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Capital Bank International Ltd. v. Citigroup

August 4, 2003

CAPITAL BANK INTERNATIONAL LTD., PLAINTIFF,
v.
CITIGROUP, INC. ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Document Nos.: 32, 33, 35, 37

MEMORANDUM OPINION

TRANSFERRING THE ACTION TO THE DISTRICT OF DELAWARE

I. INTRODUCTION

This matter is before the court on motions by two of the three defendants to dismiss the complaint for lack of personal jurisdiction and a motion by the plaintiff to transfer the action to the District of Delaware if the court finds that it lacks personal jurisdiction. The plaintiff is Capital Bank International Ltd. ("Capital Bank"), a West Indies banking corporation. The defendants are Citigroup, Inc. ("Citigroup"), a Delaware banking association; Citibank Delaware, another Delaware banking association; and BT North America, Inc. ("BTNA"), a corporation with its principal place of business in New York. The plaintiff brings suit against the defendants to recover $272,772.46 after an allegedly fraudulently indorsed check in that amount was deposited into a Capital Bank account. Defendants Citigroup and Citibank Delaware filed motions to dismiss for lack of personal jurisdiction. Because the contacts between the two defendants and the District of Columbia are insufficient to satisfy specific or general jurisdiction, the court lacks personal jurisdiction over either defendant. In the interest of justice, however, the court grants the plaintiff's motion to transfer the action to the District of Delaware.

II. BACKGROUND

A. Factual Background

At the heart of this action is a single check in the amount of $272,772.46 that changed hands some four years ago. In February 1999, a client of defendant Citibank Delaware issued the check to defendant BTNA. Am. Compl. ¶¶ 7-8. The check apparently was indorsed over to Waset Asset Management ("Waste"), who deposited the check in its Capital Bank account.*fn1 Id. The plaintiff accepted the check, subject to clearance by defendants Citibank Delaware and Citigroup, and sent it off to its collecting and correspondent bank, the International Bank of Miami. Id. ¶¶ 9-10. After the International Bank of Miami credited the check to the plaintiff's account, the plaintiff allowed Waset to draw against the $272,772.46. Id. ¶ 11.

In May 1999, after receiving a returned check against Waset's account, the plaintiff discontinued service to Waset and froze the balance of Waset's account. Id. ¶¶ 12-13. In August 1999, after no additional checks were returned against Waset's account, the plaintiff closed Waset's account and returned the balance to Waset. Id. ¶ 13.

Several months later, in February 2000, the International Bank of Miami determined that the endorsement on the $272,772.46 check deposited by Waset into its Capital Bank account had been forged. Id. ¶ 14. Accordingly, the International Bank of Miami debited Capital Bank's account by that amount. Id. After informing Citigroup and Citibank Delaware of this deduction, Capital Bank repeatedly demanded reimbursement, but was unsuccessful. Id. ¶¶ 15-16.

B. Procedural History

In June 2002, the plaintiff filed a complaint charging defendant BTNA with negligence and defendant Citibank Delaware with breach of contract, breach of warranty, negligence, and fraud. Compl. ¶¶ 17-63. The plaintiff seeks compensatory and punitive damages. Id. On February 3, 2003, the plaintiff amended its complaint to add Citigroup as a defendant on the breach of contract, breach of warranty, negligence, and fraud claims. See generally Am. Compl. On February 14, 2003, defendant BTNA filed an answer. On February 26, 2003, defendant Citibank Delaware filed a motion to dismiss for lack of personal jurisdiction. On March 3, 2003 defendant Citigroup filed a motion to dismiss for lack of personal jurisdiction and for failure to state a claim upon which relief can be granted. In its oppositions to the motions to dismiss, the plaintiff requested that if the court lacks personal jurisdiction over these defendants, it transfer the action to the District of Delaware. Pl.'s Citigroup Opp'n at 9; Pl.'s Citibank Delaware Opp'n at 6. The court now turns to the motions to dismiss.

III. ANALYSIS

A. Legal Standard for Motion to Dismiss for Lack of ...


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