United States District Court, D. New Jersey
CEVDET AKSÜT OĞULLARI KOLL. STI, Plaintiff,
ROBIN A. CAVUSOGLU, et al., Defendants.
WILLIAM J. MARTINI, U.S.D.J.
Cevdet Aksüt Oğullari Koll. Sti
(“Plaintiff”) brings this action against Huseyin
Cavusoglu and multiple associates, including the law firm of
Hinckley Allen & Snyder LLP (“Hinckley
Allen”), alleging thirteen counts of New Jersey,
federal and common law violations, in connection with the
fraudulent importation of food products from Turkey to the
United States. This matter comes before the Court on Hinckley
Allen's motion for summary judgment pursuant to Federal
Rule of Civil Procedure 56. There was no oral argument.
Fed.R.Civ.P. 78(b). For the reasons set forth below, Hinckley
Allen's motion for summary judgment is
GRANTED and all outstanding claims and
cross-claims against it are DISMISSED WITH
general, the Complaint alleges that Hinckley Allen and others
conspired with Defendant Cavusoglu in operating a fraudulent
enterprise that induced Turkish food suppliers to ship their
goods to Defendants for sale in the United States. Plaintiff
seeks to collect an unpaid debt of approximately $1.1 million
in connection with its business dealings with that
enterprise. The Court assumes the parties' familiarity
with the facts and procedural history of this case.
The Undisputed Facts of the Sunrise Settlement and
following facts are undisputed and specific to the portion of
the case pertaining to Hinckley Allen's involvement in
the alleged fraudulent scheme. The sole remaining claims
against Hinckley Allen allege a violation of the New Jersey
Uniform Fraudulent Transfer Act (“UFTA”),
N.J.S.A. 25:2-20, civil conspiracy thereto, and a claim of
accounting. These claims arise out of Hinckley Allen's
participation in the settlement of a legal dispute between
another defendant in this case, American Pistachio
Commodities Corp. d/b/a Sunrise Commodities
(“Sunrise”), and two entities owned by Cavusoglu,
Celil Ithalat Ihracat (“Celil”) and CNC Trading
Distribution and Warehousing, Inc. (“CNC”).
See Ops., ECF Nos. 73 & 96.
22, 2012, Celil filed a lawsuit in New Jersey Superior Court,
alleging that Sunrise owed it $126, 000 in connection with
shipments of dried apricots. Hinckley Allen, along with local
counsel, represented Celil in the litigation. See
Decl. of K. Jordan-Price (“Jordan-Price Decl.”)
¶ 8, ECF No. 170-3; Ex. A, ECF No. 170-4; see
also Pl.'s Counter-Statement of Undisputed Material
Facts (“Pl.'s Counter-Statement”) ¶ 6,
ECF No. 181-1 (“Defendant's contentions are true
only in the most literal, superficial and technical sense . .
. .”). On November 8, 2012, the parties entered into
mediation guided by a retired New Jersey judge, Thomas
Olivieri of the firm Chasan Lamparello Mallon & Cappuzzo,
PC. Id. ¶ 9. The parties ultimately agreed to
settle the dispute for $500, 000 (the “Sunrise
Settlement”), which included the amount for the
apricots and an additional $374, 000 for damages sought by
CNC related to packing machinery. Id. ¶ 10.
settlement agreement provided Sunrise with a general release
from all potential future claims by any Cavusoglu entities,
including HGC Commodities (“HGC”). The agreement
also called for Sunrise to wire the settlement amount to
Hinckley Allen's trust account (the “Sunrise
Transfer”). Id., Ex. B. Hinckley Allen
received a total of $98, 907.53 in legal fees for its
representation of Cavusoglu in the Sunrise Settlement.
Id. ¶ 13. Of the remaining amount, Hinckley
Allen transferred $126, 000 to Celil and $265, 032.8 to CNC.
Id. ¶ 14. These transfers form the basis of
Plaintiff's remaining claims.
The Parties' Motions
Hinckley Allen's Summary Judgment Motion and
Plaintiff's Opposition and Cross-Motion
Allen now moves for summary judgment against Plaintiff,
arguing first that the Sunrise Transfer was not a transfer of
an asset of a “debtor” as defined by the UFTA.
See Br. of Def. in Supp. of Mot. for Summ. J.
(“Def.'s Br.”) 6-7, ECF No. 170-1. According
to Hinckley Allen, the debtor vis-à-vis Plaintiff is
HGC, which “did not transfer anything to anyone as part
of the Sunrise Settlement.” Id. at 7. Hinckley
Allen next argues that it was not a “transferee”
under the UFTA because it was the escrow agent of the Sunrise
Transfer and it, therefore, never had dominion over the
transferred asset. See id. at 7-8. Moreover, the
money it received was for the reasonably equivalent value of
its legal fees and, therefore, was not fraudulent.
Id. at 8. Hinckley Allen further argues that the
Court must dismiss Plaintiff's civil conspiracy claim
because there is no actionable underlying tort to support it.
Id. at 9. Finally, it argues that Plaintiff's
claim for accounting fails because there is no fiduciary
relationship between it and Plaintiff, the Sunrise Settlement
was not a complicated transaction and discovery has closed.
Id. at 9-10.
opposes and cross-moves for summary judgment against Hinckley
Allen. Plaintiff first argues that a debtor's lawyer can
be liable for conspiracy to violate the UFTA under
established New Jersey Supreme Court precedent. See
Pl.'s Am. Br. in Opp'n to Def.'s Mot. for Summ.
J. (“Pl.'s Opp'n”) 9-11, ECF No. 181.
Plaintiff points to this Court's “finding” in
its opinion addressing Hinckley Allen's motion to dismiss
as factual support from the record that Hinckley Allen
plausibly knew of HGC's obligation to Plaintiff at the
time of the Sunrise Settlement. See id. at 10-11.
Plaintiff next argues that it has proven that the Sunrise
Transfer was fraudulent because CNC had been dissolved for
five years at the time of the Transfer and because Celil
qualified as an “insider” under the UFTA. See
id. at 16. Moreover, Plaintiff argues that Hinckley
Allen's status as an escrow agent for the Transfer does
not immunize it from liability because the UFTA does not
protect bad-faith transferees. See id. at 18.
Finally, Plaintiff argues that it has also proven its civil
conspiracy claim because Hinckley Allen “had actual
knowledge of the illegality and unlawfulness of the transfers
it facilitated and effectuated . . . .” Id. at
Allen responds, submitting first that the facts it asserts in
its Statement of Uncontested Material Facts
(“Statement”) are undisputed pursuant to Local
Civil Rule 56.1 because Plaintiff failed to file a responsive
statement. See Reply Br. of Def. in Further Supp. of
Mot. for Summ. J. (“Def.'s Reply”) 3, ECF No.
183. It further argues that Plaintiff may not rely on the
Court's previous opinion addressing the motion to dismiss
or its allegations related to its dismissed RICO claims to
defeat summary judgment. See id. at 4-5. Finally, it
contends that Plaintiff's theory that the Sunrise
Settlement was a guise to cover Sunrise's actual debt to
HGC lacks economic sense and defies the contradictory
evidence in the record. See id. at 6-8.
Plaintiff's Motion to Strike the Jordan-Price
also moves to strike the Declaration of Kelley A.
Jordan-Price, an attorney at Hinckley Allen who represented
Cavusoglu and HGC in prior litigation against Plaintiff and
in the Sunrise Settlement negotiations. See
Pl.'s Opp'n at 20-21; Jordan-Price Decl. ¶¶
1-2, 6-8. Plaintiff argues that the facts asserted in the
Declaration constitute “(i) inadmissible hearsay and/or
(ii) lack foundation or are made without any personal
knowledge.” Pl.'s Opp'n at 20. Plaintiff points
to its Counter-Statement, where it argues that the Court
should strike paragraphs 7-11 of the Declaration because Ms.
Jordan-Price cannot testify as to Sunrise's view of the
legal dispute that led to the Settlement, the nature and
reason for Sunrise's payment and the allocations set
forth in the settlement agreement because these topics
constitute inadmissible hearsay. See Pl.'s
Counter-Statement ¶ 11. Plaintiff further contends that
Ms. Jordan-Price cannot testify about a CNC invoice because
it is inadmissible hearsay and Hinckley Allen should have
otherwise produced any such invoice during discovery.
Allen responds that Ms. Jordan-Price has personal knowledge
of her representation of Cavusoglu during the Sunrise
Settlement negotiations and Plaintiff's objections
thereto are meritless. See Def.'s Reply at 5-6.
Specifically, she has personal knowledge of the nature of the
dispute between Cavusoglu's entities and Sunrise,
including Sunrise's positions as communicated to her
during discussions, which Hinckley Allen is not offering for
the truth or merits of the underlying dispute. See
id. at 6. She also has personal knowledge of the subject
matter of the dispute, the documents exchanged between the
parties and the final terms of the Sunrise Settlement.