United States District Court, D. Utah, Central Division
BELLINGHAM, LLC, WESTERN FRONTIER ENTERPRISES, LLC, ASHBY ACRES LLC, for and in the name of INTERNATIONAL MONETARY SPECIALISTS LLC, Plaintiffs,
FIDELIS CAPITAL INVESTMENTS LIMITED, Defendant.
MEMORANDUM DECISION AND ORDER
A. KIMBALL United States District Judge.
matter is before the court on Defendant Fidelis Capital
Investments Limited's Motion to Dismiss Pursuant to Fed.
R. Civ. Pro. 12(b)(2), (3), (4), (5) & (6) and To Set
Aside Judgment As Void Pursuant to Fed. R. Civ. Pro. 60(b).
On May 10, 2017, the court held a hearing on the motion. At
the hearing, Plaintiffs were represented by Donald L. Dalton
and Defendant was represented by Steven M. Rogers. The court
took the motion under advisement. After carefully considering
the memoranda filed by the parties and the law and facts
relevant to the pending motion, the court issues the
following Memorandum Decision and Order.
are Utah limited liability companies who were majority and
controlling members of International Monetary Specialists,
LLC (“IMS”), a Delaware limited liability
company. The parties dispute where IMS's principal place
of business was at the times relevant to the present dispute.
Plaintiffs allege that IMS's principal place of business
was in Utah and Fidelis alleges that it was Delaware.
about July 11, 2013, IMS signed a Memorandum of Understanding
(“MOU”) with Fidelis. IMS was an expired Delaware
entity when the parties signed the MOU. Fidelis knew, through
contact with Joshua Trent, co-founder of IMS, that IMS was an
expired Delaware company that did not have sufficient funds
to revive itself in Delaware. Fidelis provided $2165.06 to
Joshua Trent to revive IMS as a Delaware entity. Fidelis
never registered the revived IMS to do business in Utah.
to the MOU, Fidelis acquired IMS with the responsibility of
securing its patent rights and establishing a $5 million
licensing structure with a ten percent interest in profits to
Plaintiffs. Plaintiffs allege that Fidelis' principal,
Max Day, told Plaintiffs that Fidelis had millions of dollars
behind it and that he had business ready and he would
Fidelis took control over IMS there was a large outstanding
bill for attorney fees to Greenburg Taurig for securing
intellectual property developed by IMS co-founders John
Golding and Joshua Trent. Fidelis contacted Greenburg Taurig
and negotiated a settlement of IMS' attorney fees bill.
Fidelis paid Greenburg Taurig $85, 000.00 for the negotiated
Plaintiffs claim that they became suspicious when Defendant
failed to pay for the prosecution of its patents. On April 3,
2014, patent counsel withdrew from representation with a
patent application pending. The patent was issued but
Plaintiff's claim that it was at their expense. At that
point, Plaintiffs allege that Defendant went virtually
silent. From time-to-time, Day would make an appearance with
some excuse for why action had not been taken. Shortly before
this action was filed, Defendant contacted Plaintiffs about
unwinding the transaction. However, Defendant owed money to
one of the Plaintiffs, which it was unwilling to release, and
nothing came of the proposal.
filed the present action on March 2, 2015, alleging a cause
of action for rescission for material breach and failure of
consideration. Plaintiffs' Complaint sought rescission of
the MOU, revocation of the First Amendment and Restatement of
the IMS Operating Agreement, and restoration of IMS to its
attempted service on Max Day at the Texas address Plaintiffs
had for him but the constable was told that Max Day no longer
lived at the residence and the person at the residence was a
renter. Fidelis claims that Plaintiffs had contact
information for multiple officers and directors of Fidelis,
such as Jayson Lopez who signed the MOU, but Plaintiffs did
not attempt to inform any of them of the pending lawsuit.
Defendant was a registered New Zealand limited company,
Plaintiffs also made efforts to serve Defendant in New
Zealand. Plaintiffs contacted the U.S. Department of State,
Bureau of Consular Affairs, International Judicial Assistance
and was told that New Zealand was not a party to the Hague
Convention. Plaintiffs were then directed to the U.S.
Department of Justice, Office of Foreign Litigation, which
advised Plaintiffs to use a New Zealand process server.
used WaiVista Limited, and its owner and server Raymon
Terence, to attempt service on Defendant at Defendant's
registered office and address for service. Keenan advised
Plaintiffs that the office was vacant and looked as though it
had been for some time. Keenan then attached the Summons and
Complaint to the front door and took a picture. Keenan also
signed a declaration stating that service of process was
“in accordance with New Zealand statute.” All of
this, including the photograph and the date and place of
service, appear in the Summons Returned Executed that
Plaintiffs filed with this court.
court entered Default Judgment against Defendant on February
1, 2016. In June 2016, one of the co-founders of IMS was
included on an email sent by Knight Nguyen Investments
(“KNI”), the successor in interest to Fidelis, in
which KNI was attempting to set up an exclusive master
agreement with another entity in the name of IMS. At the
time, Plaintiffs had no knowledge of KNI and had not
authorized the transfer of any rights from Fidelis to another
entity under the MOU. At that point, Plaintiffs assert that
Fidelis had no rights to give under the MOU because the MOU
had been rescinded as a result of the default judgment on
February 1, 2016. However, unbeknownst to Plaintiffs, KNI had
organized IMS as a Florida limited liability company.
Therefore, Plaintiffs retained counsel, who wrote a cease and
desist letter to KNI dated June 15, 2016. The cease and
desist letter made specific reference to the default judgment
entered in this action.
KNI received the cease and desist letter referencing a
federal court judgment, it was the first that Fidelis and KNI
had heard of a judgment. KNI contacted an attorney in Utah,
Steven Rogers. Rogers sent an email to the attorney who sent
the cease and desist letter at the email from which the cease
and desist letter had been sent and the one listed with the
Utah State Bar. Rogers also left several telephone messages
with the attorney at his office over the next ...