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Societe D'assurance De L'est Sprl v. Citigroup Inc.

September 13, 2011

SOCIETE D'ASSURANCE DE L'EST SPRL AND CABINET MAITRE SYLVANUS MUSHI BONANE,
PLAINTIFFS,
v.
CITIGROUP INC., CITIBANK, N.A., AND CITIGROUP CONGO S.A.R.L., DEFENDANTS.



The opinion of the court was delivered by: John G. Koeltl, District Judge:

MEMORANDUM OPINION AND ORDER

The plaintiffs, Societe d'Assurance de l'Est SPRL ("Assurest") and Cabinet Maitre Sylvanus Mushi Bonane ("Bonane") bring this action for breach of contract against defendants Citigroup Inc. ("Citigroup"), Citibank, N.A. ("Citibank"), and Citigroup Congo S.A.R.L. ("Citigroup Congo"). The defendants have moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of subject matter jurisdiction; Federal Rule of Civil Procedure 12(b)(2), for lack of personal jurisdiction as against defendant Citigroup Congo; Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim as against defendants Citigroup and Citibank; and the doctrine of forum non conveniens.

I.

Plaintiff Assurest is an insurance company organized and existing under the laws of the Democratic Republic of the Congo ("DR-Congo"). Second Amended Complaint ("Compl.") ¶ 12. Plaintiff Bonane is a law firm whose principal place of business is in the DR-Congo. Compl. ¶ 13. Defendant Citigroup is a corporation organized under the laws of Delaware and with its principal place of business in New York. Compl. ¶ 11(a). Defendant Citibank is a nationally chartered bank, and Citigroup's principal subsidiary; it has its principal place of business in New York. Compl. ¶ 11(b). Defendant Citigroup Congo is a wholly owned subsidiary of Citibank, organized and operating in the DR-Congo. Compl. ¶ 11(c).

In broad terms, the Second Amended Complaint (the "Complaint") alleges that the defendants, acting in concert, improperly removed $588,727 from the Citigroup Congo account of plaintiff Assurest and withheld $341,470 from the Citigroup Congo account of plaintiff Bonane, in breach of the plaintiffs' contracts with the defendants. Compl. ¶¶ 53, 59. While most of the funds withheld from Bonane's account were ultimately paid, the funds removed from Assurest's account remain missing.

Compl. ¶¶ 65-67.

According to the Complaint, Sylvanus Mushi Bonane ("Mr. Bonane"), the principal of Bonane, instituted an action through plaintiff Bonane against the Office des Douanes et Accises ("OFIDA"), an agency of the DR-Congo, on behalf of a client, Estagri SPRL ("Estagri"). Compl. ¶¶ 7, 57. Judgment was rendered in the action in favor of Estagri, but payment was not made by OFIDA. Compl. ¶ 8. Thereafter, Estagri forced Defendant Citigroup Congo to turn over payment of the judgment amount by means of a writ of attachment, levied on an account held by OFIDA. Compl. ¶ 8.

According to the Complaint, on June 27, 2007, the defendants notified Mr. Bonane that the accounts of Bonane and Assurest would be closed on July 13, 2007. Compl. ¶ 41. On June 29, 2007, $599,965 was debited from Assurest's account. Compl. ¶ 45. On July 23, 2007, the plaintiffs were notified that each of their accounts was subject to attachment pursuant to a judgment ("RC 96.136") issued in an action brought by OFIDA against Citigroup Congo, in which neither of the plaintiffs was a party, that declared the previous attachment by Estagri invalid. Compl. ¶¶ 47, 56. On August 3, 2007, the defendants and OFIDA entered into an agreement to attempt jointly to enforce the judgment against Estagri, Assurest and "all of their associates' accounts." Compl. ¶ 58 & Ex. E.

On August 6, 2007, $599,895 was debited from Assurest's account, the same amount was credited, perhaps twice, and $588,727 was finally debited. Compl. ¶¶ 50-53. All of these transactions took place despite the attachment on the account, and without Assurest's authorization. Compl. ¶¶ 50-53. The following day, the defendants refused a request by Mr. Bonane to withdraw the balance of the Bonane account, in the amount of $341,470. Compl. ¶ 59.

On August 7, 2008, the Supreme Court of Justice of the DR-Congo found that the judge who had rendered RC 96.136 had committed fraud by declaring Estagri's prior attachment invalid. Compl. ¶ 63. On September 23, 2008, Citigroup Congo agreed to pay Bonane $341,300 by reactivating its account. Compl. ¶ 65. The defendants also agreed to restore the funds removed from the Assurest account, but the funds have not been restored. Compl.

¶ 67. On April 17, 2009, the defendants closed the plaintiffs' accounts. Compl. ¶ 68. From July 23, 2007, through the date the accounts were closed, the defendants continued to charge the plaintiffs fees for administering their accounts. Compl. ¶ 62.

On June 17, 2010, the plaintiffs brought suit in this Court. The defendants moved to dismiss the complaint and the plaintiffs filed an amended complaint on September 7, 2010. The Court denied the motion to dismiss as moot and granted the plaintiffs the opportunity to file a second amended complaint, but warned that if the second amended complaint were dismissed, it would be dismissed with prejudice. See Order dated September 20, 2010. The second amended complaint that is the subject of this motion to dismiss was filed on October 1, 2010.

II.

In defending a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), the plaintiff bears the burden of proving the Court's jurisdiction by a preponderance of the evidence. Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). In considering such a motion, the Court generally must accept the material factual allegations in the complaint as true. See J.S. ex rel. N.S. v. Attica Cent. Schs., 386 F.3d 107, 110 (2d Cir. 2004). The Court does not, however, draw all reasonable inferences in the plaintiff's favor. Id.; Graubart v. Jazz Images, Inc., No. 02 Civ. 4645, 2006 WL 1140724, at *2 (S.D.N.Y. Apr. 27, 2006). Indeed, where jurisdictional facts are disputed, the Court has the power and the obligation to consider matters outside the pleadings, such as affidavits, documents, and testimony, to determine whether jurisdiction exists. See Anglo-Iberia Underwriting Mgmt. Co. v. P.T. Jamsostek (Persero), 600 F.3d 171, 175 (2d Cir. 2010); APWU v. Potter, 343 F.3d 619, 627 (2d Cir. 2003); Filetech S.A. v. France Telecom S.A., 157 F.3d 922, 932 (2d Cir. 1998); Kamen v. Am. Tel. & Tel. ...


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