Opinion
Case No. 04-CV-3440 (FB).
August 31, 2004
MEMORANDUM AND ORDER
On August 11, plaintiff Singapore Tong Teik PTE Ltd. ("STT") filed a motion for an order to show cause for an attachment on certain assets of the defendants and a temporary restraining order preventing defendants from transferring and/or dissipating certain assets. The Court denied the plaintiff's TRO and scheduled oral argument on the order to show cause for the attachment.
I.
The following is a short factual summary based on the plaintiff's allegations. Plaintiff STT is a foreign corporation with its principal place of business in Singapore. Defendant Corrado Coppola is an individual who resides in Brooklyn. Defendant Argo Commodities LLC is a Delaware limited liability corporation with its principal place of business in Brooklyn. Penn Racquet Sports, Inc. is an Ohio corporation with is principal place of business in Phoenix, Arizona.
Prior to the matter at issue in the litigation, STT and Coppola had successful prior business dealings. In April of 2004, Coppola approached STT and requested financial backing for Argo to import rubber and to resell it to Penn Racquet. The parties agreed that STT would loan Argo money to purchase the rubber, and Argo would repay the money, with interest, at regular intervals immediately following payment by Penn Racquet to Argo. Subsequently, STT loaned Argo a total of $501,895.58 for the business venture.
The first payment from Argo to STT was due on July 19, 2004. Neither Coppola nor Argo made the payment, and STT has been unable to locate Coppola since that time, despite numerous phone calls and e-mails. STT argues that it "appears that Coppola may have dissipated and/or absconded with the" money. STT seeks an order of attachment on all of the assets of Coppola and Argo, including all accounts receivable from Penn Racquet, pending the resolution of its claims against Coppola and Argo.
II.
Under Fed.R.Civ.P. Rule 64, remedies for seizure of property for the purpose of securing satisfaction of the potential judgment is governed by state law. CPLR 6201 provides in relevant part that:
An order of attachment may be granted . . . when . . . the defendant, with intent to defraud his creditors or frustrate the enforcement of a judgment that might be rendered in plaintiff's favor, has assigned, disposed of, encumbered or secreted property, or removed it from the state or is about to do any of these acts.
In order for STT to prevail on their motion for an attachment, it must demonstrate that:
(1) it has stated a claim for a money judgment; (2) it has a probability of success on the merits; (3) the defendant 'with intent to defraud his creditors or frustrate the enforcement of a judgment that might be rendered in plaintiff's favor, has assigned, disposed of, encumbered or secreted property, or removed it from the state or is about to do any of these acts;' and (4) the amount demanded from the defendant is greater than the amount of all counterclaims known to the party seeking attachment.JSC Foreign Econ. Assoc. Technos. v. Int'l Dev. Trade Sevs., 306 F.Supp.2d 482, 485 (S.D.N.Y. 2004) (quoting Bank Leumi Trust Co. v. Istim, Inc., 892 F.Supp. 478, 481 (S.D.N.Y. 1995). In order to meet the third requirement, the plaintiff must establish "(i) that the defendant either is about to or has assigned, disposed of, encumbered or secreted property, or removed it from the state, and (ii) that the defendant has acted or will act with the intent to defraud his or her creditors, or to frustrate the enforcement of a judgment that might be rendered in plaintiff's favor." Id. at 487 (quoting Bank Leumi, 892 F.Supp. at 482); see also Societe Generale Alsacienne de Banque, Zurich v. Flemingdon Dev. Corp., 500 N.Y.S.2d 278, 280 (2d Dep't 1986). "In the context of a motion for an attachment, fraud is not lightly inferred, and the moving party must establish fraudulent intent with evidentiary facts, not conclusory allegations." JSC, 206 F.Supp.2d at 487 (citing Societe Generale, 500 N.Y.S.2d at 281).
Although evidence of disposal of assets combined with the circumstances of that disposal can, in some circumstances, create an inference of intent, see, e.g., Allstate Ins. Co. v. TMR Medicbill Inc., 2000 WL 34011895, at *13 (E.D.N.Y. Jan. 3, 2000), STT has offered no facts whatsoever either as direct evidence of fraudulent intent or as circumstantial evidence from which intent can be inferred. STT has offered only conclusory allegations that "upon information and belief:" Coppola never intended to repay STT, Coppola made intentional misrepresentations regarding the financing, and Coppola may have dissipated and/or absconded with the money. Because STT lacks "evidentiary facts" to support an inference of fraud, their motion for attachment is DENIED.