Rapid Check Cashing, Inc. v. Prodira S.A. de C.V. Casa de Cambio

Rapid Check Cashing, Inc. v. Prodira S.A. de C.V. Casa de Cambio

Opinion

OMNIBUS ORDER GRANTING DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S VERIFIED COMPLAINT FOR DECLARATORY JUDGMENT (D.E. 10), VACATING ORDER REFERRING DEFENDANTS' MOTION FOR SANCTIONS TO THE MAGISTRATE JUDGE (D.E. 15), DENYING DEFENDANTS' MOTION FOR SANCTIONS (D.E. 14), AND CLOSING CASE

THIS CAUSE is before the Court on Defendants Prodira S.A. de C.V. Casa de Cambio ("Prodira") and Filemon Garcia Ayala's (collectively, "Defendants") Motion to Dismiss Plaintiff's Verified Complaint for Declaratory Judgment or, Alternatively, for Summary Judgment ("Motion," D.E. 10), filed February 17, 2014. Plaintiff filed a Response on March 20, 2014 ("Response," D.E. 18), to which Defendants filed a Reply on March 31, 2014  [*2] ("Reply," D.E. 23). Also before the Court is Defendants' Motion for Sanctions (D.E. 14), filed March 18, 2014, Plaintiff's Opposition to Defendants' Motion for Sanctions (D.E. 24), filed April 1, 2014, and Defendants' Reply thereto (D.E. 28), filed April 11, 2014. On March 18, 2014, the Court referred Defendants' Motion for Sanctions to the Magistrate Judge (see D.E. 15); that Order of referral is hereby VACATED, and the Motion for Sanctions will be disposed of by this Order. Upon review of the Motions, Responses, Replies, and the record, the Court finds as follows.

I. Relevant Background¹

On February 23, 2012, Prodira filed suit in state court against non-parties I&T Financial Services, LLC ("I&T") and Immigration Tax Services, Inc. ("ITS"), for civil theft, breach of written contract, money had and received, unjust enrichment, conversion, and civil conspiracy, to recover a debt owed to Prodira. (Compl. D.E. 1 ¶ 11.)² Thereafter, the state court froze I&T's assets. (Id. ¶ 13.) As a result, in March 2012, Plaintiff—which had recently  [*3] purchased I&T and had begun funding I&T's operations—intervened in the state court action. (Id. ¶¶ 5, 13-14.) According to the Complaint, "[a]t the time the [state court] Action was filed, [Plaintiff] was completely unaware of the debt owed by I&T and [ITS] to Prodira." (Id. ¶ 12.) On March 14, 2012, Plaintiff and Prodira entered into a settlement agreement which required I&T and ITS to pay $1,200,000 to Prodira in installment payments, with Plaintiff acting as guarantor in the event I&T and ITS failed to pay the installments. (Id. ¶¶ 15-16.) On April 11, 2012, a joint stipulation of dismissal was filed in the state court action. (Id. ¶ 17.)

In July or August 2012, Plaintiff "became aware . . . that Prodira was engaging in illegal money laundering activities and ceased making payments to Prodira." (Id. ¶ 19.) Accordingly, Plaintiff filed "a Motion for Relief from Judgment and Settlement Agreement Based Upon Fraud, . . . Unconscionability and Illegality" in state court. (Id. ¶ 21.) At a hearing on the motion, Plaintiff's counsel informed the court that it had learned that Defendants were going to be designated under the Foreign Narcotics Kingpin Designation Act ("Kingpin Act") to be placed on the Office of Foreign Assets Control ("OFAC") list, and requested an adjournment to allow time for the designation to be completed. (Id. ¶ 28.) Instead, the state court issued an order denying Plaintiff's motion for relief from judgment, granting Prodira's motion to enforce the Settlement Agreement, and entering a final judgment in the action. (Id. ¶ 29.) Pursuant to the state court's order, Plaintiff posted a surety bond in the amount of $930,750.00 ³ with SurTec Insurance Company (the "surety  [*5] company"). (Id. ¶ 30.) Plaintiff appealed the trial court's entry of final judgment on December 31, 2012. (Id. ¶ 31.)

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