Vieira v. Korda

          OPINION AND ORDER (DOC. 6)

          JOHN M. CONROY UNITED STATES MAGISTRATE JUDGE

         On August 25, 2017, Plaintiff Felipe Accioly Vieira filed the present civil action in this Court, bringing seven counts against Defendants Anthony Korda, Esq., and the Korda Law Firm (the Firm). (Doc. 1 at 10-18, ¶¶ 66-111.) The gravamen of these claims is that Korda and his law firm failed to adequately represent and advise Vieira while he sought, under the EB-5 Immigrant Investor Program administered by U.S. Citizenship and Immigration Services (USCIS), to secure permanent residency in the United States by investing in Jay Peak in Jay, Vermont. (See generally Doc. 1.) Based on these purported failures, Vieira seeks total damages in excess of $2, 000, 000 and such other relief as this Court deems proper. (Id. at 18, ¶ 9.)

         Presently before the Court is a Motion to Dismiss Case for Lack of Jurisdiction jointly filed by Korda and the Firm pursuant to Fed.R.Civ.P. 12(b)(2). (Doc. 6.) In their Motion, Korda and the Firm argue that this Court lacks personal jurisdiction because Korda “practices federal immigration law, handled outside of Vermont, without reference to Vermont law” and because Korda's representation of Vieira was limited to preparing Vieira's EB-5 application. (Id. at 3.) Vieira opposes the Motion, asserting that all aspects of Vieira's representation involved Vermont and that Korda benefited from an ongoing business relationship with Jay Peak. (Doc. 17 at 1-2.)

         Concluding that Vieira's Complaint fails to plausibly allege that Korda and the Firm had sufficient contacts with Vermont, this Court lacks personal jurisdiction over Korda and the Firm. Rather than dismissing the action without prejudice, however, the Court concludes that the interests of justice warrant transfer of this case; thus, Defendants' Motion to Dismiss for Lack of Jurisdiction (Doc. 6) is DENIED and the Clerk of Court shall TRANSFER this case to the United States District Court for the Middle District of Florida.

         Factual Background

         The following background is drawn from the allegations in Vieira's Complaint (Doc. 1), the Motion to Dismiss Case for Lack of Jurisdiction jointly filed by Korda and the Firm (Doc. 6), the parties' responses to this Motion (Docs. 17, 23), and the documents and affidavits accompanying the parties' filings. (Docs. 6-1-6-3; Docs. 17-4-17-21); see Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001) (stating that personal jurisdiction may be established through the plaintiff's “own affidavits and supporting materials” (internal quotation marks omitted)). For the purposes of deciding a Rule 12(b)(2) motion on affidavits and accompanying documents, the Court construes the allegations in the light most favorable to Vieira and resolves all doubts in his favor. Id. (internal quotation marks omitted).

         I. Relevant Persons and Companies

         Plaintiff Vieira resides in Stowe, Vermont; prior to his conditional immigration to the United States, he was a resident of Brazil. (Doc. 1 at 1, ¶ 1; Doc. 17-12 at 4.)

         Defendant Korda is a resident of Naples, Florida, ^[1] and is licensed to practice law in California. (Doc. 1 at 1, ¶¶ 2, 3; Doc. 6-1 at 1, ¶ 2.) At all relevant times, Korda was the President of the Firm, ^[2] which has its principal place of business in Naples, Florida, and an office in Beverly Hills, California. (Doc. 1 at 1, ¶¶ 3, 4; Doc. 6-1 at 1, ¶ 1.) Korda and the Firm provide legal services related to federal immigration law, including the EB-5 Immigrant Investor Program, which is discussed in detail below. (Doc. 1 at 2, ¶¶ 11-12; Doc. 6-1 at 1, ¶ 3.) Neither Korda nor the Firm advertise or solicit work in Vermont. (Doc. 6-1 at 1, ¶ 4.)

         William Stenger is the former CEO and President of Jay Peak. (Doc. 1 at 3, ¶ 17.) In this capacity, Stenger oversaw a number of EB-5 immigrant investor programs at Jay Peak, (id.), including Jay Peak Hotel Suites Stateside, L.P. (the Jay Peak Project), the project that Vieira ultimately invested in as part of the EB-5 Immigrant Investor Program. (Id. at 3-4, ¶ 21.)

         II. EB-5 Immigrant Investor Program

         Under the EB-5 Immigrant Investor Program, a foreign entrepreneur who makes a capital investment in the United States can receive a permanent U.S. visa. (Id. at 2, ¶ 12.) To apply, an entrepreneur must first file a Form I-526, entitled “Immigrant Petition by Alien Entrepreneur, ” with USCIS. (Id. at 2-3, ¶ 13); 8 C.F.R. § 204.6(a). In the I-526 Petition, the entrepreneur must show, with supporting documentation, that the entrepreneur has either invested capital in or is in the process of investing capital in a new commercial enterprise in the United States that will create at least 10 full-time jobs for qualified workers. (Doc. 1 at 2-3, ¶¶ 12-14); 8 C.F.R. § 204.6(j). In most cases, the entrepreneur's investment is administered by a specific regional center, which is designated by USCIS. (Doc. 1 at 2, ¶ 12); 8 C.F.R. § 204.6(j), (m)(3). If USCIS approves the I-526 Petition, the entrepreneur and his dependent family members are eligible for conditional permanent residency in the United States. (Doc. 1 at 2-3, ¶ 13.)

         After two years, to gain permanent residency, the entrepreneur must submit a Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status. See 8 C.F.R. § 216.6; (see also Doc. 17-14.) If the foreign entrepreneur's investment satisfies the commercial enterprise and job-creation requirements, 8 C.F.R. § 216.6(c)(1)(i)-(iv), USCIS will grant the Form I-829 Petition and the immigrant investor is eligible to permanently live and work in the United States. Id. § 216.6(d)(1); (Doc. 1 at 3, ¶ 15.)

         III. Vieira's Investment in the Jay Peak Project and I-526 Petition

         In February 2012, after discussions with Stenger, Vieira preliminarily decided to invest in the Jay Peak Project as a means of securing his U.S. immigration through the EB-5 Program. (Id. ¶ 17.) To this end, Vieira asked Stenger to recommend attorneys familiar with the EB-5 process. (Id.) Rather than providing a list of attorneys, in a February 24, 2012 email, Stenger recommended Korda as a “very good [EB]-5 lawyer” who “knows Jay Peak . . . very well.” (Doc. 17-7; see also Doc. 1 at 3, ¶ 18.)

         On the same day-February 24, 2012-Korda emailed Vieira to offer his services as an “Immigration Attorney focusing on EB 5 cases” who has “filed numerous I-526 petitions for clients, many of whom . . . invested in Jay Peak projects.”^[3] (Doc. 17-8.) Four days later, on February 28, Korda followed up with Vieira, again noting that he had “worked with Jay Peak on many successful applications” and offering a discounted service to Vieira because Jay Peak was “kind enough to refer clients to [him.]” (Doc. 17-9.) Further, Korda stated that, if Vieira decided to invest in a project other than Jay Peak, he could “assist with due diligence” and provide “advice about projects . . . to be wary of.” (Id.) Finally, Korda noted that, “[g]iven the nature of the EB-5 practice, ” most of his clients were not located in Naples and this caused “no logistical difficulties” with filing and preparing documents. (Id.)

         Korda's entreaties persuaded Vieira and, on March 5, 2012, Vieira and Korda executed a document entitled “Fee Agreement for Legal Services” (the Agreement). (Doc. 1 at 3-4, ¶ 21; see generally Doc. 6-2.) At the time Korda and Vieira entered into the contract, Vieira was a resident of Brazil and Korda was a resident of Florida. (Doc. 6-1 at 1, ¶ 8; Doc. 17-12 at 4.)

         The parties' Agreement provided that “[a] Client who enters this Fee Agreement for Legal Services is certifying and does hereby certify . . . that he or she has reached a firm and final decision to invest in [the Jay Peak Project] independently of any representations made by . . . the Firm.” (Doc. 6-2 at 1.) Further, by signing the Agreement, Vieira authorized Korda and the Firm to communicate with Jay Peak to facilitate the preparation of the I-526 Petition. (Id.) The Agreement also defined the scope of Korda's services, limiting Korda's representation to the “preparation and filing of the I-526, Immigrant Petition by Alien Entrepreneur” and any initial collateral applications. (Doc. 6-2 at 3.) Beyond the preparation of the I-526 Petition, the contract specified that “[n]o other legal services” would be provided. (Id.) In particular, the contract indicated that Korda's services did not include “[m]otions to [r]e[]consider any denial of a petition or application” or “[a]dvice upon or the filing of an application to remove conditions of lawful permanent residence.” (Id.) Notably, the Agreement did not require Korda to prepare and file the second immigration form required for Vieira to gain permanent residency under the EB-5 program: a Form I-829, or Petition by Entrepreneur to Remove Conditions on Permanent Resident Status. (Id.); see also 8 C.F.R. § 216.6. Similarly, the Agreement did not require Korda to perform a due diligence inquiry on the Jay Peak Project, nor did the contract require Korda to make the actual investment in the Jay Peak Project on behalf of Vieira. Finally, the Agreement set a flat fee for Korda's preparation of the I-526 Petition, (id. at 4-5), and indicated that the contract would be “governed by the laws of the State of Florida, U.S.A.” (Id. at 6.)

         On March 9, 2012, as the initial payment for Korda's services, Vieira sent a cashier's check from the People's United Bank branch located in Stowe, Vermont to Korda in Florida. (Doc. 17-11; Doc. 17 at 7.) Although Vieira still resided in Brazil at this time, Vieira had specifically set up a bank account with People's United to make monetary transfers to the Jay Peak Project easier. (Doc. 17-10.)

         During the same approximate time period that Vieira engaged Korda, in late February and early March 2012, Vieira became concerned with the allocation of investor funds for the Jay Peak Project. (Doc. 1 at 4, ¶ 25.) In particular, on February 28, 2012, Rapid USA Visas-a third-party EB-5 consulting company-terminated its relationship with Jay Peak because “Rapid USA no longer [had] confidence in the accuracy of representations made by Jay Peak . . . or in the financial status of and disclosures made by the various limited partnerships.” (Doc. 17-20 at 2.) When Vieira confronted Stenger regarding Rapid USA's actions, Stenger purportedly “downplayed the problems raised by Rapid USA” and stated that the issues surrounding Rapid USA were merely a “business dispute.” (Doc. 1 at 4, ¶ 26.)

         Unsatisfied with Stenger's response, (id. ¶ 27), in early March 2012, Vieira sought advice from Korda regarding Rapid USA and his EB-5 investment.^[4] (Id. at 5, ¶ 31.) On March 1, 2012, Korda emailed Vieira indicating that the issues between Jay Peak and Rapid USA were recent and that Jay Peak was “in the process of reorganizing their investor liaison.” (Doc. 17-14 at 6.) Korda further reassured Vieira that he had “emailed and ask[ed] that someone contact[] you as soon as possible as you are anxious to start the process.” (Id.) On March 9, 2012, ^[5] Korda sent another email stating that he had “absolutely no information” about the disagreement between Rapid USA and Jay Peak but he speculated that it involved a “business fallout.” (Doc. 17-15.) Korda also wrote that he had “no inside knowledge and so [could not] allay [Vieira's] concerns, ” but he offered to work with any regional center project that Vieira chose. (Id.) Vieira now claims that Korda did, in fact, have specific knowledge regarding the issues between Rapid USA and Jay Peak. (Doc. 1 at 8, ¶¶ 51-54.)

         Despite Vieira's concerns, in roughly mid-March 2012, Jay Peak provided Vieira with an escrow agreement and offering documents to invest in the Jay Peak Project. (Doc. 1 at 6, ¶ 36.) Apparently, these offering documents included a “due diligence period, ” which was set to end on approximately June 2, 2012. (Id. ¶ 37.) Vieira alleges that Korda “completely failed” to assist with this due diligence process. (Id. ¶ 38.)

         On or about April 10, 2012, Korda finished preparing a draft I-526 Petition, which described Vieira's intention to invest in the Jay Peak Project and to emigrate from Brazil once his conditional visa was approved under the EB-5 immigrant investor program. (Doc. 17-12 at 2, 4.) This draft petition was not filed at that time.

         Instead, Vieira continued to seek additional financial information from Stenger regarding the investment of EB-5 funds. (Doc. 1 at 7, ¶ 41.) Rather than provide financial information, on May 21, 2012, a Jay Peak representative provided Vieira with a subscription agreement, an investor questionnaire, and instructions for wiring money to invest in the Jay Peak Project. (Doc. 1 at 6-7, ¶¶ 40-43.) Frustrated by a perceived lack of disclosure, Vieira instructed Korda to draft a letter aborting his investment in the Jay Peak Project. (Id. at 7, ¶ 44.) Rather than draft the requested letter, Korda purportedly defended Jay Peak and asked Vieira to meet with Stenger directly. (Id. ¶¶ 45-47.) Then, on approximately May 25, Stenger sent Vieira a number of operational reports involving the Jay Peak Project, although these reports did not contain the financial information sought by Vieira. (Id. at 7-8, ¶ 48.) It is unclear whether Vieira ever received the additional information he requested. In his Complaint, however, Vieira alleges that he believed “his opportunity to live the American [D]ream was about to disappear if he did not execute the [Jay Peak Project] subscription agreement.” (Id. at 8, ¶ 49.) As a result, he signed the Jay Peak Project subscription agreement on or about May 30, 2012. (Id. ¶ 50.)

         Subsequently, additional concerns arose. Specifically, on June 28, 2012, Korda forwarded an email from an attorney representing Jay Peak to Vieira, (Doc. 17-13); the email described recent requests from USCIS seeking additional independent evidence of the budget for the Jay Peak Project and the project's effect on job creation. (Doc. 17-13 at 2.) Given the requests by USCIS, Korda advised Vieira to delay filing the I-526 Petition until Jay Peak provided the evidence requested by USCIS. (Id. at 3.) Then, on July 12, 2012, Korda followed up with Stenger for an update because “[he had] a number of clients anxious to file.” (Doc. 17-21 at 2.)

         It is unclear whether Jay Peak ever provided the information requested by USCIS. It is clear, however, that around this time, Korda submitted Vieira's I-526 Petition to the USCIS office in California. (Doc. 6-1 at 2, ¶ 17; see also Doc. 6-3.) Specifically, an I-797 Notice of Action approving Vieira's I-526 Petition indicates that the California office received Vieira's I-526 Petition on August 23, 2012. (Doc. 6-3.) Along with approving Vieira's I-526 Petition as of December 11, 2012, the I-797 Notice also transferred Vieira's approved immigrant visa petition to the Department of State National Visa Center in Portsmouth, New Hampshire, for further processing. (Id.).

         After Vieira's I-526 Petition was approved, Korda's representation of Vieira ended and Vieira did not retain Korda for any additional work. (Doc. 6-1 at 3, ¶¶ 20-21.) Vieira and his family were granted conditional lawful permanent resident status on September 24, 2013, (Doc. 17-14 at 3), and they then emigrated from Brazil to Stowe, Vermont. (Doc. 6-1 at 3, ¶ 19; Doc. 1 at 1, ¶ 1.)

         In April 2016, the United States Securities and Exchange Commission filed a securities fraud lawsuit against the Jay Peak developers, including Stenger, for misappropriating EB-5 investor funds. (Doc. 1 at 9, ¶ 57.)

         Subsequently, on November 3, 2017, USCIS sent Vieira a Notice of Intent to Deny his application for permanent residency status. (See Doc. 17-14 at 2.) In evaluating Vieira's I-829 Petition to Remove Conditions, which was filed on September 16, 2015, the USCIS evaluator concluded that the evidence Vieira submitted did not demonstrate that the Jay Peak Project would create enough jobs to satisfy the job creation requirement of the EB-5 program. (Id. at 5.) As a result, USCIS afforded Vieira an additional 30 days to submit evidence demonstrating his eligibility to have the conditions on his permanent residency status removed. (Id.) The record does not indicate whether Vieira complied with this request; however, Vieira asserts that he is now facing deportation. (Doc. 17 at 15.)

         Procedural Background

         On August 25, 2017, Vieira filed the present lawsuit in this Court. (Doc. 1.) In his Complaint, in addition to the facts set forth above, he brings seven causes of action against Korda and the Firm: in Count I, Vieira claims that Korda and the Firm committed legal malpractice by “failing to abide by Mr. Vieira's lawful instructions and requests, ” (Doc. 1 at 10, ¶ 66); in Count II, Vieira alleges that Korda and the Firm breached the Agreement by inadequately providing the bargained-for services, (id. at 11, ¶¶ 69-74); in Count III, Vieira claims that Korda and the Firm breached the duty of good faith and fair dealing by neglecting to satisfactorily represent Vieira under the Agreement's terms, (id. at 11-12, ¶¶ 75-80); in Count IV, Vieira asserts that Korda and the Firm were unjustly enriched by receiving money for legal services that were not performed, (id. at 12-13, ¶¶ 81-84); in Count V, Vieira claims that Korda and the Firm violated federal securities law, (id. at 13-15, ¶¶ 85-97); in Count VI, Vieira argues that Korda and the Korda Law Firm violated Vermont's Consumer Fraud Act, 9 V.S.A. §§ 2451-2466b, by making false representations that were likely to mislead Vieira, (id. at 15-16, ¶¶ 98-104); and in Count VII, Vieira asserts that Korda and ...