Opinion
FSTCV165016190S
03-01-2017
Vision Financial Markets, LLC v. Yiquan Lu
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION TO DISMISS (105.00)
TAGGART D. ADAMS, JUDGE TRIAL REFEREE.
I. BACKGROUND
The plaintiff, Vision Financial Markets, LLC (Vision) describing itself as " a securities and options broker-deal and clearing film" located in Stamford, Connecticut seeks to recover in excess of $3.6 million claimed to be owed it by a customer, the defendant Yiquan Lu (Lu) representing money borrowed by Lu from Vision on a margin account. Vision asserts Lu incurred " huge" trading losses in options trading and subsequently refused to repay that money when Vision made one or more margin calls on Lu.
Vision made application for a prejudgment remedy on November 29, 2016 accompanied by a proposed complaint and a motion for disclosure of assets and other papers. Lu filed an appearance on December 29, 2016, purportedly to challenge the court's jurisdiction, giving an address of " Tianlin Village 10, Shanghai, China." On January 3, 2017 the court (Karazin, JTR) granted a prejudgment remedy in the amount of $3,634,886.83 and the motion for disclosure of assets. Dkt. Entries 103.00, 104.00. Lu did not attend the hearing, and his motions to vacate the January 3, 2017 orders were denied by this court. Dkt Entries 106.00, 106.01; 107.00, 107.01.
On January 5, 2017 Lu filed a one-page document entitled " Motion to Dismiss" stating he was not a resident of California, Nevada or Connecticut and " had never conducted any business in Connecticut or directly with Vision." This unsworn statement was not accompanied by a memorandum of law, as required by Practice Book § 10-30(c) or any affidavit. Dkt. Entry 105.00. It is this motion which came before this court on the February 21, 2017 short calendar. No oral argument was heard as the matter was marked take papers. Vision opposed the motion with a memorandum of law and an affidavit of Howard Rothman, president and managing member of Vision, dated February 6, 2017. Dkt. Entry 112.00. In its opposition Vision also referenced an earlier affidavit by Rothman dated November 22, 2016 filed in support of Vision's prejudgment remedy application. Dkt. Entry 100.36.
On February 14 and 15 Lu filed an Amended Motion to Dismiss and a memorandum of law. Dkt. Entries 115.00, 116.00. In the latter Lu contends that Vision's opposition to his motion should be disregarded since it had to be filed by February 4, 2017 to comply with the 30 days to respond provisions of Practice Book § 10-31(a). The court is unpersuaded by this argument, because Lu's initial motion to dismiss did not fully qualify as such in the absence of a memorandum of law. As noted, Lu seems to have realized the incomplete nature of his original motion when he sought to amend it on February 14 and 15 by filing an amended version of the motion to dismiss, with a memorandum. Under those circumstances the court finds Vision's opposition timely.
II. Discussion
Turning to the merits of the motions to dismiss, the court will consider the arguments of Lu contained in his original and amended motions, and notes that Lu's latest version largely reiterates his prior arguments, i.e. he has never lived in or conducted any business in Connecticut. He states he signed an online brokerage agreement with an entity, Choice Trade, based in New Jersey. He also states he was not properly served in this action; that he was not a resident of California or Nevada, and never transacted any business in Connecticut as required by " [t]he Connecticut Long Arm Statute (Conn. Gen. Stat. 52-59b)." Additionally, Lu contends that Vision " fails to prove that the defendant's online contract with a firm based in New Jersey qualify (sic) as business transactions in Connecticut." Dkt. Entry 115.00. Neither the February 14, 2017 amended motion to dismiss, nor any earlier motion, contained an affidavit or other possibly admissible evidence to support Lu's claims.
Vision asserts this court has jurisdiction over Lu pursuant to General Statutes § 52-59b(a) which states
a court may exercise jurisdiction over any nonresident individual, . . . who in person or through an agent:
(1) Transacts any business within the state; (2) commits a tortious act within the state [excepting defamation]; (3) commits a tortious act without the state causing injury to person or property within the state [excepting defamation] . . .
While Lu has repeatedly asserted, though not under oath, that he did not transact any business in Connecticut, this assertion fails in the face of the facts in the record. Lu was a customer of Connecticut-based Vision that provided clearing and settlement services to Lu and loaned him money. Rothman Affidavit, 11/22/16, in ¶ ¶ 5-8. Lu signed both a customer agreement with Choice Trade that made several references to Vision's role as Choice's clearing firm, and separate agreements with Vision itself that included margin loan provisions and authorized options trading. These signatures are dated in November 2015.
Rothman's November affidavit refers to Exhibits A through G. However, these documents are not separated, or specifically identified in the court's electronic file. Nevertheless, the court, with some difficulty, has verified that the information and facts referenced in this portion of its memorandum do appear in the documents attached to the affidavit.
The Rothman November affidavit includes email messages from Choice Trade to Lu (address: witmail10@gmail.com) in October 2016 requesting additional funds to cover options trading losses. Several of Lu's email messages to Choice Trade provided a cell phone number. On October 19, 2016 Lu met a margin call of $300,000 issued by Vision. Further messages show that Lu did not come up with an additional $600,000 requested by Choice Trade. On October 20, 2016 Choice Trade emailed Lu at 1:15 p.m. demanding that he cover an additional $600,000 deficiency owed to Vision, noting that a promised wire transfer of money in that amount had not materialized. Another message to Lu from Choice Trade on October 21 indicated frustration at Lu's continued failure to cover his options position. Lu responded he was " taking actions." Nevertheless, during that day Lu did not call or accept calls, and no further money came from Lu to cover his substantial losses.
On November 3, Victoria Bova, general counsel of Vision sent Lu a letter, certified mail, return receipt requested, to three addresses: Henderson, NV, Overland Park, KA and Fremont, CA demanding payment of $3,585,306.51 (noting some small positions remained open). In her affidavit, dated November 22, 2016 Bova states she spoke to Lu on November 18, 2016 who said he was represented by counsel, but Bova could not locate or contact the attorney based on the information provided by Lu. Dkt. Entry 100.36.
A later Rothman affidavit, dated February 6, 2017 (Dkt. Entry 112.00) sets forth additional information and documentation of Lu's relationship with Vision. In February 2016 he signed a Vision customer ACH Request part of which indicated a Lu address in Nashville, TN. February Rothman Aff., Ex A. Lu also signed a Vision account transfer form, a Vision change of address form showing an address change from Nevada to Tianlin Village in Shanghai, China; he also paid in $300,000 to his Vision account, and received a rejection form from Merrill Lynch when Lu tried to switch his account from Vision. Id., Exhibits A, B, C, D and E.
In New London County Mutual Insurance Co. v. Nantes, 303 Conn. 737, 745, 36 A.3d 224 (2012), the Connecticut Supreme Court explained that General Statutes § 52-59b(a)(1) " authorizes jurisdiction over nonresidents who transact any business within the state provided the cause of action arises out of such transaction." [Quoting Bank of Babylon v. Quirk, 192 Conn. 447, 449, 472 A.2d 21 (1984).] In Ryan v. Cerullo, 282 Conn. 109, 119, 918 A.2d 867 (2007), the Connecticut Supreme Court held that engaging in " a single purposeful business transaction" by a person or entity qualifies as " transact[ing] business in Connecticut" within the scope of Gen. Stat. § 52-59b(a)(1). The facts set forth above substantiate that Lu was transacting business with Vision in Connecticut throughout most, if not all, of 2016 related to Vision's claim in this case.
The above facts also show that Lu committed tortious acts outside Connecticut resulting in injury to Vision and its property in Connecticut, thereby satisfying the jurisdictional requirements of § 52-59b(a)(3). The acts include Lu's seeming promise to cover the losses around October 20, 2016 (which at the time were about $600,000) by wire transfer, but ultimately not doing so. Rothman November Affidavit, October 20, 2016 emails at 9:22 am and 9:26 am. This false promise to take " actions" increased the losses in Lu's account that Vision is now seeking to recover.
Service of the papers initiating and setting a hearing date for the prejudgment remedy proceeding was made on the Connecticut Secretary of the State and mailed to Lu at 45280 S. Grimmer Boulevard, Fremont, CA. Dkt Entry 101.00. This was an address provided by Lu on October 24, 2016 while attempting to transfer his account to Merrill Lynch. Rothman February Affidavit, Ex. E. A subsequent change of address form indicating the Shanghai address was dated December 19, 2016 after Vision had commenced its proceeding. Id., Ex. C.
III. Conclusion
For the above reasons, Lu's motion to dismiss is denied.