INTERPLEADER COMPLAINT THE PARTIES

Transcription

1 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 1 of 9 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA SAMUEL T. FREEMAN & CO. V. Plaintiff, No. PETER HIAM, HELEN HIAM, TING WANG, and MR. LIU Defendants. INTERPLEADER COMPLAINT Plaintiff, Samuel T. Freeman & Co. ("Freeman's"), brings this Complaint in the Nature of Interpleader against Defendants, Peter Hiam, Helen Hiam (Peter and Helen together the "Sellers"), Ting Wang, and Mr. Liu (Wang and Liu, together the "Buyers"). In support thereof, Freeman's avers as follows: THE PARTIES 1. Plaintiff, Freeman's is a Delaware corporation. Its principal place of business is in Philadelphia, Pennsylvania. 2. Defendants, Peter Hiam and Helen Hiam are adult individuals who reside at 20 Craigie Street, Cambridge, MA The Hiams are citizens of Massachusetts. 3. Defendant, Ting Wang is an adult individual who resides at 100 Xiang Yun Road, Kemaozhangxing East 2701, Gonxing Qum Wingbo, China. Mr. Wang is a citizen of China. 4. Defendant, Mr. Liu is an adult individual who resides in China. Mr. Liu is a citizen of China.

2 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 2 of 9 JURISDICTION AND VENUE 5. This Court has subject matter jurisdiction of this action pursuant to 28 U.S.C. 1332, because the parties are citizens of different states, and because the amount in controversy exceeds $75,000, exclusive of interest and costs. 6. This Court also has subject matter jurisdiction of this action pursuant to 28 U.S.C. 1335, statutory interpleader, because Freeman's has possession of money and property with a value in excess of $500, two or more adverse claimants of diverse citizenship are claiming and/or may claim to be entitled to such money and/or property, and Freeman's has deposited the money at issue into the registry of the Court and is filing a motion contemporaneous with this Complaint so that the Court may deem the proper manner in which to deposit the remainder of the property, or a bond in lieu of the remainder of the property, into the registry of the Court. 7. This Court has personal jurisdiction over all parties to this action under the Pennsylvania Long Arm Statute, 42 Pa. C.S.A Venue is proper in the Eastern District of Pennsylvania pursuant to 28 U.S.C. 1391(a)(2), because a substantial part of the events giving rise to Freeman's claims occurred in this district and a substantial part of the property that is subject to this action is currently situated in this district. 9. The Buyers and Sellers also agreed to be subject to personal jurisdiction in Pennsylvania and that venue is proper in the Eastern District of Pennsylvania in the event a dispute arose regarding the transaction underlying this matter. The Terms and Conditions of Sale to which all parties agreed states that "[Sellers] and Buyer[s] agree to the exclusive jurisdiction of the Philadelphia, Pennsylvania Court of Common Pleas and the United States District Court for the Eastern District of Pennsylvania." 2

3 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 3 of 9 FACTUAL BACKGROUND 10. Freeman's is America's oldest auction house. It is located at 1808 Chestnut Street in Philadelphia, Pennsylvania. It conducts over 30 auctions a year in several categories of art and collectibles including: American Furniture, Decorative & Folk Art, English & Continental Furniture & Decorative Arts, Asian Arts, Fine American & European Paintings, Modern and Contemporary Art, Rare Books, Fine Prints, Oriental Rugs, Fine Jewelry & Silver, and 20th / 21st Century Design. 11. In early February 2011, the Sellers agreed to consign a large Ming-style blue and white Chinese vase dating from 1736 to 1795 (the "Vase") to Freeman's to auction on March 19, A photograph and description of the Vase from the Freeman's catalogue is attached hereto as Exhibit The Sellers and Freeman's entered into a written Consignment Agreement and a Contract Schedule. The Consignment Agreement incorporated certain Terms and Conditions of Sale. A copy of the Consignment Agreement is attached hereto as Exhibit 2; a copy of the Contract Schedule is attached hereto as Exhibit 3; and a copy of the Conditions of Sale is attached hereto as Exhibit Pursuant to the Consignment Agreement, Contract Schedule, and Terms and Conditions of Sale, the Sellers and Freeman's agreed to a reserve price, a commission that Freeman's would receive from the Seller's on the sale, and that Freeman's would be entitled to charge a buyer's premium to the purchaser of the Vase. 14. The Terms and Conditions applicable to the sale provided that the purchaser of the Vase was required to pay for it within ten days of its sale. If not, then the purchaser would be required to pay late fees, storage fees, and handling fees, and/or that Freeman's could cancel the 3

4 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 4 of 9 sale, and, in the event of a cancellation, that Freeman's could either resell the Vase, and/or return the Vase to the Sellers, retaining as liquidated damages all payments made by the buyer. 15. On March 19, 2011, Freeman's held an auction for Fine and Decorative Asian Arts in Philadelphia. The Vase was included in the auction. The Terms and Conditions of Sale for items at the auction were included in the auction catalog. 16. Defendant Ting Wang was present at the auction and placed the winning bid on the Vase at $1.2 million. He identified himself as the actual buyer of the Vase. The terms of sale required the purchaser to pay a buyer's premium of $185,500 in addition to the purchase price, making the total purchase price $1,385, Mr. Wang did not pay for the Vase by March 29, 2011, ten days after the auction, as required by the Terms and Conditions of Sale. 18. Instead, Mr. Wang made two payments in May and July of On May 16, 2011 he paid $100,000, of which $96,000 was remitted to the Hiams on June 1, 2011, and on July 14, 2011 he paid $300,000, of which $226,300 was remitted to the Hiams on July 18, The Sellers discussed these payments with representatives of Freeman's, knew that Freeman's had retained portions of each payment, and accepted them as partial payments. They were aware that Freeman's was attempting to secure payment in full, and approved of those efforts. 19. Thereafter, Freeman's made continued efforts to collect the remaining balance due on the Vase from Mr. Wang. In November 2011, Mr. Wang agreed to make three installment payments to Freeman's. The first installment payment, in the amount of $350,000, was to be immediately; the second installment payment, also in the amount of $350,000, was to be made on or before December 23, 2011; and the third installment payment, in the amount of $285,000, was to be made on or before January 20,

5 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 5 of Mr. Wang made the first installment payment in the amount of $350,000 on December 19, He did not, however, make the next two installment payments. 21. In January 2012, Mr. Wang informed Freeman's that he was not the actual buyer of the Vase, but that he was acting as the agent of Mr. Liu, a citizen of China who resides in China, and that Mr. Liu was the actual buyer. Although the buyer or buyers, whether one or both of Mr. Wang and Mr. Liu, were in default of the obligation to make full payment for the Vase, Mr. Wang informed Freeman's that Mr. Liu intended to visit Philadelphia personally in March 2012, pay the balance due on the Vase, and thereby complete the purchase. 22. Despite that, however, because the Buyers had been continuously in default of their obligation to pay in full for the Vase, and in accordance with the wishes of the Sellers that the sale be cancelled, Freeman's cancelled the sale. Freeman's advised the Buyers of that on February 1, Since then and at present, Freeman's has remained in possession of the Vase and $427,700 of the $750,000 paid to Freeman's by the Buyers towards the purchase price (the December 2011 $350,000 payment, and $77,700 of the $400,000 paid by the first two payments); and the Sellers have remained in possession of $322,300 paid by the Buyers that was advanced to them by Freeman's from the $400,000 first two payments, when both Freeman's and the Sellers believed that the Buyers would pay in full and that the sale would not be cancelled. 24. Since then and at present, the Buyers' intentions regarding the sale have not been made clear. Freeman's has attempted to communicate with Mr. Wang to learn Mr. Liu's intentions, but Mr. Wang has stated that he does not know if Mr. Liu intends to appear in Philadelphia and attempt to complete the purchase. Despite Freeman's having told the Buyers on February 1 that the sale was cancelled, no one purporting to represent the Buyers has 5

6 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 6 of 9 communicated with Freeman's to acknowledge the cancellation notice, or to state the Buyers' position regarding the sale or the disposition of the $750,000 paid by the Buyers towards the sale price. Freeman's does not know whether Mr. Liu or Mr. Wang will appear in Philadelphia in March 2012 to either tender the amount due on the Vase to complete the sale, or to demand the return of some or all of the $750,000 paid toward the purchase of the Vase. Freeman's believes that in either event, the Buyers are liable to compensate Freeman's and/or the Hiams for losses caused by Buyers' default. 25. The Sellers, however, have made demands. On February 21, 2012 counsel for the Sellers wrote to Freeman's. In a lengthy letter asserting that Freeman's had engaged in unfair and deceptive trade practices proscribed by the Massachusetts Consumer Protection Statute, M.G.L. c. 93A, 2 and 9, their counsel wrote to Freeman's, and demanded that: a. Freeman's cancel the sale; b. Freeman's send the Vase to the Sellers; c. All funds paid by the Buyers towards the purchase price still held by Freeman's, $427,700, be sent to them, and that they would retain those funds, together with the $322,300 that they had already received; and d. Freeman's pay the Sellers an additional unspecified amount to compensate the Sellers for: i. alleged loss of the time value of money, ii. anticipated fees that the Sellers would incur in litigation with Buyers over their apparent plan to retain the $750,000, iii. alleged loss of liquidated damages to which the Sellers are entitled, in addition to actual damages, which actual damages they have not quantified or described, 6

7 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 7 of 9 iv. alleged loss for the alleged delay in cancellation of the sale that would not be fully offset by the $750,000 they intend to keep, and v. attorneys' fees and expenses in pursuing claims against Freeman's. A copy of February 21, 2012 letter from the Sellers counsel is attached hereto as Exhibit In their letter, the Sellers expressly acknowledged that the Buyers may have a "restitutionary claim" to some portion of the $750,000 already paid, see Ex. 5 at p. 21, and suggested that Sellers may be entitled to only $240,000 in liquidated damages.nevertheless, the Sellers demanded that they are entitled to get back the Vase, and hold all $750,000 paid by the Buyers, including the $427,700 currently in Freeman's possession, and still that they want more. 27. It appears, in short that Sellers view the cancelled sale as an opportunity to reap a bonanza; to get back the vase, keep over half the total purchase price, the $750,000 paid to date towards the aborted sale and then still claim more. 28. As for Freeman's, it believes that the sale has been cancelled, and that the Vase should be returned to the Sellers. Freeman's does not, however, believe that the Sellers should both receive the Vase, be permitted to keep the amounts paid to them for the Vase, and also receive the amount still held by Freeman's. Indeed, while the Buyers' intent is unclear at the moment, Freeman's believes that if it complies with the Seller's demand to deliver all the funds to the Sellers that the Buyers would then contend that by the Sellers' demanding and receiving over half the sale price, the Sellers had ratified the sale and that Freeman's had violated a duty to the Buyers by delivering the Vase to the Sellers, thereby exposing Freeman's to a claim by the Buyers. Moreover, it is possible that the Buyers will contend that they are entitled to possession of the Vase even without delivery of the additional funds to Seller, or that if the Vase is returned to the Sellers while they still hold the $322,300, and then the Sellers are required to return all or 7

8 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 8 of 9 a portion of that $322,300 to the Sellers, they may not be financially able to do so and Freeman's may be exposed to a claim by the Buyers for having delivered the Vase to the Sellers without securing the return of all or a portion of the $322,300 already paid to the Sellers. 29. Further, Freeman's believes, it has rights in the proceeds it is still holding. If the Sellers are entitled to the Vase, then Freeman's is entitled to at least some compensation and/or reimbursement of expenses from the $750,000 paid by the Buyers. If, on the other hand, the Buyers do contend that the sale has been ratified by Sellers, and are successful in making that claim, then the sale will have been consummated after all, and Freeman's would be entitled to a buyer's premium, a commission, late fees, storage fees and handling fees. COUNT I (Action in the Nature of Interpleader) 30. Freeman's incorporates paragraphs 1 29 as if set forth in full. 31. Freeman's currently has possession of the Vase and $427,700 paid to it by the Buyers. The Sellers currently have possession of $322,300 paid by the Buyers. 32. The Sellers claim that they are entitled the Vase and the entire $750,000 sum. 33. Freeman's anticipates that the Buyers will claim that they are entitled to the Vase, or the return of some or all of the $750,000. above. 34. Freeman's contends that it has rights in the amounts it is holding, as set forth 35. Freeman's claim is superior to the right to any of the claims of the defendants 36. The claims and potential claims asserted and/or that may be asserted by the defendants are adverse to each other and to the property described above. 8

9 Case 2:12-cv RB Document 1 Filed 03/19/12 Page 9 of Plaintiff could not satisfy the defendants' claims without incurring double or multiple liabilities, so that equity should permit the plaintiff to interplead the Vase and the $427,700 in its possession, and order the Sellers to interplead the $322,300 in their possession, and have this court resolve the true ownership and distribution of the property described above. WHEREFORE, Plaintiff respectfully requests this Court to enter judgment in its favor and against the defendants, ordering that: A. Plaintiff is permitted to interplead the Vase and the $427,000 and have the court resolve all competing claims to that property; B. Peter Hiam and Helen Hiam are required to interplead the $322,300 and have the court resolve all competing claims to that property; C. Peter Hiam, Helen Hiam, Ting Wang and Mr. Liu are enjoined from commencing or pursuing any other action in any other court to pursue a claim for the stake or property described in the preceding two paragraphs; D. Plaintiff is awarded its share of the stake described in this complaint; and E. Granting such other relief as is appropriate under all of the circumstances. Dated: March 19, 2012 lan P. Stuart A. Weiss COZEN O'CONNOR 1900 Market Street Philadelphia, PA (tel.) (fax) Attorneys for Plaintiff Samuel T. Freeman & Co. 9