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Convergence Management Associates, Inc. v. Callender

United States District Court, D. Maryland

November 10, 2016

CONVERGENCE MANAGEMENT ASSOCIATES, INC. and CONVERGEX CARIBBEAN LTD., Plaintiffs,
v.
ERICA CALLENDER, Defendant.

          MEMORANDUM OPINION

          THEODORE D. CHUANG United States District Judge

         Plaintiffs Convergence Management Associates, Inc. ("CMA") and Convergex Caribbean Ltd. ("CCL") (collectively, "Plaintiffs") have brought this civil action against Defendant Erica Callender ("Defendant") alleging conversion and fraud. Presently pending before the Court is Defendant's Motion to Dismiss Amended Complaint or Alternatively to Transfer, ECF No. 45. The Motion is fully briefed and ripe for disposition, and no hearing is necessary to resolve the issues. See D. Md. Local R. 105.6. For the reasons set forth below, the Motion is DENIED.

         BACKGROUND

         The following facts relevant to the pending Motion are presented in the light most favorable to Plaintiffs, the non-moving parties.[1] CMA is a Maryland corporation with its principal place of business in Prince Frederick, Maryland. CMA is the parent corporation of CCL, a Bahamian corporation with its principal place of business in Nassau, Bahamas. CCL is registered to do business in Maryland and maintains an office at the same Prince Frederick, Maryland address used by CMA. The owner of both Plaintiff companies is Donald Callender, a Maryland resident. CMA, CCL, and Donald Callender are engaged in the business of providing financial consulting services to individuals and companies in Maryland and elsewhere. Defendant, who is the daughter-in-law of Donald Callender, was previously employed as an office manager and administrative assistant at CMA in Maryland.

         Plaintiffs claim that, on two separate occasions, Defendant transferred money out of CCL's account at Bank of the Bahamas without their knowledge or consent. First, on or about May 27, 2010, while employed at CMA, Defendant contacted Bank of the Bahamas and instructed it to wire $29, 000 from CCL's account to an account at the City National Bank of Florida in Miami, Florida (the "First Transfer"). The account at the City National Bank of Florida was maintained in the name of Island Hotel Company, Ltd., a company to which Defendant owed money. Bank of the Bahamas transferred the funds to Island Hotel Company's bank account per Defendant's instructions. Neither CCL nor Donald Callender had knowledge of or consented to the transfer.

         In 2011, Defendant moved from Maryland to Texas, where she presently resides. On April 17, 2012, she contacted Bank of the Bahamas and instructed it to wire $125, 000 from CCL's account to a bank account maintained in her own name at a Bank of America branch in Annapolis, Maryland (the "Second Transfer"). Again, Bank of the Bahamas transferred the funds per Defendant's instructions. According to Plaintiffs, at the time of the Second Transfer, Donald Callender had been hospitalized for congestive heart failure, and neither he nor CCL had knowledge of, or consented to, the transfer.

         Donald Callender filed a Complaint against Defendant and Bank of the Bahamas on December 31, 2015, alleging fraud and conversion. On May 16, 2016, after Donald Callender and Bank of the Bahamas had reached a settlement, all claims against Bank of the Bahamas were dismissed with prejudice. On June 30, 2016, after the Court granted a motion to dismiss on the grounds that Donald Callender did not have standing to pursue the case, it granted leave for CCL, as the real party in interest, to be substituted as a plaintiff. On July 13, 2016, Plaintiffs filed an Amended Complaint against Defendant, alleging that Defendant engaged in conversion and civil theft of the money transferred from Bank of the Bahamas to the accounts in Florida and Maryland and fraud arising from the use of "false and fraudulent pretenses" and "fraudulent representations or promises" in order to gain control over the funds. Am. Compl. ¶ 27, ECF No. 42. On July 27, 2016, Defendant filed the instant Motion to Dismiss Amended Complaint or Alternatively to Transfer. Plaintiffs filed an Opposition to the Motion on August 29, 2016. Defendant filed her Reply memorandum of law on September 12, 2016.

         DISCUSSION

         In her Motion, Defendant asserts that venue is improper and seeks either dismissal of the case or its transfer to the United States District Court for the Eastern District of Texas pursuant to 28 U.S.C. § 1406. In the alternative, Defendant seeks transfer to the Eastern District of Texas "in the interest of justice" under 28 U.S.C. § 1404. Defendant claims that the Amended Complaint is "devoid of any compelling, bona fide link to Maryland" because "the only asset allegedly impacted were funds in a Bahamian account owned by 'CCL, ' a Bahamian company." Mot. Dismiss at 2, ECF No. 45. According to Defendant, the case should be transferred to the Eastern District of Texas because "key witnesses" reside there, specifically Defendant and Diane Callender, a co-trustee of the Plaintiff companies and the former wife of Donald Callender. Id. at 1. Defendant argues that maintaining the case in Maryland would work an "extreme hardship" upon her. Id. Plaintiffs argue that venue is proper in Maryland and that transfer is not warranted because both allegedly fraudulent transfers have a link to Maryland, Donald Callender resides in Maryland, and a plaintiffs choice of forum generally should not be disturbed.

         I. Improper Venue

         When no evidentiary hearing is held, to prevail on a motion to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3), a plaintiff need make only a, prima facie showing of venue. Mitrano v. Howes, 377 F.3d 402, 405 (4th Cir. 2004). All well-pleaded allegations in the complaint bearing on the question of venue are taken as true, and the Court views the facts in the light most favorable to the plaintiff. Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355, 365-66 (4th Cir. 2012). The court is permitted to consider evidence outside the pleadings. Id.

         A civil action founded on diversity of citizenship may be brought in "a judicial district in which a substantial part of the events or omissions giving rise to the claims occurred." 28 U.S.C. § 1391(b)(2) (2012); CIENA Corporation v. Jarrard, 203 F.3d 312, 318 (4th Cir. 2000). In determining whether events or omissions are sufficiently substantial to support venue under § 1391, a court should review "the entire sequence of events underlying the claim." Mitrano, 377 F.3dat405. It is possible for venue to be proper in more than one judicial district. Id. If venue is not proper in the forum district, the court must dismiss the case or, if in the interest of justice, transfer the case to a district in which the case could have been brought. 28 U.S.C. § 1406(a).

         In this case, the Court is satisfied that venue is proper in the District of Maryland. Both of the allegedly fraudulent transfers have a substantial connection to Maryland. At the time of the First Transfer in May 2010, Defendant was employed by CMA, a Maryland company, at its office in Prince Frederick, Maryland. According to moving records provided by Defendant, she did not move to Texas until May 2011. The Court therefore reasonably infers that she was present in Maryland at the time that she contacted CCL to request the wire transfer. As for the Second Transfer in April 2012, even if Defendant had moved to Texas by then and contacted CCL from Texas, the Amended Complaint asserts that the funds were transferred to Defendant's bank account located in Annapolis, Maryland. Neither Defendant's briefs nor her exhibits offer any basis to doubt that Defendant was working for CMA in Maryland at the time of the First Transfer or that the funds from the Second Transfer were sent to Maryland. Thus, Plaintiffs' have made & prima facie showing that a "substantial part of the events" giving rise to Plaintiffs' claims took place in Maryland. See 28 U.S.C. § 1391; see also Mitrano, 377 F.3d at 405-06 (concluding that legal work performed under a contract constituted a "substantial part of the events" giving rise to the breach of contract claim, even though other events and omissions related to the claim occurred in a different district). Accordingly, the Motion to Dismiss under Rule 12(b)(3) is denied.

         II. ...


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