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Tonya Kay Day v. the Corner Bank (Overseas) Limited

June 10, 2011


The opinion of the court was delivered by: Royce C. Lamberth, Chief Judge



This case centers on the existence, or nonexistence, of an offshore bank account in the Caribbean. Plaintiff, a United States citizen living in Las Vegas, alleges that her mother set up an account in excess of $14 million at Corner Bank (Overseas) Limited ("CBL"), the Bahamian-based, wholly-owned subsidiary of the Swiss bank Corner Banca S.A. ("CB"), and that since her mother's death CB and CBL have conspired to wrongfully cover up the existence of any such account. Plaintiff also accuses Colyn Roberts-a CBL employee-and Graham, Thompson & Co. ("GTC")-a Bahamian law firm-of being in collusion with CBL and interfering with plaintiff's attempts to recover the account funds. For their part, defendants deny the existence of any account in plaintiff's or her mother's name and dispute any allegations of wrongdoing. Before the Court are numerous motions (1) contesting the adequacy of service, (2) requesting additional time to complete service, (3) asserting grounds for dismissal of the case, (4) seeking removal of certain allegations, and (5) asking for the imposition of sanctions under Rule 11. For the reasons set forth below, the Court finds that service has been adequately completed, that defendants' motions for sanctions are unsupported on this record, and that the new allegations should be struck-necessitating the filing of an amended complaint, after which the Court will set an expedited schedule for briefing on the remaining issues in dispute.


Plaintiff Tonya Kay Day initiated this suit nearly one year ago by filing a complaint that details a sordid affair straight out of a Hollywood script-or at least a second-rate mystery novel. Complaint, Aug. 6, 2010 [1]. According to the Complaint, nearly five years ago plaintiff visited her mother, Lavera Jean Foelgner, who began to tell plaintiff of over $14 million she had accumulated "from participation for many years in the oil business." Id. at ¶¶ 12 & 15--16.*fn1

Plaintiff's mother spoke cryptically during this conversation, telling of a "CORNER BANK" in the Bahamas at which she deposited the funds,*fn2 and pointing plaintiff to a painting in the home marked on the back by a sticker with "mechanically printed" numbers purportedly representing the account number and password. Id. at ¶¶ 17--18. Plaintiff alleges that Ms. Foelgner intended to give her daughter past bank statements for the account; however, only a few months after this conversation and before Ms. Foelgner was able to pass these records on to plaintiff, she was tragically and unexpectedly killed by a drunk driver. Id. at ¶¶ 20--21. Over the next few years, plaintiff ran down several leads before determining that the account her mother spoke of is at CBL. Id. at ¶ 23. After coming to this conclusion, plaintiff retained an attorney, who in turn reached out to GTC in the Bahamas to work on her behalf to recover the funds. Id. at ¶ 24. According to the Complaint, however, GTC actually represented CBL-a fact the firm withheld in order to gain access to plaintiff's "confidential information." Id. at ¶¶ 24--26.*fn3 Shortly thereafter, GTC withdrew from its representation of plaintiff. Id. at ¶ 26. Exhausted with the lack of progress, plaintiff herself traveled to the Bahamas nearly a year ago to visit CBL's offices. Id. at ¶ 27. Plaintiff describes her visit as follows:

[T]he bank's office was not open to the public and the bank manager was not opening the door of the office before DAY, when she asked to enter. When DAY started oral communication with the bank's manager, subsequently identified as ROBERTS, he held the door only half-open. . . . ROBERTS said that GRAHAM THOMPSON was a reputable law firm that actually represented his bank . . . . When DAY attempted, again, to enter the bank office and to pass the documents, ROBERTS, on the contrary, attempted to shut the door close, with force, pushing her out. . . . The remainder of the conversation was essentially that ROBERTS would not cooperate and he continued pushing DAY out. . . . As a result of such an encounter, DAY suffered not only the physical inconvenience of being pushed out, but also a severe emotional distress after ROBERTS's such outrageous conduct.

Id. at ¶¶ 27--30. Following these events, GTC allegedly "admitted" that it represented CBL, id. at ¶ 32, and all defendants were thereafter unresponsive to further inquiries by plaintiff or her counsel regarding the account. Id. at ¶¶ 31--34. Left with-in her view-little alternative, plaintiff filed this action against defendants in August of last year, setting forth claims for Breach of Contract and Breach of Fiduciary Duty against all parties (Counts I--II), Conversion and Unjust Enrichment against CB and CBL (Counts III--IV), Civil Conspiracy against all defendants (Count VII), Battery against Mr. Roberts, CB and CBL (Count VIII), Intentional Infliction of Emotional Distress against Mr. Roberts (Count IX), and Malpractice and Misrepresentation or Fraud against GTC (Counts X--XI), while also seeking equitable relief in the form of a Declaratory Judgment and an Accounting (Counts V & VI).

A. The Bahamian Defendants

Shortly after the Complaint was filed, plaintiff began what has been a lengthy process of serving each of the four defendants. With respect to GTC, Mr. Roberts, and CBL, plaintiff filed proofs of service with the Court consisting of affidavits from a process server in the Bahamas- verified by a judicial officer-declaring that he served the initial papers upon each Bahamian defendant by hand delivery on August 23, 2010. Return of Service/Affidavit, Sep. 14, 2010 [8]; Return of Service/Affidavit, Sep. 14, 2010 [9]; Return of Service/Affidavit, Sep. 14, 2010 [10]. Twenty-one days later, as required under the Federal Rules of Civil Procedure, defendant GTC appeared and moved to dismiss the Complaint, arguing that the Court lacks jurisdiction over it, that this is an improper forum, that the Complaint fails to state a claim for relief, and that service was ineffective. Motion to Dismiss 6--24, Sep. 13, 2010 [4] ("GTC MTD"). With respect to this last objection, GTC submitted a sworn declaration from Judith Whitehead, the head of the firm, stating that the process server did not deliver a Summons but only the Complaint to GTC, Declaration of Judith Whitehead ¶ 12, Ex. 1 to GTC MTD, Sep. 13, 2010 [4-1], and argues that, absent a Summons, service was ineffective against the firm. GTC MTD at 12--16. A few weeks later, Mr. Roberts and CBL joined the proceedings-after being prompted by plaintiff's request that the Clerk enter their default*fn4 -and upon their arrival submitted a joint motion to dismiss that raises objections concerning jurisdiction, forum, Rule 12(b)(6), and service similar to the grounds for dismissal set forth in GTC's motion. Motion to Dismiss, 4--20, Sep. 24, 2010 [22]. CBL and Mr. Roberts also filed affidavits stating that the documents delivered by the process server in the Bahamas included only the Complaint and not a Summons. Declaration of Renee Kemp ¶¶ 10--11, Ex. 1 to Mtn. to Stay, Sep. 14, 2010 [14-1].

Having learned of potential deficiencies in her first attempt at service, plaintiff moved for a stay while she attempted to serve defendants under the Hague Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters, Nov. 15, 1965, art. 3, 20 U.S.T. 361, 658 U.N.T.S. 163 (the "Hague Convention"). Cross-Motion to Stay, Oct. 4, 2010 [26]; Cross-Motion to Stay, Oct. 8, 2010 [29] (collectively, "P's Cross-Mtns."). In support of her request, plaintiff asserts that service by the Bahamian process server was proper under Article 10(c) of the Hague Convention, P's Cross Mtns. at 6--8, but nonetheless asks the Court to grant additional time to complete service under Article 5 of the Convention, id. at 7-- 10-a process she had already set in motion at the time of her request. Along with arguments in support of her request for a stay, plaintiff's cross-motions each include a section titled "Proposed Outline of Opposition," which presents a limited and incomplete overview of plaintiff's opposition to defendants' motions to dismiss. Id. at 10--17. Briefing on both the motion to dismiss and the requests for a stay were subsequently completed by the end of October.

Meanwhile, plaintiff initiated contact with the Bahamas' Office of the Attorney General, which is designated the Central Authority of the Commonwealth of the Bahamas ("Central Authority") under Article 5 of the Hague Convention. In December, plaintiff filed new proofs of service indicating that Mr. Roberts, Return of Service/Affidavit, Dec. 15, 2010 [48], CBL, Return of Service/Affidavit, Dec. 15, 2010 [49], and GTC, Return of Service/Affidavit, Dec. 15, 2010 [50], had all been served through the Central Authority. According to two of the defendants, however, the process server employed by the Central Authority interchanged two of the packets containing the relevant papers and-as a result-served GTC with a Summons directed to Mr. Roberts and Mr. Roberts with a Summons directed to GTC. Declaration (Second) of Judith Whitehead Ex. B, Oct. 10, 2010 [30-4].

Apart from the continuing back-and-forth over service of process, another conflict arose between the parties concerning several allegations in the Complaint. On September 7th, shortly after receiving a copy of the Complaint, GTC served upon plaintiff-but did not file with the Court-a motion for sanctions highlighting potential inconsistencies between verified statements in the Complaint and a sworn affidavit plaintiff submitted in a prior proceeding. In response, plaintiff filed a document, titled a "Notice of Correction," stating her intention "to add" additional text to the Complaint and explaining the need for these new allegations. Notice of Correction, Sep. 24, 2010 [21] ("P's Notice"). Defendants CBL and Mr. Roberts immediately moved to strike plaintiff's Notice on the ground that plaintiff ignored Rule 15 of the Federal Rules of Civil Procedure by modifying her allegations without filing an amended pleading, Motion to Strike Plaintiff's Notice of Correction, Sep. 27, 2010 [25] ("Mtn. to Strike"), while GTC-unsatisfied with plaintiff's procedural maneuvering-subsequently moved for Rule 11 sanctions against plaintiff and her counsel. Motion for Sanctions, Oct. 4, 2010 [27] ("GTC Sanctions Mtn."). Shortly thereafter, CBL and Mr. Roberts separately moved for sanctions on a different basis, arguing that certain allegations are internally inconsistent and wrongfully imply that plaintiff is the trustee and administrator for Lavera Jean Foelgner's estate-an assertion, according to defendants, that is directly at odds with records from Ms. Foelgner's estate proceedings in Kansas. Motion for Sanctions, Oct. 7, 2010 [28] ("CBL/Roberts Sanctions Mtn."). At this point, unsurprisingly, civility in these proceedings began to wane. In response to the sanctions motions, plaintiff accuses defendants of violating meet-and-confer requirements and characterizes their procedural attacks as both "extraordinary," Opposition to Motion to Strike, Oct. 11, 2010 [32] ("Mtn. to Strike Opp."), and part of an inappropriate, "shoot from the hip" litigation style. Opposition to Motion for Sanctions, Oct. 18, 2010 [35] ("GTC Sanctions Opp."); Opposition to Motion for Sanctions, Oct. 27, 2010 [40] ("CBL/Roberts Sanctions Opp."). Plaintiff also draws analogies between the Swiss bank defendants in this case and those Swiss banks implicated by the Volcker Commission for obstructing attempts by Holocaust survivors or their heirs to retrieve money and valuables deposited in the banks prior to World War II, P's Cross-Mtns. at 3--4-despite the fact that neither CB nor CBL existed at the time. Having been provoked, GTC's counsel asserts that plaintiff filed "a clear and deliberate misrepresentation of fact that was intended to mislead," Reply in Support of Motion for Sanctions, Oct. 25, 2010 [39], while counsel for Mr. Roberts and CBL accuses plaintiff's counsel of adopting a "new and convenient characterization" of the original allegations in a post-hoc attempt "to avoid sanctions for filing the perjured statements." Reply in Support of Motion for Sanctions, Nov. 3, 2010 [42] ("CBL/Roberts Sanctions Reply").

A short time later, plaintiff further escalated the dispute by launching an assault on defendants' credibility through a motion to compel GTC's affiant, Ms. Whitehead, to appear and give testimony concerning her contention that GTC was served with a Summons addressed to Mr. Roberts. Motion for Order to Show Cause, Dec. 22, 2010 [53] ("OSC Mtn."). In her motion, plaintiff accuses GTC and Ms. Whitehead of having "engaged after-the-fact in banal dodging of service of process with improper denials, which should be held unbecoming of an attorney." Id. at 9. GTC fired back the very next day, charging plaintiff with "using this Court as a soapbox to make scurrilous personal attacks against the defendants." Opposition to Motion for Order to Show Cause, Dec. 23, 2010 [54]. Plaintiff, naturally, retorted that GTC is doing ...

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