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Stafford v. Stanton

United States District Court, W.D. Louisiana, Shreveport Division

November 9, 2018





         Before the Court is a Rule 12(b)(3) Motion to Dismiss for Improper Venue (Record Document 30) filed by Defendant, Walter J. Stanton, III (“Stanton”). Plaintiff, Raymond Stafford (“Stafford”), opposes the motion. See Record Document 37. For the reasons assigned herein, Stanton's motion is hereby DENIED.


         The litigation herein stems from an investment opportunity turned sour. Stafford, a resident of Dublin, Ireland, was formerly friends with Stanton, a resident of Coral Gables, Florida. See Record Document 12 at ¶¶ 1, 2, and 11. Stafford alleges that for many years, and at times relevant to the claims herein, Stanton provided legal assistance to Defendant David deBerardinis (“deBerardinis”), a resident of Shreveport, Louisiana, and deBerardinis' company, Defendant Financial Resources, LLC (“FR”), a Louisiana limited liability company with its principal place of business in Shreveport, Louisiana. See id. at ¶¶ 5, 9. Stanton allegedly provided legal services to deBerardinis, FR, and FR's related business entities regarding fuel purchase contracts. See id. at ¶ 10. During the time period relevant to the litigation, it is also alleged that Stanton held an officers' position in a FR related entity. See id. at ¶ 9.

         Stafford contends that on or about February 16, 2016, Stanton contacted him to discuss an opportunity to make an investment that would yield a large return in a short period of time. See id. at ¶ 13. Stanton allegedly advised Stafford that FR had an opportunity to earn significant revenue by facilitating the sale of fuel from Alon USA to Freeport McMoRan, both large publicly traded companies. See id. Stanton allegedly proposed that Stafford make a “bridge loan” of up to $8, 000, 000.00 to FR with terms that would provide Stafford with a repayment of his initial investment plus 10% profit within 60 days. See id. at ¶ 17. Stafford alleges that Stanton assured him that deBerardinis and FR's financials were in excellent shape, and the investment involved virtually no risk. See id. at ¶ 13. Stafford asserts that Stanton, in an effort to encourage his investment, provided him with a brochure demonstrating the strong financial condition of both deBerardinis and FR. See id. at ¶ 15. Stafford contends that the brochure also listed Stanton as a corporate officer in one of deBerardinis' fuel trading entities. See id. at ¶ 15.

         Stafford claims that Stanton advised him that repayment of the loan would be made from an Alon USA account that held substantial funds for FR, which was designated as the “Alon FR Master Trading Account.” See id. at ¶ 16. Stafford also contends that Stanton advised him that FR would provide a personal guaranty of the investment from deBerardinis, and Alon USA would provide a corporate guaranty. See id. Stafford alleges that he decided to invest $2, 500, 000.00 in FR based upon the urging and representations of Stanton, the financial documentation provided to him by Stanton, and their fiduciary relationship. See id. at ¶ 19.

         Stanton allegedly drafted the legal documents necessary for Stafford's investment, including the promissory note with FR, which provided a repayment date of May 16, 2016. See id. at ¶ 20. Stanton also allegedly drafted a letter agreement for execution by Alon USA that confirmed the existence of the Alon FR Master Trading account, and balance thereof, and contained a promise to timely remit repayment from that account to Stafford. See id. at ¶ 18. Stanton also allegedly drafted deBerardinis' personal guaranty, Alon USA's corporate guaranty, and undertook the responsibility of getting deBerardinis to obtain the necessary signatures on the Alon USA guaranty and letter agreement. See id. at ¶ 20. Thereafter, Stanton allegedly forwarded the executed copies of the documents to Stafford's Louisiana counsel. See id. at ¶ 18 and 21.

         On March 17, 2016, Stafford initiated a wire transfer of $2, 500, 000.00 into FR's account to complete the investment. See id. at ¶ 21. When the due date for repayment of Stafford's $2, 500, 000.00 investment and $250, 000.00 profit arrived, no payment was made. See id. at ¶ 22. Stanton allegedly advised Stafford that there would be a short delay, but there was no cause for concern. See id. Stafford asserts that despite Stanton's reassurances, no portion of the $2, 750, 000.00 owed to him has ever been paid. See id. at ¶ 23.

         Stafford claims that he made demands for payment upon deBerardinis, FR, and Alon USA without success. See id. at ¶ 24. Alon USA allegedly responded to Stafford by stating that the corporate guaranty purportedly executed by Alon USA was a forgery, and Alon USA never agreed to guaranty payment of funds owed to him. See id. at ¶ 25. Stafford alleges that pleadings filed in related litigation in Texas demonstrate that the purported fuel trading agreements involving deBerardinis and his business entities were part of a scam, complete with fake Alon USA agreements, forged signatures, bogus checks, and fabricated trading confirmations. See id. at ¶ 27.[1]

         Stafford considered Stanton to be his fiduciary regarding the investment opportunity, and he trusted Stanton's opinion based on their relationship and Stanton's intimate knowledge of deBerardinis and FR's finances. See id. at ¶ 13. Stafford claims that Stanton was aware that he was relying on his representations as a fiduciary in deciding whether to make the investment. See id. at ¶ 14, 30. Stafford contends that if Stanton had exercised reasonable due diligence he would have known the true financial condition of deBerardinis and FR, the true status of the Alon FR Master Trading Account, the inauthenticity of the Alon USA letter agreement and guaranty, and FR's inability to repay the loan. See id. at ¶ 28. Stafford claims that Stanton is liable to him for negligent misrepresentation, arguing that Stanton was aware of his reliance on the representations regarding the financial status of deBerardinis and FR, and therefore, Stanton had a duty to supply him with correct information. See id. at ¶ 29. Likewise, Stafford asserts that Stanton's lack of due diligence regarding the investment also constitutes a breach of his fiduciary duty. See id. at ¶ 30. Stafford claims that but for Stanton's negligent misrepresentation and breach of fiduciary duty, he would never have made the investment in FR, which caused him damage. See id. at ¶¶ 30-31.

         Stafford also asserts direct claims against Stanton's professional liability insurers, National Union Fire Insurance Company (“National Union”) and Berkley Assurance Company (“Berkley”) under Louisiana's Direct Action Statute, La. Rev. Stat. 22:1269. See id. at ¶¶ 4-5, 32. Stafford claims that based on the allegations above, Stanton, National Union, Berkley, FR, and deBerardinis are each liable to him, in solido, for all amounts owed under the promissory note. See id. at ¶ 33.


         Stanton moves the Court to dismiss Stafford's claims against him pursuant to Rule 12(b)(3), arguing that the Western District of Louisiana is an improper venue. See Record Document 30. If a defendant objects to venue, the burden is on the plaintiff to establish that venue is proper in the judicial district in which the case has been brought. See Perez v. Pan Am Life Ins. Co., 70 F.3d 1268 at *2 (5th Cir. 1995).[2] As a general rule, venue must be proper as to each cause of action and each defendant. See Ricks v. Cadorath Aerospace Lafayette, LLC, No. 15-6686, 2017 WL 590293, at *9 (E.D. La. Feb. 14, 2017) (citing Tucker v. United States Dep't of Army, 42 F.3d 641, *2 (5th Cir. 1994)). When considering a Rule 12(b)(3) motion, the Court must accept all allegations in the complaint as true and resolve all conflicts in favor of the plaintiff. See Braspetro Oil Services Co. v. Modec (USA), Inc., 240 Fed.Appx. 612, 615 (5th Cir. 2007). The Court may “look at all evidence in the record beyond simply those facts alleged in the complaint and its proper attachments.” Ambraco Inc. v. ...

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