Wei et al v. Rocky Point International LLC

Filing 43

ORDER signed by Judge J.P. Stadtmueller on 3/30/2017: DENYING 36 Defendant's Motion to Dismiss for Failure to Join Indispensable Parties; DENYING 37 Defendant's Motion for Extension of Time to file a Memorandum in Support of its Motion to Dismiss; and DENYING as moot 38 Plaintiffs' Motion to Strike Defendant's Motion to Dismiss. (cc: all counsel) (jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
SEAH CHEE WEI and TAN SUAH PIN,
Plaintiffs,
v.

Case No. 16-CV-1282-JPS

ROCKY POINT INTERNATIONAL LLC,
Defendant.

ORDER

In this case, Plaintiffs, liquidators of Traxiar Drilling Partners II Pte.,
Ltd. (“Traxair”), assert several claims arising from allegedly fraudulent
transfers of funds to Defendant Rocky Point International LLC (“Rocky
Point”). Before the Court is Rocky Point’s second motion to dismiss for
failure to join indispensable parties under Federal Rule of Civil Procedure 19
(Docket #36) and its motion for extension of time to file a brief in support of
the motion to dismiss (Docket #37). Plaintiffs oppose both motions. (Docket
#38 and #39). For the reasons stated below, Rocky Point’s motions will be
denied.1
This is the third occasion in about as many months that the Court has
addressed this matter. As a result, the Court will not rehash the detailed
exploration of the facts it made in prior orders. See Wei v. Rocky Point Int’l,
LLC, Case No. 16-CV-1282-JPS, 2016 WL 7046802, at *1–2 (E.D. Wis. Dec. 2,
2016); Wei v. Rocky Point Int’l, LLC, 16–CV–1282–JPS, 2017 WL 74263, at *1–2
(E.D. Wis. Jan. 6, 2017). The Court will instead assume familiarity with the
factual background and proceed to address the merits of the present motions.

1

Plaintiffs filed a motion to strike Rocky Point’s motion to dismiss on the ground that it
was improperly incorporated into Rocky Point’s answer. (Docket #38). Because the Court finds
the motion to dismiss to be meritless, it will deny the motion to strike as moot.

In its motion to dismiss, Rocky Point claims that Plaintiffs have failed
to join two parties in this action—Symphony Ventures Pte., Ltd.
(“Symphony”) and its principal, Michel Kurzer (“Kurzer”). (Docket #36 at
1–2). As the Court explained in its most recent order, Symphony was a
creditor to Traxair by virtue of a loan agreement between them, and that loan
agreement precipitated the fund transfers in late 2013 that Plaintiffs allege
were fraudulent. Wei, 2017 WL 74263, at *1. Rocky Point believes that Kurzer,
through Symphony, has hijacked Traxair’s liquidation and directed Plaintiffs,
as Traxair’s liquidators, to engage in a campaign of litigation across the globe
to collect funds in connection with Traxair’s default on the loan agreement.
Id. at *2. The gist of the allegation is that Kurzer is using Plaintiffs as pawns
to collect far more than the original loan balance from various entities. Id.
In its motion for extension of time to file its brief in support of its
motion to dismiss, Rocky Point claims that a trial in a related case in
Singapore has revealed facts which it believes substantiate the claim that
Kurzer, using Plaintiffs, has collected more money than is due under the loan
agreement. (Docket #37 at 2–6); (Docket #41 at 1–2). Rocky Point requests an
extension of time to collect the transcripts of the relevant testimony so that
it can be presented to this Court in support of its motion. (Docket #37 at 6–7).
The requested extension would amount to approximately forty-five days’
extension from the date the motion was filed. See (Docket #41 at 2).
Rocky Point’s rationale for the relevance of this evidence is that Kurzer
and Symphony “are actually making the decisions for [Plaintiffs]. Thus
they have stepped into the shoes of [Plaintiffs] and have liability for
their actions. [Plaintiffs], on behalf of Kurzer and Symphony, are also
pursuing recovery of money that is not actually due on the Symphony debt.
Thus Rocky Point is exposed to multiple or inconsistent obligations.” (Docket
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#37 at 7). In its reply, Rocky Point reiterates that because Kurzer and
Symphony “have been made whole (and then some) by acquiring monies
from Traxair and Traxair’s guarantors,” and because Kurzer continues to use
Plaintiffs to pursue still more litigation in his collection efforts, “Rocky Point
will be subject to a substantial risk of incurring double, multiple, or otherwise
inconsistent obligations.” (Docket #41 at 2). Rocky Point claims that without
these two parties, it “will have great difficulty showing that [Plaintiffs] are
pursuing recovery in a matter that they should be pursuing on behalf of
parties who have already been paid.” Id.
If Rocky Point’s argument seems familiar, it is. The Court rejected this
precise argument in its January 6, 2017 order. Wei, 2017 WL 74263, at *3.
There, the Court considered the suggestion that Kurzer and Symphony are
indispensable to this litigation as defined in Rule 19. Id. at *5. The Rule
defines a necessary party as one (1) in whose absence the court cannot accord
complete relief among the existing parties, or (2) who claims an interest
relating to the subject of the action and is so situated that disposing of the
action may (a) as a practical matter impair or impede that person’s ability to
protect the interest or (b) leave an existing party subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent obligations because
of the interest. Fed. R. Civ. P. 19(a)(1). Undertaking the necessary party
analysis “entails a pragmatic approach, focusing on realistic analysis of the
facts of each case.” Bio–Analytical Servs., Inc. v. Edgewater Hosp., Inc., 565 F.2d
450, 452 (7th Cir. 1977); Provident Tradesmens Bank & Trust Co. v. Patterson, 390
U.S. 102, 118 (1968). The party invoking Rule 19 bears the initial burden to
show why a party is necessary under Subsection (a). See Molinos Valle del
Cibao, C. por A. v. Lama, 633 F.3d 1330, 1347 (11th Cir. 2011); Disabled in Action

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of Pa. v. S.E. Pa. Transp. Auth., 635 F.3d 87, 97 (6th Cir. 2011); Pulitzer–Polster
v. Pulitzer, 784 F.2d 1305, 1309 (5th Cir. 2006).
In its January 2017 order, the Court concluded that Rocky Point’s first
motion did not satisfy Rule 19’s standards. Wei, 2017 WL 74263, at *5. The
Court was unpersuaded by Rocky Point’s theory that Kurzer and Symphony
are relevant because “they masterminded this litigation to extract more
money from Rocky Point” and other entities than the amount to which they
were entitled under the loan agreement. Id. As the Court explained, this
theory is untethered from the matters actually at issue in this action. Id. The
Court reasoned that
Plaintiffs’ claim in this case is, at its core, that [Dag Dvergsten
Pte., Ltd. (“DDPTE”)] took Traxair’s money that should have
been paid to Symphony and absconded with it. Eventually,
some of that money ended up under Rocky Point’s control.
Although the disputes between these parties span much of the
globe, the question in this Court is straightforward: was the
transfer of funds to Rocky Point fraudulent, in violation of [the
Wisconsin Uniform Fraudulent Transfer Act]?
To answer this question, the Court need not determine
how much is left to be paid on the loan agreement between
Traxair and Symphony. Consider the hypothetical situation in
which Traxair, after learning that DDPTE stole its funds, found
another source of money and kept up its obligations under the
loan agreement with Symphony. In that case, Plaintiffs could
still come to this Court seeking to recover the money DDPTE
had stolen. Whether the original loan was fully or partially
repaid would be of no moment. That is true in this case as well.
Thus, Rocky Point has not shown that Symphony and Kurzer
have an interest relating to the subject of the action or why
failure to join them would expose Rocky Point to multiple or
inconsistent obligations. See Fed. R. Civ. P. 19(a)(1)(B).
Nor do Plaintiffs’ claims require the Court to consider
Rocky Point’s and the Intervenors’ theory that Kurzer is the
puppet-master behind this case. The allegedly fraudulent
transfers underlying this case occurred well before Traxair’s
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default and liquidation. As a result, whether Plaintiffs are
acting as Kurzer’s cronies has no bearing on whether the
transfers at issue here were fraudulent. The parties, who have
been involved in the entire course of the Somnath saga, see
every part of it as linked. The Court, on the other hand,
appreciates the narrow issues it must decide and leaves to
more appropriate fora the resolution of the parties’ other
disagreements. Indeed, to hear Rocky Point’s claims against
Symphony and Kurzer would cause the very waste of judicial
resources that Rule 19 is designed to prevent. See Moore, 901
F.2d at 1447.
Id. The Court therefore denied Rocky Point’s first motion under Rule 19. Id.
For the same reasons, the Court must deny this second attempt to
advance the same argument. Rocky Point ignores the deficiencies in its theory
of relevance and instead insists that it can prove its allegations of
wrongdoing directed at Kurzer and Symphony. But the problem with Rocky
Point’s allegations, as the Court has already explained, is not that they are
untrue. The problem is that they are irrelevant. The Court will not embroil
itself in disputes over the balance due on the loan agreement, which “is only
relevant to explain why Traxair paid $6 million to DDPTE in the first place.
Whether DDPTE’s transfers of those funds were fraudulent is not affected by
anything that occurred subsequent to the transfers, including Kurzer’s alleged
campaign of trickery to turn a profit on Traxair’s liquidation.” Wei, 2017 WL
74263, at *6.
Moreover, this second motion to dismiss highlights Rocky Point’s
misapprehension of the Rule 19 inquiry. Although Rocky Point believes that
it will be subject to multiple or inconsistent liability in the absence of Kurzer
and Symphony, it fails to appreciate that the inconsistency in question must
arise from claims related to those already at issue in the action. Delgado v.
Plaza Las Americas, Inc., 139 F.3d 1, 3 (1st Cir. 1998) (“Inconsistent
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adjudications or results. . .occur when a defendant successfully defends a
claim in one forum, yet loses on another claim arising from the same incident
in another forum.”). Furthermore, even “where two suits arising from the
same incident involve different causes of action, defendants are not faced
with the potential for double liability because separate suits have different
consequences and different measures of damages.” Id.
In this case, Rocky Point is not exposed to multiple or inconsistent
obligations with respect to the 2013 fund transfers simply because Kurzer
might have over-collected on the loan underlying those transfers. Plaintiff’s
fraudulent transfer claims are factually and legally distinct from claims
related to the satisfaction of the loan agreement. Thus, there is no danger that
Rocky Point will face inconsistent adjudications of its liability as to those
transfers if claims about the loan agreement are excluded. By the same token,
Rocky Point’s ability to seek relief from Kurzer’s alleged misdeeds is not
affected by the disposition of Plaintiffs’ fraudulent transfer claims. However,
such relief must be sought in the correct forum. Rocky Point cannot use Rule
19 as a vehicle to join unrelated parties for the assertion of unrelated claims
and defenses. Consequently, in the absence of any suggestion that Rocky
Point’s new motion to dismiss will cure the problems that doomed the first
one, the second motion (and the motion for extension of time to file a brief
in support) must be denied.
In closing, the Court recalls its sentiment from its January 6 order:
“These parties clearly have a long and troubled relationship, but the Court
invites them in future filings to remain focused on the narrow issues
presented in this action.” Id. at *6. Rocky Point, by filing the present motions,
has declined that invitation. The Court no longer invites but admonishes the

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parties to confine their arguments and evidence to the issues relevant to this
action.
Accordingly,
IT IS ORDERED that Rocky Point’s motion to dismiss for failure to
join indispensable parties (Docket #36) be and the same is hereby DENIED;
IT IS FURTHER ORDERED that Rocky Point’s motion for extension
of time to file a memorandum in support of its motion to dismiss for failure
to join indispensable parties (Docket #37) be and the same is hereby
DENIED;
IT IS FURTHER ORDERED that Plaintiffs’ motion to strike Rocky
Point’s motion to dismiss (Docket #38) be and the same is hereby DENIED
as moot.
Dated at Milwaukee, Wisconsin, this 30th day of March, 2017.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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