Anwar et al v. Fairfield Greenwich Limited et al

Filing 643

REPLY MEMORANDUM OF LAW in Support re: #612 MOTION to Dismiss Amended Class Action Complaint in Pujals v. Standard Chartered Bank International (Americas) Ltd... Document filed by Standard Chartered Bank International (Americas) Limited, Standard Chartererd Bank. (Nelles, Sharon)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

PASHA S. ANWAR, et al.,
Plaintiffs,
v.
FAIRFIELD GREENWICH LIMITED, et al.,

Master File No. 09-CV-118 (VM) (THK)

Defendants.
This Document Relates To: Jose Antonio
Pujals v. Standard Chartered Bank
International (Americas) Ltd., No. 10-CV2878
REPLY MEMORANDUM OF LAW OF STANDARD CHARTERED BANK
INTERNATIONAL (AMERICAS) LTD. AND STANDARD CHARTERED BANK IN
SUPPORT OF THEIR MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT

Sharon L. Nelles
Bradley P. Smith
Patrick B. Berarducci
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Diane L. McGimsey
(Admitted Pro Hac Vice)
SULLIVAN & CROMWELL LLP
1888 Century Park East
Los Angeles, California 90067
Attorneys for Defendants Standard
Chartered Bank International
(Americas) Ltd. and Standard
Chartered Bank
April 20, 2011

TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT .....................................................................................................1 
I. 

BY QUESTIONING THE ENFORCEABILITY OF THE
PURCHASE LETTER, PLAINTIFFS RENDER THEIR
BREACH OF CONTRACT ALLEGATIONS TOO VAGUE TO
MAINTAIN. ........................................................................................................................2 

II. 

THE BANK WAS AUTHORIZED TO CHARGE THE
SERVICING FEES BASED ON THE REPORTED VALUE OF
THE SENTRY SHARES. ....................................................................................................2 

III. 

THE FACT THAT MADOFF’S FRAUD WAS NOT EXPOSED
UNTIL 2008 DOES NOT NEGATE THAT PLAINTIFFS WERE
ON NOTICE OF THE BANK’S METHOD FOR SETTING THE
SERVICING FEES SINCE 2004 AND THEREFORE WAIVED
ANY BREACH OF CONTRACT CLAIM. ........................................................................7 

IV. 

PLAINTIFFS CANNOT CREATE AN UNJUST ENRICHMENT
CLAIM BY QUESTIONING THE SCOPE AND VALIDITY OF
THE PURCHASE LETTER. ...............................................................................................9 

CONCLUSION ..............................................................................................................................10 

TABLE OF AUTHORITIES
Page(s)
CASES
Acosta v. Dist. Bd. of Trs. of Miami-Dade Cmty. Coll.,
905 So. 2d 226 (Fla. Dist. Ct. App. 2005) .................................................................................8
Anwar v. Fairfield Greenwich Ltd.,
728 F. Supp. 2d 372 (S.D.N.Y. 2010)........................................................................................3
Anwar v. Fairfield Greenwich Ltd.,
745 F. Supp. 2d 360 (S.D.N.Y. 2010)..............................................................................6, 9, 10
Broughel v. Battery Conservancy,
No. 07-CV-7755, 2009 WL 928280 (S.D.N.Y. Mar. 30, 2009) ................................................2
Bruhl v. PricewaterhouseCoopers Int’l,
No. 03-CV-23044, 2008 WL 899250 (S.D. Fla. Mar. 31, 2008)...............................................3
Cortec Indus., Inc. v. Sum Holding L.P.,
949 F.2d 42 (2d Cir. 1991).........................................................................................................9
Highlands Ins. Co. v. PRG Brokerage, Inc.,
No. 01-CV-2272, 2004 WL 35439 (S.D.N.Y. Jan. 6, 2004) .....................................................2
Hines v. Fiserv, Inc.,
No. 08-CV-2569, 2010 WL 1249838 (M.D. Fla. Mar. 25, 2010) .........................................5, 6
Huntington on the Green Condo. v. Lemon Tree I-Condo.,
874 So. 2d 1 (Fla. Dist. Ct. App. 2004) .....................................................................................7
In re Beacon Assocs. Litig.,
745 F. Supp. 2d 386 (S.D.N.Y. 2010)....................................................................................5, 6
In re Managed Care Litig.,
185 F. Supp. 2d 1310 (S.D. Fla. 2002) ....................................................................................10
Jordan (Bermuda) Inv. Co. v. Hunter Green Invs. LLC,
No. 00-CV-9214, 2007 WL 2948115 (S.D.N.Y. Oct. 3, 2007) .................................................3
Mellon Bank, N.A. v. Aetna Bus. Credit, Inc.,
619 F.2d 1001 (3d Cir. 1980).....................................................................................................4
Moynet v. Courtois,
8 So.3d 377 (Fla. Dist. Ct. App. 2009) ......................................................................................9
Nat’l Fire Ins. Co. of Hartford v. Fortune Constr. Co.,
320 F.3d 1260 (11th Cir. 2003) .................................................................................................7
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TABLE OF AUTHORITIES
Page(s)
CASES
Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC,
446 F. Supp. 2d 163 (S.D.N.Y. 2006)........................................................................................3
TracFone Wireless, Inc. v. Access Telecom, Inc.,
642 F. Supp. 2d 1354 (S.D. Fla. 2009) ......................................................................................9
STATUTES
Fla. Stat. § 95.03 ..............................................................................................................................9
OTHER AUTHORITIES
11 Fla. Jur. 2d Contracts § 158 ........................................................................................................4

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PRELIMINARY STATEMENT
Standard Chartered Bank International (Americas) Ltd. (“SCBI”) and Standard
Chartered Bank (collectively, the “Bank”) performed exactly how plaintiffs authorized them to
under the only operative agreement alleged in the amended complaint—the Purchase Letter. The
Bank purchased shares of Fairfield Sentry Ltd. (the “Sentry Fund”) on plaintiffs’ behalf and then
provided safe custody of those shares. In exchange, the Bank charged plaintiffs its standard
“distribution and servicing fee” based on the “month end NAV of the [Sentry] Shares” (the
“Servicing Fee”)—just as the Purchase Letter provided. (Berarducci Decl. Ex. B.) For five
years, the Bank accurately calculated and charged the Servicing Fees from the only possible
source of the “month end NAV of the Shares”—the valuations that the Sentry Fund reported on a
monthly basis.
Apparently now recognizing that the plain language of the Purchase Letter defeats
their breach of contract claim, plaintiffs go so far as to assert that the Purchase Letter is not a
contract at all. If so, however, the plaintiffs’ complaint fails on its face—there can be no breach
without a contract. And in any event, whether contractual or otherwise, the interpretation of the
Bank’s obligation used by plaintiffs—to have charged the Servicing Fees based on the unknown
“Madoff-fraud-adjusted” value of the Sentry Fund’s assets—defies both law and reason. First,
plaintiffs do not allege that the Bank knew the “actual” value of the Sentry Fund, and, in fact,
they acknowledge that the Bank had no contractual obligation to uncover or account for
Madoff’s fraud. Second, and more fundamentally, it is undisputed industry practice that
intermediaries, such as the Bank, rely on the NAV per share reported by the issuer of a fund.
This does not make them a guarantor in perpetuity of those valuations. Indeed, the Bank had no
possible alternative method to value plaintiffs’ shares, which plaintiffs do not dispute. Finally,
even if the Bank did owe some implausible (and impossible) duty to compute the Servicing Fees

based on the “actual” value of the Sentry Fund’s assets, plaintiffs were on notice for five years
that the Bank instead used reported values. Their failure to object for five years constitutes a
waiver under Florida law of all related claims. Plaintiffs’ causes of action for breach of contract
and unjust enrichment should be dismissed.
I.

BY QUESTIONING THE ENFORCEABILITY OF THE PURCHASE LETTER,
PLAINTIFFS RENDER THEIR BREACH OF CONTRACT ALLEGATIONS
TOO VAGUE TO MAINTAIN.
In their opposition papers, plaintiffs argue that the Purchase Letter, on which they

base their breach of contract claim, is not a contract at all and does not reflect an agreement
between the parties in respect of the Servicing Fees.1 (Plaintiffs’ Memorandum in Opposition to
Defendants’ Motion to Dismiss Amended Class-Action Complaint (“Opp.”) at 2-3.) But
plaintiffs cannot maintain a breach of contract claim in the absence of a contract. To withstand a
motion to dismiss, plaintiffs must identify the contract and specific provisions that were
allegedly breached. Broughel v. Battery Conservancy, No. 07-CV-7755, 2009 WL 928280, at *5
(S.D.N.Y. Mar. 30, 2009) (citing Sirohi v. Trs. of Columbia Univ., No. 97-CV-7912, 1998 WL
642463, at *2 (2d Cir. Apr. 16, 1998)); Highlands Ins. Co. v. PRG Brokerage, Inc., No. 01-CV2272, 2004 WL 35439, at *8 (S.D.N.Y. Jan. 6, 2004). The Purchase Letter is the only contract
identified in the amended complaint and plaintiffs put forward no alternative now.
II.

THE BANK WAS AUTHORIZED TO CHARGE THE SERVICING FEES BASED
ON THE REPORTED VALUE OF THE SENTRY SHARES.
Plaintiffs argue in the next breath that even if the Purchase Letter is a contract, the

Bank breached it when it set the Servicing Fees based on the value of plaintiffs’ shares reported
by the Sentry Fund on a monthly basis, which values did not reflect Madoff’s then-unknown
1

Plaintiffs argue, for example, that the Purchase Letter binds only Mr. Pujals because Mrs.
Pujals did not sign the letter. (Opp. at 2.) This argument ignores that plaintiffs, when
opening their joint account at SCBI, authorized SCBI to “honor and act upon the orders,
. . . endorsements or other instructions, made by ANY ONE OR MORE OF US . . . .”
(Berarducci Decl. Ex. A (Account Application and Agreement) ¶ 7.)
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misappropriation of the Fund’s assets. Plaintiffs contend that the phrase “month end NAV of the
[Sentry] Shares” in the Purchase Letter means a value calculated “by deducting total liabilities
. . . from total assets . . . and dividing such amount by the number of shares outstanding.” (Opp.
at 4-5 (quoting Black’s Law Dictionary 1049 (6th ed. 1991).) But it does not follow from this
legal dictionary definition that the Bank was responsible under the Purchase Letter for this
calculation or a guarantor of its accuracy. The Purchase Letter calls for Servicing Fees to be set
in relation to the “month end NAV of the [Sentry] Shares.” The Sentry Fund reported that value
to the Bank on a monthly basis, and the Bank accurately calculated the Servicing Fees in reliance
on these reported figures. (Am. Compl. ¶ 31.)
This is precisely in line with industry practice, whereby the NAV per share of an
investment fund is calculated and reported by the issuer of the fund (or its administrator) and
represents the price at which investors can buy or sell interests in the fund. E.g., Jordan
(Bermuda) Inv. Co. v. Hunter Green Invs. LLC, No. 00-CV-9214, 2007 WL 2948115, at *19
(S.D.N.Y. Oct. 3, 2007) (“[H]edge funds are open-end funds that directly sell and redeem their
shares to and from shareholders at the shares’ NAV.” (citation omitted)); Pension Comm. of the
Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 446 F. Supp. 2d 163, 172-73
(S.D.N.Y. 2006) (funds’ offering documents established third-party administrator would “report
the values of securities held by the [f]unds,” and funds’ board of directors and investment
manager would “determine at what value the investment securities are reported for the
determination of the [NAV]”).2

2

See also Anwar v. Fairfield Greenwich Ltd., 728 F. Supp. 2d 372, 393 (S.D.N.Y. 2010)
(fund administrator of Sentry and other Fairfield funds contracted to “calculate NAV of
Sentry, which determined, among other things, plaintiffs’ “reported profits”); Bruhl v.
PricewaterhouseCoopers Int’l, No. 03-CV-23044, 2008 WL 899250, at *1 (S.D. Fla.
Mar. 31, 2008) (fund administrator contracted to compute hedge funds’ NAV).
-3-

In this case, the “month end NAV of the Shares” of the Sentry Fund was the
subscription and redemption price that was set and reported by the Sentry Fund on a monthly
basis.3 Because shares in the Sentry Fund, like most hedge funds, did not publicly trade on an
open exchange, the Sentry Fund was the only source for the “NAV of [its] Shares.” The only
plausible interpretation of the Purchase Letter, therefore, is that the Bank was authorized to rely
on these reported values. 11 Fla. Jur. 2d Contracts § 158 (“Technical words are to be interpreted
as usually understood by persons in the profession or business to which [the words] relate.”);
Mellon Bank, N.A. v. Aetna Bus. Credit, Inc., 619 F.2d 1001, 1013 (3d Cir. 1980) (“Generally
parties will be held to definitions given to words in specialized commercial and trade areas in
which they deal. Similarly, certain words attain binding definition as legal terms of art.”).
Plaintiffs also point to the Securities and Exchange Commission (“SEC”)
definition of “net asset value” because it provides the same basic formula for calculating NAV as
Black’s Law Dictionary. (Opp. at 5 n.8.) The SEC definition, in fact, presumes that NAV is
calculated by the issuer:
An investment company calculates the NAV of a single share (or
the ‘per share NAV’) by dividing its NAV by the number of shares
that are outstanding. For example, if a mutual fund has an NAV of
$100 million, and investors own 10,000,000 of the fund’s shares,
the fund’s per share NAV will be $10. Because per share NAV is
based on NAV, which changes daily, and on the number of shares
held by investors, which also changes daily, per share NAV also
will change daily. Most mutual funds publish their per share
NAVs in the daily newspapers.
Fast Answers – Net Asset Value, SEC, http://www.sec.gov/answers/nav.htm (last modified Mar.
26, 2007) (emphasis added). It follows, then, that third-party intermediaries necessarily rely on

3

(E.g., Berarducci Decl. Ex. C (Subscription Agreement) ¶ 1 (explaining that shares in the
Sentry Fund were “offered at a price equal to the net asset value (‘Net Asset Value’) per
Share as of the effective date of the purchase”) & Ex. D (July 1, 2003 PPM) at cover page
(“Purchase Price per Share: Net Asset Value per Share”).)
-4-

these reported valuations in executing transactions and providing custody of such investments for
clients. The cases are in accord. In both In re Beacon Associates Litigation, 745 F. Supp. 2d 386
(S.D.N.Y. 2010) and Hines v. Fiserv, Inc., No. 08-CV-2569, 2010 WL 1249838 (M.D. Fla. Mar.
25, 2010), courts rejected attempts by plaintiffs to recover standard investment fees that were
charged based on the value of investment assets later learned to have been worthless. As the In
re Beacon court explained, “the [parties’ agreements] presumably anticipated that Defendants
would use the figures reported to them [not the actual asset values] to calculate fees.” 745 F.
Supp. 2d 386, 420; see also Hines, 2010 WL 1249838, at *5 (plaintiffs fail to “point to any term
in the contract which even arguably creates an obligation that [the custodian] would report the
‘accurate’ value of customers’ holdings”).
Plaintiffs attempt to distinguish In re Beacon and Hines, arguing that those
actions involved agreements that “made clear that the calculation of fees would not be tied to
actual asset values, but rather would be calculated based on reported asset values.” (Opp. at 910, 12.) But the same is true in this case. The Sentry Subscription Agreement and Offering
Memorandum (collectively the “Sentry Offering Documents”), and also plaintiffs’ Statements of
Accounts, made plain that (i) the Bank could only value plaintiffs’ Sentry shares by relying on
figures reported by the Sentry Fund (e.g., Berarducci Decl. Ex. D at 13), and (ii) those valuations
were not guaranteed by the Bank to represent the “actual” value of the Sentry Fund’s assets at
any given time (e.g., Am. Compl. Ex. C at 4). Indeed, the Sentry Offering Documents (provided
to plaintiffs at the time they invested in Sentry) and plaintiffs’ monthly Statements of Accounts
contain language that is substantially the same as that at issue in In re Beacon and Hines:
Beacon
Agreements:



Discretionary Investment Management Agreement provides that assets
“shall be valued in such manner as determined in good faith by the
Investment Manager to reflect its fair market value.” (Opp. at 10
(emphasis omitted).)



Beacon Fund Offering Memorandum states that: “Investments in
-5-

Investment Pools are valued pursuant to the valuation submitted to the
Company by the Managers of the Investment Pools, which valuations the
Company expects to accept. All values are assigned by the Managing
Member are final, binding and conclusive on all the Members.” (Opp. at
10.)
Hines
Agreement:



Individual Retirement Account contract valuation reporting policy provides
that the custodian “‘does not conduct appraisals of investments and does
not seek to verify the prices or values provided to it.’” (Opp. at 12.)

Pujals
Agreements:



Subscription Agreement discloses that “the value of [the subscriber’s
Sentry] Shares and redemptions thereof, and the performance of the Fund,
may be based on unaudited and in some cases, estimated, valuations of the
Fund’s investments and that any valuation provided in Subscriber’s
account statement may be an unaudited, estimated value.” (Berarducci
Decl. Ex. C ¶ 10.)



Each Statement of Accounts provides that: “Prices are believed to be
reliable, but their accuracy is not guaranteed.” (Am. Compl. Ex. C at 4.)



Offering Memorandum states that: “‘All decisions on the valuation of
assets and liabilities and determination of Net Asset Value shall be made
by the Fund’s Board of Directors.’” (Berarducci Decl. Ex. D at 13.)

Plaintiffs do not dispute that the language in the Sentry Offering Documents and
their Statements of Accounts is fatal. Instead, they assert that this Court should not consider the
Offering Memorandum because plaintiffs did not attach it to their amended complaint.4 In
support, plaintiffs cite this Court’s decision in Anwar v. Fairfield Greenwich Ltd., 745 F. Supp.
2d 360, 367-68 (S.D.N.Y. 2010). In Anwar, this Court declined to consider the Offering
Memorandum (referred to in that opinion as the Placement Memo) because, although certain of
the plaintiffs alleged that they received the Offering Memorandum, it was unclear which version
of the Offering Memorandum each plaintiff received, and the various versions contained
potentially “crucial” differences. Id. at 368. Those circumstances are not present here:
(1) plaintiffs acknowledged receiving the Offering Memorandum when they signed both the

4

Plaintiffs advance no arguments with respect to the Subscription Agreement or their
Statements of Accounts.
-6-

Purchase Letter and the Subscription Agreement, and (2) plaintiffs do not and cannot argue that
the Offering Memorandum differs across versions in a way that is material to the issues here.5
Plaintiffs also assert that the Court should disregard the Offering Memorandum
because it is not a part of the parties’ agreement in the Purchase Letter. (Opp. at 7.) It is black
letter law, however, that “where two contracts are part and parcel of the same general
transaction, they may . . . be interpreted together.” Huntington on the Green Condo. v. Lemon
Tree I-Condo., 874 So. 2d 1, 4 (Fla. Dist. Ct. App. 2004); see also Nat’l Fire Ins. Co. of Hartford
v. Fortune Constr. Co., 320 F.3d 1260, 1275 (11th Cir. 2003) (“It is the general rule of contract
law that where a writing expressly refers to and sufficiently describes another document, the
other document is to be interpreted as part of the writing.” (citation omitted)). Plaintiffs
executed the Purchase Letter and Subscription Agreement at the same time in connection with
their investment in Sentry, and both documents expressly incorporate the Offering
Memorandum. Plaintiffs cannot now disavow the Offering Memorandum in arguing that their
shares were not valued properly.
III.

THE FACT THAT MADOFF’S FRAUD WAS NOT EXPOSED UNTIL 2008
DOES NOT NEGATE THAT PLAINTIFFS WERE ON NOTICE OF THE
BANK’S METHOD FOR SETTING THE SERVICING FEES SINCE 2004 AND
THEREFORE WAIVED ANY BREACH OF CONTRACT CLAIM.
Even though the Sentry Offering Documents and plaintiffs’ monthly Statements

of Accounts made perfectly clear that the Bank was charging the Servicing Fees based on the
Sentry Fund’s reported NAV of its shares (supra at 5-6), plaintiffs made no objection for the five
years they held Sentry shares in their account. Plaintiffs thus cannot argue now that the Bank
5

Each version of the Offering Memorandum contains virtually identical language about
the issues relevant to this case, namely, the valuation of Sentry shares. For example, each
version makes clear, “All decisions on the valuation of assets and liabilities and
determination of Net Asset Value shall be made by the Fund’s Board of Directors.”
(Berarducci Decl. Ex. D (July 1, 2003 PPM) at 13; Supplemental Declaration of Patrick
B. Berarducci (“Suppl. Berarducci Decl.”) Ex. A (Oct. 1, 2002 PPM) at 9 & Ex. B (Oct.
1, 2004 PPM) at 11 & Ex. C (Aug. 14, 2006 PPM) at 12).)
-7-

breached the Purchase Letter because they either waived such claims, Arbogast v. Bryan, 393 So.
2d 606, 608-09 (Fla. Dist. Ct. App. 1981), or “acquiesced in an alteration of the terms of the
[Purchase Letter], thereby barring its enforcement,” Acosta v. Dist. Bd. of Trs. of Miami-Dade
Cmty. Coll., 905 So. 2d 226, 229 (Fla. Dist. Ct. App. 2005).
Plaintiffs contend no claim was waived because “[t]he true nature of the Sentry
Fund—i.e., that it was worthless because its underlying ‘assets’ were non existent—was not
known by Plaintiffs (or Defendants for that matter) until roughly December 2008.” (Opp. at 15.)
Plaintiffs miss the point. Plaintiffs allege that the Bank breached its obligations by using the
reported not “actual” value of the Sentry Fund in calculating the Servicing Fees. But from the
moment plaintiffs received the Sentry Offering Documents they were on notice that the Bank
charged servicing fees based on the reported NAV of the shares, and thus did not guarantee the
accuracy of the valuations, and they were reminded of this fact in their monthly Statements of
Accounts, which stated that the prices contained therein “are believed to be reliable, but their
accuracy is not guaranteed.” (Supra at 5-6.) Stated differently, the only piece of information
that was unknown until 2008—that Madoff was misappropriating assets from the Sentry Fund—
does not establish the breach alleged by plaintiffs.6
Plaintiffs also argue that the Court should not consider provisions in the Rules and
Regulations Governing Accounts (“RRGA”) requiring them to object within 30 days to improper
fee charges because the RRGA were not attached to plaintiffs’ amended complaint and “raise a
host of factual issues.”7 (Opp. at 14.) Plaintiffs fail to articulate a single factual issue raised by
the RRGA, however, and they cannot avoid the terms of their account agreements merely by
6

As plaintiffs themselves emphasize, they “do not contend that Standard Chartered knew
or should have known that the figures regarding plaintiffs’ Madoff-related investments
were false and used them anyway.” (Opp. at 11 n.21.)

7

The RRGA are attached as Exhibits J-L to the Berarducci Declaration.
-8-

choosing not to attach them to their amended complaint, Cortec Indus., Inc. v. Sum Holding L.P.,
949 F.2d 42, 47 (2d Cir. 1991). Moreover, plaintiffs ignore that their Statements of Accounts,
independent from the RRGA, also required that objections to charges had to be made within 30
days. (See, e.g., Am. Compl. Ex. C at 4; Berarducci Decl. Ex. F at 6, 8 & Ex. G at 6, 9.)
Similarly unavailing, is plaintiffs’ argument that the RRGA’s 30-day waiver provision is
unenforceable because it shortens the applicable statute of limitations in violation of Fla. Stat.
§ 95.03. (Opp. at 17.) The Bank is not attempting to “enforce” a 30-day statute of limitations.
Here, plaintiffs waived their claim by acquiescing for five years to the Bank’s method of
calculating the Servicing Fees. Plaintiffs’ failure to raise any objection in light of the 30-day
provision shows that plaintiffs acquiesced to and are now bound by the Bank’s method.
IV.

PLAINTIFFS CANNOT CREATE AN UNJUST ENRICHMENT CLAIM BY
QUESTIONING THE SCOPE AND VALIDITY OF THE PURCHASE LETTER.
To salvage their unjust enrichment claim, plaintiffs rely on TracFone Wireless,

Inc. v. Access Telecom, Inc., 642 F. Supp. 2d 1354 (S.D. Fla. 2009), for the unremarkable
proposition that where no legal remedy exists, equitable remedies may be available. (Opp. at 2022.) Plaintiffs argue that the subject matter of their claim is not covered by a written agreement
because the Purchase Letter “may not” cover the entirety of their $600,000 Sentry investment or
“speak to what, if any, fees Standard Chartered is entitled to charge or retain if any of the
investments held in Plaintiffs’ account were later determined to be worthless, i.e. part of a Ponzi
scheme.” (Opp. at 19.) Even if the Court were to reach such conclusions regarding the Purchase
Letter, it would not save plaintiffs’ claim. “[W]here there is an express contract between the
parties, claims arising out of that contractual relationship will not support a claim for unjust
enrichment.” Moynet v. Courtois, 8 So.3d 377, 379 (Fla. Dist. Ct. App. 2009) (citations
omitted); see also Anwar, 745 F. Supp. 2d at 378-79. Plaintiffs’ relationship with the Bank is a
contractual one, subject to written agreements, including agreements that specifically address the
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Bank’s ability to charge fees in connection with plaintiffs’ investments.8 Plaintiffs therefore
cannot maintain an unjust enrichment claim, irrespective of the scope of the Purchase Letter.
CONCLUSION
SCBI and SCB respectfully request that the Court dismiss with prejudice the
Pujals Amended Complaint in its entirety.
Dated: April 20, 2011
New York, New York
/s/ Sharon L. Nelles
Sharon L. Nelles
Bradley P. Smith
Patrick B. Berarducci
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Diane L. McGimsey
(Admitted Pro Hac Vice)
SULLIVAN & CROMWELL LLP
1888 Century Park East
Los Angeles, California 90067
Attorneys for Defendants Standard
Chartered Bank International
(Americas) Ltd. and Standard
Chartered Bank

8

See Am. Compl. ¶ 10; Berarducci Decl. Ex. A (Account Application and Agreement)
¶¶ 6(a), 7; & Ex. B (Purchase Letter) & Exs. J-L (RRGA) § 17(c) (governing fees). Even
assuming arguendo the absence of any written agreements governing the instant dispute,
plaintiffs still could not maintain an unjust enrichment claim because they “have not
explicitly alleged that an adequate remedy at law does not exist.” In re Managed Care
Litig., 185 F. Supp. 2d 1310, 1337 (S.D. Fla. 2002). Courts forgive the lack of an express
allegation only where it is clear from the face of the complaint that no legal remedy
exists. Id. at 1337. That is hardly the circumstance here. See generally Anwar, 745 F.
Supp. 2d 360 (maintaining legal claims against Standard Chartered defendants seeking,
among other things, fees arising from investments in the Sentry Fund).
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