Guirlando v. TC ZIRAAT BANKASI AS, Docket No. 09-0478-cv.

• Citation: 602 F.3d 69
• Decision Date: 08 April 2010
• Docket Number: Docket No. 09-0478-cv.
• Parties: Theresa GUIRLANDO, Plaintiff Appellant, v. T.C. ZIRAAT BANKASI A.S., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

602 F.3d 69

Theresa GUIRLANDO^*, Plaintiff Appellant, v. T.C. ZIRAAT BANKASI A.S., Defendant-Appellee.

Docket No. 09-0478-cv.

United States Court of Appeals, Second Circuit.

Argued: October 23, 2009.

Decided: April 8, 2010.

COPYRIGHT MATERIAL OMITTED

V. Elizabeth Grayson, New York, NY, for Plaintiff-Appellant.

Michael T. Sullivan, New York, N.Y. (Sullivan & Worcester, New York, NY, on the brief), for Defendant-Appellee.

Before: JACOBS, Chief Judge, KEARSE, Circuit Judge, and GARDEPHE, District Judge^**.

KEARSE, Circuit Judge:

Plaintiff Theresa Guirlando ("Guirlando") appeals from a final judgment of the United States District Court for the Southern District of New York, Richard J. Sullivan, Judge, dismissing her claims against defendant T.C. Ziraat Bankasi A.S., a Turkish bank ("Ziraat" or the "Bank"), for, inter alia, negligence, negligent and intentional misrepresentations and omissions, and breach of fiduciary duty in enabling Guirlando's husband to withdraw most of her life savings from a newly established bank account in Turkey. The district court granted Ziraat's motion pursuant to Fed.R.Civ.P. 12(b)(1) and provisions of the Foreign Sovereign Immunities Act ("FSIA" or the "Act"), see 28 U.S.C. §§ 1330(a), 1603-1605, to dismiss the action for lack of subject matter jurisdiction, finding that Ziraat is an agency or instrumentality of a foreign state within the meaning of the Act and is immune from this suit because the acts on which Guirlando's claims were based did not "cause a direct effect in the United States," 28 U.S.C. § 1605(a)(2). On appeal, Guirlando contends that the district court erred in concluding that Ziraat's acts did not cause a direct effect in the United States. For the reasons that follow, we reject Guirlando's contentions and affirm the judgment of the district court.

I. BACKGROUND

The status of Ziraat as an instrumentality of the government of Turkey is not disputed. The following description of the events on which Guirlando's claims are based is drawn from the allegations of the amended complaint ("Complaint"), which are accepted as true for purposes of reviewing this Rule 12(b)(1) dismissal.

A. The Events

In Port Jefferson, New York, in October 2006, Guirlando, a 67-year-old United States citizen, married Mevlut Cicek, a citizen of Turkey who was not legally present in the United States. In March 2007, Cicek disappeared without notice. He thereafter telephoned Guirlando, explained that he had been deported to Turkey, and asked her to move to Turkey to join him. Guirlando sold her house and car; in May 2007 she flew to Turkey, bringing a check drawn on a New York branch of Citibank payable to herself in the amount of $251,156.63, representing the proceeds from those sales and the entire balance of her Citibank account — in essence, her "life savings." (Complaint ¶ 8.)

When Guirlando arrived in Cicek's home town of Adana, Turkey, Cicek took her to the Adana branch of Ziraat, where he was "well known to the Manager and other executive level personnel." (Id. ¶ 9.) Guirlando informed English-speaking employees of Ziraat that she wished to open an individual account and deposit her check into it. She alleges that the Bank employees told her, falsely, that she could not open an account without a Turkish identification number; they thus persuaded her to open a joint account with Cicek. In addition, without informing Guirlando of the availability of an account from which withdrawals could be made only by the owners jointly, the Ziraat employees had her sign forms and signature cards for a joint account of a "disjunctive character," allowing withdrawals to be made by one owner without the consent of the other. (Id. ¶ 11.) The forms and signature cards were entirely in Turkish, and Guirlando was unaware that her money could be withdrawn from the account without her signature.

The Ziraat employees promised to telephone Guirlando as soon as the deposited funds became available; instead, once the funds had arrived, they informed Cicek. Cicek promptly went to the Bank and commenced withdrawing money from the account; he withdrew more than $200,000 in a series of transactions completed in a single day. (See id. ¶ 16.)

"While Cicek was at Ziraat Bank withdrawing the funds, Cicek's adult daughter informed Guirlando that Cicek had gone to the bank to steal her money." (Complaint ¶ 17.) After the Bank confirmed that Cicek had made withdrawals, Guirlando promptly withdrew the remaining balance, approximately $50,000. She subsequently returned to the United States and commenced the present action against Ziraat.

In addition to the above allegations, Guirlando alleged on information and belief

that at the time when she opened her Ziraat Bank account, the manager and executive personnel at Ziraat Bank knew that Cicek was a criminal and a swindler, and that his marriage to Guirlando was bigamous and void because Cicek was already married to a Turkish woman when he married Guirlando. The Ziraat employees expected to profit from Cicek defrauding Guirlando.

(Id. ¶ 19.) The Complaint asserted that, as a result of the conduct of Ziraat's employees with respect to the opening of the account for the deposit of Guirlando's check, the Bank was liable for negligence, negligent and intentional misrepresentations and omissions, breach of the covenants of good faith and fair dealing, and breach of fiduciary duty.

B. Ziraat's Motion To Dismiss and the Ruling of the District Court

Ziraat moved to dismiss the Complaint on various grounds, including lack of subject matter jurisdiction. In support of its motion, it submitted a declaration by its First Legal Counsel stating, inter alia, that Ziraat is a joint-stock company wholly owned by the government of Turkey (see Declaration of Yurdagül Rüzgar dated February 8, 2008, ¶ 2), and that its historical roots "date back to the Ottoman Empire when it was formed as the first agricultural financial institution founded and guaranteed by the state" (id. ¶ 4). Ziraat argued, inter alia, that it is thus an instrumentality of a foreign state and hence entitled to immunity under the FSIA. Guirlando did not dispute Ziraat's status as an instrumentality of a foreign state within the meaning of the FSIA; but she argued that Ziraat lacked immunity under that statute because the actions of the Bank's employees caused a direct effect in the United States by causing the payment of approximately a quarter of a million dollars from Guirlando's Citibank account in New York.

In an Order of Dismissal dated December 15, 2008, the district court granted Ziraat's motion to dismiss for lack of subject matter jurisdiction under the FSIA. See Guirlando v. T.C. Ziraat Bankasi, A.S., No. 07 Civ. 10266, 2008 WL 5272195 (S.D.N.Y. Dec. 15, 2008) ("Guirlando"). The court rejected Guirlando's contention that Ziraat's actions had a direct effect in the United States. It noted that this Court had ruled that the FSIA's "`commercial activity'" exception did not apply where "`all legally significant acts'" took place in the foreign country and the only alleged "`direct effect'" in the United States was "`that the money came from a bank account in New York.'" Id. at *4 (quoting Antares Aircraft, L.P. v. Federal Republic of Nigeria, 999 F.2d 33, 36 (2d Cir.1993), cert. denied, 510 U.S. 1071, 114 S.Ct. 878, 127 L.Ed.2d 74 (1994)). Here, instead, the district court found that "all `legally significant' acts" by Ziraat "took place in Turkey, where Plaintiff opened the joint bank account, and where all of Ziraat's allegedly unlawful behavior occurred," Guirlando, 2008 WL 5272195, at *4. The court concluded that "the sole act connected to the United States in the instant matter, the drawing of a check on a bank in New York, is not legally significant, as it was entirely fortuitous and entirely unrelated to the liability of Ziraat," id. (internal quotation marks omitted).

Judgment was entered dismissing the Complaint. Guirlando's motion for reconsideration pursuant to Fed.R.Civ.P. 59(e) and 60(b) was denied, and this appeal followed.

II. DISCUSSION

On appeal, Guirlando challenges the judgment of dismissal (as well as the denial of her motion for reconsideration-although she proffers no separate arguments as to that denial), contending principally that either the "payment of the $251,156.63 out of the New York Citibank account" (Guirlando brief on appeal at 35) or her impoverishment "as an American citizen" (id. at 41; see also Guirlando reply brief on appeal at 6-7) constitutes a direct effect in the United States sufficient to meet this Court's "legally significant act" test. Alternatively, she urges this Court to abandon the "legally significant act" test and rule that the Citibank payment or her impoverishment constitutes the requisite direct effect. (See Guirlando brief on appeal at 37-38, 45; Guirlando reply brief on appeal at 18-19.)

Given the absence of any dispute as to the status of Ziraat as a foreign state within the meaning of the FSIA, see 28 U.S.C. §§ 1603(a) and (b), and Ziraat's acceptance of the allegations of the Complaint as true for purposes of its Rule 12(b)(1) motion, Guirlando's contentions present only questions of law, which we review de novo. See generally Virtual Countries, Inc. v. Republic of South Africa, 300 F.3d 230, 235 (2d Cir.2002) ("Virtual Countries"). For the reasons that follow, we reject Guirlando's contentions.

A. The FSIA Meaning of "Direct Effect in the United States"

The FSIA "`provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country.'" Saudi Arabia v. Nelson, 507 U.S. 349, 355, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993) (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989)). The Act provides, in general, that the federal district courts have subject matter jurisdiction over "any nonjury civil action against a foreign state as defined in section 1603...