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Continental Petroleum Corporation, Inc., and Plastitex, S.A v. Corporation Funding Partners

April 12, 2012


The opinion of the court was delivered by: Paul A. Engelmayer, District Judge:


Continental Petroleum Corporation, Inc. and Plastitex, S.A. (collectively, "plaintiffs"), bring this claim against Corporate Funding Partners, LLC ("CFP"), Green Pampas, Inc. ("Green Pampas"), Pablo Antoniazzi, Caren Raphael, and Joseph Lau (collectively, "defendants") under sections 1962(c) and (d) of the Racketeer Influenced and Corrupt Organizations Act of 1970, 18 U.S.C. § 1961 ("RICO"), and under New York law. Defendants move to dismiss plaintiffs' claims under Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, defendants' motion is granted in full as to Green Pampas, Antoniazzi, Raphael, and Lau, and granted in part and denied in part as to CFP. As to the only claims that have not been dismissed-plaintiffs' contract claims against CFP-plaintiffs are directed to submit a memorandum of law by April 30, 2012 explaining why diversity jurisdiction has been adequately pleaded.


Plaintiff Continental Petroleum Corporation, Inc. ("Continental") is a foreign corporation, organized under the laws of Peru. Plaintiff Plastitex, S.A. ("Plastitex") is a foreign corporation, organized under the laws of Paraguay.

As to defendants, CFP is a limited liability corporation, incorporated under the laws of New York with its principal place of business in New York. Green Pampas is a Delaware corporation with its principal place of business in Florida. Lau and Raphael are corporate officers of CFP. Antoniazzi was an employee of CFP and a corporate representative of Green Pampas during the relevant time period.

On April 11, 2008, Continental entered into an agreement to buy a quantity of urea, an organic compound, from a non-party company. The agreement required a letter of credit for the transaction, embodying the following terms: "Terms of payment irrevocable, confirmed, transferable, at the sight 100% payable documentary letter of credit top 25/50 world bank." Am. Compl. ¶ 4.4 (Dkt. 19).

In April 2008, Plastitex entered into an agreement to purchase a quantity of urea with a separate non-party company. That agreement also required a confirmed letter of credit with a top 25 world bank. See Am. Compl. ¶ 4.16.*fn2 The Court refers to the Continental and Plastitex agreements as the "urea purchase agreements."

Continental and Plastitex each approached CFP to secure letters of credit to fund their respective transactions. Defendant Antoniazzi, CFP's South American representative, was CFP's designated representative as to both transactions.

In order to enable it to issue the requested letters of credit, CFP required that Continental and Plastitex each complete several forms provided by CFP, and attach certain documents, including, inter alia, the underlying urea purchase agreements. CFP also required each company to pay certain fees for the issuance of letters of credit. Continental and Plastitex provided CFP with all necessary forms, including the urea purchase agreements, which set out the standards to which letters of credit were required to conform. Each also paid the required fees.

In May 2008, the non-party urea suppliers in both transactions rejected the letters of credit issued by CFP. Plaintiffs assert that the suppliers rejected CFP's letters of credit because these letters did not conform to the credit standards set out in the underlying urea purchase agreements, in that neither letter of credit had been confirmed by a bank in the United States. Because the letters of credit had been rejected, the suppliers did not deliver urea to Continental or Plastitex.

After the letters of credit had been rejected by the two suppliers, Antoniazzi proposed a solution: He separately told Continental and Plastitex that he could connect each company to a urea supplier that would accept a letter of credit consistent with the letters of credit that CFP had issued. In June 2008, after Antoniazzi had represented that he was then doing business with non-party Trifecta Trading, both Continental and Plastitex separately entered into agreements with Trifecta Trading to purchase urea from it. Pursuant to these agreements, each plaintiff paid all required fees to CFP, and CFP issued each a corresponding letter of credit.*fn3 In July 2008, Trifecta Trading represented that it had accepted the letters of credit issued by CFP. In later communications, however, Trifecta Trading informed both Continental and Plastitex that it would not accept the letters of credit. Trifecta Trading never delivered urea to either Continental or Plastitex.

After Trifecta Trading had failed to deliver the urea as provided in its contracts with Continental and Plastitex, Antoniazzi suggested that another company, Green Pampas, could serve as a source of urea. However, Continental declined to do business with Green Pampas.

On January 20, 2009, Plastitex entered into an agreement with Green Pampas for the sale of urea (the "Green Pampas Agreement"). Paragraph 12 of the Green Pampas Agreement, entitled "Disputes and Arbitration," states:

If any dispute arises, the two parties agree to try their utmost to solve it by friendly negotiation. If the dispute proves impossible to settle, all disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of The International Chamber of Commerce. The disputed matter will be subject to Arbitration by an Arbitrator in Paris, France under ICC Rules and Regulations. The losing party will pay the Arbitration fee. It is understood that in the event of dispute or arbitration, English shall prevail. The award of the Arbitrator shall be final and binding for both parties.

Am. Compl. Ex. at Plas-60. After entering into the agreement, Plastitex paid CFP the fee required under the contract for the issuance of a letter of credit. Green Pampas, however, never delivered urea to Plastitex pursuant to the Agreement.

On November 1, 2011, Continental and Plastitex filed the Complaint in this action; on January 30, 2012, they filed an Amended Complaint, bringing claims against the defendants under the RICO statute and New York law. On January 30, 2012, Green Pampas filed a motion to dismiss. On February 7, 2012, CFP and Raphael filed a motion to dismiss. On March 9, 2012, Lau filed a motion to dismiss. On March 9, 2012, the Court granted Antoniazzi's request to extend his time to answer the Amended Complaint until after Green Pampas's motion to dismiss had been resolved.

II.Applicable Legal Standards

In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). To survive a motion to dismiss, a plaintiff must plead sufficient factual allegations "to state a claim to relief that is plausible on its face." Id. A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556). To satisfy this standard, plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant acted unlawfully." Iqbal, 129 S. Ct. at 1949. Where a plaintiff has not "nudged [his or her] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Twombly, 550 U.S. at 570. Although on a motion to dismiss the Court must accept as true all well-pleaded factual allegations in the complaint, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 129 S. Ct. at 1949.

As to claims alleging fraud, Federal Rule of Civil Procedure 9(b) imposes a heightened pleading standard. Such claims must "state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b). To satisfy Rule 9(b), "a complaint must 'allege facts that give rise to a strong inference of fraudulent intent.'" Berman v. Morgan Keenan & Co., No. 11-2725-cv, 2012 WL 147907, at *2 (2d Cir. Jan. 19, 2012) (slip op.) (quoting Acito v. IMCERA Group, Inc., 47 F.3d 47, 52 (2d Cir. 1995)). Specifically, "the complaint must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the ...

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