Shandong Yuyuan Logistics Co., Ltd v. Soleil Chartered Bank et al
Filing
26
OPINION re: 20 MOTION to Dismiss Plaintiff's Cmplaint filed by Soleil Chartered Bank, Govind Srivastava, Soleil Capitale Corporation. For the foregoing conclusions, the motion for the Defendants to dismiss the Complaint is granted without prejudice. Shandong is granted twenty (20) days to replead. It is so ordered. (Signed by Judge Robert W. Sweet on 6/28/2018) (anc)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------ x
SHANDONG YUYUAN LOGISTICS, CO ., LTD,
Plaintiffs ,
17 Civ. 9421
- against OPINION
SOLEIL CHARTERED BANK , SOLEIL CAPITALE
CORPORATION , and GOVIND SRIVASTAVA,
Defendants .
-------------------------------------------x
APPEARANCES:
Attorneys for Plaintiffs
DAI & ASSOCIATES , P.C.
1500 Broadway, 22 nd Floor
New York , New York 10036
By : Bernard C. Daley , Esq.
Attorney for Defendants
PEYROT & ASSOCIATES , P.C.
62 William Street , 8 th Floor
New York , New York 1 0005
By : David C. Van Leeuwen, Esq.
(RWS)
Sweet, D.J.
Defendants Soleil Chartered Bank ("SCB") , Soleil
Capitale Corporation ("SCC") , and Govind Srivastava
("Srivastava")
(collectively , the "Defendants" ) have moved
pursuant to Federal Ru les of Civil Procedure 12(b) (1),
and 12(b) (6)
to dismiss the complaint
Shandong Yuyuan Logistics, Co., Ltd.
("Complaint")
12(b) (5) ,
of plaintiff
("Shandong" or the
"Pl aintiff") , arising out of a letter of credit issued by SCB
("Letter of Credit") . Based upon the conclusions set forth
below, the motion is granted.
I.
Facts & Prior Proceedings
The Complaint sets forth the following facts,
which
are assumed true for the purpose of this motion to dismiss.
Koch v . Christie's Int'l PLC,
699 F.3d 141, 145
Shandong , a Chinese corporation ,
(2d Cir.
See
2012) .
filed the Complaint
on December 1, 2017 , alleging diversity jurisdiction pursuant to
28 U.S.C. § 1332 against SCB, a bank registered in the Union of
Comoros ,
resident.
sec,
a New York corporation, and Srivastava, a New York
See Compl .
~~
1-6.
1
The Complaint alleges five causes of action arising
ou t of a Letter of Credit in the amount of $345,000 issued for
the benefit of Shandong in order to secure a sale of cargo of
urea (the " Cargo " ) to Radha International Corporation ("Radha").
Id.
~
9. Plaintiff alleges the Letter o f Credit was made payable
upon the delivery of certain documents, including bills of
lading (the "Documents"), to the SCB office at 55 Wall Street,
New York.
Id.
On October 27 , 20 16, SCB sent notice from sec
notifying Plaintiff that SCB had rejected the Documents f or a
discrepancy, and that SCB would hold the Documents until receipt
of "disposal instructions." Id.
~
10. On November 25, 2016,
Plaintiff sent Defendants notice that Radha had accepted the
discrepancy, and Plaintiff requested that SCB complete the
transaction.
Id .
~
11. On three occasions in early December
2016, Plaintiff informed Defendants that Radha had taken
delivery of the Cargo, and Plaintiff again requested payment
from Defendants under the Letter of Credit.
Id.
~
12. On
December 22 and 29, 2016, Plaintiff requested Defendants return
the Documents.
Id.
~
13. On December 29, 2016, Defendants
informed Plaintiff via email that Radha did n ot have the funds
to pay "taxes, duties, shipment costs," and t hat Defendants
instead paid $45,000 on behalf of Radha and t ook ownership of
2
the Cargo.
Id.
':II
14. On January 4, 2017, Defendants told
Plaintiff that they had stored the Cargo on a warehouse, and
were trying to sell it on Plaintiff's behalf. Id.
':II
15. The
following day, Plaintiff requested that Defendants either return
the Documents or fulfill payment under the Letter of Credit.
':II
Id.
16.
Plaintiff alleges, upon information and belief, that
Defendants delivered the Documents to the shippers, took
delivery of the Cargo on November 13, 2016 , and sold the Cargo
in exchange for payment. Id. ':ll':ll 17-18. Defendants have made
payments to Plaintiff totaling $106,000, but have failed to
provide an accounting or disclosure of the underlying sales or
transactions, or the outstanding $238,080 of Cargo that
Defendants took possession of in connection with the Letter of
Credit. Id . ':ll':ll 19-20.
Plaintiff alleges claims for
see id. ':ll':ll 21-26 ;
( 1 ) breach of contract,
(2) unjust enrichment,
breach of fiduciary duty,
see id . ':ll':ll 27 - 33;
see id. ':ll':ll 34-39;
(3)
(4) failure to
provide an acc o unting of transactions, see id . ':ll':ll 40-43; and ( 5)
deceptive acts and practices in violation of New York General
Business Law§ 349(a), see id. ':ll':ll 44-47.
3
The instant motion of the Defendants was heard and
marked fully submitted on March 14, 2018.
II.
The Applicable Standard
"A case is properly dismissed for lack of subject
matter jurisdiction under Rule 12(b) (1) when the district c o urt
lacks the statutory or constitutional power to adjudicate it."
Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). "In
resol v ing a mo tion to dismiss under Rule 12(b) (1), the district
court must take all unc o ntroverted facts in the complaint (o r
petition) as true, and draw all reasonable inferences in favor
of the party asserting jurisdiction." Tandon v. Captain's Cove
Marina of Bridgeport, Inc.,
752 F.3d 239, 243
(2d Cir. 2014).
However, "where jurisdictional facts are placed in dispute, the
court has the power and obligation to decide issues of fact by
reference to evidence outside the pleadings." Id. "A plaintiff
asserting subject matter jurisdiction has the burden of proving
by a preponderance of the evidence that it exists." Makarova,
2 01 F.3d at 113.
4
III. Defendants' Motion to Dismiss Plaintiff's Complaint is
Granted
The threshold question presented on this motion is
whether subject matter jurisdiction exis t s to withstand
dismissa l.
(interna l
See Ashcroft v . I qbal , 556 U. S . 662 ,
citations omitted)
671
(2009)
(" Subject - matter ju risdiction
cannot be forfeited or waived and s h ould be considered when
fairly in doubt ." ) . In the absence of subject matter
jurisdiction , "the court must dismiss the complaint in its
entirety ," including any pendent state -l aw c l aims . Arbaugh v .
Y&H Corp ., 546 U. S . 500 , 515 (2006). The basic sta t utory grants
of federal subject matter jurisdiction are contained in 28
U. S . C . § 1331 , which provides f or federal - question jurisdiction ,
and 28 U. S . C . § 1332 , which establishes diversity of cit i zenship
jurisdiction . Id. at 513 .
I n its Complaint , Pl aintif f a ll eges the Co ur t
diversity jurisdiction over this act i on . See Compl .
~
has
5. Section
1332 provides that "[ t]he district cour t s sha l l have origina l
jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75 , 000 , exclusive of
i nterest and costs , and is between
. c i tizens of different
States . " 28 U. S . C . § 1332(a) (1). A " party seeking to i nvoke
5
jurisdiction under 28 U.S.C. § 1332 bears the burden of
demonstrating that the grounds for diversity exist and that
diversity is complete." Herrick Co v. SCS Commc'ns, Inc.,
251
F.3d 315, 322-23 (2d Cir. 2001) .
Here,
Compl. at 7
~
Plaintiff has requested $238,080 in damages,
see
3 , such that there is no dispute that the amount
in controversy requirement o f 28 U.S.C. § 1332 is satisfied. See
Hall v . EarthLink Network , Inc., 396 F.3d 500, 506 (2d Cir.
2005)
(noting that "for purposes of diversity jurisdiction, the
amount in controversy is established as of the date of the
complaint") .
As to the diversity of citizenship requirement, the
parties dispute whether SCB is a citizen of New York sufficient
to satisfy this inquiry. See Compl.
~
6; Defs.' Br. 6-7.
Relevant here, the Second Circuit has provided that "[w] hile 28
U.S.C.
§
1332(a) (2) permits diversity jurisdiction in cases
between ' citizens of a State and citizens or subjects of a
foreign state,'
. that diversity is absent where there are
foreign parties on both sides of the case." Hong Leong Fin. Ltd.
(Singapore)
v. Pinnacle Performance Ltd., 297 F.R.D. 69, 73
(S .D.N.Y. 2013)
(quoting 28 U.S.C.
§
1332(a) (2)) ; see also
Bayerische Landesbank, N .Y. Branch v . Aladdin Capital Mgmt. LLC,
6
692 F . 3d 42,
49 (2d Cir . 2012)
(diversity jurisdiction lacking
"where the only parties are foreign entities, or where on one
side there are citizens and aliens and on the opposite side
there are only aliens.") . " For jurisdictional purposes , a
corporation is deemed to be a citizen both of the state in which
it has been incorporated and the state in which it has its
principal place of business . " Advani Enters. , Inc . v .
Underwriters at Lloyds, 140 F . 3d 157 , 161
(2d Cir . 1998)
(c i ting
28 U. S.C. § 1332(c)). A corporation ' s "'principal place of
business '
is best read as referring to the p l ace where a
corporation ' s officers direct, control , and coordinate the
corporat i on ' s activities,
. i . e ., the ' nerve center ,' and
not simply an office where the corporation holds its board
meetings [ .] ". Hertz Corp . v . Friend , 130 S.Ct . 1181 , 1 192
(2010 ) .
It is uncontested that Plaintiff i s a Chinese entity
with its principal place of business at Northwest Corner of
Tauyuyuan Street and Gaowu Road , Comprehensive Free Trade Zone ,
Weifang , People's Republic of China. See Compl.
~
1 . However ,
the parties dispute whether SCB is a citizen o f the Union of
Comoros or of New York . See Compl .
~
6; Defs . '
Br . 6 - 7.
Plaintif f does not a l lege that SCB is incorporated or has its
principal place of business in New York (or any other state) ,
7
,
.
but instead provides that it "is a bank registered in Union of
Comoros with an office at 55 Wall Street , Suite 530 , New York ,
NY ." Compl. i 2. As noted above,
such allegations are
insufficient to satisfy diversity, and therefore, subject matter
jurisdiction. See Advani Enters., Inc.,
140 F. 3d at 160
(finding
that no "subje ct -matter jurisdiction over this case under 28
U.S . C. § 13 32 because [plaintiff] ' s pleadings do not demonstrate
that the parties are completely diverse ." ) . Dismissal is
required.
See Universal Licensing Corp ., 293 F.3d at 581
(affirming dismissal where diversity was lackin g because action
was solely between foreign parties) .
IV.
Conclusion
For the forego i ng conclusions, the motion for the
Defendants to dismiss the Complaint is granted without
prejudice . Shandong is granted twenty (20)
days to replead .
It is so orde red.
New York, NY
June
2018
if[
U . S.D.J.
8
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