Berkshire Place Associates LP v. MDG Real Estate Global Limited
1:19-cv-00432
D.R.I.Jan 31, 2020Background
- Berkshire Place agreed to sell a Providence nursing-home facility to MDG; MDG deposited $1.4 million in escrow as earnest money under the contract.
- The parties' contract waived jury trial and required binding arbitration under Rhode Island law for contract disputes.
- An AAA arbitration panel awarded Berkshire the $1.4 million deposit; the award issued June 26, 2019.
- MDG filed a summons and notice in New York Supreme Court on July 3, 2019 seeking to vacate the award; Berkshire filed to confirm the award in Rhode Island Superior Court on July 9, 2019.
- Both state actions were removed to federal court (EDNY and D.R.I.); the parties dispute which action is properly "first-filed" and whether MDG’s New York filing was procedurally sufficient (special proceeding requirements).
- The District of Rhode Island considered venue/comity principles and, concluding EDNY should determine the first-filed rule and NY filing sufficiency, granted MDG’s alternative motion to stay and stayed the Rhode Island case pending adjudication in EDNY.
Issues
| Issue | Plaintiff's Argument (Berkshire) | Defendant's Argument (MDG) | Held |
|---|---|---|---|
| Whether the Court should consider MDG's pre-removal Motion to Dismiss/Stay despite MDG not re-filing after removal | Berkshire argued MDG failed to re-file the motion as required, so it should be disregarded | MDG relied on electronic transfer of state-court filings and urged the Court to consider the motion without duplication | Court exercised discretion to consider the motion and Berkshire’s objections despite procedural defect |
| Which forum is appropriate under the first-filed rule when parallel actions exist (EDNY v. D.R.I.) | Berkshire argued MDG’s NY filing was procedurally defective and thus not entitled to first-filed deference; preferred proceeding in Rhode Island | MDG argued its July 3 NY summons and notice commenced the NY action first and favored adjudication in EDNY (nexus to NY escrow/business) | Court declined to apply Rhode Island’s presumption, deferred venue determination to EDNY (where MDG’s NY action was removed) |
| Whether MDG’s July 3, 2019 NY filing (summons and notice) constituted proper commencement of a "special proceeding" under NY law | Berkshire: NY special proceedings require a petition; MDG’s summons-and-notice was deficient so the NY case did not truly commence until the later complaint | MDG: the summons and notice filed July 3 were sufficient to commence the NY action; plaintiff’s argument should not defeat the first-filed presumption | Court noted the question is governed by NY law and deferred the sufficiency determination to EDNY |
| Whether to stay the Rhode Island proceeding pending resolution of the NY action | Berkshire: case should proceed in D.R.I. because MDG’s NY filing was defective | MDG: stay or dismissal in favor of NY is appropriate given earlier NY filing and NY nexus | Court stayed the Rhode Island action pending adjudication in MDG Real Estate Global Ltd. v. Berkshire Place Associates (E.D.N.Y.) |
Key Cases Cited
- Gemco Latona Am., Inc. v. Seiko Time Corp., 623 F. Supp. 912 (D.P.R. 1985) (discusses avoiding duplicative litigation and conflicting judgments in parallel federal suits)
- S. Windus, Inc. v. Aetna Cas. & Sur. Co., 653 F. Supp. 631 (D.R.I. 1987) (first-filed presumption can be overcome by convenience or special circumstances)
- Holmes Group, Inc. v. Hamilton Beach/Proctor Silex, Inc., 249 F. Supp. 2d 12 (D. Mass. 2002) (sets out multi-factor convenience balancing for venue decisions)
- Ontel Prods., Inc. v. Project Strategies Corp., 899 F. Supp. 1144 (S.D.N.Y. 1995) (the court in which the first-filed case was brought decides whether to apply the first-filed rule)