TransFirst Group, Inc. v. Magliarditi

237 F. Supp. 3d 444, 2017 WL 660638, 2017 U.S. Dist. LEXIS 21580
CourtDistrict Court, N.D. Texas
DecidedFebruary 15, 2017
DocketCivil Action No. 3:16-CV-1918-L
StatusPublished
Cited by17 cases

This text of 237 F. Supp. 3d 444 (TransFirst Group, Inc. v. Magliarditi) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
TransFirst Group, Inc. v. Magliarditi, 237 F. Supp. 3d 444, 2017 WL 660638, 2017 U.S. Dist. LEXIS 21580 (N.D. Tex. 2017).

Opinion

MEMORANDUM OPINION AND ORDER

Sam A. Lindsay, United States District Judge-

On February 9, 2017, the court issued a memorandum opinion and order finding that Plaintiffs had established a prima facie case that the court has personal jurisdiction over Defendants Dominic Mag-liarditi (“Mr. Magliarditi”); Francine Magliarditi, as sued in her capacity as trustee of FRM Trust, DJM Irrevocable Trust, and Fane Trust (the “Trust Defendants”); ' DII Capital, Inc., ATM Enterprises, LLC, and Spartan Payment Solutions, LLC (the “Shell Company Defendants”). See Mem. Op. & Order 14 (Doc. 32). The court also stated: ‘Whether [it] has personal jurisdiction over Mrs." Magliarditi, sued in her individual capacity, DFM Holdings, Ltd., and DFM Holdings, LP, will be addressed in a separate order, which will also address the remainder of Defendants’ arguments presented in their respective motions.” Id. at 14-15. After careful consideration of the motions, pleadings, record, and applicable law, the court finds that it lacks personal jurisdiction over Mrs. Magliardi-ti, as sued in her individual capacity (“Mrs. Magliarditi”), as well as DFM Holdings, Ltd. and DFM Holdings, LP (the “Partnership Defendants”). Rather than dismiss Mrs. Magliarditi and the Partnership -Defendants for lack of personal jurisdiction, and for the reasons set forth below, the court determines - that this case-should be transferred to the District of Nevada for the convenience of the parties and witnesses and in the interest of justice pursuant to 28 U.S.C; §§ 1631 and 1404(a). . -

I. Factual and Procedural Background

A. The 2006 Action & Entry of Judgment Against Dominic Magliardi-ti

Plaintiffs are TransFirst Group, Inc. f/k/a TransFirst Holdings, Inc. (“Trans-first”), a Delaware corporation. with its principal place of business ,in Hauppauge, New York; and two Delaware limited liability companies, TransFirst Third. Party Sales, LLC and Payment Resources International, LLC, whose sole member is TransFirst. Plaintiffs have a judgment in the amount of $4,486,725 against Defendant Mr. Magliarditi. .The judgment was obtained in a separate lawsuit brought by Plaintiffs against Mr. Magliarditi .and others in 2006. See TransFirst Holdings, Inc., et al., v. Dominic J. Magliarditi, et al., Case No. 3:06-CV-2303-C, in the United States District Court for the Northern District of Texas (the “2006 Action”).1 Following a three-week bench trial in 2009, the Honorable Jorge A. Solis adjudged Mr. Magliarditi and other entities; liable for mail and wire fraud in violation of the Racketeer Influenced and Corrupt Organizations" Act (“RICO”) and found that Mr. Magliarditi had lied under oath in sworn [450]*450interrogatory responses and affidavits. On August 30, 2011, Judge Solis entered a final judgment and,,after several amendments, on April 22, 2013, entered the Third Amended Final Judgment., (the “Judgment”) .against Mr. Magliarditi and 'the other entities and in favor of Plaintiffs in the amount of $4,486,725.

In June 2014, the United States Court of Appeals for the Fifth Circuit affirmed the Judgment. TransFirst Holdings, Inc. v. Magliarditi, 574 FedAppx. 345 (5th Cir. 2014). Between entry of the Judgment, and continuing until the present, Plaintiffs have sought to uncover Mr. Magliarditi’s assets and to enforce the Judgment in this District, as well'as in California and Nevada. Among other things, a postjudgment discovery dispute between Plaintiffs and Mr. Magliarditi was referred to Magistrate Judge Paul D. Stickney who, on August 6, 2015, overruled Mr. Magliarditi’s objections to postjudgment discovery requests, sanctioned him, and ordered him to travel to Texas’at his own expense to testify in a postjudgment deposition in the magistrate judge’s chambers in Dallas, which took place on September 16, 2015. That'litigation is -ongoing, as evidenced by recent docket entries in 2016 and 2017.

B. The Current Lawsuit

On June 30, 2016, Plaintiffs filed this lawsuit against judgment debtor Mr. Mag-liarditi, as well as new Defendants who were .not parties to the 2006 Action, namely; Mrs. Magliarditi, the Trust Defendants, the Shell Company Defendants, and the Partnership Defendants, alleging that Mr. Magliarditi fraudulently transferred assets to Mrs. Magliarditi and the other Defendants in an effort to frustrate Plaintiffs’ ongoing efforts to collect on the Judgment.

In Plaintiffs’ First Amended Complaint (“Complaint” or “Compl.”) (Doc. 11), Plaintiffs allege that, to date, Mr. Magliarditi has only paid $62 toward the Judgment. Plaintiffs allege that Mr. Magliarditi and Mrs. Magliarditi “are working together to defraud Plaintiffs and prevent them from collecting on the Judgment by hiding and transferring assets through the use of a labyrinth of layered shell companies and trusts [which are] shams, existing for no reason other than to hide assets, defraud Transfirst, and otherwise act as the alter ego of [Mr. Magliarditi].” Id. at 2. Seeking to unwind the alleged fraudulent transfers and to hold Mrs. Magliarditi, the Trust Defendants, the Shell Company Defendants, and the Partnership Defendants liable for the Judgment entered in the 2006 Action, Plaintiffs assert the following causes of action: (1) fraudulent transfers under the Texas Uniform Fraudulent Transfer Act (“TUFTA”), Tex. Bus. <&' Com. Code §§ 24.006(b) and 24.005(a); (2) unjust enrichment; and (3) alter ego, alleging that Mrs. Magliarditi, as sued in her individual capacity, the Trust Defendants, the. Shell Company Defendants, and the Partnership Defendants “are alter-egos of [Mr. Magliarditi] and, therefore, they should be held jointly and severally liable with [him] on the Judgment.” Compl. at 2-3. Plaintiffs seek compensatory damages, restitution, punitive and exemplary damages, attorney’s fees, injunctive relief, appointment of a receiver, and any other relief to which they are entitled. Id. at 30-31.

C. The Pending Motions and the Court’s February 9, 2017 Ruling (Doc.32)

Defendants have moved to dismiss the Complaint on a: variety of grounds, including for lack of personal jurisdiction, improper venue, and for failure to state a claim; or, alternatively, they request that the court strike portions of the Complaint and direct Plaintiffs to file more particular[451]*451ized averments with regard to the fraudulent conveyance claim pursuant to Federal Rule of Civil Procedure 12(e). On February 9, 2017, the court issued a memorandum opinion and order finding that, contrary to Defendants’ arguments in their pending motions to dismiss, Plaintiffs had established a prima facie case that the court has personal jurisdiction over Defendants Mr. Magliarditi, the Trust Defendants, and the Shell Company Defendants. See Mem. Op. & Order 14 (Doc. 32). The court also stated: “Whether [itj has personal jurisdiction over Mrs. Magliarditi, as sued in her individual capacity, DFM Holdings, Ltd., and DFM Holdings, LP, will be addressed in a separate order, which will also address the remainder of Defendants’ arguments presented in their respective motions.” Id. at 14-15.

II. Legal Standards for Rule 12(b)(2)— Lack of Personal Jurisdiction

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Bluebook (online)
237 F. Supp. 3d 444, 2017 WL 660638, 2017 U.S. Dist. LEXIS 21580, Counsel Stack Legal Research, https://law.counselstack.com/opinion/transfirst-group-inc-v-magliarditi-txnd-2017.