843 F. Supp. 2d 386
S.D.N.Y.2012Background
- RA Global provides global oilfield services; Burch is RA Global's executive and board chair.
- RA Global contracted with CapitalinQ in 2005 to secure capital and CapitalinQ connected RA Global to Gün and Avicenna.
- RA Global executed loans with Avicenna in 2005 and 2006, secured by promissory notes and Burch's personal guarantees, with Avicenna gaining potential control on default.
- A 2006 MOU extended loan maturities to July 31, 2007 and allowed Avicenna to place a director on RA Global's board, with executives to be hired partly chosen by Gün.
- RA Global alleges the personnel installed by Avicenna under the MOU mismanaged RA Global, increasing expenses and hindering loan repayment.
- RA Global previously sued related parties in Texas and obtained a default judgment against some defendants; Avicenna later pursued a separate suit in New York and RA Global challenged jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Avicenna claims are barred by res judicata. | RA Global argues U.K. action precludes claims here. | Avicenna contends prior English proceeding and related defenses bar subsequent actions. | Avicenna claims barred; claims dismissed with prejudice. |
| Whether Gün is barred by res judicata due to his derivative involvement with Avicenna. | Gün’s conduct tied to Avicenna and the Avicenna-led actions implicate him. | Gün’s absence from the U.K. action may still bar claims if derivative. | Gün claims barred as derivative of Avicenna's; dismissed. |
Key Cases Cited
- New York v. Applied Card Sys., Inc., 11 N.Y.3d 105 (2008) (res judicata requires a prior judgment on the merits and privity)
- Pace v. Perk, 81 A.D.2d 444 (2d Dep’t 1981) (permissive counterclaims allow separate action despite not raised earlier)
- CIBC Mellon Trust Co. v. HSBC Guyerzeller Bank AG, 56 A.D.3d 307 (1st Dep’t 2008) (unlitigated counterclaims barred when arising from same facts)
- Gargiulo v. Oppenheim, 63 N.Y.2d 843 (1984) (compulsory counterclaims and preclusion rationale in English forum context)
- Sirinakis v. Colonial Bank, 600 F.Supp. 946 (S.D.N.Y. 1984) (comity and parallel res judicata treatment between English and New York law)
- Brown v. Lockwood, 432 N.Y.S.2d 186 (2d Dep’t 1980) (circumstances of simultaneous proceedings and waiver arguments)