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Gary Kremen v. Michael Joseph Cohen

January 2, 2013


The opinion of the court was delivered by: Lucy H. Koh United States District Judge


Plaintiff Gary Kremen ("Plaintiff") filed this action on November 8, 2011, under California's Uniform Fraudulent Transfer Act ("UFTA"), Cal. Civ. Code §§ 3439.04, 3439.05, 20 3439.07, 3440, against Defendants Michael Joseph Cohen ("M. Cohen") and FNBPay Corporation 21 ("FNBPay"), a corporation incorporated under the laws of the State of Arizona (collectively 22 "Defendants"). See ECF No. 1 ("Compl."). Plaintiff alleges that Defendants are the transferees of 23 certain property, including money, fraudulently transferred to each of them by Stephen Michael 24 Cohen ("S. Cohen" or "Judgment Debtor"), an individual against whom Plaintiff has an 25 enforceable money judgment in the amount of $67,867,053.37 ("Renewed Judgment"). At a 26 hearing on July 19, 2012, counsel for Plaintiff acknowledged that Plaintiff had by that point 27 succeeded in collecting approximately $20 million. Tr. at 8:3-8. Now before the Court is 28 Defendant Michael Cohen ("M. Cohen")'s renewed motion for summary judgment.

The Court finds these matters appropriate for determination without oral argument and accordingly 2 VACATES the January 3, 2012 hearing on the motion for summary judgment, see Civ. L. R. 7-3 1(b), and denies at moot M. Cohen's motion to appear by telephone at that hearing. Having 4 considered the parties' submissions and the relevant law, and for the reasons discussed herein, the Court GRANTS M. Cohen's motion for summary judgment.*fn1


A. Factual Background

The facts of this case have previously been summarized in the Court's Order Denying Defendants' Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue; and 10 recounted here only to the extent necessary. Plaintiff is an internet entrepreneur who obtained a $65 million judgment (the "Judgment") in the United States District Court for the Northern District 13 of California, on April 3, 2001, against S. Cohen and S. Cohen's alter ego entities for fraudulently 14 converting the internet domain name See Compl. ¶ 16; see also Kremen v. Cohen, 15 337 F.3d 1024, 1026-27 (9th Cir. 2003) (describing the facts giving rise to the Judgment and 16 history between Kremen and S. Cohen relevant to this case); Kremen v. Jhuliana Aramis Cohen, 17 S. Cohen has resisted court orders and Kremen's attempts to exact payment on the Judgment. During the underlying litigation between Kremen and S. Cohen, S. Cohen failed to 20 comply with a preliminary injunction order requiring the repatriation of $25 million from offshore 21 accounts. See Pl.'s Request for Judicial Notice ("RJN") Ex. 15, ECF No. 158-7. S. Cohen fled to 22 Marshal pursuant to an arrest warrant issued in March 2001 for S. Cohen's refusal to comply with 24 various court orders. See RJN Ex. 4; RJN Ex. 6; Compl. at ¶ 18. In September 2005, Plaintiff 25 brought an enforcement application, and the United States District Court for the Northern District 26 of California found that seven individuals and twelve companies were acting in concert with S. 27

Denying Plaintiff's Motion for Preliminary Injunction, ECF No. 68, and will therefore be No. 05-cv-01319-JM (POR), 2007 WL 1875779 (S.D. Cal. June 27, 2007) (same). 18

Mexico, where, in October 2005, he was detained and deported into the custody of the U.S. 23 Cohen to evade enforcement of the Judgment and enjoined them from acting to interfere with 2 Plaintiff's rights thereunder. Pl.'s Opp'n to Def.'s First Mot. for Summ. J., ECF No. 76 ("Opp'n to 3 First MSJ"), at 4. On November 18, 2009, Plaintiff obtained a judgment and permanent injunction 4 against S. Cohen's step-daughter, Jhuliana Cohen; his ex-wife, Rosa Cohen; and his former 5 attorney, Gustavo Cortez, based on their participation in fraudulent transfers to assist S. Cohen's 6 attempts to conceal assets and avoid the Judgment. Id. at 4-5. On March 22, 2011, the United 7 States District Court for the Northern District of California renewed the Judgment against S. Cohen 8 in the amount of $67,867,053.36 ("Renewed Judgment"). Id. at 1-2.

Plaintiff's Renewed Judgment. Compl. at ¶ 21. Plaintiff further alleges that S. Cohen has used M. 14 M. Cohen's and/or FNBPay's name to transact business for the benefit of S. Cohen. Id. at ¶ 20. In 16 particular, Plaintiff asserts that deposits and withdrawals of funds into and out of a specific Wells 17

Fargo bank account (the "Wells Fargo Account"), opened by M. Cohen under the name FNBPay, 18 were the result of transfers made by, or at the direction of, S. Cohen. Id. 19

parte motion seeking a temporary restraining order ("TRO") freezing certain assets "to prevent the 22 dissipation of more than $109,000 that is currently being held at Wells Fargo Bank . . . under the 23 name FNBPay" ("Wells Fargo Account"). ECF No. 5 at 2. This account is alleged to be the 24 vehicle for the alleged fraudulent transfers from S. Cohen. For good cause shown, the Court 25 granted the TRO on December 7, 2011, granted Plaintiff's request for limited expedited discovery, 26 and issued an Order to Show Cause ("OSC") setting a briefing schedule and hearing date on 27

Plaintiff's motion for a preliminary injunction enjoining Defendants from disposing of funds held 28 in the Wells Fargo Account. See ECF No. 16. The Court also requested supplemental briefing on

Most recently, Plaintiff filed this action on November 8, 2011, seeking relief against M.

Cohen, who is S. Cohen's cousin, and against FNBPay, a corporation created by M. Cohen.

Plaintiff alleges that M. Cohen formed FNBPay to assist S. Cohen in funneling money through various websites with the intent to conceal S. Cohen's assets from Plaintiff and avoid payment of 13 Cohen to conduct business through FNBPay on S. Cohen's behalf, and to open bank accounts in 15

B. Procedural History

Plaintiff filed this action on November 8, 2011. On December 2, 2011, Plaintiff filed an ex whether this Court had personal jurisdiction over Defendants and whether venue in this district was 2 proper. Defendants answered the OSC on December 20, 2011, and both sides submitted 3 supplemental briefing on personal jurisdiction and venue. Defendants also filed a motion to 4 dismiss for lack of jurisdiction and improper venue, or, in the alternative, a motion to transfer to the 5

Defendants' motion to dismiss or, in the alternative, to transfer. See ECF No. 68. Upon 7 introduction of evidence that the Wells Fargo Account at issue had in fact been closed in August 8

District of Arizona pursuant to 28 U.S.C. § 1404. On January 7, 2012, the Court denied 6 2011 with a closing balance of $0.00, the Court denied Plaintiff's motion for a preliminary 9 injunction for failure to show a risk of irreparable harm in the absence of an injunction, and 10 likewise dissolved the previously issued TRO on January 7, 2011. See id.

Defendant M. Cohen filed a motion for summary judgment on February 6, 2012. See ECF No. 72.

On April 2, 2012, S. Cohen filed a motion to intervene. See ECF No. 93. On July 17, 2012, this 13 Rule of Civil Procedure 56(d). In denying the motion for summary judgment, the Court noted that 15 Plaintiff had not raised a genuine issue of material fact as to the existence of an actual transfer of 16 funds, as required by the UFTA. However, because discovery had not yet closed, Plaintiff was 17 entitled to complete discovery and attempt to oppose summary judgment on the basis of a fully 18 developed record. ECF No. 142. At a case management conference held on July 19, 2012, the 19

Plaintiff had sufficient opportunity to gather evidence to oppose summary judgment. See ECF No. 21 No. 156. Plaintiff filed an opposition on October 29, 2012, ECF No. 158, and M. Cohen ...

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