Bazarian International Financial Associates, LLC v. Desarrolloa Aerohotelco, C.A.
168 F. Supp. 3d 1
D.D.C.2016Background
- BI (Bazarian International Financial Associates) contracted with Desarrollos Aerohotelco, C.A. (Aerohotelco) under a February 5, 2007 Investment Banking Agreement to help obtain a Palm Beach, Aruba lease option and financing for a hotel project; the Agreement contained a D.C. forum-selection clause and fees (a “Debt Fee”) payable if financing concluded within 36 months from sources introduced by BI.
- BI introduced Aerohotelco (and its president Stipa) to AIB Bank; AIB sent a non-binding Indicative Term Sheet in March 2007; Aerohotelco later won the Palm Beach option but the lease was executed by DHC (a related defendant). AIB and Aerohotelco or another Project defendant entered a Facility Agreement in 2009.
- BI sued, alleging breach of contract (Debt Fee) and, alternatively, quantum meruit; plaintiff added several corporate defendants and Stipa (the Project Developers), alleging they are successors/related entities or alter egos of Aerohotelco.
- Service was difficult abroad; the court authorized alternative service under Fed. R. Civ. P. 4(f)(3) by email and registered mail to the defendants’ U.S. counsel; defendants moved to dismiss for lack of personal jurisdiction, improper service, and failure to state a claim.
- The court (Howell, J.) denied dismissal for lack of personal jurisdiction and improper service, finding the forum-selection clause could bind the related entities and that Rule 4(f)(3) service via U.S. counsel was permissible; it dismissed the quantum meruit claim but denied dismissal of the contract claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction via forum-selection clause | Forum clause in Agreement binds Aerohotelco and its "successor or related entities" (so court has jurisdiction over Project Developers) | Project Developers were not parties, not successors/related entities; clause applies only to Aerohotelco | Court: BI plausibly alleged relatedness/alter-ego facts (common ownership, shared officers, succession of project); jurisdiction upheld |
| Sufficiency of service under Rule 4(f)(3) | Alternative service via defendants’ U.S. counsel by email/registered mail was necessary and reasonably calculated to give notice | Rule 4(f) forbids using counsel inside U.S.; must exhaust Hague Convention; service offended foreign law | Court: Rule 4(f)(3) authorizes such service when reasonably calculated to notify; plaintiff not required to exhaust Hague; service valid |
| Breach of contract — timing/"financial commitments" requirement | BI says Indicative Term Sheet satisfied §2.B’s "financial commitments" proposal and Agreement construed in context (36‑month window) | Defendants say §2.B required binding commitments within 8 weeks, which BI did not obtain | Court: Contract language ambiguous; §2.B’s "proposes" + §2.C/§3 indicate nonbinding preliminary commitments could satisfy §2.B; claim survives |
| Quantum meruit (unjust enrichment) | Alternative remedy if contract does not apply | Express Agreement governs parties’ relationship and covers the services; unjust enrichment barred by existence of contract | Court: Quantum meruit barred because Investment Banking Agreement covers the subject matter; claim dismissed |
Key Cases Cited
- Bazarian Int’l. Fin. Assocs., L.L.C. v. Desarrollos Aerohotelco, C.A., 793 F. Supp. 2d 124 (D.D.C. 2011) (prior related dismissal for lack of jurisdiction)
- Freedom Watch, Inc. v. Organization of the Petroleum Exporting Countries, 766 F.3d 74 (D.C. Cir. 2014) (discussing Rule 4(f)(3) and service through U.S. counsel)
- Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007 (9th Cir. 2002) (approving Rule 4(f)(3) alternatives including service on U.S. counsel)
- Mwani v. bin Laden, 417 F.3d 1 (D.C. Cir. 2005) (prima facie standard for personal jurisdiction; service and jurisdiction distinct)
- Mann v. Castiel, 681 F.3d 368 (D.C. Cir. 2012) (plaintiff’s burden to show valid service)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (same; legal conclusions insufficient)
- Walden v. Fiore, 134 S. Ct. 1115 (jurisdictional allegations accepted as true at motion to dismiss stage)