United States District Court, E.D. Wisconsin
Stadtmueller, U.S. District Judge.
case, Plaintiffs, liquidators of Traxiar Drilling Partners II
Pte., Ltd. (“Traxair”), assert several claims
arising from allegedly fraudulent transfers of funds to
Defendant Rocky Point International LLC (“Rocky
Point”). Before the Court is Rocky Point's second
motion to dismiss for failure to join indispensable parties
under Federal Rule of Civil Procedure 19 (Docket #36) and its
motion for extension of time to file a brief in support of
the motion to dismiss (Docket #37). Plaintiffs oppose both
motions. (Docket #38 and #39). For the reasons stated below,
Rocky Point's motions will be denied.
the third occasion in about as many months that the Court has
addressed this matter. As a result, the Court will not rehash
the detailed exploration of the facts it made in prior
orders. See Wei v. Rocky Point Int'l, LLC, Case
No. 16-CV-1282-JPS, 2016 WL 7046802, at *1-2 (E.D. Wis. Dec.
2, 2016); Wei v. Rocky Point Int'l, LLC,
16-CV-1282-JPS, 2017 WL 74263, at *1-2 (E.D. Wis. Jan. 6,
2017). The Court will instead assume familiarity with the
factual background and proceed to address the merits of the
motion to dismiss, Rocky Point claims that Plaintiffs have
failed to join two parties in this action-Symphony Ventures
Pte., Ltd. (“Symphony”) and its principal, Michel
Kurzer (“Kurzer”). (Docket #36 at 1-2). As the
Court explained in its most recent order, Symphony was a
creditor to Traxair by virtue of a loan agreement between
them, and that loan agreement precipitated the fund transfers
in late 2013 that Plaintiffs allege were fraudulent.
Wei, 2017 WL 74263, at *1. Rocky Point believes that
Kurzer, through Symphony, has hijacked Traxair's
liquidation and directed Plaintiffs, as Traxair's
liquidators, to engage in a campaign of litigation across the
globe to collect funds in connection with Traxair's
default on the loan agreement. Id. at *2. The gist
of the allegation is that Kurzer is using Plaintiffs as pawns
to collect far more than the original loan balance from
various entities. Id.
motion for extension of time to file its brief in support of
its motion to dismiss, Rocky Point claims that a trial in a
related case in Singapore has revealed facts which it
believes substantiate the claim that Kurzer, using
Plaintiffs, has collected more money than is due under the
loan agreement. (Docket #37 at 2-6); (Docket #41 at 1-2).
Rocky Point requests an extension of time to collect the
transcripts of the relevant testimony so that it can be
presented to this Court in support of its motion. (Docket #37
at 6-7). The requested extension would amount to
approximately forty-five days' extension from the date
the motion was filed. See (Docket #41 at 2).
Point's rationale for the relevance of this evidence is
that Kurzer and Symphony “are actually making the
decisions for [Plaintiffs]. Thus they have stepped into the
shoes of [Plaintiffs] and have liability for their actions.
[Plaintiffs], on behalf of Kurzer and Symphony, are also
pursuing recovery of money that is not actually due on the
Symphony debt. Thus Rocky Point is exposed to multiple or
inconsistent obligations.” (Docket #37 at 7). In its
reply, Rocky Point reiterates that because Kurzer and
Symphony “have been made whole (and then some) by
acquiring monies from Traxair and Traxair's guarantors,
” and because Kurzer continues to use Plaintiffs to
pursue still more litigation in his collection efforts,
“Rocky Point will be subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent
obligations.” (Docket #41 at 2). Rocky Point claims
that without these two parties, it “will have great
difficulty showing that [Plaintiffs] are pursuing recovery in
a matter that they should be pursuing on behalf of parties
who have already been paid.” Id.
Rocky Point's argument seems familiar, it is. The Court
rejected this precise argument in its January 6, 2017 order.
Wei, 2017 WL 74263, at *3. There, the Court
considered the suggestion that Kurzer and Symphony are
indispensable to this litigation as defined in Rule 19.
Id. at *5. The Rule defines a necessary party as one
(1) in whose absence the court cannot accord complete relief
among the existing parties, or (2) who claims an interest
relating to the subject of the action and is so situated that
disposing of the action may (a) as a practical matter impair
or impede that person's ability to protect the interest
or (b) leave an existing party subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent
obligations because of the interest. Fed.R.Civ.P. 19(a)(1).
Undertaking the necessary party analysis “entails a
pragmatic approach, focusing on realistic analysis of the
facts of each case.” Bio-Analytical Servs., Inc. v.
Edgewater Hosp., Inc., 565 F.2d 450, 452 (7th Cir.
1977); Provident Tradesmens Bank & Trust Co. v.
Patterson, 390 U.S. 102, 118 (1968). The party invoking
Rule 19 bears the initial burden to show why a party is
necessary under Subsection (a). See Molinos Valle del
Cibao, C. por A. v. Lama, 633 F.3d 1330, 1347 (11th Cir.
2011); Disabled in Action of Pa. v. S.E. Pa.
Transp. Auth., 635 F.3d 87, 97 (6th Cir. 2011);
Pulitzer-Polster v. Pulitzer, 784 F.2d
1305, 1309 (5th Cir. 2006).
January 2017 order, the Court concluded that Rocky
Point's first motion did not satisfy Rule 19's
standards. Wei, 2017 WL 74263, at *5. The Court was
unpersuaded by Rocky Point's theory that Kurzer and
Symphony are relevant because “they masterminded this
litigation to extract more money from Rocky Point” and
other entities than the amount to which they were entitled
under the loan agreement. Id. As the Court
explained, this theory is untethered from the matters
actually at issue in this action. Id. The Court
Plaintiffs' claim in this case is, at its core, that [Dag
Dvergsten Pte., Ltd. (“DDPTE”)] took
Traxair's money that should have been paid to Symphony
and absconded with it. Eventually, some of that money ended
up under Rocky Point's control. Although the disputes
between these parties span much of the globe, the question in
this Court is straightforward: was the transfer of funds to
Rocky Point fraudulent, in violation of [the Wisconsin
Uniform Fraudulent Transfer Act]?
To answer this question, the Court need not determine how
much is left to be paid on the loan agreement between Traxair
and Symphony. Consider the hypothetical situation in which
Traxair, after learning that DDPTE stole its funds, found
another source of money and kept up its obligations under the
loan agreement with Symphony. In that case, Plaintiffs could
still come to this Court seeking to recover the money DDPTE
had stolen. Whether the original loan was fully or partially
repaid would be of no moment. That is true in this case as
well. Thus, Rocky Point has not shown that Symphony and
Kurzer have an interest relating to the subject of the action
or why failure to join them would expose Rocky Point to
multiple or inconsistent obligations. See Fed. R.
Civ. P. 19(a)(1)(B).
Nor do Plaintiffs' claims require the Court to consider
Rocky Point's and the Intervenors' theory that Kurzer
is the puppet-master behind this case. The allegedly
fraudulent transfers underlying this case occurred well
before Traxair's default and liquidation. As a result,
whether Plaintiffs are acting as Kurzer's cronies has no
bearing on whether the transfers at issue here were
fraudulent. The parties, who have been involved in the entire
course of the Somnath saga, see every part of it as linked.
The Court, on the other hand, appreciates the narrow issues
it must decide and leaves to more appropriate fora the
resolution of the parties' other disagreements. Indeed,
to hear Rocky Point's claims against Symphony and Kurzer
would cause the very waste of judicial resources that Rule 19
is designed to prevent. See Moore, 901 F.2d at 1447.
Id. The Court therefore denied Rocky Point's
first motion under Rule 19. Id.
same reasons, the Court must deny this second attempt to
advance the same argument. Rocky Point ignores the
deficiencies in its theory of relevance and instead insists
that it can prove its allegations of wrongdoing directed at
Kurzer and Symphony. But the problem with Rocky Point's
allegations, as the Court has already explained, is not that
they are untrue. The problem is that they are irrelevant. The
Court will not embroil itself in disputes over the balance
due on the loan agreement, which “is only relevant to
explain why Traxair paid $6 million to DDPTE in the first
place. Whether DDPTE's transfers of those funds were
fraudulent is not affected by anything that occurred
subsequent to the transfers, including Kurzer's alleged
campaign of trickery to turn a profit on Traxair's
liquidation.” Wei, 2017 WL 74263, at *6.
this second motion to dismiss highlights Rocky Point's
misapprehension of the Rule 19 inquiry. Although Rocky Point
believes that it will be subject to multiple or inconsistent
liability in the absence of Kurzer and Symphony, it fails to
appreciate that the inconsistency in question must arise from
claims related to those already at issue in the action.
Delgado v. Plaza Las Americas, Inc., 139 F.3d 1, 3
(1st Cir. 1998) (“Inconsistent adjudications or
results. . .occur when a defendant successfully defends a
claim in one forum, yet loses on another claim arising from
the same incident in another forum.”). Furthermore,
even “where two suits arising from the same incident