Alpine Atlantic Asset Management AG v. Comstock

552 F. Supp. 2d 1268, 2008 U.S. Dist. LEXIS 39035, 2008 WL 2036809
CourtDistrict Court, D. Kansas
DecidedMay 12, 2008
Docket07-2595-JWL
StatusPublished
Cited by8 cases

This text of 552 F. Supp. 2d 1268 (Alpine Atlantic Asset Management AG v. Comstock) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alpine Atlantic Asset Management AG v. Comstock, 552 F. Supp. 2d 1268, 2008 U.S. Dist. LEXIS 39035, 2008 WL 2036809 (D. Kan. 2008).

Opinion

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM, District Judge.

Plaintiff Alpine Atlantic Asset Management AG is a Swiss asset management firm. Defendant Andrew Comstock formerly worked for Alpine as a consultant. This lawsuit arises out of events surrounding and following his resignation in which Mr. Comstock and others established Everest Asset Management, AG, a Zurich company that is now one of Alpine’s competitors. Alpine asserts several claims against Mr. Comstock for tortious interference, conversion, misappropriation of trade secrets, breach of contract, unjust enrichment, and breach of fiduciary duty, as well as similar claims under the Swiss Code of Obligations. This matter comes before the court on Defendant Andrew Comstock’s Motion to Dismiss for Lack of Subject Matter Jurisdiction, Improper Venue and Failure to State a Claim (doc. # 10). 1 For the reasons explained below, defendant Comstock’s motion to dismiss for lack of subject matter jurisdiction is denied, his motion to dismiss for improper venue is granted, and his motion to dismiss for failure to state a claim is denied as moot.

FACTUAL BACKGROUND

According to the allegations in plaintiffs complaint, Alpine is a foreign corporation with its principal place of business in Zurich, Switzerland. It is in the business of international asset management, and offers a broad range of services for institutional and individual clients, focusing on the independent management of investment portfolios. From time to time, Alpine engages consultants to perform services relating to its investments, clients, and customers. In 2004, Mr. Comstock became a consultant for Alpine as per the terms of a consulting agreement. The agreement required Mr. Comstock to provide certain consulting services for the sole benefit of Alpine during the term of the agreement. Those services involved client relationships and investment decisions. In addition, in connection with the agreement Mr. Comstock was designated as a trading officer for Alpine in certain limited circumstances, which gave him the authority to give certain trading instructions and directives concerning clients’ investments with Haywood Securities 2 and other institutions, *1272 but not to authorize the removal of money out of Alpine’s or Alpine’s clients’ accounts. During the term of the agreement, Mr. Comstock routinely performed consulting services from his personal residence in Prairie Village, Kansas.

In or about April of 2006, Erwin Speckert, a former manager of Alpine who resides in Switzerland, attempted to purchase Alpine by seeking to buy the ownership position of the majority shareholder. This attempt was unsuccessful. Unbeknownst to Alpine, soon thereafter in or about May of 2006, Mr. Comstock and others, including Mr. Speckert, began to execute a scheme to defraud Alpine of its money, assets, clients, capital, goodwill, standing in the international investment industry, and future business opportunities. At that time, Mr. Com-stock’s consulting agreement with Alpine was still in force. The scheme was memorialized in an email exchange dated May 1, 2006, among Mr. Speckert, Tony Moore, Herbert Towning, and Mr. Com-stock. Alpine’s complaint refers to these four individuals, along with Sylvia Hannes and Livia Floria, as “co-conspirators” who created and incorporated another entity, Everest Asset Management, AG, a Zurich company, to compete with Alpine; to unlawfully seize Alpine’s assets, goodwill, and standing in the international investment industry; and to solicit Alpine’s existing customers. Ms. Hannes and Ms. Floria were both previously employed by Alpine and are now employed by Everest.

On July 28, 2006, Mr. Comstock tendered his notice terminating his consulting agreement with Alpine effective August 31, 2006. Under the terms of the agreement, Mr. Comstock was to continue to perform his obligations under the agreement for a one-month notice period. And, Mr. Com-stock stated in his notice as follows: “I fully intend to provide Alpine Atlantic with the same high level of professional services I have delivered in the past.” During the one-month notice period, Mr. Comstock indicated that he was returning to his residence in Kansas. Mr. Comstock’s termination of the consulting agreement also terminated his authority to be a trading officer of Alpine concerning Alpine’s accounts, including accounts with Haywood Securities.

Alpine alleges that on or about December 4, 2006, Mr. Comstock drafted and signed a fax cover sheet on Alpine letterhead and stationery instructing Haywood to “close the account of Alpine Atlantic Asset Management” and directing Haywood that “[a]U cash and securities should be transferred to the new account in the name of: Everest Asset Management AG ... immediately upon receipt of this fax.” On the face of the fax, Mr. Comstock falsely represented himself as still being a consultant engaged with and under a mandate with Alpine, and falsely implied that he had authority to give and direct trading and securities instructions to Haywood on behalf of Alpine. The fax was signed by both Mr. Comstock and Ms. Floria, who were both at that time employed by Everest.

At the time, Alpine had a master account and several sub-accounts held with Haywood that were used to facilitate investments with Alpine’s clients. Haywood relied on the fax and transferred the assets as instructed in the form of at least fifteen separate wire transfers in excess of $300,000. The assets were deposited into an account held by Everest and are now managed solely by Everest through Haywood. Haywood has enabled Everest to continue to trade securities in and out of its accounts, and has frozen the transferred assets “for an indefinite period of *1273 time.” Alpine has no access to the Haywood Securities account in question and has completely lost the ability to manage the frozen transferred assets despite its ongoing contracts with its clients. Alpine’s credibility as an international asset management firm has been stigmatized, and Alpine has incurred substantial and ongoing costs and expenses in having to investigate these claims, re-establishing its standing in the international asset management business and with clients, and seeking legal counsel to advise and bring legal action to cure the damages caused by this misconduct.

Based on these factual allegations, Alpine asserts the following claims against Mr. Comstock: (Count I) tortious interference with contract, (II) tortious interference with prospective business relations and/or future commercial expectancy, (III) conversion, (IV) misappropriation of trade secrets, (V) breach of contract, (VI) unjust enrichment, (VII) breach of fiduciary duty, (VIII) breach of mandate under the Swiss Code of Obligations, (VIII[sic]) tortious wrong causing damage to another under the Swiss Code of Obligations, and (IX) unjust enrichment under the Swiss Code of Obligations.

Mr. Comstock now moves to dismiss Alpine’s claims against him on two grounds. 3 First, he contends that the court lacks subject matter jurisdiction because jurisdiction is based on diversity and the claims in this case do not satisfy the $75,000 amount-in-controversy requirement.

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Bluebook (online)
552 F. Supp. 2d 1268, 2008 U.S. Dist. LEXIS 39035, 2008 WL 2036809, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alpine-atlantic-asset-management-ag-v-comstock-ksd-2008.