Opinion ID: 172533
Heading Depth: 1
Heading Rank: 9

Heading: Swiss Courts are Adequate

Text: Yavuz also maintains Switzerland is an inadequate forum because some of his claims and requested remedies may not be available in Swiss courts. In particular, he argues his claim seeking to impose a constructive trust on the Tulsa property is  in rem and exclusive venue lies where the land is located. Aplt. Br. at 29. Because a Swiss court would have no jurisdiction over the Tulsa property, Yavuz asserts that the district court erred in finding that Switzerland was an adequate alternative forum. But as the defendants correctly point out, Yavuz is conflating a possible remedya constructive trust on the defendants' real propertywith the nature of his lawsuita tort and contract suit arising out of a failed business relationship between the defendants and him. Yavuz creatively attempts to fashion his claims against the defendants as arising out of a dispute over the Tulsa property claims which could not be brought in Switzerland. But his argument misses the forest for the trees. As we noted in Yavuz I, Yavuz's complaint, although it seeks a constructive trust and restitution as remedies, essentially contends the defendants engaged in an over two-decade-long conspiracy to defraud him of his investment of money with Adi. See 465 F.3d at 423-24. For the following three reasons, we reject Yavuz's narrow view of his claims against the defendants. First, Yavuz's complaint itself undermines his attempt to construe this lawsuit as anything but an investment dispute comprising contract and tort claims. For example, Yavuz alleges the defendants... committed an implied breach of contract when they accepted his money ... and ... subsequently refused to acknowledge [his] appropriate and proper share in the entities and/or property. Id. at 423-24 (emphasis added) (brackets omitted) (quoting Yavuz's amended complaint). Yavuz also asserts the defendants were unjustly enriched by having the use of [his] invested funds for over twenty years. Id. at 423 (emphasis added). These claims are clearly based on Yavuz's failed business relationship with the defendants and, by their own words, admit they arise out of contract law. Similarly, Yavuz references the same failed business relationship for his allegations of common law fraud, constructive fraud, conspiracy, and embezzlement. He contends the defendants' communications to [him,] ... constituted common-law fraud, were used to gain[] an advantage... by misleading [him] to his prejudice, and the defendants conspired to obtain [a substantial amount of money] through false and fraudulent statements. Id. at 423-24. In particular, he alleges the defendants structur[ed] the investment transaction so that his investment would be worthless. Id. at 424. At bottom, Yavuz alleges the defendants conspired with one another and engaged in tortious conduct to deprive him of his monetary investment. Second, nothing in the Fiduciary Agreement or any other legal documents before the district court appeared to grant Yavuz an interest in any land. Rather, his relevant investment was to be 20% in the share capital of Madonna BV [the predecessor of 61 MM Corp.]. Id. at 422 (quoting the Fiduciary Agreement). [5] Accordingly, his claims arise out of his business relationship with the defendants, and largely sound in contract and tort. Third, as to Yavuz's constructive trust claim, he conflates a potential remedy with the substantive cause of action. Oklahoma state courts have recognized the purpose of a constructive trust is to remedy fraudulent conduct or prevent unjust enrichment: An implied trust or constructive trust arises by operation of law. It is imposed against an individual when the individual obtains a legal right to property through fraudulent, abusive means or through a method which violates equity and good conscience. A constructive trust is one of equity's most powerful fraud-rectifying devices. The primary reason for imposing a constructive trust is to avoid unjust enrichment. Delk v. Markel Am. Ins. Co., 81 P.3d 629, 640 n. 48 (Okla.2003) (citation omitted). A constructive trust is a remedial device used by courts to enforce substantive rights, it is not itself a substantive right. Howell Petroleum Corp. v. Samson Res. Co., 903 F.2d 778, 780 (10th Cir.1990) (applying Oklahoma law) (internal citations omitted). In other words, a constructive trust may be a valid remedy in a successful unjust enrichment or fraud action in Oklahoma. See Roberson v. PaineWebber, Inc., 998 P.2d 193, 200 (Okla.Civ.App. 1999); see generally George G. Bogert et al., The Law of Trusts and Trustees § 471 (2008) (describing a constructive trust as a fraud-rectifying trust and not an intent-enforcing trust). We find no error in the district court's construction of Yavuz's dispute with defendants as one arising from a failed investment relationship. And, when this case is properly construed as a contract and tort dispute, the lack of a particular remedy or cause of action in the alternative Swiss forum does not necessarily render that venue inadequate. Swiss courts have routinely been held adequate for contract and tort claims similar to those Yavuz is raising here. See, e.g., Dickson Marine, Inc. v. Panalpina, 179 F.3d 331, 342 (5th Cir.1999) (holding Switzerland was an adequate alternative forum that recognize[s] causes of action for both contract and tort); Alpine Atlantic Asset Mgmt. AG v. Comstock, 552 F.Supp.2d 1268, 1277-78 (D.Kan.2008) (finding Switzerland an adequate alternative forum for similar tort-and contract-based claims); LaSala v. UBS, AG, 510 F.Supp.2d 213, 222-23 (S.D.N.Y.2007) (finding Swiss courts adequate for tort claims); Do Rosário Veiga v. World Meteorological Org., 486 F.Supp.2d 297, 304 (S.D.N.Y.2007) ([C]ourts ... have repeatedly found that Switzerland is an adequate forum for adjudication of civil disputes involving common law claims based on contract and tort principles....). Additionally, a foreign venue may be adequate even if it does not have the same procedural safeguards or the identical remedies available in the United States. See Piper Aircraft, 454 U.S. at 256, 102 S.Ct. 252. Thus, Switzerland is not inadequate just because it may not permit the identical remedies that Yavuz's Oklahoma suit seeks, such as his request for punitive damages or a constructive trust. See Gschwind, 161 F.3d at 607 ([T]he remedy provided by the alternate forum need not be the same as that provided by the American court ....); see also DTEX, LLC v. BBVA Bancomer, S.A., 508 F.3d 785, 796 (5th Cir.2007) (`Adequacy' does not require that the alternative forum provide the same relief as an American court.). Similarly, even though certain claims, such as Yavuz's RICO claim, [6] may not be available in Swiss courts, Switzerland may still be an adequate forum. See Piper Aircraft, 454 U.S. at 247, 102 S.Ct. 252 (The possibility of a change in substantive law should ordinarily not be given conclusive or even substantial weight in the forum non conveniens inquiry.); In re Factor VIII or IX Concentrate Blood Prods. Litig., 484 F.3d 951, 957 (7th Cir. 2007) (noting that  Piper Aircraft establishes that the [foreign] law ... need not be identical to U.S. law, or even as favorable to plaintiffs); Dickson Marine Inc., 179 F.3d at 342 (same). Nothing in the record or Yavuz's arguments persuades us that Switzerland does not offer sufficient procedural protections and substantive avenues for Yavuz to hold the defendants liable for their allegedly unlawful business dealings. Finally, to the extent any monetary damages may be insufficient to make Yavuz whole, Yavuz is not without recourse. Nothing prevents Yavuz, after a successful suit in Swiss courts, from enforcing his Swiss judgment in the United States by seeking a constructive trust or an attachment of the defendants' property, such as the Tulsa property. The district court therefore did not abuse its discretion by holding Switzerland to be an available and adequate alternative forum for Yavuz's lawsuit. 2. Swiss Law Applies But this does not end the threshold forum non conveniens inquiry. We must still determine whether the district court erred in finding that Swiss law governs this dispute. We find it did not. Here, the district court concluded: Swiss law applies under both the choice of law provision in the fiduciary agreement and under Oklahoma choice of law principles. App., Vol. III at 1019 (Dist.Ct.Hr'g, Oct. 16, 2008). Yavuz argues the district court's choice of law analysis was deeply flawed. Aplt. Br. at 37. He claims the court's analysis was cursory, was made without benefit of a record, and ignored his well pleaded allegations that a substantial portion of the defendants' unlawful activities occurred in Oklahoma. Id. at 38. Further, Yavuz contends that his tort and implied contract claims should not be governed by the Fiduciary Agreement's choice-of-law provision. We review a district court's choice-of-law determination de novo. Gschwind, 161 F.3d at 608. If domestic law is applicable to the case, the forum non conveniens doctrine is inapplicable. Rivendell Forest Prods., Ltd. v. Canadian Pac. Ltd., 2 F.3d 990, 993 n. 4 (10th Cir. 1993). We agree with the district court's conclusion for two reasons. First, Swiss law governs Yavuz's claims that arise directly from the Fiduciary Agreement. This includes his allegations of the defendants' breach of their fiduciary duties under the Agreement as well as his cause of action for accounting. In Yavuz I, we determined: What is not ambiguous is that the parties agreed that Swiss law governs the Fiduciary Agreement. 465 F.3d at 431. This holding from Yavuz I is the law of the case and we are bound by it in this appeal. See Ford v. Pryor, 552 F.3d 1174,1179 (10th Cir.2008) (citing Weston v. Harmatz, 335 F.3d 1247, 1255 (10th Cir.2003) (stating holding of prior appeal must be followed by the appellate court in subsequent appeals)). Second, to the extent Yavuz's fraud and breach-of-implied contract claims may not be governed by the Agreement's choice-of-law provision, [7] Oklahoma conflict-of-law principles apply. See Elec. Distrib., Inc. v. SFR, Inc., 166 F.3d 1074, 1083 (10th Cir.1999) ([I]n making a choice of law determination, a federal court sitting in diversity must apply the choice of law provisions of the forum state in which it is sitting. (internal quotation marks omitted)). And, Oklahoma conflicts of law supports the district court's conclusion that Swiss law governs these contract and tort claims as well. For Yavuz's implied contract claims, Oklahoma conflicts-of-law principles dictate that lex loci contractus controlsi.e., the nature, validity, and interpretation of a contract are governed by the law where the contract was made. Harvell v. Goodyear Tire & Rubber Co., 164 P.3d 1028, 1034 (Okla.2006). For his tort claims, including his allegations of fraud and conspiracy by the defendants, Oklahoma applies the most significant relationship test, looking at (1) the place where the injury occurred, (2) the place where the conduct causing the injury occurred, (3) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (4) the place where the relationship, if any, between the parties occurred. BancOklahoma Mortg. Corp. v. Capital Title Co., 194 F.3d 1089, 1103-04 (10th Cir.1999) (quoting Brickner v. Gooden, 525 P.2d 632, 637 (Okla.1974)). Both of these tests point to Swiss law as governing this dispute. To gain the benefit of Oklahoma law, Yavuz again attempts to frame his claims as arising from a property dispute. But his own complaint belies this assertion. Yavuz himself states he brings this action to obtain relief arising out of his investment of money with the Defendants. App., Vol. I at 60-61 (emphasis added). As the district court concluded: Here the crux of [Yavuz's] second amended and restated petition is that the plaintiff was deprived of his investment which was made and reaffirmed in Switzerland. Switzerland was also where the agreement was executed, where Adi and FPM entered into oral and implied contracts. The alleged conduct of the defendants occurred in large measure in Switzerland. App., Vol. III at 1019 (Dist.Ct.Hr'g, Oct. 16, 2008). The district court also properly found that Adi was a resident of Fribourg [Switzerland] at the time of Yavuz's initial investment and is still a Swiss citizen and resides in Syria.... Yavuz is a citizen and resident of Turkey [and] ... traveled to Switzerland to negotiate with Adi and execute the agreement. Id. at 1020. Nothing in Yavuz's arguments or in the record casts doubt on the conclusion that the entirety of Yavuz's monetary investment with the defendants and the bulk of the parties' interactions (including the allegedly fraudulent and misleading conduct by the defendants) occurred outside the United States. Indeed, Yavuz's initial monetary investmenthis deposit of currencyoccurred in Switzerland. Moreover, the parties' relationship between that time and the date they executed the Fiduciary Agreement in 1989 occurred mostly, if not entirely, outside the United States. Subsequent communications, while occasionally emanating from the United States, related to the parties' performance under the Fiduciary Agreement and occurred outside the United States as well. Swiss law therefore is more appropriate than Oklahoma law to govern any of Yavuz's claims that may not fall within the exclusive purview of the Fiduciary Agreement and its choice-of-law provision. [8] For these reasons, we find no error in the district court's conclusion that Swiss law governs this dispute.