Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CORRESPONDENT SERVICES CORP. v. J.V.W. INVESTMENTS LTD.

November 13, 2000

CORRESPONDENT SERVICES CORPORATION, INTERPLEADER-PLAINTIFF
V.
J.V.W. INVESTMENTS LTD., FIRST EQUITIES CORPORATION OF FLORIDA, J.V. WAGGONER, AND DONAL KELLEHER, INTERPLEADER-DEFENDANTS, AND SUISSE SECURITY BANK AND TRUST, LTD., ADDITIONAL DEFENDANT ON THE CROSS-CLAIMS.



The opinion of the court was delivered by: Robert W. Sweet, Distridt Judge.

OPINION

The Parties

Interpleader-plaintiff CSC is a Delaware corporation with its principal place os business in New York, New York.

Defendant JVW is a corporation formed under the laws of the Commonwealth of Dominica ("Dominica"), with its principal places of business in Dominica.

Defendant Donal Kelleher ("Kelleher") is a foreign national and a resident of Surrey, England. At all times relevant to this action, Kelleher was an officer of JVW. Third-party defendant SSBT is a Bahamian corporation with its principal place of business in the Bahamas. SSBT received a transfer of funds from Kelleher for deposit into a new account on behalf of JVW that is the subject of this action.

Prior Proceedings

The background and prior proceedings in this action have been set forth in a prior opinion, Correspondent Services Corp. v. J.V.W. Investment, Ltd., 2000 WL 1174980 (S.D.N.Y. Aug. 18, 2000), familiarity with which is assumed. The remaining issue in this action is JVW's attempt to recovery a $2.3 million shortfall in a $10 million deposit to the Bahamian bank. SSBT alleges that the shortfall is due to a decrease in the value of stocks it purchased with the funds at JVW's request. JVW disputes ever authorizing the purchase of stock, and contends that because the funds were deposited in a "one-day call" money market account, SSBT's failure to return the funds upon request renders it liable for the eventual shortfall. In response, SSBT contends that the swift transfers of large sums into and then out of the account raised suspicions of money laundering, as a result of which it notified the Bahamian banking authorities and froze the account during the ensuing investigation. SSBT holds funds at the New York brokerage firm of Tucker Anthony, which JVW wishes to attach in the present action.

JVW moved by order to show cause on September 28, 2000 for leave to file and serve an amended pleading adding SSBT as a defendant on cross-claims, asserting cross-claims against Kelleher and SSBT, and moving for an attachment order against SSBT's funds at Tucker Anthony. On September 28, 2000, after hearing argument from counsel for both JVW and SSBT, this Court issued a temporary restraining order attaching up to $3 million in assets held at Tucker Anthony by SSBT. JVW filed a $200,000 undertaking pursuant to CPLR § 6212(b). The attachment remained in effect until JVW's motion to confirm was heard on October 5. By agreement of the parties, the attachment order continued until November 1, when the rescheduled hearing took place.

SSBT opposed the motion to confirm and moved to vacate the attachment order on the grounds that (1) as a Bahamian corporation with no significant contacts in New York, it was not subject to the personal jurisdiction of this Court; and (2) JVW failed to meet its burden of proving that it was likely to succeed on the merits of the underlying claim. The Court granted JVW's motion to serve amended pleadings adding SSBT as a third-party defendant, and extended the temporary order attaching the funds for 10 days, until Friday, November 17, 2000, pending this decision.

I. Discussion

As any order issued against a party over whom this Court lacks jurisdiction would be void, the jurisdictional question is addressed first.

A. Personal Jurisdiction

SSBT argues that, as it is a Bahamian bank with no contacts with New York, it is not subject to personal jurisdiction in this Court, and therefore the Third-Party Complaint should be dismissed and the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.