Shah v Federbush, 2019 WL 5060496 ( S.D. N.Y., 2019)[Thailand][Habitual residence][Petition denied]

In Shah v Federbush, 2019 WL 5060496 ( S.D. N.Y., 2019)  the district court  dismissed the petition of Nishita Shah (“Shah”) against her husband, Max Federbush (“Federbush”), for an order returning JF to Thailand.  

Petitioner and Respondent moved to New York from Thailand with the Child in August 2017 and separated ten months later. On May 29, 2019, the proceeding was commenced.

Shah, a citizen of Thailand, Canada, and an overseas citizen of India, went to college in the United States and spent a year after she graduated from college in California. Although she was a Managing Director of her family’s Thailand-based business “GP Group,” she had limited decision-making and managerial powers, and her financial resources, beyond a modest salary, were controlled by her father. Federbush was a citizen of the United States. He worked in private equity and real estate, and he has had several business ventures in Asia. He also had close ties to a family business in New York, with which he has been intermittently involved for twenty years. 

The parties met in Thailand in 2008, married ceremonially in Turkey in 2010, and married legally in Thailand in 2012. After their ceremonial marriage, Shah became pregnant with JF. A few months before the Child was due in spring 2012, the couple temporarily relocated from Thailand to Canada. When JF was a few months old, the couple returned to Thailand, where the Child received his Thai citizenship. The couple lived in Bangkok for the next five years. Around 2013, Shah quit sleeping in the same bed as Federbush, and the couple argued frequently. 

Notwithstanding their marital difficulties, in 2016 the parties began to contemplate moving to the United States. They turned their sights to New York. Federbush told Shah that he wanted JF to experience living in the United States, spend time with Federbush’s aging parents, and attend Federbush’s primary school alma mater, the Buckley School (“Buckley”). Shah traveled to New York in early 2016 to view apartments for purchase. Later that summer, when the family was visiting New York, they decided to apply for JF to attend Buckley. They interviewed at Buckley in August after preparing for the interview with friends at a dinner in New York. JF was admitted in late 2016; the parties had assured Buckley that they would move to New York, enroll JF for the full eight- or nine-years boys can attend Buckley, and be a part of the school community. 

Soon after JF was admitted, Shah and Federbush decided to move to New York. They leased an apartment for one year on the Upper East Side not far from Buckley and arrived in August 2017. A month later they officially announced their move to friends and family at a large welcome party held in their honor. JF began kindergarten at Buckley that fall. Shah and Federbush also left a deposit on file at NIST, JF’s former school in Thailand, to hold his spot there in case the family returned.

One new point of contention that arose after the move was that Shah could spend only a limited number of days in the United States under the terms of her visitor’s visa and before being subject to U.S. taxes—a number the couple closely tracked.. Despite difficulties in their relationship, in early 2018 they extended the lease on their apartment for another year. But during the family’s 2018 summer vacation in Thailand, Shah informed Federbush that she wished to separate. He and JF returned to New York before the beginning of the next school year without major incident. Shah arrived soon after; but during the fall and winter of JF’s first grade year, Shah stayed in a hotel in New York rather than in the apartment where Federbush and JF lived.

Around the new year, Shah moved out of the hotel and rented her own apartment in New York for a term ending in January 2020 with JF listed as an additional occupant. When Shah was in New York, JF (and his Thai nanny, Jum) spent time between Federbush’s apartment and Shah’s. Tr. 271:8-10. In the spring of 2019, Federbush told Shah (and her father) that he was registering JF for second grade at Buckley; at some point, Federbush paid JF’s tuition. At around the same time, in anticipation of the upcoming school year, Shah, Federbush, and JF decided that he would take French, and Shah ordered JF’s summer reading that was assigned by Buckley.The parties continued to negotiate a permanent solution to the separation, but by late spring, the parties had hit an impasse. This lawsuit followed on May 29, 2019.

Shah asserted that the move was conditioned on a “trial period, that if their marriage failed, they would move back to Thailand after two years.. Shah said she agreed to try living in New York “for the sake of peace ... and a chance for [their] marriage to work.” As a result, Shah contended, the parties’ last shared intent was that JF would reside in Thailand. Federbush says that the parties moved to New York without condition. He argued that the parties were, of course, aware that they might have to return to Thailand for some unforeseeable reason, but there was no condition understood by either of them that their marriage had to succeed in order for JF to remain in New York. Therefore, Federbush asserts that their last shared intent was for JF to reside in New York. 

The Court did not credit Shah’s testimony that the move to the United States was conditional. First, according to Shah, the condition was communicated to no one except her parents and brother. Second, Shah’s description of the nature and circumstances of the condition is vague and inconsistent. Finally, although there was some evidence that corroborates her testimony, the substantial weight of the credible evidence runs counter to her narrative.

Shah testified that she thought returning to Thailand “might be possible” if “things [did not] work out” between her and Federbush. She also testified that she intended to “stay for two years and [then] reassess.” But she also testified that they would “just go [to the United States] right now and then we’ll figure it out.” The court pointed out that anticipating a mere “possibility” of return and having a plan to “reassess” their commitment to living in New York is just not the same as a condition that if the marriage failed, they (or at least she and JF) would return to Thailand. When asked what they planned to do if the marriage was not going well after two years, the condition precedent on which she hinged her case, Shah testified that she did not know, acknowledging that “[m]aybe we never really spoke about it.” This admission contradicted other testimony by Shah regarding “conversations with Max before we moved that if things didn’t work out that we would move back to Thailand.” Shah testified that her ideal resolution of this dispute would be custody “two weeks on and two weeks off” in New York.

Shah argued that she left over ninety percent of her belongings in Thailand, that Federbush left behind the entire contents of his study, and that the parties left behind many of JF’s toys. But Shah and Federbush also had “stuff” in storage in New York, including Federbush’s furniture and ninety-five percent of his belongings; he testified that he left in Thailand only unused files and summer clothing. Further, on each subsequent trip to New York, Shah brought so much luggage that she was on one occasion stopped at the border and denied entry as an intended immigrant. Moreover, the parties took with them JF’s favorite toys and weather-appropriate clothes that he had not outgrown. 

Shah’s mother testified that before the move to New York, Federbush told her that if things did not work out, they might be back in a year. But this did little to evince an agreed-upon condition to return to Thailand. At most it evincedthe mere possibility, and it did nothing to evince a two-year conditional period. Shah’s brother testified that Federbush told him that they had allowed a two-year period to make their new lives in New York work. But Shah’s brother’s testimony was just as unhelpful: even though Shah’s brother identified a “two year” period, he also testified that “there was no understanding as far as [he] knew as to what would happen at the end of two years if all did not go well.” 

Shah pointed to the fact that they left a deposit at NIST (JF’s school in Thailand) as evidence that there was no intent to move permanently to New York. When JF was not re-enrolled at NIST (because he was moving to New York), NIST asked his parents whether they would leave a deposit to facilitate JF’s re-enrollment if they returned to Thailand. Federbush made his intentions clear to Shah when he texted her that there was no need to do so: “burn our boats.” The fact that a deposit was left at NIST was ambiguous at best. There was no evidence that Shah made a conscious decision to act contrary to Federbush’s desire to “burn our boats.”

Some of the facts were indicative of Shah’s desire to maintain ties and perhaps even to return to Thailand, but these facts are also consistent with there having been no condition on the move. Shah retained her business interests in Thailand and continued serving on the board of directors for two of G.P. Group’s public companies. Shah similarly testified that in early August 2018, during an interview with Forbes Thailand, she told the reporter that she was “going to stay in the states for two years,” after which she planned to “be back in Thailand” to look after her various Thai business interests. But that statement goes to her own connections to Thailand, not JF’s. Indeed, Shah did not testify that she told the reporter that she and her family would be returning in two years.

Shah also argued that she never tried to become a permanent resident or to obtain permission to work in the United States, and she never addressed the tax and business consequences that would attend permanent residency. The Court found  credible Federbush’s testimony that the tax day-counting arrangement was part of a longer process of addressing the tax and business consequences of permanent residence.  This arrangement was meant to give the Shah family a window to restructure their holdings to minimize or eliminate whatever difficulties (tax or otherwise) would arise if Shah were a permanent resident of the United States while remaining Managing Director and a substantial shareholder of GP Group. 

In contrast to the limited quantum and persuasiveness of evidence corroborating Shah’s narrative that the move to New York was conditional, there was substantial persuasive evidence that tends to corroborate Federbush’s testimony that the couple moved to New York indefinitely and without condition. After moving, the parties acted in ways that were consistent with a shared understanding that JF would remain in New York long-term and entirely inconsistent with a shared understanding (or even a unilateral understanding) that JF was living in New York on a conditional basis.

The parties’ actions with respect to Buckley all evinced a mutual understanding that the move to the United States was for much longer than two years. Even with Shah’s family wealth, it strains credulity to believe that she would have made a long-term pledge to the school unless she believed JF would be attending the school long term.

After Shah notified Federbush that she wanted to separate, she behaved as though she would continue to live in New York consistently or on a periodic basis well past the August 2019 two-year anniversary of the move. Shah continued to count the number of days she spent in the United States to make sure she stayed under the global income-tax threshold. Shah rented, furnished, and moved into an apartment in Manhattan with a lease term extending to January 2020. When Shah and Federbush told JF that they were separating, they assured him that his life would not change: he would continue to live in his father’s apartment and his mother would live just ten minutes away.

The Court found  that the last shared intent of Shah and Federbush was that JF would reside in New York, and neither Shah nor Federbush contemplated a condition, implied or explicit, that JF would return to Thailand if the parties separated.

The Court noted that  Second Circuit has stressed that habitual residence is simply the place where the child “usually or customarily lives.” Saada v. Golan, 930 F.3d 533, 539 (2d Cir. 2019) (quoting Guzzo, 719 F.3d at 109). “[T]he overall assessment of habitual residence is not formulaic but instead is a fact-intensive determination that necessarily varies with the circumstances of each case.” Guzzo, 719 F.3d at 109 

To determine habitual residence, the Second Circuit has instructed the trial court to analyze the parents’ latest shared intent and, if in conflict with where the child has been retained, whether the child has nonetheless acclimatized to his or her new locale: First, the court should inquire into the shared intent of those entitled to fix the child’s residence (usually the parents) at the latest time that their intent was shared. In making this determination the court should look, as always in determining intent, at actions as well as declarations. Normally the shared intent of the parents should control the habitual residence of the child. Second, the court should inquire whether the evidence unequivocally points to the conclusion that the child has acclimatized to the new location and thus has acquired a new habitual residence, notwithstanding any conflict with the parents’ latest shared intent.

Shah argues that JF’s habitual residence is Thailand. She bases her argument on her narrative in which the family’s move to New York was for a two-year trial period, conditioned on their marriage improving. Because the move was conditional, and because the condition did not come to pass, she argues that the parties did not have a shared intent to move to New York. Thus, Shah asserts, the parties’ last shared intent was that JF would reside in Thailand. 

The court found that the greater weight of evidence supported Respondent’s narrative that the parties intended to move to New York indefinitely. Although Shah may have hoped that they would consider returning to Thailand if their marriage did not work out (the Court was not persuaded that Shah believed Federbush would ever return to Thailand), habitual residence is not determined by “wishful thinking alone. “When the child moves to a new country accompanied by both parents, who take steps to set up a regular household together, the period need not be long [to establish a new habitual residence].” Id. The parties both intended that JF would reside in New York. The parties moved there together. And the parties established a locus of family life, schooling, friends, possessions, and expectations in New York. New York, by all indications—including the parties’ last shared intent—is where the Child usually and customarily lives. Because the Court found that the parties intended to move indefinitely, not, as Shah contended, for a trial period, Shah did not met her burden of proving that Thailand was JF’s habitual residence. Therefore, Federbush was not wrongfully retaining JF in the United States. Petitioner failed to satisfy her burden of proving, by a preponderance of the evidence, that Thailand was JF’s habitual residence.