the pleadings and relevant exhibits submitted by the parties, and for the reasons set forth below, this Court GRANTS defendant's motion to dismiss.

BACKGROUND

This case stems from an alleged personal guaranty concerning the franchise of Dunkin' Donuts shops in Mexico. Plaintiff DB Mexican franchising ("DB Mexican"), a Delaware corporation registered to do business in Mexico, owned the rights to franchise Dunkin' Donuts shops in Mexico. The franchisee, Panera El Roble S.A. de C.V. ("Panera") is a company organized and existing under the laws of Mexico. Defendant is a shareholder of Panera.

DB Mexican and Panera, on January 14, 2008, entered into a "Multiple Unit Development and Franchise Agreement" ("MUDFA"), which established a franchise relationship between the parties for operation of Dunkin' Donuts shops in Mexico. Prior to the execution of the MUDFA, DB Mexican informed Cue that it needed a personal guaranty from Panera shareholders to ensure payment of the initial franchise fees based on the lack of a long-term operating history and weak financial statements. The guaranty was included in the closing documents executed on January 14, 2008.

On January 29, 2009, Panera informed DB Mexican that it was repudiating the MUDFA and subsequently ceased performance under the agreement. Panera then initiated arbitration against DB Mexican pursuant to the MUDFA's arbitration clause, which provided for disputes to be arbitrated in Boston, Massachusetts. DB Mexican cross-claimed against Panera. The arbitrator issued a partial award on January 1, 2011, awarding DB Mexican $345,000 with interest, fees and costs to be determined later. The instant suit was filed on March 15, 2011, seeking damages based on allegations of a breach of the personal guaranty against Cue.

Cue filed his motion to dismiss on April 21, 2011. DB Mexican filed an opposition to the motion on June 27, 2011 and Cue filed a reply brief on July 1, 2011. The motion was then taken under submission without oral argument. See CivLR 7.1(d.1).

DISCUSSION

Cue moves to dismiss, or in the alternative, to stay proceedings under the common law doctrine of forum non conveniens.

1. Legal Standard

The doctrine of forum non conveniens is a judicial doctrine permitting a federal district court to dismiss an action where "a court abroad is the more appropriate and convenient forum for adjudicating the controversy." Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 430-31(2007). The doctrine should be applied sparingly, thus, requiring the moving party to make a: clear showing of facts which establish such oppression and vexation of a defendant as to be out of proportion to plaintiff's convenience, which may be shown to be slight or nonexistent.

Ravelo Monegro v. Rose, 211 F.3d 509, 514 (9th Cir. 2000). A party moving to dismiss based on forum non conveniens bears the burden of showing: (1) there is an adequate alternative forum; and (2) the balance of private and public interest factors favors ...


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