Wachovia Bank, N.A. v. Tien

• Decision Date: 06 August 2007
• Docket Number: No. 04-20834-CIV.,04-20834-CIV.
• Citation: 534 F.Supp.2d 1267
• Parties: WACHOVIA BANK, NATIONAL ASSOCIATION, formerly known as First Union National Bank, a national association, Plaintiff, v. Dr. Paul TIEN, Ming Tien, Henry Tien, The American University of The Caribbean N.V., et nl., Defendants.
• Court: U.S. District Court — Southern District of Florida

534 F.Supp.2d 1267

WACHOVIA BANK, NATIONAL ASSOCIATION, formerly known as First Union National Bank, a national association, Plaintiff, v. Dr. Paul TIEN, Ming Tien, Henry Tien, The American University of The Caribbean N.V., et nl., Defendants.

No. 04-20834-CIV.

United States District Court, S.D. Florida.

August 6, 2007.

COPYRIGHT MATERIAL OMITTED

Alan Grunspan, Esq., Miami, FL, for Wachovia Bank.

Hendrick G. Milne, Esq., and Craig Kalil, Esq. & Carlos Osorio, Esq., Miami, FL, for Dr. Paul Tien, Yife Tien, corporate defendants.

Paul Batista, Esq., New York, NY, Roger Slade, Esq., Andrew Herron, Esq., & Jose Ortiz, Esq., & Kevin Jacobs, Esq., Miami, FL, for Ming Tien and Henry Tien.

Gary Rosen, Esq., Becker & Poliakoff, P.A., Fort Lauderdale, FL; Manjit S. Gill, Esq. & Daniel Wallach, Esq., Becker & Poliakoff, P.A., Coral Gables, FL, for Turks & Caicos Islands, BWI.

Adam Chotiner, Esq., Boca Raton, FL, for Shapiro," Blasi, Wasserman & Gora, P.A.

INTERIM ORDER REGARDING OWNERSHIP OF ACCOUNTS; FINDINGS OF FACT AND CONCLUSIONS OF LAW FOLLOWING BENCH TRIAL PURSUANT TO RULE 52(a);

ALAN S. GOLD, District Judge.

THIS MATTER came before the Court following a bench trial which commenced on July 23, 2007. At the trial, the Court heard from the following witnesses: Dr. Paul S. Tien (by deposition), Henry Tien, Ming Tien, Yife Tien, Robert J. Sokol, Jeffrey Craig Froehle, C.P.A., Michael Paul Elkin, C.P.A., and Orin Connor Ward, Pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, the Court enters by this Order the following Findings of Fact and Conclusions of Law:

I. Procedural Background

This is an action for interpleader pursuant to 28 U.S.C. § 1335 and Federal Rules of Civil Procedure Rule 22, and, alternatively, for declaratory relief pursuant to 28 U.S.C. § 2201 and Federal Rules of Civil Procedure Rule 57 commenced by Wachovia Bank, N.A. ("Wachovia") on April 9, 2004 in order to establish ownership of five bank accounts funds held on deposit in Wachovia. The first bank account is in the name of "American University of the Caribbean School of Medicine" or as referred to throughout this case, "AUC Cayman No. 2." It was account number 9981595648 and is now account 9986157036. The second account was in the name of "American University of the Caribbean" or as referred to throughout the case, "AUC Cayman No. 1." It was account number, 2000015516189 and is now account number 2000016747892. The third account is titled in the name of "Medical Education Information Office, Inc.," or, as referred to throughout the case, "MEIO." This account was account number 9980288176 and is now account number 9986157023; The fourth account is titled in the name "Southeastern Trust Company, Ltd." ("Southeaster Trust Company" or "SETC"). This account was number 2000015516163 and is now account number 2000016747902 ("The large SETC account."). The fifth account is titled in the name "Southeastern Trust Company, Ltd." This account was number 2000015516176 and is now account number 2000016774915 ("The small SETC account.").

The Cross-Defendants, which consist of members of the Tien family and the corporate entities that they each allegedly control, each have a different position as to who or which entity is entitled to the subject funds. The exception is Yife Tien who has made no claim to any of the funds. Cross-claimant, the American University of the Caribbean ("AUC Cayman No. 1") is a company organized and existing under the laws of the Cayman Islands, British West Indies, with its principal place of business in the Cayman Islands. Crossclaimant, American University of the Caribbean N.V., Inc. ("AUC, N.V.") is a company organized and existed under the laws of the Netherlands Antilles, with its principal place of business on the island of Saint Maarten in the Netherlands Antilles. Cross-claimant, The American University of the Caribbean School of Medicine ("AUC Cayman No. 2") is a company organized and existed under the laws of the Cayman Islands, British West Indies, with its principal place of business in the Cayman Islands The three foregoing companies are collectively sometimes referred to herein as "the AUC Companies." Crossclaimant, Medical Education Information Office, Inc., ("MEIO") is a company organized and existing `under the laws of the State of Florida with its principal place of business in Coral Gables, Florida. The AUC Companies and MEIO claim to own all the funds and contend that Henry and Ming Tien have no claim to the monies in question. On the other hand, Cross-Defendants Henry and Ming Tien claim that they are the rightful owners of at least a portion, if not all, of the subject funds.¹

To summarize, the various entities' accounts which are in dispute among the various entities and individuals is provided below:

1. Southeastern Trust Company LTD:

a. Account # 2000016747902, balance as of January 26, 2004 $61,073,642.23 (old account # 2000015516163);

b. Account # 2000016747915, balance as of January 26, 2004 $2,404,857.78 (old account # 20000155116176);

2. American University of Caribbean:

a. Account # 9986157036, balance as of January 26, 2004 $3,866,555.05 (old account # 9981595648 American University of the Caribbean School of Medicine account overdraft position of -$365.17);

b. Account # 200001674747892, balance as of January 26, 2004 $23,572,694.46 (old account 2000015516189); and

3. Medical Education Information Office:

a. Account # 9980288176, balance as of January 26, 2004 $313,873.71;

b. New account opened by Mr. Yife Tien 9986157023, balance as of January 26, 2004$790.00.²

On March 28, 2006, the AUC Companies and MEIO filed Cross-Claims against Henry and Ming Tien. [DE # 420]. On May 8, 2006, Henry and Ming Tien filed their Amended Answer, Defenses, and Affirmative Defenses to the Cross-Claim. [DE # 440]. In their Defenses and Affirmative Defenses, Henry and Ming Tien stated:

4. Henry Tien is the legal and equitable owner of at least 25% of the funds at issue and the entire AUC enterprise.

5. Ming Tien is the legal and equitable owner of at least 25% of the funds at issue and the entire AUC enterprise.

6. The funds at issue belong to owners of the AUC enterprise, not Cross-Plaintiffs and/or any AUC-related corporate entities.

7. Cross-Plaintiffs' claims are barred by the doctrine of unclean hands.

8. Cross-Plaintiffs do not have the authority to bring forward the Crossclaim and have no rights to, or interests in, the funds at issue. 9. Regardless of how the AUC enterprise was structured on paper, all members of the Tien family always agreed and understood that each family member owned 25% of the AUC enterprise and its profits.

It is undisputed that Henry and Ming Tien never filed an affirmative Cross-Claim against the AUC Companies, MEIO, and Yife Tien.

On January 24, 2005, the AUC Companies, MEIO, and Yife Tien filed a Motion for Summary Judgment. [DE # 143]. In this Motion, the AUC Companies, MEIO, and Yife Tien argued that there were no genuine issues of material fact in dispute and argued that Henry and Ming Tien have no interest in the monies. In their Supplemental Motion for Summary Judge filed on August 22, 2006, the AUC Companies, MEIO, and Yife Tien argued that the evidence obtained in discovery provides a clear answer as to owns the money in controversy. [DE # 526]. Additionally in their Motion for Summary Judgment, the AUC Companies, MEIO, and Yife Tien argued that even if the Court were to credit Henry and Ming Tien's theory of the case, then Henry and Ming Tien would not be entitled to any more than fifty percent of the assets in controversy. In Response, Henry and Ming Tien argued that the Southeastern Trust Company is an "unincorporated association," composed of the four family members, Paul, Ming, Yife, and Henry Tien, and that the monies held in the name of the Southeastern Trust Company in the Wachovia accounts belongs equally to the four of them. [DE # 552]. To support this proposition, Henry Tien submitted a Declaration. [DE # 549]. Additionally, Henry Tien stated at the video-taped deposition that each of the family members were each entitled to twenty-five percent of all of the assets in question. [DE # 520]. At the oral. argument held on October 27, 2006, counsel for Henry and Ming stated that under their theory of the case the four Tien family members, Paul, Ming, Yife, and Henry were each entitled to twenty-five percent of the assets in this case. Because under such a theory, it would appear that Henry and Ming Tien would have no claim to at least fifty percent of the assets in controversy, I permitted Supplemental Briefing on this issue. [DE # 588 & 593] In the Supplemental Briefing, Henry and Ming contended that a significant issue of fact remained regarding their entitlement to all the monies based on other claims. By Order dated December 5, 2006, I denied the AUC Companies, MEIO, and Yife Tien's Preliminary and Supplemental Motion for Summary Judgment. [DE # 601]. In relevant part, the Order denying the AUC Companies, MEIO, and Yife Tien's Motion for Summary Judgment, stated:

I conclude that there are genuine issues of material fact which preclude summary judgment and require resolution at trial. In so ruling, I make no comment on the merit, or lack of merit, of any of the arguments. Accordingly, the AUC Companies, MEIO, and Yife Tien's dispositive Summary Judgment against Henry and Ming Tien [DE # 143], as well as their Supplemental Motion for Summary Judgment, [DE # 526] are both DENIED in their entirety.

[Omnibus Order, p. 12-13].³ By separate order, I directed that the AUC Companies and MEIO's Cross-Claim against Henry and Ming Tien would proceed with a jury trial. [DE # 600].

After the issuance of the Omnibus Order in December 2006, Henry and Ming Teen's local counsel, the firm of Herron, Jacobs, & Ortiz, filed a Motion to Withdraw as local counsel.⁴ Upon consent of Henry and Ming Tien, I granted the motion. A new local counsel, ...