Petroholding Dominicana, Ltd. v. Gordon

Filing 34

OPINION AND ORDER re: 28 MOTION to Dismiss Amended Complaint filed by Michael Gordon. For the reasons set forth above, Defendant's motion to dismiss the case is GRANTED. The Clerk of Court is directed to terminate all pending motions, adjourn all remaining dates, and close this case. SO ORDERED. (Signed by Judge Katherine Polk Failla on 6/3/2019) (rro) Transmission to Orders and Judgments Clerk for processing.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
PETROHOLDING DOMINICANA, LTD.,
Plaintiff,
-v.-

18 Civ. 1497 (KPF)
OPINION AND ORDER

MICHAEL GORDON,
Defendant.
KATHERINE POLK FAILLA, District Judge:

Plaintiff Petroholding Dominicana, Ltd. (“Petroholding” or “Plaintiff”), a
Dominican company that is the successor-in-interest to Antonveneta Holdings,
Ltd. (“Antonveneta”), a Cypriot company, has brought suit against Michael
Gordon (“Defendant”), a resident of California, for an alleged fraud. Plaintiff
alleges that Defendant exploited his language skills and a shared Russian
heritage to trick Plaintiff into believing that a Chinese oil conglomerate wished
to invest in Plaintiff’s Dominican real estate project. While this web of
international intrigue spanning across corporations and continents provides a
complex factual background, the motion before the Court requires analysis of a
far more limited question: Does the Dominican or the Cypriot statute of
limitations control? Defendant argues for the application of the Dominican
statute, which would render Plaintiff’s allegations time-barred, while Plaintiff
argues for the Cypriot statute, which would allow the case to move forward.
For the reasons set forth below, the Court finds that the Dominican statute of
limitations controls and, therefore, grants Defendant’s motion to dismiss in
full.

The Court is aware that this result can seem troubling in light of the
serious allegations in the Amended Complaint. However, while the outcome
may be discomforting, the Court finds no legal basis for applying any other
statute of limitations that would allow the case to move forward.
BACKGROUND 1
A.

Factual Background
1.

The Parties

Plaintiff is a corporation, with its headquarters and principal place of
business in the Dominican Republic. (Am. Compl. ¶ 2). Plaintiff is a developer
of real estate in the Dominican Republic. (Id. at ¶ 6). Antonveneta is a Cypriot
company, with its headquarters and principal place of business in the
Dominican Republic. (See Def. Br. 4-5). 2 Michael Gordon is a resident of
California and a United States citizen. (Am. Compl. ¶ 4).

1

The facts in this section are drawn principally from the allegations in the Amended
Complaint (“Am. Compl.” (Dkt. #23)) and the attached Declaration of Michael Gordon
(Am. Compl., Ex A. (“Gordon Decl.”) (Dkt. #23-1)). The Court also relies on certain
exhibits attached to the Declaration of Professor Keith S. Rosenn in Support of
Defendant’s Motion to Dismiss (“Rosenn Decl.” (Dkt. #31)), and the Declaration of Scott
S. Humphreys in Support of the Motion to Dismiss (“Humphreys Decl.” (Dkt. #71)).
For ease of reference, the Court refers to Defendant’s Memorandum of Law in Support
of the Motion to Dismiss as “Def. Br.” (Dkt. #29); to Plaintiff’s Memorandum of Law in
Opposition to the Motion to Dismiss as “Pl. Opp.” (Dkt. #32); and to Defendant’s Reply
Memorandum of Law in Support of the Motion to Dismiss as “Def. Reply” (Dkt. #33).

2

Defendant notes that in both the initial Complaint (Compl. ¶ 2) and in Plaintiff’s
counsel’s representations to the Court (Dkt. #22 (Transcript of June 22, 2018 Hearing)
at 11:7-9), Plaintiff acknowledged this fact. While Plaintiff’s Amended Complaint does
not restate these facts, and states merely that “[Antonveneta] is an investment fund
registered in Cyprus, and maintains its bank accounts, domicile, and financial center in
Cyprus” (Am. Compl. ¶ 3), Plaintiff does not attempt to deny or walk back counsel’s
statement that Antonveneta is headquartered in the Dominican Republic and maintains
its principal place of business there. The Court agrees that it may take judicial notice
of the prior Complaint and the prior hearing in ruling on the motion to dismiss. See
Castagna v. Luceno, No. 09 Civ. 9332 (CS), 2011 WL 1584593, at *5 (S.D.N.Y. Apr. 26,
2011).

2

2.

Defendant’s Business Relationship with Plaintiff

This case arises from Plaintiff’s development of a building in Juan Dolio
in the Dominican Republic, called the Mariposa (the “Mariposa Development”).
(Am. Compl. ¶ 8). Antonveneta provided funding for Plaintiff to build the site,
and Plaintiff sought further funds to complete the development or to sell it.
(Id.). In 2010, Defendant and Plaintiff’s president, Vladimir Bulavin, met, and
Defendant allegedly represented to Mr. Bulavin that he was affiliated with
Glickman Capital (“Glickman”), a private equity firm headquartered in
California. (Id. at ¶¶ 10-11).
Defendant, purporting to act on behalf of Glickman, negotiated an
agreement whereby Plaintiff would pay Glickman $45,000 per month for a
period of four months, from September 2010 through December 2010, in
exchange for Glickman’s assistance with financial restructuring and
fundraising. (Am. Compl. ¶¶ 12-15). This agreement specified that it would be
governed by New York law, with disputes resolved in New York courts. (Id. at
¶ 16). Plaintiff paid $180,000 to what it believed to be Glickman, and also paid
Defendant’s travel expenses, on the belief that Defendant and Glickman were
Defendant points to numerous Dominican government records to establish that
Antonveneta maintains its principal place of business in the Dominican Republic. (See
Def. Br. 5). The Court does not consider it necessary to review these records, as
Plaintiff does not object to Defendant’s characterization of Antonveneta as having its
headquarters and principal place of business in the Dominican Republic. Plaintiff
states: “Antonveneta is a company registered in Cyprus. It maintains its independent
bank accounts and financial center in Cyprus.” (Pl. Opp. 4). The Court has considered
the well-pleaded allegations of the Amended Complaint, Defendant’s arguments and
Plaintiff’s lack of response to them, as well as Plaintiff’s prior submissions and Plaintiff’s
counsel’s in-court statements, of which the Court takes judicial notice. Based on this
review, the Court determines that Antonveneta is a Cypriot company, with a
headquarters and principal place of business in the Dominican Republic that maintains
its bank accounts in Cyprus.

3

performing the work specified in the agreement. (Id. at ¶ 17). Defendant
represented that he was negotiating with investors, and he convinced Plaintiff
to pay an additional $45,000 per month. (Id. at ¶ 20). This second agreement
was also governed by New York law, with disputes to be adjudicated in New
York courts. (Id. at ¶ 21). In total, “Plaintiff paid, purportedly to Glickman
Capital, a total of $495,000 in monthly fees of $45,000 each, as well as
expense payments of more than $80,000, for a total of approximately
$575,000.” (Id. at ¶ 22). The funds for these payments originated in
Antonveneta’s accounts in Cyprus. (Id.).
In April 2011, Defendant informed Plaintiff that the Chinese oil
conglomerate Sinopec was interested in purchasing the Mariposa Development
for $67,500,000. (Am. Compl. ¶ 23). Defendant informed Plaintiff that, to
complete the transaction, Plaintiff needed to create a Delaware holding
company, which Defendant offered to establish. (Id. at ¶¶ 25-27). On April 21,
2011, Defendant set up a Delaware holding company, and named it
Petroholding International, LLC (“Petroholding International”). (Id.). Defendant
allegedly appointed himself Petroholding International’s sole manager, and
designated Glickman and Antonveneta as members, purporting to sign the
paperwork on Antonveneta’s behalf. (Id. at ¶ 28).
On October 27, 2011, Defendant presented Plaintiff a purported
purchase agreement, by which Sinopec agreed to pay $67,500,000 for the
Mariposa Development. (Am. Compl. ¶ 30). As part of the agreement, Sinopec
would make a deposit of $6,750,000 into Petroholding International’s account
4

on November 1, 2011. (Id. at ¶ 31). To complete the agreement, Petroholding
International would make a deposit of $675,000, plus up to an additional
$250,000 to protect Sinopec against potential losses. (Id. at ¶ 32). On
November 2, 2011, Defendant provided Plaintiff a wire transfer report, showing
that Sinopec had made the $6,750,000 deposit. (Id. at ¶ 33). Based on this
representation, Antonveneta wired $925,000 for the deposit to the Petroholding
International account on November 16, 2011. (Id. at ¶ 34). Thereafter,
Antonveneta requested a report from Glickman on the progress of sales
negotiations, but its letter to Glickman was returned as undeliverable. (Id. at
¶¶ 35-36).
3.

The Discovery of the Alleged Fraud

The sale to Sinopec was supposed to close on March 1, 2012, and
Plaintiff sought information from Defendant and Glickman, unsuccessfully, in
the weeks and months prior to that date. (Am. Compl. ¶ 37). Having failed to
obtain information, on April 15, 2012, Plaintiff reached out directly to Sinopec,
which informed Plaintiff that it had no business in the Dominican Republic;
that it knew nothing about the Mariposa Development; and that the individual
who reportedly signed an agreement on Sinopec’s behalf did not exist. (Id. at
¶ 38). Plaintiff alleges that Defendant, who had control of the Petroholding
International account, had merely stolen the $925,000 deposit from
Antonveneta, along with the $575,000 in monthly payments and expense
reimbursements. (Id. at ¶¶ 39-41).

5

In March 2013, Mr. Bulavin was able to contact Defendant, who refused
to return the money and — richly, as later events would suggest — blamed
Plaintiff for the failure of the alleged Sinopec deal. (Am. Compl. ¶ 43). Plaintiff
states that Petroholding International had been dissolved and had no active
bank accounts. (Id. at ¶ 44).
Several years later, in April 2016, Plaintiff alerted Glickman to the entire
sequence of events. (Am. Compl. ¶ 45). Glickman then informed Plaintiff that
Defendant held no position with the company and had no authority to bind the
company — and, indeed, that Glickman had no prior knowledge of any of
Defendant’s conduct. (Id.). Plaintiff states that it did not learn of the extent of
Defendant’s fraud until it reviewed a signed declaration by Defendant that
Defendant had submitted to Glickman, in which Defendant acknowledged that
he had misrepresented his relationship with Glickman and falsely presented
himself to Plaintiff as Glickman’s representative. (Id.; see also Gordon Decl.).
B.

Procedural Background
On March 10, 2017, Plaintiff brought a complaint against Defendant in

this District concerning the above-described events. See Complaint, No. 17
Civ. 1799 (WHP), Petroholding Dominicana v. Gordon (S.D.N.Y. Mar. 10, 2017).
On September 12, 2017, United States District Judge William H. Pauley III
dismissed the case without prejudice, as Plaintiff had failed to serve the
summons and complaint. See Order, No. 17 Civ. 1799 (WHP), Petroholding
Dominicana v. Gordon (S.D.N.Y. Sept. 12, 2017). Plaintiff states that Defendant

6

intentionally misled a process server to avoid service in this initial case. (Am.
Compl. ¶ 47).
Plaintiff filed the initial complaint in this case on February 20, 2018.
(Dkt. #1). On May 18, 2018, Defendant filed a letter motion requesting leave to
file a motion to dismiss. (Dkt. #18). On June 22, 2018, the Court held a premotion conference and set a schedule for Plaintiff to file an amended
complaint. (See Dkt. #24 (transcript of conference)). On July 30, 2018,
Plaintiff filed the Amended Complaint. (Dkt. #23). The complaint states four
causes of action, for fraud, money had and received, breach of contract, and
breach of fiduciary duty. (See Am. Compl. ¶¶ 50-86).
On September 14, 2018, Defendant filed a motion to dismiss the
complaint as time-barred by the Dominican statute of limitations, which is
applicable through New York’s borrowing statute. (Dkt. #28-31). On
October 5, 2018, Plaintiff filed its opposition to the motion to dismiss (Dkt.
#32), and on October 19, 2018, Defendant filed a reply (Dkt. #33).
DISCUSSION
A.

Applicable Law
1.

Motions to Dismiss Under Federal Rule of Civil Procedure
12(b)(6)

The limitations arguments advanced by Defendant speak to Plaintiff’s
ability to state a claim, and are therefore governed by Federal Rule of Civil
Procedure 12(b)(6). When considering a motion to dismiss under Rule 12(b)(6),
a court should “draw all reasonable inferences in [the plaintiff’s] favor, assume
all well-pleaded factual allegations to be true, and determine whether they
7

plausibly give rise to an entitlement to relief.” Faber v. Metro. Life Ins. Co., 648
F.3d 98, 104 (2d Cir. 2011) (internal quotation marks omitted). Thus, “[t]o
survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “While Twombly does not require heightened fact
pleading of specifics, it does require enough facts to ‘nudge [a plaintiff’s] claims
across the line from conceivable to plausible.’” In re Elevator Antitrust Litig.,
502 F.3d 47, 50 (2d Cir. 2007) (quoting Twombly, 550 U.S. at 570). “Where a
complaint pleads facts that are ‘merely consistent with’ a defendant’s liability,
it ‘stops short of the line between possibility and plausibility of entitlement to
relief.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557).
In considering a motion to dismiss for failure to state a claim pursuant to
Rule 12(b)(6), the court is not limited to the face of the complaint. Rather, the
court “may [also] consider any written instrument attached to the complaint,
statements or documents incorporated into the complaint by reference, legally
required public disclosure documents filed with the [relevant government
agencies], and documents possessed by or known to the plaintiff and upon
which it relied in bringing the suit.” ATSI Commc’ns, Inc. v. Shaar Fund, Ltd.,
493 F.3d 87, 98 (2d Cir. 2007); see also Goel v. Bunge, Ltd., 820 F.3d 554, 559
(2d Cir. 2016) (discussing materials that may properly be considered in
resolving a motion brought under Fed. R. Civ. P. 12(b)(6)); DiFolco v. MSNBC
Cable LLC, 622 F.3d 104, 111 (2d Cir. 2010). Documents fairly considered in
8

the instant matter include Defendant’s declaration, which Plaintiff has
attached to the Amended Complaint (Gordon Decl.), and the Delaware
Secretary of State’s records showing the date on which Petroholding
International ceased operating (Humphreys Decl., Ex. 3). See Pani v. Empire
Blue Cross Blue Shield, 152 F.3d 67, 75 (2d Cir. 1998) (“It is well established
that a district court may rely on matters of public record in deciding a motion
to dismiss under Rule 12(b)(6).”).
2.

New York’s Borrowing Statute

Defendant’s sole argument for dismissal concerns the timeliness of
Plaintiff’s claims. Resolution of this motion thus requires a determination of
the applicable statute of limitations. “Under New York’s ‘borrowing statute,’ a
case filed by a non-resident plaintiff requires application of the shorter statute
of limitations period, as well as all applicable tolling provisions, provided by
either New York or the state where the cause of action accrued.” Cantor
Fitzgerald Inc. v. Lutnick, 313 F.3d 704, 710 (2d Cir. 2002) (citation omitted)
(citing N.Y. C.P.L.R. § 202); Antone v. Gen. Motors Corp., Buick Motor Div., 64
N.Y.2d 20, 26 (1984)). 3 “New York follows ‘the traditional definition of
accrual — a cause of action accrues at the time and in the place of the injury.’”

3

New York Civil Practice Law and Rules Section 202 provides:
An action based upon a cause of action accruing without the state
cannot be commenced after the expiration of the time limited by
the laws of either the state or the place without the state where the
cause of action accrued, except that where the cause of action
accrued in favor of a resident of the state the time limited by the
laws of the state shall apply.
N.Y. C.P.L.R. § 202.

9

Cantor Fitzgerald Inc., 313 F.3d at 710 (quoting Global Fin. Corp. v. Triarc Corp.,
93 N.Y.2d 525, 529 (1999)); see also Commerzbank AG v. Deutsche Bank Nat’l
Tr. Co. (hereinafter “CB/DB”), No. 15 Civ. 10031 (JGK), 2017 WL 564089, at *5
(S.D.N.Y. Feb. 10, 2017) (citing Portfolio Recovery Assocs., LLC v. King, 14
N.Y.3d 410, 416 (2010). And “[w]here, as here, the ‘injury is purely economic,
the place of injury usually is where the plaintiff resides and sustains the
economic impact of the loss.’” Cantor Fitzgerald Inc., 313 F.3d at 710 (quoting
Global Fin. Corp., 93 N.Y.2d at 529); see also Norex Petroleum Ltd. v. Blavatnik,
23 N.Y.3d 665, 671 (2014) (“As a resident of Alberta, Canada, alleging purely
economic injuries, [plaintiff’s] injuries accrued in Alberta.”).
For purposes of the borrowing statute, the residency of a corporate
plaintiff is typically the principal place of business. See, e.g., CB/DB, 2017 WL
564089, at *5; IKB Deutsche Industriebank AG v. McGraw Hill Fin., Inc., No. 14
Civ. 3443 (JSR), 2015 WL 1516631, at *3 (S.D.N.Y. Mar. 26, 2015) (finding that
corporate plaintiff resided in Germany because it was incorporated and had its
principal place of business in Germany), aff’d, 634 F. App’x 19 (2d Cir. 2015)
(summary order).
3.

The Competing Statutes of Limitations

The parties dispute the controlling limitations period. New York provides
that, for actions based on fraud, “the time within which the action must be
commenced shall be the greater of six years from the date the cause of action
accrued or two years from the time the plaintiff … discovered the fraud or could
with reasonable diligence have discovered it.” N.Y. C.P.L.R. § 213(8). Neither
10

party disputes that the action is timely under New York’s statute of limitations.
However, since the borrowing statute requires the Court to apply the shorter
statute of limitations between New York and the foreign state, see Cantor
Fitzgerald, 313 F.3d at 710, Defendant claims the Dominican statute of
limitations is the controlling one here.
To provide the Court with relevant expertise on Dominican law,
Defendant provides the Declaration of Professor Keith S. Rosenn. (Dkt. #31). 4
Professor Rosenn provides two principal conclusions. First, the analogous
statutes of limitations under Dominican law apply to Plaintiff’s various causes
of actions as follows:
(1) one year on the first cause of action for fraud; (2) six
months or one year on the second cause of action for
money had and received; (3) two years on the third
cause of action for breach of contract; and (4) one year
on the fourth cause of action for breach of fiduciary duty
if the claim sounds in tort, or two years if the claim is
for breach of contract.

4

As this Court has previously held:
Rule 44.1 of the Federal Rules of Civil Procedure permits the Court
to consider, “in determining foreign law ... any relevant material or
source, including testimony, whether or not submitted by a party
or admissible under the Federal Rules of Evidence.” Fed. R. Civ.
P. 44.1. The Rule further provides that “the court's determination
must be treated as a ruling on a question of law.” Id. “Accordingly,
foreign law should be argued and briefed like domestic law. As
with domestic law, judges may rely on both their own research and
the evidence submitted by the parties to determine foreign law.”
Commerzbank AG v. Deutsche Bank Nat'l Tr. Co., No. 15 Civ. 10031
(JGK), 234 F. Supp. 3d 462, 472, 2017 WL 564089, at *7 (S.D.N.Y.
Feb. 10, 2017) (citation omitted) (quoting Sealord Marine Co. v. Am.
Bureau of Shipping, 220 F. Supp. 2d 260, 271 (S.D.N.Y. 2002)).
BlackRock Allocation Target Shares: Series S. Portfolio v. Wells Fargo Bank, Nat’l Ass’n,
247 F. Supp. 3d 377, 419 (S.D.N.Y. 2017).

11

(Rosenn Decl. ¶ 32). Second, Professor Rosenn states that the statute of
limitations “would start to run on the date that the Plaintiff knew of its alleged
injuries and was legally and factually able to assert its claims against the
Defendant.” (Id. at ¶ 33). Professor Rosenn’s affidavit also provides detailed
analysis of the Dominican Republic’s civil code and case law substantiating his
conclusions. (See generally Rosenn Decl.).
As Defendant notes in reply, Plaintiff voices no objection to Professor
Rosenn’s analysis of Dominican law or the Dominican statute of limitations.
(See Def. Reply 7 (“Nor does Plaintiff offer any challenge to the expert
declaration of Professor Rosenn[.]”)). Indeed, Plaintiff tacitly accepts that
Defendant’s recitation of Dominican law is correct. (See Pl. Opp. 7 (citing to
Defendant’s brief for a description of the Dominican statute of limitations)).
From the Court’s review, Professor Rosenn’s declaration accurately describes
the consensus of experts on Dominican statute of limitations periods. See, e.g.,
Jones v. FC USA, Inc., No. CV 17-1126, 2017 WL 5453497, at *3 (E.D. Pa.
Nov. 14, 2017) (“Dr. Herrera-Beato states … the [Dominican] statute of
limitations for contract disputes is two years.”); Grp. CG Builders & Contractors
v. Cahaba Disaster Recovery, L.L.C., No. CA 11-00729-KD-C, 2012 WL
3245972, at *3 (S.D. Ala. July 5, 2012) (“Mr. Fiallo provides that … ‘that the
applicable statute of limitations is two years from the alleged breach of the
contract.’”), report and recommendation adopted sub nom. Grp. CG Builders &
Contractors v. Cahaba Disaster Recovery, LLC, No. CIV.A. 11-00729-KD-C,
2012 WL 3206671 (S.D. Ala. Aug. 7, 2012), aff’d, 534 F. App’x 826 (11th Cir.
12

2013) (per curiam). Based on Professor Rosenn’s declaration, the Court’s
review of the relevant law, and Plaintiff’s lack of objection, the Court finds that
the relevant statutes of limitations under Dominican law are accurately
described in the Rosenn Declaration.
Significantly, however, Plaintiff argues that the Cypriot statute of
limitations is the controlling one. Plaintiff states that the Cypriot statute of
limitations is ten years or six years, providing support in the form of citations
to versions of the Cypriot legal code available on commercial search engines.
(Pl. Opp. 6 n.2). Defendant does not contest that the action would not be timebarred under Cypriot law. The Court accepts that, for the purposes of this
motion, Cypriot statutes of limitations would permit the suit to go forward, but
the Court ultimately does not consider Cypriot law controlling in the case.
B.

Analysis
1.

The Dominican Statute of Limitations Applies in This Case

Both parties acknowledge that New York’s general rule is that a foreign
plaintiff’s cause of action for economic damages accrues “where the plaintiff
resides and sustains the economic impact of the loss.” Global Fin. Corp., 93
N.Y.2d at 529. “Courts within the Second Circuit have consistently held that a
business entity’s residence is determined by its principal place of business.”
Woori Bank v. Merrill Lynch, 923 F. Supp. 2d 491, 494 (S.D.N.Y.), aff’d, 542 F.
App’x 81 (2d Cir. 2013) (summary order). 5 As both Antonveneta and Plaintiff

5

In Luv N’ Care Ltd. v. Goldberg Cohen, LLP, a sister court in this District provided an
extensive list of holdings reflecting this rule:

13

have their principal places of business in the Dominican Republic, Defendant
argues that the analysis clearly points to the Dominican statute of limitations
governing the case. (See Def. Br. 10-12; Def. Reply 1). The Court agrees that
both Antonveneta and Plaintiff have their principal places of business in the
Dominican Republic.
Perhaps unsurprisingly, given the clarity of the case law regarding
residency, Plaintiff does not contest that it resides (insofar as it maintains its
principal place of business) in the Dominican Republic, but rather argues that
the borrowing statute does not require the Court to borrow the statute of
limitations from a party’s state of residency when that party maintains a
separate “financial base” in a different jurisdiction. (Pl. Opp. 3-5 (citing Lang v.
Paine Webber, Jackson & Curtis, Inc., 582 F. Supp. 1421 (S.D.N.Y. 1984)). In
Lang, the individual plaintiff was a resident of Canada, but he maintained all of

Guzman v. Macy’s Retail Holdings, Inc., No. 09 Civ. 4472 (PGG),
2010 WL 1222044, at *10 (S.D.N.Y. Mar. 29, 2010) (“A
corporation’s principal place of business, rather than its state of
incorporation, determines its residence.” (internal quotation marks
omitted)); Pereira v. Cogan, No. 00 Civ. 619 (RWS), 2001 WL
243537, at *18 (S.D.N.Y. Mar. 8, 2001) (“District courts in this
circuit applying New York law have held that the residence of a
corporation for purposes of New York’s borrowing statute is the
corporation’s principal place of business.”), rev’d on other grounds
sub nom. Pereira v. Farace, 413 F.3d 330 (2d Cir. 2005);
Investigative Grp., Inc. v. Brooke Grp. Ltd., No. 95 Civ. 3919 (CSH),
1997 WL 727484, at *3 (S.D.N.Y. Nov. 21, 1997) (“For purposes of
the borrowing statute ... a corporation’s residence is its principal
place of business.”); Nat’l Union Fire Ins. Co. of Pittsburgh, PA v.
Forman 635 Joint Venture, No. 94 Civ. 1312 (LLS), 1996 WL
507317, at *4 (S.D.N.Y. Sept. 6, 1996); McMahan & Co. v.
Donaldson, Lufkin & Jenrette Sec. Corp., 727 F. Supp. 833, 834
(S.D.N.Y. 1989).
No. 15 Civ. 9248 (NRB), 2016 WL 4411419, at *5 (S.D.N.Y. Aug. 18, 2016), aff’d sub nom.
Luv N’ Care, Ltd v. Goldberg Cohen, LLP, 703 F. App’x 26 (2d Cir. 2017) (summary order).

14

the bank accounts that funded the disputed investments in Massachusetts. Id.
at 1426-27. The court held that, despite Plaintiff’s residency, the controlling
statute of limitations was Massachusetts’s, as “the direct loss from the
securities transactions at issue … was imposed primarily on the balance of
funds Lang had remaining in Massachusetts; any such injury was only
indirectly felt in Canada. Under these circumstances … the place of injury in
this case was Massachusetts[.]” Id. at 1426. Plaintiff argues that this case is
analogous, as Antonveneta maintains its bank accounts in Cyprus and is
Plaintiff’s principal source of capital. (Pl. Opp. 4). Plaintiff suggests that any
losses flowed from Cyprus, and any recovery would flow back to Cyprus, and
therefore the Court should apply the Cypriot statute of limitations and allow
the case to move forward. (Id.).
The Court does not find that the decision in Lang is applicable in this
case and concludes that the site of injury is where Plaintiff maintains its
principal place of business, in the Dominican Republic. To begin, while the
Lang decision is concededly non-precedential, even its continued
persuasiveness is questionable. See Deutsche Zentral-Genossenchaftsbank AG
v. HSBC N. Am. Holdings, Inc., No. 12 Civ. 4025 (AT), 2013 WL 6667601, at *5
(S.D.N.Y. Dec. 17, 2013) (“Plaintiff … identifies one case in the almost thirty
years since Lang was decided that has followed the Lang or ‘financial base’
exception.”); Robb Evans & Assocs. LLC v. Sun Am. Life Ins., No. 10 Civ. 5999
(GBD), 2013 WL 123727, at *1 (S.D.N.Y. Jan. 8, 2013) (“[Plaintiff] has not
identified a case in which a court has applied the limited Lang exception to
15

hold that a corporate entity’s claims accrued outside of its principal place of
business.”). What is more, Defendant provides several other cases where
courts have questioned whether Lang was correctly decided in the aftermath of
the New York Court of Appeals’ more recent confirmation that a company’s
claims accrue at its place of residence. (See Def. Reply 2-3 (citing Global Fin.
Corp., 93 N.Y.2d at 530)). Indeed, Appel v. Kidder, Peabody & Co., 628 F.
Supp. 153, 156 (S.D.N.Y. 1986), which Plaintiff cites in support of the Lang
standard (Pl. Opp. 4), did not rely on a financial base standard and does not
cite to Lang.
This Court has previously had occasion to review this issue and agreed
with many other judges in this District that only “extremely rare case[s] where
the party has offered unusual circumstances” could “justify the Court’s
employment of the financial-base exception.” Blackrock Allocation Target
Shares: Series S. Portfolio v. Wells Fargo Bank, N.A., 247 F. Supp. 3d 377, 41720 (S.D.N.Y. 2017) (citing to Commerzbank AG v. Deutsche Bank Nat’l Trust,
234 F. Supp. 3d 462, 469-71 (S.D.N.Y. 2017)). Beyond the citation to Lang,
Plaintiff does not address the numerous cases that have questioned its
authority as precedent and invoked a higher standard for invocation of the
financial base exception. Lang’s moribund status counsels the Court heavily
against applying an exception to New York’s general rule that a claim accrues
at Plaintiff’s principal place of business.
However, even assuming the continued validity of Lang, the Court does
not find that this case is “on all fours with Lang.” (See Pl. Opp. 4). Lang
16

involved an individual plaintiff, and not a corporation. 582 F. Supp. at 1426.
As was noted in Robb Evans, 2013 WL 123727, at *1, the Lang reasoning has
never been extended to a foreign corporation. Furthermore, as Defendant
notes, Lang involved the plaintiff’s financial base. (Def. Reply 4). Here, Plaintiff
invokes Antonveneta’s financial base, even though Petroholding is the Plaintiff.
Petroholding is the party that seeks recovery for its injuries. As Defendant
notes, Plaintiff does not suggest that Petroholding maintained its bank
accounts, financial reserves, or financial center, in Cyprus. (Id.). Instead,
Plaintiff states that Antonveneta’s financial base is in Cyprus, and Antonveneta
provided funding to Plaintiff.
Plaintiff asks the Court to consider “who became poorer, and where did
they become poorer as a result of the conduct complained of.” (Pl. Opp. 4
(citing Appel, 628 F. Supp. at 156 (internal citations omitted))). It argues that
the answer is clearly Cyprus, as the money all originated in Cyprus, but the
relevant question is not the origin of the funds. The relevant question is who
became poorer, and the answer is the injured party, Petroholding.
Petroholding became poorer by providing money to Defendant as the result of
allegedly fraudulent conduct concerning Plaintiff’s development project in the
Dominican Republic. (Am. Compl. ¶¶ 2-3, 8).
At base, Plaintiff is asking the Court to expand the financial base
exception beyond a plaintiff’s financial base to a plaintiff’s investors’ financial
base. In so doing, Plaintiff invites the Court not merely to breathe new life into
Lang as persuasive authority, but to imbue it with a vitality beyond that it

17

originally held. The Court declines to do so and finds that Plaintiff resides in
the Dominican Republic and was injured there.
Plaintiff argues that, at a minimum, the Court should permit discovery
as to the location of Plaintiff’s injury. (Pl. Opp. 4-5). For this argument,
Plaintiff relies on Landesbank Baden-Württemberg v. RBS Holdings USA, Inc.,
14 F. Supp. 3d 488, 501-03 (S.D.N.Y. 2014). In that case, the defendant
argued for the application of Lang, stating that the German statute of
limitations should apply to claims brought not just by the German-bank
plaintiff, but also by certain special purpose vehicles established by that
plaintiff in Ireland and the Cayman Islands. Id. at 501-02. The district court
found that the complaint provided insufficient information regarding the
structure and operation of these vehicles to decide whether Lang would apply.
Id. The Court does not find this decision to be relevant to its determination
here. The Amended Complaint specifies that Petroholding is a Dominican
corporation, had its principal place of business in the Dominican Republic, and
attempted to develop property in the Dominican Republic. (Am. Compl. ¶¶ 2,
3, 8). The Gordon Declaration, which is attached to the Amended Complaint,
describes the meetings on the Mariposa Development as occurring primarily in
the Dominican Republic. (Gordon Decl. ¶¶ 4, 10, 24). None appears to have
occurred in Cyprus. In short, the Court does not consider any discovery
necessary to conclude that Plaintiff’s injury accrued at its residence, principal
place of business, and area of economic activity: the Dominican Republic.

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2.

The Dominican Statute of Limitations Bars the Claims in This
Case

Having determined that the Dominican statute of limitation applies and
provides a maximum two-year statute of limitations on Plaintiff’s claims (see
Rosenn Decl. ¶ 32), the Court now addresses when this limitation period began
to run. Professor Rosenn states that, under Dominican law, the clock starts
“when the damage is suffered after the act was committed, or if the damage is
discovered after the act was committed, the period of prescription begins to run
on the day that the act caused the prejudice, or from the moment at which the
damage is discovered.” (Id. at ¶ 30 (quoting Dr. Jorge Subero Isa, former
president of the Dominican Supreme Court)).
Plaintiff does not contest this interpretation of Dominican law, but
asserts that it did not become aware of the fraud until it reviewed the Gordon
Declaration on May 22, 2016. (Pl. Opp. 7). Defendant rejoins that Plaintiff
learned of the damage when Sinopec stated that it had no business in the
Dominican Republic on April 15, 2012. (Def. Br. 17-18 (citing Am. Compl.
¶¶ 36-37)). Defendant argues that, at the latest, Plaintiff learned of the damage
when its representative, Mr. Bulavin, spoke with Defendant in March 2013 and
learned that Defendant intended to keep Plaintiff’s money. (Am. Compl. ¶ 43).
Furthermore, Defendant observes that Petroholding International, the alleged
sham company established by Defendant to receive Plaintiff’s funds, was
dissolved as of December 20, 2011. (Humphreys Decl., Ex. 3). Defendant
points out that Plaintiff offers no explanation for the four years of inaction

19

between when Plaintiff learned of Sinopec’s complete unawareness of
Defendant’s actions and Plaintiff’s outreach to Glickman. (Def. Br. 8-9).
The Court agrees with Defendant that the statute of limitations began to
run no later than March 2013. By that date, Plaintiff had learned that the
alleged deal with Sinopec did not exist and that Defendant had no intention of
returning any of Plaintiff’s money. Plaintiff’s sole statement in response is that
it “was not aware of the massive fraud by Defendant until May 22, 2016
when … Defendant admitted … that he had fraudulently misrepresented
himself as an officer of Glickman Capital, forged Glickman Capital letterhead
and business cards, fabricated the underlying ‘transaction’ involving Plaintiff,
and then fraudulently stolen Plaintiff’s funds.” (Pl. Opp. 7). While Plaintiff can
credibly claim that it did not know every detail of Defendant’s alleged fraud
until 2016, the Amended Complaint makes clear that Plaintiff was aware of the
fact of the fraud back in 2013, when Plaintiff learned that Defendant was not
returning funds for a purported deal as to which Sinopec had wholly
disclaimed involvement. The Court concludes that Plaintiff’s causes of action
began to run “from the moment at which the damage is discovered” (Rosenn
Decl. ¶ 30), and, since the date for each of them was no later than March 2013,
Plaintiff’s time to bring these claims expired no later than March 2015.
Finally, and relatedly, the Court notes that Plaintiff discusses
Defendant’s 2017 efforts to evade service in the Amended Complaint. (Am.
Compl. ¶47). Even if the Court were to toll the statute of limitations from the
date of filing the earlier case before Judge Pauley, Plaintiff did not file that case

20

until March 20, 2017, two years after the statute of limitations had expired.
See Complaint, No. 17 Civ. 1799 (WHP) (S.D.N.Y. Mar. 10, 2017). Plaintiff does
not make an argument for tolling, and the Court can find no grounds to toll the
statute of limitations for any period prior to 2017. Plaintiff’s claims are
untimely, and they must be dismissed.
To review, the Court is aware that the application of the Dominican
statute of limitations leads to a harsh result for Plaintiff, which has credibly
alleged a sizable fraud. However, this Court cannot shirk its duty to apply the
law as written. As the Second Circuit has stated, “[t]he failure to seek … relief
on a timely basis may, in some instances, lead to a harsh result, but the
harshness of the default is largely a self-inflicted wound.” ILGWU Nat. Ret.
Fund v. Levy Bros. Frocks, 846 F.2d 879, 887 (2d Cir. 1988)
CONCLUSION 6
For the reasons set forth above, Defendant’s motion to dismiss the case
is GRANTED. The Clerk of Court is directed to terminate all pending motions,
adjourn all remaining dates, and close this case.
SO ORDERED.
Dated:

6

June 3, 2019
New York, New York

__________________________________
KATHERINE POLK FAILLA
United States District Judge

As the Court has dismissed the case, it declines to reach the issue of punitive damages
or address Defendant’s request that it strike the introduction of Plaintiff’s opposition.
(See Def. Br. 18; Reply 1).

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