BMF Advance, LLC v. Litiscape, LLC, 2:21-cv-00103-DBB

CourtUnited States District Courts. 10th Circuit. United States District Court of Utah
Writing for the CourtDavid Barlow United States District Judge
Docket Number2:21-cv-00103-DBB
Decision Date02 May 2022

BMF ADVANCE, LLC, Plaintiff,


No. 2:21-cv-00103-DBB

United States District Court, D. Utah

May 2, 2022


David Barlow United States District Judge

Plaintiff BMF Advance, LLC brought this suit for unjust enrichment against defendants Litiscape, LLC; Encorp, LLC, EN Corp USA; Joseph H, Inc.; Michael Kamalu; Joseph Azulay; Enrique Garcia; Victor Enriquez; and Does 1-10.[1] EN Corp, Enriquez, and Garcia (the EN Corp parties) moved to dismiss on the basis that this court does not have personal jurisdiction over Enriquez and Garcia and that BMF failed to state a claim for unjust enrichment.[2] Because BMF has not shown that this court has personal jurisdiction over Garcia and Enriquez and because BMF fails to state a claim for unjust enrichment, Defendants' Motion to Dismiss is GRANTED.



Plaintiff BMF Advance, a New York LLC, alleges that in 2020 it entered into an agreement to participate in the purchase of six million boxes of nitrile gloves from Vietnam.[3] In funding the transaction, BMF deposited three million dollars into the custody of Clark Law, a Utah law firm.[4] It alleges that defendants Joseph H. Inc., Michael Kamalu, Joseph Azulay, and Litiscape, LLC asserted that they needed $1.8 million to pay freight charges for the gloves, but instead released those funds from the account in Utah to Litiscape.[5] BMF further alleges that Litiscape and Kamalu claim that they passed most of the $1.8 million on to defendants EN Corp, Enrique Garcia, and Victor Enriquez.[6] Finally, BMF alleges that “Litiscape and Kamalu claim that Encorp, Garcia, and Enriquez have refused to return any portion of the Missing Funds.”[7]

BMF brought this suit against Litiscape, EN Corp, Joseph H, Kamalu, Azulay, Garcia, and Enriquez in Utah state court for unjust enrichment.[8] The EN Corp parties removed to federal court.[9] Now, defendants Garcia and Enriquez move to dismiss the complaint on the basis that this court does not have personal jurisdiction over them.[10] Additionally, the EN Corp parties move to dismiss the claim for unjust enrichment on the basis that the complaint fails to state a claim for unjust enrichment.[11]



Dismissal is warranted under Federal Rule of Civil Procedure 12(b)(2) if the court lacks personal jurisdiction over a defendant.[12] A plaintiff has the burden of showing that the court has personal jurisdiction over a defendant, but when there has been no evidentiary hearing on jurisdiction, the plaintiff need only make a prima facie showing of personal jurisdiction to defeat a motion to dismiss.[13] The court must resolve all factual disputes in favor of the plaintiff regarding that prima facie showing and must treat well-pleaded factual allegations in the complaint as true, unless they are disputed by a declaration.[14]

Additionally, dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6) when the complaint, standing alone, is legally insufficient to state a claim on which relief may be granted.[15] Each cause of action must be supported by sufficient, well-pleaded facts to be plausible on its face.[16] In reviewing a complaint on a Rule 12(b)(6) motion to dismiss, the court accepts all well-pleaded (“that is plausible, non-conclusory, and non-speculative”)[17] facts as true and draws all reasonable inferences from the pleadings in favor of the nonmoving party.[18] But the court disregards “assertions devoid of factual allegations” that are nothing more than “conclusory” or “formulaic recitation[s]” of the law.[19]



I. BMF has not demonstrated that this court has personal jurisdiction over Enriquez and Garcia.

First, the court considers if it has personal jurisdiction over Enriquez and Garcia in their personal capacities. “The Due Process Clause of the Fourteenth Amendment constrains a State's authority to bind a nonresident defendant to a judgment of its courts.”[20] Utah's long-arm statute extends “jurisdiction over nonresident defendants to the fullest extent permitted by the due process clause of the Fourteenth Amendment....”[21] Thus, the personal jurisdiction analysis here is a single due process inquiry.[22]

Due process requires that the defendant “purposefully established minimum contacts within the forum state” and that the “assertion of personal jurisdiction would comport with ‘fair play and substantial justice.'”[23] The minimum contacts test for specific personal jurisdiction requires: first, that the defendant has purposefully directed its activities at residents of the forum state; and second, that the plaintiff's injuries arose out of the defendant's forum-related activities.[24]

The purposeful direction requirement “ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, . . . or of the unilateral activity of another party or a third person.”[25] Three frameworks courts use to determine whether


an out-of-state defendant's activities satisfy the purposeful direction requirement are “(1) continuing relationships with forum state residents (‘continuing relationships'); (2) deliberate exploitation of the forum state market (‘market exploitation'); and (3) harmful effects in the forum state (‘harmful effects').”[26] While an out-of-state defendant's direct communications with forum-state residents provide “some evidence suggesting purposeful direction, ”[27] “phone calls and letters are not necessarily sufficient in themselves to establish minimum contacts.”[28]Furthermore, personal jurisdiction over an individual who acted on behalf of a company must be based on individual contacts with the forum state, not any acts on behalf of a company.[29]

Here, BMF alleges personal jurisdiction over Enriquez and Garcia because they “engaged in tortious, inequitable, or otherwise wrongful conduct with respect to the funds BMF deposited with Clark Law in Utah . . . by accessing and obtaining those funds from Utah-and knew or should have known that the effects of [their] conduct would justify this Court's exercise of jurisdiction over Garcia and Enriquez.”[30] In short, BMF does not allege that Enriquez or Garcia had continuing relationships with residents of Utah or that they deliberately exploited the markets in Utah, but rather that they participated in tortious conduct that had harmful effects in Utah.

To establish personal jurisdiction based on “effects” felt within the state, the Tenth Circuit requires three elements: “(a) an intentional action . . ., that was (b) expressly aimed at the


forum state . . ., with (c) knowledge that the brunt of the injury would be felt in the forum state.”[31] Thus, in order to determine if this court has personal jurisdiction over Enriquez and Garcia, the court must consider whether the allegations in the complaint make a prima facie showing that satisfies the three elements above.

BMF makes the following allegations with respect to Enriquez and Garcia's contacts with Utah.[32] First, it alleges that Defendants Litiscape and Kamalu fraudulently transferred $1.8 million in funds from an account in Utah and “passed most of the Missing Funds on to Encorp, Garcia, and/or Enriquez.”[33] Next, it alleges that “Litiscape and Kamalu have represented that they have spoken to Encorp, Garcia, and Enriquez and that they have acknowledged receipt of all or a portion of the Missing Funds.”[34] Finally, it alleges that “Encorp, Garcia, and Enriquez have refused to return any portion of the missing funds.”[35]

Taken together, these allegations do not satisfy the requirements for purposeful direction for Garcia and Enriquez. First, out of all the allegations, the only allegation that Garcia and Enriquez took an intentional material action is the allegation that they now refuse to return any portion of the missing funds. The other allegations are merely allegations that other parties took intentional actions, such as the allegations that Litiscape and Kamalu fraudulently withdrew funds or transferred the funds to EN Corp, Garcia, and Enriquez. Furthermore, BMF has not


shown that the only alleged intentional action that Enriquez and Garcia took, refusing to return any of the missing funds, was intentionally aimed at the forum state. Although the funds were held in Utah, [36] the ultimate allegation is that the funds came from BMF, which is a New York LLC.[37] Given that BMF is a New York LLC that claims ownership of the missing funds, it seems that the brunt of the injury of the alleged refusal to return any missing funds would fall in New York, not Utah. BMF has not carried its burden to make a prima facie showing that Enriquez and Garcia purposefully directed their conduct involving the funds at Utah.

BMF's only remaining argument as to why Enriquez and Garcia have minimum contacts with Utah is that Enriquez and Garcia engaged in a series of emails with a law office in Utah regarding a Zoom meeting about the deal between EN Corp, Litiscape, and BMF.[38] BMF argues that “Garcia communicated directly with Carl Clark [located in Utah] regarding other funds on deposit with his firm”[39] and that “Kamalu forwarded Garcia an email from [a banker with a signature block clearly disclosing that he was in Utah].”[40] Of course, the fact that a Utah resident forwarded an email to Garcia is not evidence that Garcia (or Enriquez) purposefully directed his own conduct at Utah. BMF also provides an email from Enriquez to the Utah law firm that is part of a larger email chain about a Zoom meeting between the EN Corp parties, the Utah law firm,...

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