The opinion of the court was delivered by: ROANNE MANN, Magistrate Judge
On May 1, 2001, plaintiff Jean Dufort Baptichon ("plaintiff"),
proceeding pro se, commenced this securities fraud action
against various defendants, seeking damages resulting from his
fraudulently induced investment of $10,000 in a promotion operated out of
California, As discovery was ending, plaintiff amended his complaint for
a second time and added Nevada State Bank ("defendant" or "NSB") as a
defendant. Plaintiff now requests additional opportunities to amend.
Concurrently, NSB moves to dismiss plaintiff's claims, based on lack of
personal jurisdiction, improper venue, failure to state a claim upon
which relief can be granted, and expiration of the applicable statutes of
limitations. On July 17, 2003, the Honorable Nicholas G. Garaufis
referred both sets of motions to the undersigned magistrate judge for a
Report and Recommendation,
For the reasons that follow, this Court recommends that NSB's motion to
dismiss be granted, and that plaintiff's motion to further amend be
denied, based on lack of personal jurisdiction.
PLATNTIFF'S VARIOUS PLEADINGS*fn1
Plaintiff filed his original complaint on May 2, 2001, charging Ronald
Mulhall, eight other individuals, and Yes Entertainment Network Inc.
("Yes"), with violating Section 10(b) of the Securities Exchange Act of
1934, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.RR. § 240, 10b-5.
See Complaint ("Compl.") [#1],*fn2 Plaintiff alleges in that
pleading that in August 1999, he was induced to invest in Yes as part of
a fundraising effort to launch an initial public offering. See
Compl. [#1] at ¶¶ 4, 6, and Exhibits ("PX") 1-2 thereto, As a result
of the original defendants' misrepresentations about the investment,
plaintiff, on August 11, 1999, sent them a check for $10,000 in exchange
for a certificate representing four "units." See Compl. [#1] at
¶¶ 7-10 and PX 4. Unbeknownst to plaintiff, his investment was
worthless and, after cashing plaintiff's check, the original defendants
failed to respond to any of plaintiffs messages. See Compl.
[#1] at ¶¶ 8-10.
On February 15, 2002, plaintiff filed his initial "Amended Complaint"
[#35], against the same defendants. This pleading repeated the prior
violations, but added particulars concerning the misrepresentations made
by the original defendants. See Amended Complaint
[#35] at ¶¶ 8-10, 15,
On August 30, 2002, the Pro Se Clerk's Office received from plaintiff a
different document entitled "Amended Complaint" [#61], which adds NSB as
a defendant, and drops several of the original defendants.*fn3 The
allegations against the original defendants remain substantially the
same. The allegations against NSB are contained in paragraph 13 of that
document, which complains that on or about August 16, 1999, NSB "aided
and assisted the defendants in defrauding the plaintiff of his money by
depositing [plaintiff's check] [into the] `Yes Entertainment Network'
account, as opposed to `Yes Entertainment Inc.,['] the payee named on the
plaintiffs check. . . ." Amended Complaint ("Am. Compl.") [#61] at
¶ 13. Plaintiff further alleges that, "but for the Nevada State
Bank's willful intent or negligence in accepting to deposit and cash the
plaintiff check on the account of an entity that was not named as payee
on the check, the defendants would not have defrauded the plaintiff of
his $10,000,00 invested with defendants on August 11, 1999."
Id. The pleading again alleges that "the defendants" violated
Section 10(b) and Rule 10b-5, Am. Compl. [#61] at ¶¶ 17-18.
On November 18, 2002, plaintiff submitted a document entitled "Motion
to Amend Amended Complaint as to Defendant Nevada State Bank" ("Mot.
Am.") [#54]. Paragraph 4 of the motion papers describes NSB's involvement
in the misconduct alleged by plaintiff, and
avers that NSE, as the depositary bank, "accepted a forged
endorsement" on plaintiff's $10,000 check and "willfully or negligently"
"disregard[ed] the restriction on the check," by depositing the check
into the account of "Yes Entertainment Network Inc." and presenting the
cheek to plaintiff's bank for payment, despite the fact that the check
was made payable to "Yes Entertainment Inc," Mot. Am. [#54] at ¶
4.*fn4 Attached to plaintiff's motion is a document entitled "Amended
Complaint as to Defendant Nevada State Bank" ("Am. Compl. NSB") [#54]. In
addition to adding language concerning Rule 15 of the Federal Rules of
Civil Procedure and supplemental jurisdiction (Am. Compl. NSB [#54] at
¶¶ 2, 4), that pleading includes a new paragraph that alleges that
plaintiff's payment "in violation of a forged restrictive endorsement"
gives rise to liability "based on money had and received or
conversion. . . ." Id. at ¶ 15.*fn5
Plaintiff's Proposed Amended Complaint as to NSB [#54] which in
fact constitutes his fourth pleading and third amended
complaint is one of the pleadings that is the subject of the
pending motions referred by Judge Garaufis. Although plaintiff's
characterizations of his claims vary somewhat from submission to
submission, he has now unequivocally abandoned any theory that NSB aided
and abetted a federal securities law violation;*fn6 rather, plaintiff
appears to complain of "a violation of a forged restrictive endorsement
based on money had and received or conversion, couched in negligence."
Letter to the Court dated November 18,
2002, from Jean Dufort Baptichon [#49] at 2; see
id. at 6 ("plaintiff's claim against the Defendant is for money
had and received or conversion and common law negligence. . . .");
compare "Brief Memorandum in Support of Plaintiff's Motion to
Amend Second Amended Complaint as to Defendant Nevada State Bank" ("Pl.
Mem. to Am.") [#64] at 10 (stating that plaintiff seeks to assert, "in
addition to the Security fraud violations, claims arising under the
doctrine of money had and received, conversion, willful or negligent
violation of common law and the UCC"),
At a premotion conference held on February 26, 2003, plaintiff
disclosed that he wished to amend his complaint further, and Judge
Garaufis gave him until March 21, 2003, to submit additional materials.
See Calendar Entry dated February 26, 2003. This resulted in
the submission of a document dated May 15, 2003, mistakenly entitled
"Plaintiff's Third Amended Complaint as to Defendant Nevada State Bank"
("Third Am. Compl.") [#76].*fn7
Plaintiff's proposed "Third Amended Complaint" omits the prior
allegations as to the original defendants and, in describing the injuries
flowing from NSB's acts, now complains of "economic damages and emotional
distress." Third Am. Compl. [#76] at ¶ 7. In addition to reiterating
his theories of liability "based on money had and received or
conversion," id. plaintiff also claims that NSB violated "me
Bank Secrecy Act," 12 U.S.C. § 1951 et seq., and the "Money
Laundering Control Act," 31 U.S.C. § 5311 et seq., and he
seeks civil and
criminal penalties. Third Am. Compl. [#76] at ¶¶ 8-16 see id. at
Liberally construed, plaintiff's various pleadings appear to allege the
following theories of liability; money had and received, conversion,
violation of the Uniform Commercial Code ("UCC"), aiding and abetting an
act of fraud, and violations of the Bank Secrecy Act and Money Laundering
Control Act. NSB moves to dismiss all claims and opposes plaintiff's
motions to amend based on lack of personal jurisdiction, improper venue,
failure to state a claim upon which relief can be granted, and expiration
of the applicable statutes of limitations.
For the purpose of the pending motions, the Court accepts as true die
facts alleged in plaintiff's pleadings and related submissions.
Specifically, in August 1999, plaintiff was contacted by the other
defendants and fraudulently induced to invest in Yes. Plaintiff mailed a
$10,000 check to Yes in exchange for a certificate representing four
"units." Because of a "prior bad experience" with an investment scheme,
plaintiff intentionally made the check out to "Yes Entertainment Inc.,"
rather than to "Yes Entertainment Network, Inc.," in order to "protect
his investment, "*fn8 Nonetheless, the check was endorsed in the name of
"Yes Entertainment Network"*fn9 and NSB deposited it into the account of
Yes Entertainment Network, Inc.; the check was forwarded through the
normal federal banking channels until it
finally reached plaintiff's New York account, which was debited
Plaintiff does not allege that NSB had any knowledge of the state in
which plaintiff's bank account was located. Nor is there any evidence
suggesting that NSB was at all involved in, or even had knowledge of,
Yes's fraudulent acts, Plaintiff has proffered no facts to establish that
NSB does or solicits business in New York or ...