The opinion of the court was delivered by: Sidney H. Stein, United States District Judge.
Mac Truong, Esq., who purports to represent plaintiffs Vishipco Line, Ha Nam Cong Ty, Dia Nam Hang Hai C.T., Vietnam Hang Hai C.T., Rang Dong Hang Hai C.T., Mekong Ship Co. SARL, Vishipco SARL, Thai Binh C.T., Viet Nam Tau Bien C.T., Van An Hang Hai C.T., and Cong Ty U Tau Sao Mai (collectively, "Vishipco"),*fn1 himself, his wife and children, brought these six actions against defendants Charles Schwab & Co. ("Schwab") and its attorneys, Layton Brooks & Hecht and Eamonn F. Foley, Esq. alleging that Schwab improperly handled plaintiffs' assets and Schwab and its attorneys conspired to restrict, and in fact restricted, plaintiffs' access to their property through misrepresentations or false pretenses. Defendants have now filed a motion in all six actions to (1) dismiss the actions pursuant to the doctrines of collateral estoppel and res judicata and failure to state a claim upon which relief can be granted; (2) enjoin Mac Truong from filing additional actions against Schwab or its attorneys; (3) enjoin Mac Truong and his wife, Maryse Mac Truong, from proceeding in a virtually identical action in New Jersey and directing them to withdraw that complaint; and (4) impose sanctions against Mac Truong for harassing and vexatious litigation tactics. At oral argument on December 5, 2002, this Court denied defendants' motion enjoining Mac Truong and his wife from proceeding in the New Jersey action. Now, for the reasons set forth below, defendants' motion is granted in all other respects.
The underlying facts of this Hydra-headed dispute have been repeatedly summarized in earlier decisions of this Court and New York Supreme Court in predecessor actions filed in those courts See e.g., Truong v. Charles Schwab, No. 02 Civ. 2533, 2002 WL 1159668 (S.D.N.Y. May 31, 2002) (SHS); Vitranschart, Inc. v. Levy, No. 00 Civ. 3618, 2000 WL 1239081 (S.D.N.Y. Aug. 31, 2000) (SHS); Mac Truong v. Vitranschart, Inc., No 98 Civ. 6328 (SHS), slip op. at 2-5 (S.D.N.Y. Jan. 21, 1999) (SHS); Mac Truong v. Charles Schwab, No. 604650/97, slip op. at 9-14 (N.Y. Sup.Ct. Apr. 3, 2000). This dispute has spanned two continents and more than a score of litigations. The time has drawn nigh to attempt to resolve it once and for all.
These six actions involve funds belonging to Vietnamese shipping companies that were nationalized after the fall of Saigon in 1975. In 1977, Truong Dinh Tran ("Tran"), a former manager of the companies, entered into an agreement with Mac Truong for Mac Truong to act on behalf of the companies — collectively known as Vishipco — to recover certain funds and settlement claims in return for receiving a percentage of the recovery as compensation. Mac Truong was able to recover some of the money and deposited it into certain accounts at Merrill Lynch & Co., Inc.
In 1975, the United States government blocked all assets of the Vietnamese government that were located in the U.S., see the Trading With the Enemy Act ("TWEA"), 50 U.S.C. App. §§ 1 et seq., until 1995, when the U.S. and Vietnam entered into a treaty pursuant to which the U.S. agreed to unblock these assets and release them to the Vietnamese government, except for the sum of $200 million, which it retained to compensate U.S. nationals. See the Vietnam Claims Settlement Act ("VCSA"), 22 U.S.C. § 1645 et seq. The VCSA purported to settle all nationalization-related property claims between the two nations. See To v. Bentsen, No. 93 Civ. 6241, 1995 WL 86422 (S.D.N.Y. Mar. 2, 1995), aff'd To v. Bank of New York, 101 F.3d 681 (2d Cir. 1996). See also To v. Rubin, 99 F.3d 400 (2d Cir. 1995) (unpublished disposition). Mac Truong represented the plaintiffs in To v. Bentsen and To v. Rubin.
In June 1995, Merrill Lynch wrote to Mac Truong to inquire whether the Vietnamese government was now the rightful owner of the funds that had been deposited with it on behalf of Vishipco. In lieu of responding to the letter, Mac Truong (1) unilaterally transferred the funds to Schwab, where he established accounts under the same names as at Merrill Lynch and (2) opened five individual accounts at Schwab for himself, his wife and his two children.*fn2 At some point in time, a dispute arose between Tran and Mac Truong over control of these accounts. Tran eventually convinced Schwab to deny Mac Truong access to the accounts.
In 1997, Mac Truong filed suit in New York Supreme Court (Truong v. Charles Schwab, No. 604650/97), claiming he was the rightful owner of the funds (the "Funds").*fn3 On June 18, 1998, Judge Cozier of New York Supreme Court dismissed Mac Truong's complaint against Schwab for misrepresentation and conversion, among other claims, finding that Schwab was authorized to control the accounts. See Truong v. Charles Schwab, No. 604650/97, slip op. at 15-16 (June 18, 1998). Prior to this adjudication, Mac Truong filed a second New York state court action against Tran and others for fraud and conversion. See Truong v. Nguyen, et al., No. 102512/98.
In April 2000, the New York state court consolidated the two state actions and granted summary judgment to Tran, Dai Nam and Vishipco Lines on the grounds that Mac Truong had forfeited any claim to his portion of the Funds by transferring the Funds to his own accounts. See Truong v. Charles Schwab, No. 604650/97, slip op. at 22 (N.Y. Sup. Ct. Apr. 3, 2000) ("the court finds that plaintiff has forfeited his right to compensation, in the form of commissions or otherwise, effective upon his unlawful transfer of corporate funds into his personal accounts in or about August 1995."), aff'd 289 A.D.2d 98, 735 N.Y.S.2d 15 (1st Dep't 2001)."*fn4
In July 2000, subsequent to the New York court's determination that Mac Truong had no claim to the Funds, Mac Truong and his wife (Maryse Mac Truong) filed a petition for personal bankruptcy in New Jersey. See Foley Aff., Ex. B at 5. The bankruptcy judge, noting that "this case has all the makings of another Jarndyce v. Jarndyce," dismissed the bankruptcy petition on October 23, 2002 because "the debtor hasn't moved its case forward not even a quarter of an inch." See Foley Aff., Ex. B at 13; see also Mac Truong Aff., Ex. 14.
In October 2001, "The Government of Vietnam" ("Vietnam"), allegedly represented by Richard Zweig, intervened in the state court action. That court noted that Vietnam had a "plausible claim to the disputed assets" based on the VCSA. See Truong v. Charles Schwab, No. 604650/97, slip op. at 1, 4 (N.Y. Sup. Ct. Oct. 5, 2001). Vietnam filed cross-claims against all parties in October 2001 and in March 2002 filed an amended cross-claim seeking a declaratory judgment that it was the rightful owner of the Funds.
On September 26, 2002, the New York court dismissed Vietnam's claim to the Funds since Zweig had neither provided documentation nor depositions that the court ordered to prove that he in fact represented Vietnam. See Truong v. Charles Schwab, No. 604650/97, slip op. at 3, 8 (N.Y. Sup. Ct. Sept. 26, 2002). The court also directed Schwab to turn the Funds over to Vishipco Lines and Dai Nam and granted Schwab attorney's fees of $14,151.50 (Id. at 7-8, 10).
In response, Mac Truong filed the six complaints presently before this Court, alleging that (1) Schwab improperly handled plaintiffs' assets and (2) Schwab and its attorneys illegally transferred, and conspired to transfer, plaintiffs' assets to other parties through misrepresentation and false pretenses. At the end of October 2002, Truong also filed a complaint in the U.S. District Court in the District of New Jersey alleging the same claims, but adding the law firm of Sills, Cummis, Radin, Tischman, Epstein & Gross — Schwab's local counsel in New Jersey in the Mac Truong bankruptcy petition — as an additional defendant.
On November 19, Schwab moved by order to show cause for the relief it seeks here and on December 5, 2002, the Court held oral argument on that motion.
In reviewing a motion to dismiss a complaint, a court must accept as true the factual allegations in the complaint and must read the pleadings in the light most favorable to, and draw all reasonable inferences in favor of, the non-moving party. See Weinstein v. Albright, 261 F.3d 127, 131 (2d Cir. 2001); Bolt Elec., Inc. v. City of New York, 53 F.3d 465, 469 (2d Cir. 1995). Dismissal of the complaint is only proper when "it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). The review is limited, and "[t]he issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)). The ...