Damian v. Yahia Meftah Sole Prop.
- Joseph Spero
- 3:22-cv-02573
- U.S. District Court · Northern District of California
- 25
In Damian v. Yahia Meftah Sole Prop., Judge Spero ordered Damian to explain why defendants’ dismissal motion should not become summary judgment and be granted.
Melanie E. Damian and the defendants, Yahia Meftah and Zak Meftah. The order did not finally resolve the fraudulent-transfer claim; it required Damian to respond before the court decided whether to convert and grant the defendants’ motion.
What happened
In Damian v. Yahia Meftah, et al., Melanie E. Damian, acting as receiver for All In Publishing, sued Yahia Meftah and Zak Meftah. She seeks $1,442,274.93 based on alleged transfers of profits from an illegal binary-options marketing scheme and brings one Florida fraudulent-transfer claim.
The defendants asked the court to dismiss the claim as filed too late. They argued the one-year period began when Damian became receiver on October 5, 2018. Damian argued the period began when she or her accountants discovered the transfers, which she said occurred no earlier than January 21, 2019, or possibly November 13, 2018.
Judge Spero did not enter summary judgment. Instead, he ordered Damian to show why the dismissal motion should not be converted into a summary-judgment motion and granted, concluding that the available evidence appeared to show the claim was untimely. The parties were given deadlines to respond.
The detailed version
- Damian v. Yahia Meftah Sole Prop. · No. 3:22-cv-02573
- Joseph Spero
- Dec. 21, 2022
Background
Melanie E. Damian, acting as receiver for All In Publishing, LLC, seeks to recover $1,442,274.93 from Yahia Meftah, doing business as Yahia Meftah Sole Prop. (YMSP), and Zak Meftah. The complaint alleges that All In Publishing earned profits through an illegal binary-options marketing scheme and that, between February 8 and December 31, 2013, thirteen transfers totaling $1,442,274.93 were made to YMSP and then transferred to Zak Meftah. Damian asserts one claim for actual fraudulent transfer under Florida Statutes section 726.105(1)(a).
Damian became receiver for All In Publishing on October 5,
- She alleges that she began collecting financial records immediately and that forensic accountants identified the transfers on or around January 21,
- She sent a demand letter to Yahia in June
- The parties entered a tolling agreement on November 8, 2019, and Damian filed the original complaint on December 23, 2019.
Defendants’ Motion
The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the fraudulent-transfer claim was barred by Florida Statutes section 726.110(1). That statute requires an action to be filed within four years after the transfer or, if later, within one year after the transfer was or could reasonably have been discovered by the claimant.
Because the last alleged transfer occurred on December 31, 2013, the court stated that the claim could be timely only under the statute’s one-year savings period. The defendants argued that the period began when Damian was appointed receiver, giving her until October 5, 2019 to sue. Damian argued that the period began when the transfer was actually discovered or could reasonably have been discovered, and that her December 2019 filing was preserved by the tolling agreement.
Evidence and Analysis
The court determined that the statute focuses on discovery of the transfer itself, not discovery of the transfer’s allegedly fraudulent character. The court also explained that Rule 12(b)(6) generally limits review to the complaint and certain materials subject to judicial notice. Because the supplemental evidence went beyond those materials, the court considered whether the motion should be converted under Rule 12(d) into a motion for summary judgment under Rule 56.
The supplemental evidence indicated that the Commodity Futures Trading Commission uploaded relevant bank records to an FTP server accessible to Damian’s attorneys and accountants on October 25, 2018. An accountant later identified the transfers to YMSP on November 13, 2018. The court found that the evidence raised questions about whether the records were immediately available from All In Publishing or its bank, but concluded that, once the relevant records were uploaded and available, Damian could reasonably have discovered the transfers.
Based on that analysis, the court stated that Damian could reasonably have discovered the transfers on October 25, 2018. If so, the one-year period expired before the November 2019 tolling agreement, leaving nothing timely to toll. The court therefore stated that the claim appeared barred by the statute of repose—a deadline that generally cannot be extended beyond the statute’s express terms.
Disposition
Judge Joseph Spero declined to enter summary judgment at that time. He ordered Damian to show cause why the defendants’ motion to dismiss should not be treated as a motion for summary judgment and granted in that converted form. Damian’s response was due January 13, 2023; the defendants’ response was due January 20, 2023; and Damian could file a final brief by January 27, 2023, but only if the defendants submitted additional evidence. The opinion does not state that the motion was ultimately converted, granted, or denied.
Read the full 25-page opinion on CourtListener, the free public archive maintained by the Free Law Project.