CHASE v. MERSON et al
Filing
81
AMENDED MEMORANDUM DECISION ON MOTION FOR EX PARTE ATTACHMENT (unsealed on 1/25/19) 3 EX PARTE MOTION For Attachment By MAGISTRATE JUDGE JOHN H. RICH III. (mjlt)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
JOHN F. CHASE,
Plaintiff
v.
ARTHUR MERSON, et al.,
Defendants
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No. 2:18-cv-00165-NT
FILED UNDER SEAL
(UNSEALED 01/25/2019)
AMENDED MEMORANDUM DECISION ON MOTION FOR EX PARTE ATTACHMENT1
The plaintiff seeks an ex parte attachment against the property of each of the defendants in
the amount of $500,000, the sum that he alleges he lost as the result of a fraudulent investment
scheme. See Plaintiff’s Ex Parte Motion for Attachment on Trustee Process (“Motion”) (ECF No.
3) at 1-2. For the reasons that follow, the Motion is denied without prejudice on the showing made.
I. Applicable Legal Standard
This court applies Maine law pertaining to the seizure of “a person or property to secure
satisfaction of the potential judgment.” Fed. R. Civ. P. 64(a).2 The plaintiff states that he seeks
ex parte attachment on trustee process, see Motion at 1, which is governed by Maine Rule of Civil
Procedure 4B, but cites Maine Rule of Civil Procedure 4A, see id. at 2-3, 11, which pertains to
attachment of “real estate, goods and chattels and other property[,]” Me. R. Civ. P. 4A(a). For
purposes of disposition of the instant motion, there is no substantive difference: with immaterial
wording differences, the showing required for the grant of an ex parte attachment pursuant to Rule
1
This decision supersedes a May 18, 2018, decision (ECF No. 9) that I vacated by order dated May 25, 2018 (ECF
No. 11) because it incorrectly stated that no affidavit had been filed with the plaintiff’s motion. The plaintiff had, in
fact, provided an affidavit; however, as the result of a clerical error, it had not been docketed on CM-ECF. The
affidavit since has been docketed as ECF No. 10. Yet, as set forth more fully herein, with the benefit of review of the
affidavit, I conclude that the plaintiff continues to fall short of making the showing necessary to warrant an ex parte
attachment.
2
“[A] federal statute governs to the extent it applies.” Fed. R. Civ. P. 64(a). However, the plaintiff invokes Maine
law as the basis for attachment. See Motion at 2-3.
1
4A and Rule 4B is identical. Compare Me. R. Civ. P 4A(g) with Me. R. Civ. P. 4B(i). Therefore,
I set forth only the pertinent text of Rule 4A.
Rule 4A provides that, to grant a motion for attachment on an ex parte basis, the court must
find that:
it is more likely than not that the plaintiff will recover judgment in an amount equal
to or greater than the aggregate sum of the attachment and any insurance, bond, or
other security, and any property or credits attached by other writ of attachment or
by trustee process known or reasonably believed to be available to satisfy the
judgment, and that either (i) there is a clear danger that the defendant if notified in
advance of attachment of the property will remove it from the state or will conceal
it or will otherwise make it unavailable to satisfy a judgment, or (ii) there is
immediate danger that the defendant will damage or destroy the property to be
attached.
Me. R. Civ. P. 4A(g). Rule 4A further provides:
The motion for such ex parte order shall be accompanied by a certificate by the
plaintiff’s attorney of the amount of any insurance, bond, or other security, and any
other attachment or trustee process which the attorney knows or has reason to
believe will be available to satisfy any judgment against the defendant in the action.
The motion, in the filing of which the plaintiff's attorney shall be subject to the
obligations of Rule 11, shall be supported by affidavit or affidavits meeting the
requirements set forth in subdivision (i) of this rule.
Id. Pursuant to subdivision (i), affidavits must “set forth specific facts sufficient to warrant the
required findings and . . . be upon the affiant’s own knowledge, information or belief; and, so far
as upon information and belief, shall state that the affiant believes this information to be true.”
Me. R. Civ. P. 4A(i).
The plaintiff supplies both a certificate of his attorney, see Motion at 11, and an affidavit,
see Affidavit of John F. Chase (“Chase Aff.”) (ECF No. 10).
II. Discussion
A. Factual Background
The plaintiff alleges that:
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1.
The defendants “fraudulently induced [him] to participate in an investment
opportunity which [they] falsely represented would yield substantial returns with little-to-norisk[,]” specifically, that “for every $250,000 [the plaintiff] invested in certain standby letters of
credit, he would receive $10,000,000 within 7-12 days.” Complaint (ECF No. 1) at 2; see also
Chase Aff. ¶¶ 2-33.
2.
The defendants’ “misrepresentations were intended to induce [the plaintiff] to part
with his money by wiring funds to a participant in the fraudulent scheme[,]” and he “in fact relied
on [their] fraudulent representations and assurances and invested $500,000 of his money in the
purported standby letter of credit transactions.” Complaint at 2; see also Chase Aff. ¶¶ 8-26.
3.
“Contrary to the [d]efendants’ representations, [the plaintiff] did not receive the
promised returns or even a return of any portion of his initial investment.” Complaint at 2; see
also Chase Aff. ¶¶ 28-33.
4.
The defendants’ scheme to defraud the plaintiff was “part of a wider pattern and
practice by [the] [d]efendants that they have carried out on a nationwide scale[,]” constituting
“violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.
§ 1961, et seq., Maine common law torts, and breach of contract.” Complaint at 2; see also Chase
Aff. ¶¶ 34-40.
As relevant here, the plaintiff asserts that:
1.
On March 29, 2017, in accordance with two standby letter of credit agreements, he
transferred the sum of $500,000 to his attorney, who transferred it to the IOLTA trust account of
defendant Law Office of Chris Ochoa P.A. (“Law Office”). See Chase Aff. ¶¶ 25-26.
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2.
Shortly thereafter, defendant Christopher M. Ochoa informed him that the two
letters of credit had been issued but did not provide formal confirmation of their transmission as
required by the agreements, and still has not done so. See id. ¶ 27.
3.
The plaintiff has not been paid the required return on his investment. See id. ¶ 28.
4.
The plaintiff and his attorney were repeatedly told by defendants Ochoa and Arthur
Merson from May 2017 through August 2017 that payment would be coming soon. See id. ¶ 30.
5.
Defendant Ochoa stopped communicating with the plaintiff after August 2017, and
defendant Merson continued to state through the winter of 2018 that payment would be coming
any day. See id. ¶ 31.
6.
The plaintiff has made demands to defendants Merson and Ochoa for the return of
his $500,000 investment, but, despite defendant Merson’s assurances that it is forthcoming, no
portion of those funds has been returned. See id. ¶ 32.
7.
In November 2017, the plaintiff filed a complaint with the Florida Bar against
defendant Ochoa. See id. ¶ 34. In connection therewith, defendant Ochoa produced documents
showing that the plaintiff’s funds were immediately disbursed on receipt on March 29, 2017. See
id. ¶ 35. The defendant Law Office’s IOLTA account had a balance of $6,230 prior to the receipt
of the plaintiff’s $500,000 wire, which brought the balance to $506,230, the vast majority of which
was disbursed the same day to a separate bank account of the defendant Law Office, The Caswell
Group, Hearld Trade, and Anderson Law. See id. ¶ 36.
8.
Through the Florida Bar proceedings, the plaintiff learned that at least defendants
Merson, Ochoa, and Russell Hearld had perpetrated their standby letter of credit scheme against
other victims. See id. ¶ 38. A February 6, 2018, report of the referee for the Florida Bar
recommending the disbarment of defendant Ochoa described a standby letter of credit scheme
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perpetrated against Frank K. Wheaton and IntraGlobal Consulting Group, LLC, that was nearly
identical to the scheme perpetrated against the plaintiff. See id. ¶ 39. Defendant Merson has told
the plaintiff that a number of other investors in the standby letter of credit transaction have not
received their funds, and some have initiated civil actions or criminal investigations. See id. ¶ 40.
B. Discussion
The plaintiff contends that an ex parte attachment is appropriate because facts discussed in
the section of his motion addressing his likelihood of success on the merits of his claims
“establish[] that [the] [d]efendants have little regard for the law or [his] rightful property.” Motion
at 11. He argues that, “[b]ecause the [d]efendants swindled [him] and have since eluded his efforts
to recover his funds, it is clear that [they] if notified in advance of attachment of their property
would attempt to make it unavailable for judgment.” Id.; see also id. at 3-11.
This showing does not suffice to justify the extraordinary remedy of ex parte attachment.
First, the plaintiff identifies no specific property or assets that he wishes to attach, rendering
it difficult to assess whether “there is a clear danger that the defendant[s] if notified in advance of
attachment of the property will remove it from the state or will conceal it or will otherwise make
it unavailable to satisfy a judgment[.]” Me. R. Civ. P. 4A(g).
Second, the plaintiff fails to set forth specific facts demonstrating a “clear danger” that any
of the defendants will make property unavailable if notified in advance of his bid to attach it.
Instead, he relies on the presupposition that past is prologue, contending that, because the
defendants defrauded him, absconded with his funds, and failed to return them upon demand, and
at least three of the 10 defendants have perpetrated this scheme against other victims, the
defendants can be expected (collectively or individually) to make their property unavailable to be
attached.
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As this court has previously held, assumptions of this kind are too thin a reed on which to
predicate an ex parte attachment. See, e.g., De Lage Landen Fin. Servs., Inc. v. Tri State Crane
Rental Corp., No. 2:12-cv-44-DBH, 2012 WL 484244, at *3 (D. Me. Feb. 13, 2012) (denying
motion for ex parte attachment when plaintiff offered “nothing beyond an assumption that, because
two of the defendants put the plaintiff’s collateral beyond its reach, all of the defendants will do
something similar with whatever assets they have when they become aware of this action”);
Clough v. Presnall, No. 2:12-cv-54-DBH, 2012 WL 476384, at *1-2 (D. Me. Feb. 13, 2012)
(rejecting plaintiff’s argument that individual defendant’s planned nuptials, combined with the fact
that he had moved the corporate co-defendant to three states in three years, justified an ex parte
attachment; noting, “a plaintiff-affiant’s personal belief that the defendants will act to make
otherwise attachable assets unavailable, without more, is insufficient to meet the ‘clear danger’
prong of the ex parte rule”); Rockport Whale Watch, Inc. v. Hawley, No. 07-148-P-H, 2007 WL
4531714, at *2 (D. Me. Dec. 18, 2007) (denying motion for ex parte attachment premised on
plaintiff’s assumption that defendants’ past willingness to “strip” a company they owned of its
assets indicated they would do the same with real estate and boat plaintiff sought to attach);
Carlson v. Rice, 817 F. Supp. 193, 194 (D. Me. 1993) (denying motion for ex parte attachment
predicated on plaintiff’s unsubstantiated belief that defendants would make property unavailable
for judgment; noting, “unlike [in] Herrick [v. Theberge, 474 A.2d 870 (Me. 1984)], in the case at
bar, there is no evidence that Defendants have begun to liquidate their holdings, nor is there any
direct or circumstantial evidence that Defendants will likely try to do so”).3
3
In Herrick, the Law Court found no reversible error in the grant of an ex parte attachment when, “[g]iven the size
of plaintiffs’ damage claims and the attempted sale of one house by defendants, the Superior Court justices were
justified in concluding that defendants, if notified of an impending attachment, might well sell some of their property
and make it unavailable to satisfy a judgment.” Herrick, 474 A.2d at 875-76. The plaintiffs had submitted an affidavit
describing “the anonymous advertisement of one piece of defendants’ real estate[.]” Id. at 875.
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III. Conclusion
For the foregoing reasons, the Motion is DENIED without prejudice on the showing made.
Dated this 1st day of June, 2018.
/s/ John H. Rich III
John H. Rich III
United States Magistrate Judge
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