Elmer Yuen; Safari Development Co., Ltd v. Bank of China Appeal From the United States District Court for the District of New…

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-4068
ELMER YUEN; SAFARI DEVELOPMENT CO., LTD,
Appellants
v.
BANK OF CHINA
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
D.C. Civil 03-cv-00744
District Judge: The Honorable Anne E. Thompson
Submitted Under Third Circuit LAR 34.1(a)
September 13, 2005
Before: SLOVITER, BARRY, and SMITH, Circuit Judges
(Opinion Filed: September 22, 2005 )
OPINION
BARRY, Circuit Judge
Appellant Elmer Yuen, through his corporation, appellant Safari Development Co.,
Ltd. (“Safari”), was the owner of a condominium in the Trump International Hotel and

-- 1 of 4 --

This sale occurred in connection with a settlement agreement between Yuen and1
Downs.
2
Tower, located in New York City. The condominium was subject to a mortgage held by
appellee, the Bank of China, with Safari as mortgagor and Yuen as guarantor. The
mortgage and related loan documents were executed in New York, and contain New York
choice of law provisions.
This action arises out of two previous litigations. In April, 2001, Yuen’s former
wife, Stephanie Downs, sued Yuen in New Jersey Superior Court in connection with the
couple’s divorce. In November, 2002, the Bank of China commenced a mortgage
foreclosure action against Yuen and Safari in New York Supreme Court (“the New York
action”). Shortly thereafter, Yuen and Safari commenced this action in New Jersey
Superior Court, seeking to enjoin the Bank of China from foreclosing in the New York
action. The Bank of China removed this case to the U.S. District Court for the District of
New Jersey. The District Court stayed the case pending the disposition of the New York
action.
On February 27, 2004, Yuen and Safari sold the condominium, and the proceeds of
the sale were used to satisfy the outstanding mortgage balance. As a result, the New1
York court dismissed the New York action as moot.
Yuen and Safari claim that the sale of the condominium was pursuant to an oral
settlement reached with the Bank of China, whereby the parties agreed that Yuen and

-- 2 of 4 --

Indeed, based on the record provided, it appears that no such agreement was reached.2
In a letter from Yuen to the Bank of China on the date of the sale, Yuen claimed that
“Safari is experiencing significant cash flow problems to disburse the taxes and legal fees
involved. Safari would like to sincerely propose that Bank of China forgive Safari of the
related legal fees of approximately $140,000.” App. 163.
3
Safari would not be responsible for some additional $500,000 in fees and penalties. The
Bank of China denies that any such agreement had been reached, and demanded the
$500,000, which Yuen and Safari were forced to pay.2
Yuen and Safari thereafter filed a motion in the District Court to enforce the
purported settlement with the Bank of China. While the parties continue to dispute the
existence of a settlement agreement, Yuen and Safari concede that any such agreement
was never reduced to writing. There is no dispute as to the underlying state law: all
parties agree that New York law requires settlement agreements to be in writing, while
New Jersey law recognizes oral settlement agreements. Rather, the main issue is whether
New York or New Jersey law applies.
The District Court held that New York law applied because New York had the
greater interest in, and most significant connection to, the litigation. The District Court
noted that the mortgage agreement and settlement agreement (to the extent it existed)
were both entered into in New York, and the condominium was located in New York. In
contrast, New Jersey was connected to the case only because of the litigation filed in New
Jersey.
On appeal, Yuen and Safari argue that the purpose of New York’s policy that

-- 3 of 4 --

4
settlement agreements be in writing is “to relieve New York courts of the burden of
collateral litigation over [settlement] agreements.” Reply Brief, at 2. Because this action
is before the New Jersey courts, the argument goes, New York’s policy would not be
frustrated by enforcing the settlement agreement, while New Jersey’s policy would be
vindicated. This argument fails. New York’s policy is intended to protect both the courts
and the litigants from collateral litigation, and to promote finality. Although this action is
before a court in New Jersey, New York continues to have an interest in promoting its
policies, particularly where the litigation is in connection with real property located in
New York. And, we note, the procedural history of this case strongly suggests that Yuen
and Safari engaged in forum shopping, which is a significant factor to be considered in
applying choice-of-law principles. See State Farm Mutual Automobile Ins. Co. v.
Simmons’ Estate, 417 A.2d 488, 492 (N.J.1980); Business Loan Center v. Nischal, 331 F.
Supp. 2d 301, 310 (D.N.J. 2004).
The October 13, 2004 order of the District Court will be affirmed.

-- 4 of 4 --