Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-00418/USCOURTS-azd-2_12-cv-00418-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question: Securities Violation

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Kingsley Capital Management, LLC, an 

Arizona limited liability company, and 

Bruce Paine Kingsley MD IRA Rollover, a 

Qualified Individual Retirement Account, 

Plaintiffs, 

vs. 

The Members of the Board of Directors of 

the Park Avenue Bank of New York as of 

2008: Donald G. Glascoff Jr., Charles J 

Antonucci Sr., Bruno De Vinck, Frederick 

Keller, Patrick R. Murphy, Angella MirizziOlson, Mendel Zilberberg, 

Defendants.

No. CV 12-00418-PHX-NVW

ORDER 

Before the Court is “Defendant’s Donald G. Glascoff, Jr., Bruno De Vinck, 

Frederick Keller, Angella Mirizzi-Olson and Mendel Zilberberg’s Motion to Dismiss the 

Complaint” (Doc. 19). For the reasons stated below, the motion will be granted and the 

case will be transferred to the Southern District of New York. 

I. BACKGROUND 

Plaintiff Kingsley Capital Management is an Arizona limited liability company 

controlled by Dr. Bruce Kingsley, an Arizona resident. Plaintiff Bruce Paine Kingsley 

MD IRA Rollover is a trust for which Kingsley is the trustee. Kingsley himself is not a 

plaintiff, but at all times relevant to this action, Plaintiffs acted at Kingsley’s direction. 

For purposes of this order, there is no need to distinguish between Plaintiffs’ actions and 

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Kingsley’s actions. The Court’s use of “Kingsley” below therefore refers to actions taken 

by Bruce Kingsley himself, as well as the actions he caused Plaintiffs to take. 

This case is an extension of certain cases Kingsley brought previously against 

various persons and entities by whom he was allegedly defrauded in an investment 

scheme regarding workers compensation insurance. The Court has elsewhere 

summarized the relevant allegations in detail. See Kingsley Capital Mgmt., LLC v. Sly, 

820 F. Supp. 2d 1011, 1014–17 (D. Ariz. 2011). For present purposes, the following 

suffices. 

In March 2008, a Kentucky businessman named Anthony Huff, along with some 

of his associates, pitched to Kingsley an investment in Huff’s workers compensation 

business — a conglomeration of entities sometimes referred to as “Oxygen.” According 

to Huff and the other promoters, Kingsley’s investment would be used to boost Oxygen’s 

insurance reserves, permitting it to expand. Any investment, said the promoters, would 

be held in FDIC-insured accounts at the Manhattan-based Park Avenue Bank. 

At the time of the investment pitch, Charles J. Antonucci, Sr., was president, CEO, 

and a member of the board of directors of Park Avenue Bank. Antonucci was present 

during the pitch to Kingsley and confirmed much of what Huff and the other promoters 

claimed, including that Oxygen was “‘doing very well.’” (Doc. 1 ¶ 42.) At a later time, 

Kingsley alleges that Antonucci told him, “‘These guys are making an awful lot of 

money,’” referring to Huff and those invested in Oxygen. (Id. ¶ 53.) Kingsley alleges 

that Antonucci knew at the time he made these statements that Oxygen was not doing 

well, but instead required significant credit from Park Avenue Bank. Antonucci also had 

been authorizing Oxygen’s substantial overdrafts, in part in implicit exchange for perks 

such as rides on Huff’s private jet. 

In June 2008, Kingsley decided to invest $1.75 million in Oxygen. That money 

went into accounts at Park Avenue Bank. In part, Kingsley was won over by irrevocable 

standby letters of credit intended to guarantee the security of his investment. Kingsley 

received these letters of credit through Park Avenue Bank, with Antonucci’s help. 

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Allegedly, Antonucci never properly collateralized these letters of credit, and did not 

enter them on the bank’s records. 

In August 2008, the FDIC informed Park Avenue Bank that the bank had been 

downgraded from a “well-capitalized” rating to an “adequately capitalized” rating, 

meaning that the bank could no longer engage in certain transactions without regulators’ 

approval. In an apparent attempt to reestablish Park Avenue Bank’s “well-capitalized” 

rating, Antonucci in October 2008 invested $6.5 million of what he said were his own 

funds. According to a federal criminal information later filed against Antonucci, this 

$6.5 million was actually money that Antonucci arranged for the bank to loan to entities 

related to the workers compensation business in which Kingsley had invested. The 

principals of these entities (who also had promoted the investment to Kingsley) then 

caused the entities to transfer that money to Antonucci personally, who then transferred it 

back to the bank as his “own” funds. 

Kingsley’s $1.75 million was part of this $6.5 million round-trip transaction, 

although at the time he was not aware of that. Huff had told him that month, however, 

that Antonucci’s supposedly personal investment was actually a loan from Huff. (See

CV10-2243, Doc. 1-3 ¶ 149.) 

In March 2009, Park Avenue Bank sent a letter signed by Defendant Glascoff to 

all account holders. This letter accompanied the monthly account statement. The letter 

announced Antonucci’s “personal” investment and stated that the bank’s financial status 

had substantially improved because of it. However, according to a later FDIC report 

regarding Park Avenue Bank, the bank was at that time undercapitalized and under 

significant scrutiny from the FDIC and the New York State banking regulator. The bank 

remained under regulatory scrutiny for the balance of that year as it attempted to develop 

an acceptable capitalization plan. 

In January 2010, Kingsley became “increasingly concerned about his security in 

the [investment] transaction because [among other reasons] he had heard that Antonucci 

left [Park Avenue Bank].” (CV10-2243, Doc. 1-3 ¶ 150.) On January 24, 2010, 

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Kingsley directed his attorney to prepare a letter to the bank to confirm the validity of the 

letters of credit. For reasons that are immaterial here, he never sent the letter. 

Park Avenue Bank failed to re-capitalize and was closed in March 2010. That 

closure effectively doomed the security of Kingsley’s investment. Antonucci was 

eventually indicted in the Southern District of New York on bank fraud and related 

charges. He pleaded guilty to certain of those charges. 

Kingsley sued Antonucci here in Arizona and eventually obtained a default 

judgment given Antonucci’s failure to appear. (CV10-2243, Docs. 44, 45.) In this new 

action, Kingsley sues those who were directors of Park Avenue Bank at the time 

Antonucci engaged in his fraudulent schemes. Kingsley’s suit appears to have been 

inspired by the FDIC’s report regarding the bank’s failure, which concluded that “Park 

Avenue failed primarily because of lax oversight by its Board and management and a 

lack of sound corporate governance.” (Doc. 1-3 at 3.) Although this statement referred 

largely to a pattern of reckless underwriting that was typical of many banks before the 

recent recession, Kingsley nonetheless claims that the directors’ inadequate supervision 

extended to Antonucci, over whom the board had control. Kingsley therefore pleads 

causes of action for “control person” and indirect liability under the Arizona Securities 

Act. See A.R.S. §§ 44-1991(A), 44-1999(B). Specifically, Kingsley claims: 

The Board Defendants had overall responsibility and 

authority for formulating sound policies and objectives for 

PAB [i.e., Park Avenue Bank] and for effectively supervising 

its affairs during the relevant period. 

The Board Defendants had the legal power, either 

individually or as part of a group, to directly or indirectly 

control Antonucci’s actions and conduct as alleged herein, at 

all relevant times, up to the date when he no longer was 

employed by PAB. 

The Board Defendants did not act in good faith with respect 

to their control or lack of control of Antonucci during the 

relevant period. 

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The Board Defendants did not take reasonable steps to 

maintain and enforce a reasonable and proper ongoing system 

of appropriate supervision and internal controls during the 

relevant period. 

The Board Defendants did not act with due care as to their 

control of Antonucci during the relevant period. 

The Board Defendants’ inaction indirectly induced 

Antonucci’s fraud on [Kingsley] during the relevant period. 

* * * 

Antonucci is liable to [Kingsley] pursuant to [the Securities 

Act] . . . . 

The Board Defendants are persons who directly or indirectly 

controlled Antonucci, as alleged herein. 

The Board Defendants, and each of them, are thus liable to 

these plaintiffs, jointly and severally, for their misconduct in 

violation of [the Securities Act] to the same extent as 

Antonucci is liable to these plaintiffs for his violations of and 

liability pursuant to [the Securities Act]. 

(Doc. 1 ¶¶ 82–87, 91–93.) 

All defendants have moved to dismiss based on lack of personal jurisdiction, 

failure to file within the limitations period, and failure to state a claim. Concerning 

personal jurisdiction, defendants submitted declarations stating that they are all residents 

of New York or New Jersey. In addition: 

No Defendant has conducted business in Arizona at any 

relevant time. No Defendant ever has owned, possessed or 

held any personal or real property in Arizona. No Defendant 

ever has had any employees, agents, affiliates or 

representatives based in Arizona. No Defendant ever has had 

any bank or brokerage accounts in Arizona. No Defendant 

ever has solicited or serviced activities or produced tangible 

goods in Arizona. . . . No Defendant ever has entered into 

any contracts to conduct any business activities or perform 

any services in Arizona. No Defendant had, at any time 

relevant to the allegations in the Complaint, any knowledge 

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of Charles Antonucci’s fraudulent schemes or any knowledge 

of his activities in Arizona. 

(Doc. 19 at 4.) 

II. PERSONAL JURISDICTION 

A. Legal Standard 

The burden to establish jurisdiction rests on the plaintiff, but if (as here) the 

motion attacking jurisdiction “is based on written materials rather than an evidentiary 

hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to 

withstand the motion to dismiss.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 

1218, 1223 (9th Cir. 2011). “The plaintiff cannot simply rest on the bare allegations of 

its complaint, but uncontroverted allegations in the complaint must be taken as true.” Id. 

(internal quotation marks omitted). 

As a federal court sitting in diversity, the personal jurisdiction test theoretically 

depends first on Arizona’s long-arm statute, and then on whether exercising personal 

jurisdiction comports with the U.S. Constitution’s due process clause. However, Arizona 

permits its courts to exercise personal jurisdiction “to the maximum extent permitted by 

. . . the Constitution of the United States.” Ariz. R. Civ. P. 4.2(a). Accordingly, the only 

question to decide is whether this Court can exercise personal jurisdiction consistent with 

the U.S. Constitution. The Constitution permits courts to exercise personal jurisdiction 

over defendants who do not reside in the state in which they have been sued if there is at 

least “minimum contacts” with that state such that the exercise of jurisdiction “does not 

offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. 

Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted). 

Kingsley has not argued that any defendant is subject to “general jurisdiction” in 

Arizona — i.e., that his or her contacts with Arizona are so pervasive that he or she could 

be sued in Arizona for wrongs that happened both in Arizona and elsewhere. Kingsley 

therefore must establish “specific jurisdiction.” “A court exercises specific jurisdiction 

where the cause of action arises out of or has a substantial connection to the defendant’s 

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contacts with the forum.” Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain 

Co., 284 F.3d 1114, 1123 (9th Cir. 2002). 

 Specific jurisdiction turns on a three-part test: 

(1) The non-resident defendant must purposefully direct his 

activities or consummate some transaction with the forum or 

resident thereof; or perform some act by which he 

purposefully avails himself of the privilege of conducting 

activities in the forum, thereby invoking the benefits and 

protections of its laws; (2) the claim must be one which arises 

out of or relates to the defendant’s forum-related activities; 

and (3) the exercise of jurisdiction must comport with fair 

play and substantial justice, i.e. it must be reasonable. 

Mavrix Photo, 647 F.3d at 1227–28. In tort-based cases such as this one, the first 

question is itself broken into three elements, sometimes known as the “effects test.” It 

requires showing that “the defendant (1) commit[ed] an intentional act; (2) expressly 

aimed at the [forum] state; (3) causing harm in the [forum] state that the defendant knew 

was likely to be suffered in that state.” CE Distrib., LLC v. New Sensor Corp., 380 F.3d 

1107, 1111 (9th Cir. 2004). 

This test must be satisfied as to each defendant. Moreover, Kingsley may not rely 

on Park Avenue Bank’s contacts with Arizona to establish jurisdiction over these 

defendants. He must establish that each defendant’s personal actions (whether or not 

taken on the bank’s behalf) created the necessary minimum contacts with Arizona to 

justify specific jurisdiction. Calder v. Jones, 465 U.S. 783, 790 (1984); Davis v. Metro 

Prods., Inc., 885 F.2d 515, 522 (9th Cir. 1989) Personal jurisdiction over corporate 

officers is proper when they were primary and direct participants in the supposedly 

wrongful acts. Cummings v. W. Trial Lawyers Ass’n, 133 F. Supp. 2d 1144, 1155–56 

(D. Ariz. 2001). 

B. Analysis 

Kingsley’s argument in favor of personal jurisdiction over defendants rests 

entirely on his relationship with Park Avenue Bank generally and Antonucci in particular. 

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Kingsley points to the fact that he opened multiple accounts at Park Avenue Bank, all of 

which Antonucci solicited. He also points to the letters of credit which he claims were 

drafted and negotiated in Arizona, with Antonucci’s participation. Finally, he notes that 

he received the monthly account statements from Park Avenue Bank, at least one of 

which included a letter (to all account holders) from Defendant Glascoff regarding 

Antonucci’s “personal” $6.5 million investment. 

Kingsley’s allegation about Glascoff’s letter to account holders is the only 

allegation mentioning any defendant by name. As to Glascoff, this single letter is 

insufficient to establish purposeful direction of his activities at Arizona. Although a 

“single act can support jurisdiction” if it “creates a substantial connection,” “single or 

occasional acts related to the forum may not be sufficient to establish jurisdiction if their 

nature and quality and the circumstances of their commission create only an attenuated 

affiliation with the forum.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) 

(citations and internal quotation marks omitted). Glascoff’s letter created no “substantial 

connection.” Given its content and the fact that it was sent to account holders generally, 

its “nature and quality and the circumstances of [its transmission] create[e] only an 

attenuated affiliation with [Arizona].” Cf. Far West Capital, Inc. v. Towne, 46 F.3d 1071, 

1077 (10th Cir.1995) (series of phone calls and faxes insufficient to show minimum 

contacts); Gehling v. St. George’s Sch. of Med., Ltd., 773 F.2d 539, 544 (3d Cir. 1985) 

(single, form-type letter mailed to forum state insufficient to establish personal 

jurisdiction). 

Kingsley’s complaint otherwise contains no allegations that would support 

personal jurisdiction over any defendant. Admittedly, this may be due to the nature of 

the causes of action he asserts against defendants. Kingsley’s “control person” claim, in 

particular, permits liability essentially for failure to supervise properly, regardless of the 

control person’s knowledge or state of mind. See A.R.S. § 44-1999(B) (“Every person 

who, directly or indirectly, controls any person liable for a [primary] violation of [the 

Securities Act] is liable . . . to the same extent as the controlled person . . . unless the 

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controlling person acted in good faith and did not directly or indirectly induce the act 

underlying the action.”); E. Vanguard Forex, Ltd. v. Ariz. Corp. Comm’n, 206 Ariz. 399, 

411–13, 79 P.3d 86, 98–100 (Ct. App. 2003) (relying on Arizona state legislature’s intent 

to uphold control person liability where alleged control persons had no knowledge of 

fraudulent practices but “disregard[ed] their duty to monitor the activities of the 

controlled person”). But the fact that the legislature may have intended to create a broadreaching cause of action does not give the legislature power to create jurisdiction as well. 

In a CERCLA case, for example, a plaintiff argued that jurisdiction over a foreign parent 

corporation was appropriate in part because of CERCLA’s comprehensive reach. Am. 

Tel. & Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 590 (9th Cir. 1996). The 

Ninth Circuit, however, rejected the notion that the scope of liability affected personal 

jurisdiction: 

. . . [Plaintiff] may not use liability as a substitute for personal 

jurisdiction. Even if the requirement of personal jurisdiction 

allows a parent corporation to avoid liability, and thus 

undercuts CERCLA’s sweeping purpose “to affix the ultimate 

cost of cleaning up these disposal sites to the parties 

responsible for the contamination,” liability is not to be 

conflated with amenability to suit in a particular forum. 

Personal jurisdiction has constitutional dimensions, and 

regardless of policy goals, Congress cannot override the due 

process clause, the source of protection for non-resident 

defendants. 

Id. at 590–91 (citations omitted). Likewise, the Arizona legislature may not use the 

Securities Act’s scope of control person liability to extend the constitutional scope of 

personal jurisdiction. Accordingly, on this record, Kingsley has not established personal 

jurisdiction over any defendant. 

C. Request for Jurisdictional Discovery 

Kingsley’s request for jurisdictional discovery will be denied. Although 

jurisdictional discovery is appropriate in some cases, it is not appropriate here. Kingsley 

may sue these defendants in New York, and Kingsley has offered no credible argument 

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why suing them in New York is unduly burdensome. To the contrary, the scope of 

litigation Kingsley has instituted based on the fallout from his investments, and his 

travels and wealth described in his various complaints, all suggest that he has more than 

ample resources to pursue this action where jurisdiction is unquestionable. Jurisdictional 

discovery would therefore be needless expense simply to resolve whether the lawsuit may 

remain in Arizona. 

D. Transfer Under 28 U.S.C. § 1631 

Lacking jurisdiction, the Court does not reach defendants’ statute of limitations 

and failure-to-state-a-claim arguments. However, where (as here) a “court finds that 

there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer 

[the] action . . . to any other . . . court in which the action . . . could have been brought at 

the time it was filed.” 28 U.S.C. § 1631. The record discloses that these defendants 

would be subject to at least specific personal jurisdiction in the Southern District of New 

York, where Park Avenue Bank was headquartered. In the interests of justice, this action 

will be transferred there. 

IT IS THEREFORE ORDERED that “Defendant’s Donald G. Glascoff, Jr., Bruno 

De Vinck, Frederick Keller, Angella Mirizzi-Olson and Mendel Zilberberg’s Motion to 

Dismiss the Complaint” (Doc. 19) is GRANTED. 

IT IS FURTHER ORDERED, pursuant to 28 U.S.C. § 1631, that the Clerk shall 

transfer this case to the Southern District of New York. 

Dated this 15th day of August, 2012. 

 

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