United States District Court, S.D. Florida
MELANIE E. DAMIAN, Plaintiff,
YELLOW BRICK CAPITAL ADVISERS (UK) LIMITED; et al., Defendants.
CECILIA M. ALTONAGA UNITED STATES DISTRICT JUDGE
CAUSE came before the Court on Defendants, Yellow
Brick Capital Advisers (UK) Limited (“Yellow Brick
UK”) and Yellow Brick Innovations (US)
LLC's (“Yellow Brick US['s]”)
Motion to Dismiss First Amended Complaint [ECF No. 35] for
failure to state a claim for relief under Federal Rule of
Civil Procedure 12(b)(6) as to Yellow Brick US, and for lack
of personal jurisdiction over Yellow Brick UK under Rule
12(b)(2). Plaintiff, Melanie Damian, filed a Response [ECF
No. 37]; to which Defendants filed a Reply [ECF No. 38]. The
Court has carefully considered the First Amended Complaint
(“Am. Compl.”) [ECF No. 25], the parties'
written submissions, and applicable law. For the following
reasons, the Motion is denied.
an action to recover allegedly fraudulent transfers from Onix
Capital LLC, an insolvent company, to Defendant Yellow Brick
UK. (See Am. Compl. 1-2). Plaintiff is the Receiver
for Onix Capital. (See id. ¶ 11). Defendant
Yellow Brick UK is a United Kingdom private limited company
advertising itself as an investment and financial advisory
firm. (See Id. ¶¶ 12, 21). Defendant
Yellow Brick U.S. is a Delaware limited liability company
with its principal place of business in Florida. (See
Id. ¶ 13).
alleges Yellow Brick U.S. was incorporated by and is
financially, logistically, and pragmatically controlled by
Yellow Brick UK. (See Id. ¶¶ 13, 28). On
July 25, 2019, Plaintiff filed the Amended Complaint,
bringing three separate claims of fraudulent transfer and one
claim of unjust enrichment against Yellow Brick UK and Yellow
Brick US, as Yellow Brick UK's alter ego. (See
November 2016, the Securities and Exchange Commission
(“SEC”) commenced an action against Onix Capital
and the Relief Defendants as entities run for the purpose of
furthering a securities fraud scheme perpetrated by Alberto
Chang-Rajii (“Chang”). (See Id. ¶
1). The case - SEC v. Onix Capital LLC, No.
16-CV-24678 (S.D. Fla. filed Nov. 8. 2016) (the
“Receivership Proceeding”) - is pending. (See
id.). On April 4, 2017, the court in the Receivership
Proceeding entered an order (the “Receivership
Order”) appointing Plaintiff as Receiver. (See
Id. ¶ 2). Under the Receivership Order, Plaintiff
has the duty to investigate the assets belonging to Onix
Capital and the Relief Defendants and prosecute causes of
action to recover assets, including bringing fraudulent
transfer actions. (See Id. ¶¶ 2-4 (citing
determined Onix Capital paid Defendant Yellow Brick UK an
amount in excess of $164, 833.00 while Onix Capital was
insolvent, in furtherance of Onix Capital's fraudulent
scheme. (See Id. ¶ 5). Plaintiff filed this
action to recover the fraudulent transfers. (See Id.
The Yellow Brick Group
Brick UK and Yellow Brick U.S. comprise the Yellow Brick
Group. (See Id. 1). Plaintiff alleges
Andres Hammer is the CEO of the Yellow Brick Group and
Jonathan Kol-Bar is Yellow Brick Group's Group Executive
Chairman. (See Id. ¶¶ 12-13).
According to Plaintiff, since opening its office in the
United States, “Yellow Brick U.S. has agreed to act on
Yellow Brick UK's behalf, and has been financially,
logistically and pragmatically controlled by Yellow Brick UK
and the Yellow Brick Group.” (Id. ¶ 13).
Plaintiffs allegations regarding Yellow Brick UK, the
formation of Yellow Brick US, and the relationship between
the two entities are as follows:
2010, Yellow Brick UK, a United Kingdom private liability
company, has been controlled by Joko Holdings LLC, a
Florida-based company registered in New York with a principal
office at 20890 North East 32nd Avenue, Aventura, Florida
33180. (See id. ¶¶
20-21 (citing PSC Form 2)). Joko Holdings owns seventy-five
percent or more of Yellow Brick UK's voting shares.
(See Id. ¶ 12). Joko Holdings is the required
signatory for Yellow Brick UK's corporate governance
resolutions. (See Id. ¶ 22). Kol-Bar is the
authorized signatory of Joko Holdings. (See Id.
the Amended Complaint, Plaintiff shows Yellow Brick UK
engaged in business in the United States at least twice prior
to the creation of Yellow Brick US. (See Id. ¶
27). In 2015, Yellow Brick UK announced a merger with a
Lancaster, Pennsylvania company, Aspire Ventures; and the
same year, Yellow Brick UK advertised business dealings in
San Francisco with a company called Smart Sparrow. (See
Id. (incorporating screen shots from Yellow Brick
Capital Facebook page)).
2016, Yellow Brick UK hired Hammer as CEO of the Yellow Brick
Group. (See Id. ¶ 28). Yellow Brick UK,
“through Mr. Kol-Bar and Mr. Hammer” incorporated
Yellow Brick US. (Id. ¶ 28). Kol-Bar is a
director and shareholder of Yellow Brick US. (See
Id. ¶ 29). Hammer is a director and shareholder of
Yellow Brick US. (See Id. ¶ 32).
2016, Hammer opened an office in Aventura, Florida in Yellow
Brick US's name; however, Yellow Brick UK advertised the
office as its own on its website YBCAP.com. (See Id.
¶ 28 (citing Ex. E, YBCAP.com Website [ECF No. 25-5]
(listing the address for Yellow Brick UK's “USA
Office” as 20807 Biscayne Boulevard, Suite 100,
Aventura, FL 33180))). Yellow Brick UK pays the salaries and
expenses of Yellow Brick US. (See Id. ¶ 30).
Yellow Brick UK is Hammer's sole “client” in
the United States. (Id. ¶ 31). Hammer testified
Yellow Brick U.S. has other clients, but these are managed by
Kol-Bar and Hammer is unsure what income, if any, Yellow
Brick U.S. receives from those clients. (See Id.
¶ 30 (citing Ex. F, July 1, 2019 Andres Hammer
Deposition (“Hammer Dep.”) [ECF No. 25-6]
61:14-62:12)). Yellow Brick U.S. is “directly
funded” by Yellow Brick UK via invoices Hammer submits
to Yellow Brick UK after Hammer completes Yellow Brick U.S.
assignments for Yellow Brick UK. (Id.).
corporate formalities between the two entities are otherwise
unclear or nonexistent. (See Id. ¶ 31). The two
share the same officers and directors. (See Id.
¶ 32). There is no written partnership agreement
between the two. (See Id. ¶ 31 (citing Hammer
Dep. 88:5-6)). There is no written agreement formalizing
a client relationship - only a “verbal consulting
agreement.” (Id. (quoting Hammer Dep.
81:6-7)). Yellow Brick U.S. does not have its own website,
and it is only referred to on Yellow Brick UK's website.
(See Id. ¶ 33). Yellow Brick US's
information technology infrastructure is controlled by Yellow
Brick UK, and Hammer's work email address shares the same
URL as the emails for Yellow Brick UK. (See Id.
(citing Hammer Dep. 132:22-133:7)).
Work on Behalf of Yellow Brick UK.
is listed on Yellow Brick UK's website and Facebook page
as Yellow Brick UK's CEO. (See Am. Compl. ¶
32). Hammer's LinkedIn page lists him as an employee of
Yellow Brick UK. (See id.). Hammer testified when
Yellow Brick U.S. needs to discuss something with Yellow
Brick UK, the conversation is between him and Kol-Bar,
similar to regular conversations the two have as partners of
Yellow Brick U.S. and as partners of Yellow Brick UK.
(See Id. ¶ 34).
his base in Florida, Hammer participates in major business
decisions regarding Yellow Brick UK, decisions that do not
pertain to Yellow Brick US. (See Id. ¶ 35).
Plaintiff alleges Hammer's activities “reflect
Yellow Brick UK uses Yellow Brick US's office space as
its own and the daily operations of Yellow Brick UK and
Yellow Brick U.S. are not kept separate.” (Id.
¶ 35 (alteration added)). For example, Mr. Hammer worked
from his home base in Florida “as Andres Hammer,
Partner” of Yellow Brick UK to decide whether Yellow
Brick UK should adjust its licensing status with the United
Kingdom's Financial Conduct Authority
(“FCA”). (Id. ¶ 35 (citing Hammer
Dep. 85:3-17; 108:20-109:10)).
is based in Miami, and Kol-Bar is based in London. (See
Id. ¶ 36). Hammer and Kol-Bar “work
fluidly” between the offices under the name “The
Yellow Brick Group.” (Id.). For instance,
Kol-Bar and Hammer travelled to Israel together on behalf of
the Yellow Brick Group. (See Id. ¶ 37). The
pair also travelled to London together to inaugurate the
ground floor of Yellow Brick UK's London hotel. (See
Brick UK's Relationship with Onix Capital and the Alleged
2013, Yellow Brick UK transferred $5, 000 to Highlander Real
Estate Ventures, an entity owned by Chang. (See Id.
¶ 23 (citing Ex. C, Highlander Bank Records [ECF No.
25-3])). Chang published marketing materials in connection
with Highlander, stating Kol-Bar was a member of Onix
Capital's “advisory board.” (Id.
¶ 24 (internal quotation marks removed)). Around the
time of the Highlander transaction, “Mr. Kol-Bar,
Yellow Brick UK and Chang developed a close
relationship.” (Id. ¶ 25). Kol-Bar
introduced Chang to people Chang would later hire as
employees in London. (See id.). Yellow Brick UK
permitted Chang to work from its London office and have
packages delivered there. (See id.). Chang also
invited Kol-Bar to serve on the board of directors of
Chang's UK company, Onix Capital Limited. (See
Id. ¶ 26).
4, 2015, prior to the creation of Yellow Brick US, Onix
Capital wired Yellow Brick UK $57, 518.00 for
“Consulting Fees.” (Id. ¶ 38
(citing Ex. I, Bank Records [ECF No. 25-9]). On October 8,
2015, Onix Capital wired Yellow Brick UK $107, 315.83 for
“Advisory Services.” (Id.). These
transfers occurred at times when Onix Capital was insolvent.
(See Id. ¶ 44). At the time of the transfers,
Yellow Brick UK had been owned and controlled by
Florida-based Joko Holdings LLC for at least five years.
(See Id. ¶ 38). Yellow Brick UK had also been
actively engaged in business with one of Chang's
Miami-based companies for at least two years.(See
Attempt to Recover the Alleged Fraudulent
January 8, 2019, Plaintiff subpoenaed the Yellow Brick Group
at its Aventura office for documents relating to the wire
transfers and the consulting services provided to Onix
Capital. (See Id. ¶ 39 (citing Ex. J, Subpoena
[ECF No. 25-10])). Yellow Brick Group responded to the
subpoena via a letter dated January 9, 2019, stating the only
documents in its possession relating to Chang concerned
Chang's rental of office space belonging to Yellow Brick
UK in London. (See Id. (citing Ex. K, Response to
Subpoena [ECF No. 25-11] 4-5)). The letter states
“[Yellow Brick UK] did not have any other business or
other activity with Alberto Chang and/or any of his
companies, investments or anything related to them.”
(Id. ¶ 42 (quoting Response to Subpoena 5
(alteration added; internal quotation marks omitted))).
Hammer testified he participated in drafting the letter.
(See Id. ¶ 40).
January 9, 2019 letter's statements are inconsistent with
the memo notes on the alleged fraudulent wire transfers
indicating payments were made to Yellow Brick UK for
“Consulting Fees” and “Advisory
Services.” (Id. ¶ 41 (internal quotation
marks omitted)). The letter's statement Yellow Brick UK
“did not have any other business or activity with
Alberto Chang” is also inconsistent with the fact
Yellow Brick previously transferred $5, 000 to Chang's
Highlander entity. (Id. ¶ 42 (quoting Response
to Subpoena 5 (alteration added; internal quotation marks
omitted))). Yellow Brick Group did not produce a lease
agreement between any Yellow Brick entity and Onix Capital to
substantiate the claim the wire transfers constituted lease
payments. (See Id. ¶ 43). Neither did Yellow
Brick Group produce documents showing the wire transfers were
for consulting or advisory services. (See
Brick Group did not return the funds. (See Id. Am.
Compl. ¶ 45). Instead, Yellow Brick UK asserts it has an
agreement with Chang under which Chang still owes Yellow
Brick UK $700, 000.00. (See Id. ¶ 59).
Efforts to Distinguish Yellow Brick UK from Yellow Brick
alleges “the Yellow Brick Group has taken several
proactive and improper steps to try and to distance itself
from the Receiver's and this Court's
jurisdiction.” (Id. ¶ 45).
correspondence with Plaintiff's counsel, Hammer
“has repeatedly modified his email signature to cover
up the Yellow Brick Group and [Yellow Brick UK]'s contact
with and business dealings in Florida.” (Id.
¶ 47 (alteration added)). On January 31, 2019, Hammer
emailed Plaintiff's counsel attaching the January 9, 2019
letter. (See Id. (citing Response to Subpoena 2)).
The email signature block identifies Hammer as “Group
CEO” of “Yellow Brick Group” and lists an
Aventura, Florida address. (Id. (internal quotation
marks omitted)). The email contains subscript stating,
“[Yellow Brick UK] is authorized and registered by the
Financial Conduct Authority (FCA).” (Id.;
Response to Subpoena 2 (alteration added)).
asked Hammer to accept service of the subpoena directed to
him in his capacity as Group CEO of the Yellow Brick Group.
(See Id. ¶ 49). On March 4, 2019, Hammer
replied via email stating he would accept service, but
modified his email signature to state “CEO” of
“Yellow Brick US” and not “Group CEO”
of “Yellow Brick Group.” (Id. (citing
Ex. M, March 4, 2019 Email [ECF No. 25-13] 1])). The March 4,
2019 email contains the same subscript as the January 31,
2019 email concerning Yellow Brick UK. (See id.).
asked the Yellow Brick Group to enter into a tolling
agreement when it appeared Hammer's deposition would be
delayed. (See Id. ¶ 50). Hammer replied to
Plaintiff via email requesting the tolling agreement be
addressed to Yellow Brick U.S. only. Hammer further stated he
has “no authority to sign on behalf of any entity
besides [Yellow Brick US].” (Id. (quoting Ex.
N, March 6, 2019 Email [ECF No. 25-14] 1] (alteration
added))). Hammer again altered the signature block of the
March 6, 2019 email. The March 6, 2019 email's signature
block identifies Hammer as CEO of Yellow Brick U.S. and
removes the subscript pertaining to Yellow Brick UK present
in his earlier emails. (See id.). Hammer's
LinkedIn page, however, identifies him as an employee of
Yellow Brick Capital, based in the Miami/Ft. Lauderdale
8, 2019, Plaintiff served Andres Hammer “as CEO for
[Yellow Brick UK]” at 20201 East Country Club Dr.,
Miami FL 33180. (See Return of Service [ECF No. 6]
now move to dismiss on two grounds: (1) Plaintiff fails to
state a claim against Yellow Brick U.S. under Rule 12(b)(6);
and (2) Yellow Brick UK must be dismissed for lack of
personal jurisdiction under Rule 12(b)(2). (See
Dismissal for Failure to State a Claim
Federal Rule of Civil Procedure 12(b)(6), a defendant may
move to dismiss a claim against it by asserting the complaint
fails state a claim for relief that is “plausible on
its face.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (alteration added; quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). The pleading
standard “does not require ‘detailed factual
allegations,' but it demands more than an unadorned,
Id. (quoting Twombly, 550 U.S. at 555).
Pleadings must contain more than “labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550
U.S. at 555 (citation omitted). Therefore a plaintiff must
“plead factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678
(alteration added; citing Twombly, 550 U.S. at 556).
When reviewing a motion to dismiss, the Court must construe
the complaint in the light most favorable to the plaintiff
and take the factual allegations therein as true. See
Brooks v. Blue Cross & Blue Shield of Fla., Inc.,
116 F.3d 1364, 1369 (11th Cir. 1997) (citation omitted).
Dismissal for Lack of Personal Jurisdiction
Federal Rule of Civil Procedure 12(b)(2), a defendant may
move to dismiss a claim against it by asserting the defense
of lack of personal jurisdiction. Because “[f]ederal
courts ordinarily follow state law in determining the bounds
of their jurisdiction over persons, ” Daimler AG v.
Bauman, 571 U.S. 117, 125 (2014) (citing Fed.R.Civ.P.
4(k)(1)(A)), a federal court sitting in Florida may properly
exercise personal jurisdiction only if the requirements of
(1) Florida's long-arm statute; and (2) the Due Process
Clause of the Fourteenth Amendment to the United States
Constitution are both satisfied. See Posner v. Essex Ins.
Co., Ltd., 178 F.3d 1209, 1214 (11th Cir. 1999) (citing
Sculptchair, Inc. v. Century Arts Ltd., 94 F.3d 623,
626 (11th Cir. 1996)).
plaintiff seeking to obtain jurisdiction over a non-resident
defendant initially need only allege sufficient facts to make
out a prima face case of jurisdiction.” Id.
(citing Electro Eng'g Prods. Co. v. Lewis, 352
So.2d 862, 864 (Fla. 1977)). “The district court must
accept the facts alleged in the complaint as true, to the
extent they are uncontroverted by the defendant's
affidavits.” Peruyero v. Airbus S.A.S., 83
F.Supp.3d 1283, 1286 (S.D. Fla. 2014) (citing Consol.
Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1291 (11th
Cir. 2000)). If a plaintiff pleads sufficient facts to
support the exercise of personal jurisdiction, the burden
shifts to the defendant to make a prima facie showing of the
inapplicability of the state's long-arm statute. See
Future Tech. Today, Inc. v. OSF Healthcare Sys., 218
F.3d 1247, 1249 (11th Cir. 2000) (per curiam) (quoting
Prentice v. Prentice Colour, Inc., 779 F.Supp. 578,
583 (M.D. Fla. 1991)).
defendant satisfies its burden, the burden then shifts to the
plaintiff to “substantiate the jurisdictional
allegations in the complaint by affidavits or other competent
proof, and not merely reiterate the factual allegations in
the complaint.” Id. “The district court
must construe all reasonable inferences in the light most
favorable to the plaintiff when dealing with conflicting
evidence.” Peruyero, 83 F.Supp.3d at 1287
(citing PVC Windoors, Inc. v. Babbitbay Beach Const.,
N.V., 598 F.3d 802, 810 (11th Cir. 2010)) (other