8:15-cv-00317-LES-TDT Doc # 81 Filed: 11/13/15 Page 1 of 11 - Page ID # 497

UNITED STATES DISTRICT COURT

DISTRICT OF NEBRASKA

COR CLEARING, LLC, a Delaware limited

liability company,

)
)
)
Plaintiff,
)
)
v.
)
)
CALISSIO RESOURCES GROUP, INC., a
)
Nevada corporation; ADAM CARTER, an
)
individual; SIGNATURE STOCK TRANSFER, )
INC., a Texas corporation; and DOES 1-50.
)
)
Defendants.
)
)

Case No. 8:15-cv-00317-LES-FG3

BRIEF IN OPPOSITION TO DEFENDANT
SIGNATURE STOCK TRANSFER, INC.S
MOTION TO DISMISS

In its comprehensive, 75-paragraph Complaint, Plaintiff COR Clearing, LLC (COR

Clearing) details the fraudulent dividend distribution scheme perpetrated by all three
Defendants in this action: Calissio Resources Group, Inc. (Calissio), Calissios president,
Adam Carter (Carter), and Calissios transfer agent, Signature Stock Transfer, Inc.
(Signature). The Complaint sets forth the precise nature of this fraud and each partys role in
it, as well as the way in which each Defendant, including Signature, purposefully availed itself of
this forum. Accordingly, the Court should deny Signatures motion to dismiss in its entirety
because COR Clearing has (1) alleged plausible and legally cognizable claims for declaratory
judgment, unjust enrichment, and fraud against Signature, and (2) demonstrated that Signature is
subject to personal jurisdiction in Nebraska.
Moreover, Signatures half-baked motion provides no basis for this Court to dismiss the
Complaint. Indeed, Signature focuses on only five of the 75 paragraphs in the Complaint to
support its baseless assertions that COR Clearing has failed to state a claim under Rules 12(b)(6)

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and 9(b), and has failed to sufficiently allege personal jurisdiction under Rule 12(b)(2). See Mot.
at 4. What is more, Signatures motion is completely devoid of any factual or legal support. See
id. at 4-5. Thus, Signature has fallen far short of meeting its burden at the motion to dismiss
stage, and the motion to dismiss should be denied in its entirety.
I.

THE COMPLAINT STATES CLAIMS FOR DECLARATORY JUDGMENT AND

UNJUST ENRICHMENT UPON WHICH RELIEF CAN BE GRANTED
Signature argues that COR Clearings First and Second Claims for Relief (declaratory

judgment and unjust enrichment, respectively) should be dismissed for failure to state a claim.
See Mot. at 5. As discussed below, however, the Complaint more than adequately alleges these
claims against Signature under Rule 8 of the Federal Rules of Civil Procedure, which even
Signature admits is a generous pleading standard. See Mot. at 2.
To survive a motion to dismiss under Rule 12(b)(6), a plaintiff merely needs to state a
claim to relief that is plausible on its face. Northstar Indus., Inc. v. Merrill Lynch & Co., 576
F.3d 827, 831-32 (8th Cir. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
It is axiomatic that in evaluating a motion to dismiss, [t]he complaint is construed most
favorably to the nonmoving party. Id. at 832 (citing Casino Res. Corp. v. Harrahs Entmt,
Inc., 243 F.3d 435, 437 (8th Cir. 2001)). Here, when construed in the light most favorable to
COR Clearing, the Complaint undoubtedly meets Rule 8s generous pleading standard.
Specifically, the Complaint alleges that Signature and the other Defendants engaged in a
calculated scheme to defraud the marketplace and the clearing system in order to obtain
millions of dollars from unsuspecting market participants by exploiting a weakness in the
dividend payment system of the third-party Depository Trust Clearing Corporation (DTCC).
Compl. 1. The Complaint further alleges that Defendants have defrauded COR Clearing and
its customers by surreptitiously issuing hundreds of millions of shares of Calissio stock after

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declaring a dividend on all common shares outstanding prior to the issuance, then repurchasing
hundreds of millions of these new shares . . . and relying on DTCCs dividend payment system to
fail to distinguish between shares entitled to dividends and those not so entitled. Id.
Defendants then capitalized on this circumstance when DTCC thereby paid to Calissio and
purchasing shareholders dividends with proceeds taken from the accounts of COR Clearing
and other market participants. Id.
With regard to Signature, in particular, the Complaint alleges that Calissio and
[Signature] converted Calissios debt into even more shares, which totaled approximately four
times the number of shares outstanding as of the June 30, 2015 record date. Id. 20.
Moreover, Signature, Calissio, and Carter conspired to keep this issuance silent. Id. 21.
Signature, Calissio, and Carter were also aware of the fact that DTCC was collecting dividends
for it on non-dividend eligible shares that Calissio and its affiliates had repurchased, but
intended to defraud the sellers, the clearing system, and indeed the marketplace by failing to
provide this information to DTCC or the sellers of those shares. Id. 31. Signature and the
other Defendants also benefited from this scheme by permitting Calissio and its affiliates to
purchase shares in Calissios buyback program for substantially less than the value of the
dividend payable on each share. Id. 32. Therefore, Signature and the other Defendants
caused the wrongful charging of Nobilis (through COR Clearing) of a dividend of over $3.3
million to which it was not entitled, and caused this same harm as to Beaufort in the amount of
nearly $700,000. Id. 49.
Based on these allegations, which are assumed to be true and construed in the light most
favorable to COR Clearing, the Complaint more than adequately states claims for declaratory
judgment and unjust enrichment against Signature. In particular, COR Clearings declaratory

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judgment claim seeks a declaration that Signature and the other Defendants are not entitled to
over $4 million in dividends for the purchase of the shares from Nobilis [and Beaufort], and
therefore the $4 million debits were wrongfully made against COR Clearings account. Id.
52. Likewise, COR Clearings unjust enrichment claim seeks restitution from Signature and
the other Defendants, since they received and accepted the benefit of the shares from Nobilis
and Beaufort, and some or all of the over $4 million from COR Clearing. Id. 56. COR
Clearing also seeks injunctive relief precluding Defendants from disposing of the [funds]. Id.
52, 60.
In light of the Complaints detailed allegations regarding Signatures participation and
role in the fraudulent dividend distribution scheme, Signatures arguments to the contraryall of
which lack any factual or legal supportshould be rejected.
First, Signature contends that the Complaint fails to allege any actions by [Signature]
that actually contributed to the error/glitch. Mot. at 4. However, as discussed above, the
Complaint alleges (among other things) that Calissio and [Signature] converted Calissios debt
into even more shares, which totaled approximately four times the number of shares outstanding
as of the June 30, 2015 record date, and conspired to keep this issuance silent in order to
exploit a weakness in DTCCs dividend payment system. Compl. 1, 20-21. Moreover,
Signatures suggestion that DTCC should have been named a defendant lacks merit. Mot. at 2,
4. Although the Complaint alleges weaknesses in DTCCs system, the Complaint further
describes how Signature and the other Defendants took advantage of those weaknesses to collect
dividends they were not entitled to receive. See Compl. 1, 31. In other words, the alleged
weakness in DTCCs system simply provides background for COR Clearings claims against
Signature and the other Defendants.

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Second, Signature asserts that [t]here are no allegations of [Signature] handling any
money let alone $700,000. Mot. at 4; see also Mot. at 5 (Plaintiffs Second Claim for Relief
. . . asserts unjust enrichment when [Signature] received no funds and none alleged in the
complaint.). To the contrary, the Complaint specifically alleges that Signature and the other
Defendants received and accepted the benefit of the shares from Nobilis and Beaufort, and
some or all of the over $4 million from COR Clearing. Compl. 56.
Third, Signature argues that paragraph 20 of the Complaint throws [Signature] in with
active participants Calissio and Carter (DTCC) with no facts alleging any actual wrongdoing by
[Signature]. Mot. at 4; see also Mot. at 5 (Plaintiffs First Claim for Relief simply lumps
[Signature] with the other defendants and makes no specific allegations of wrong doing by
[Signature].). As an initial matter, the Complaint alleges that Signature and the other
Defendants conspired to carry out the fraudulent dividend distribution scheme, and thus many of
the allegations in the Complaint apply to all three Defendants. See, e.g., id. 21. Moreover, in
any event, the Complaint includes numerous specific factual allegations concerning Signatures
participation and role in the fraudulent scheme. See, e.g., Compl. 13, 14, 20, 21, 31, 32, 49.
Accordingly, Signatures motion to dismiss COR Clearings First and Second Claims for
Relief should be denied. The allegations of the Complaint, which are presumed to be true and
construed in the light most favorable to COR Clearing, are more than sufficient to state these
claims under Rule 8s generous pleading standard.
II.

THE COMPLAINT STATES A CLAIM FOR FRAUD UNDER RULE 9(B)

For the same reasons, Signatures unfounded assertion that COR Clearings Third Claim

for Relief (fraud) has absolutely no compliance with Rule 9(b) should be denied. Rather, as
discussed below, the Complaint expressly alleges the who, what, where, when, and how of the

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alleged fraud. See Mayer v. Countrywide Home Loans, 647 F.3d 789, 792 (8th Cir. 2011)
(citation omitted).
The Complaint satisfies the who requirement by alleging that Signature was one of the
parties that actively perpetrated the fraudulent scheme in its role as Calissios transfer agent.
Compl. 70 (For its part in the fraudulent scheme, [Signature] acted as the instrumentality used
by the other Defendants to carry out the fraud. [Signature] should have known that not
all shares were entitled to dividends, but it kept this silent from purchasers and shareholders, and
it made no effort to alert DTCC of this dividend issue, allowing the other Defendants to
perpetrate the fraud without alerting their victims.).
The Complaint satisfies the what and how requirements by providing a detailed
account of the fraudulent dividend distribution scheme carried out by Signature and the other
Defendantsi.e., flooding the marketplace with additional common shares of Calissio stock that
were not dividend-eligible to take advantage of DTCCs procedures and collect improper
dividends. Compl. 17-33, 64-65.
The Complaint also alleged that this fraud took place in the marketplace in which
Calissio, COR Clearing, and Signature are all active players, with the harm directed at COR
Clearings account in Nebraska, satisfying the where requirement. Compl. 1, 15.
The when of the scheme is thoroughly pled, beginning with Calissios announcement
of its share buyback program on June 1, 2015, and going through the ex-dividend date of August
19, 2015 and DTCCs subsequent debiting of COR Clearings account on August 24, 2015.
Compl. 18-20, 24-25, 34, 39-40.
Therefore, Signatures motion to dismiss COR Clearings fraud claim should be denied
because the Complaint satisfies Rule 9(b)s heightened pleading standard.

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III.

SIGNATURE HAS SUFFICIENT CONTACTS WITH NEBRASKA TO SUBJECT

IT TO PERSONAL JURISDICTION
Finally, Signature wrongly contends that the Complaint should be dismissed for lack of

personal jurisdiction. See Mot. at 2, 4-5. As discussed below, the allegations of the Complaint,
which are assumed to be true at the pleading stage, make clear that the injury giving rise to this
lawsuit occurred within the state of Nebraska. In addition, extrinsic evidence demonstrates that
Signature regularly conducts business with COR Clearing and its employees located in
Nebraska. Therefore, the Court should deny Signatures motion to dismiss for lack of personal
jurisdiction.
To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must state
sufficient facts in the complaint to support a reasonable inference that the defendants can be
subjected to jurisdiction within the state. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072
(8th Cir. 2004) (citation omitted). Although the plaintiff has the burden of proving facts
supporting personal jurisdiction, it need only make a prima facie case that personal jurisdiction
exists. Id. at 1072-73. The plaintiffs showing must be tested by both the pleadings and the
affidavits and exhibits presented with the motions and in opposition thereto. Id. When
considering these evidentiary materials, the Court must view the facts in the light most favorable
to the plaintiff and resolve all factual conflicts in its favor. Pecoraro v. Sky Ranch for Boys, Inc.,
340 F.3d 558, 561 (8th Cir. 2003); see also Dever, 380 F.3d at 1076.
In determining whether the Court has personal jurisdiction over Signature, two issues
must be considered: (1) whether the requirements of Nevadas long-arm statute have been
satisfied and (2) whether the exercise of personal jurisdiction over Signature satisfies the
requirements of due process. Dever, 380 F.3d at 1073. Because Nebraskas long-arm statute,
Neb. Rev. Stat. 25-536, has been interpreted to extend jurisdiction over nonresident

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defendants to the fullest degree allowed by the Due Process Clause of the United States
Constitution, . . . the Court need only determine whether the assertion of jurisdiction offends
constitutional limits. J.D. Heiskel Holdings, LLC v. Trans Coastal Supply Co., No. 8:14-cv277, 2015 WL 751983, at *2 (D. Neb. Feb. 20, 2015) (citing Wagner v. Unicord Corp., 526
N.W.2d 74, 77-78 (Neb. 1995)).
Under the constitutional analysis, [d]ue process requires minimum contacts between
[a] non-resident defendant and the forum state such that maintenance of the suit does not offend
traditional notions of fair play and substantial justice. Dever, 380 F.3d at 1073. Under the
theory of specific jurisdiction, which COR Clearing alleges in its Complaint, a court has personal
jurisdiction over a defendant if the injury giving rise to the lawsuit occurred within or had some
connection with the forum state. Id. (citing Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 414 (1984)).
Here, there can be no reasonable dispute that the injury giving rise to this lawsuit
occurred within Nebraska. As alleged in the Complaint, COR Clearing is a clearing and
settlement firm headquartered in Omaha, Nebraska. Compl. 9-10. The Complaint further
alleges that Defendants, including Signature, purposefully directed their actions to Nebraska to
harm COR Clearing in this forum by having DTCC pursue COR Clearing for the [improper
dividend distribution] funds, which were paid from its accounts in Nebraska. Compl. 15.
Thus, based on the allegations of the Complaint, which are assumed to be true at the pleading
stage, Signatures intentional acts and participation in the fraudulent dividend distribution
scheme caused injury to COR Clearing in the state of Nebraska.
In addition, extrinsic evidence demonstrates that Signature regularly conducted business
with COR Clearing and its employees located at its headquarters in Omaha, Nebraska. For

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instance, Signatures President, Jason M. Bogutski, regularly communicates with COR Clearing
employees regarding the stocks that COR Clearing processes for Signature. See, e.g.,
Declaration of Colette Rex (Rex Decl.) 3-8, Exs. A-D (emails between Signatures
President and various COR Clearing employees located in Omaha, Nebraska). Signature and
COR Clearing also regularly mail each other certificates to assist the underlying shareholder of
the security in re-registering physical certificates or depositing book-entry shares. See, e.g., Rex
Decl. 3, 9-12, Exs. E-G (letters and shipping labels reflecting shipments of certificates from
Signature to COR Clearing in Omaha, Nebraska). Therefore, Signature was well aware that it
was conducting business with a Nebraska company, and that its participation in the fraudulent
dividend distribution scheme would inevitably cause injury in the state of Nebraska. See
Johnson v. Arden, 614 F.3d 785, 796 (8th Cir. 2010) (a court can establish specific jurisdiction
when a non-resident defendant performs tortious acts knowing that the consequences will be felt
in the forum state).
Signatures only argument against a finding of personal jurisdiction is that it has no
connection to Nebraska nor [is] any of its business related to any commercial activity in
Nebraska. Mot. at 4. However, Signatures argument is not only devoid of any factual or legal
supportSignature notably did not submit any declarations or exhibits in support of its
motionbut it is also squarely contradicted by the allegations of Complaint and the extrinsic
evidence discussed above, which unmistakably demonstrate that Signature purposefully availed
itself of the privilege of conducting business within Nebraska.
Accordingly, the Court should reject Signatures argument that the Complaint fails to
allege facts sufficient to support a reasonable inference of personal jurisdiction.

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IV.

CONCLUSION
For the reasons discussed above, the Court should deny Signatures motion to dismiss in

its entirety.1

Dated: November 13, 2015

By: s/ Michael T. Hilgers

Michael T. Hilgers (#24483)
mhilgers@goberhilgers.com
Carrie S. Dolton (#24221)
cdolton@goberhilgers.com
GOBER HILGERS PLLC
14301 FNB Parkway, Suite 100
Omaha, NE 68154
Telephone: (402) 218-2106
Facsimile: (877) 437-5755
Attorneys for Plaintiff COR Clearing, LLC

Should the Court determine that any of COR Clearings claims are not sufficient as currently
pled, it should dismiss such claims without prejudice, so that COR Clearing may remedy any
such defects in an amended complaint. Michaelis v. Nev. State Bar Assn, 717 F.2d 437, 438-39
(8th Cir. 1983); Laird v. Ramirez, 884 F. Supp. 1265, 1273-74 (D. Iowa 1995).
1

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CERTIFICATE OF SERVICE
The undersigned hereby certifies that on this 13th day of November 2015, a true and
correct copy of the foregoing was filed via the Courts CM/ECF System, and was served on all
counsel of record.

_s/ Michael T. Hilgers_______________

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