Court Opinion

ID: 182834
Source: CourtListenerOpinion
Date Created: 2011-01-14 19:52:23+00
Date Added: 2024-06-11T17:26:01.440698
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                                No. 09-1676

ALAN M. GRAYSON; AMG TRUST, The,

                Plaintiffs - Appellees,

          v.

CHARLES HSIN,

                Defendant - Appellant,

          and

CHARLES CATHCART; EVELYN CATHCART; YURIJ DEBEVC; SCOTT
CATHCART; SCOTT AND WHITNEY CATHCART FAMILY TRUST; DERIVIUM
CAPITAL USA INCORPORATED; VERIDIA SOLUTIONS LLC; SHENANDOAH
HOLDINGS   LTD;   VERISTEEL   INCORPORATED;   PTS   INTERTECH
INCORPORATED; AQUILIUS INCORPORATED; OPTECH LIMITED; PAUL
ANTHONY JARVIS; NIGEL HARLEY WOOD; COLIN BOWEN; BANCROFT
VENTURES LTD; BANCROFT VENTURES UK LTD; SPENCER PARTNERS
LTD; ISLE OF MAN ASSURANCE LTD; DMITRY BOURIAK; VISION
INTERNATIONAL PEOPLE GROUP PL; TOTAL ECLIPSE INTERNATIONAL
LTD; BRYAN JEEVES; ALEXANDER JEEVES; KRISTINA PHELAN; JEEVES
GROUP, The; JEEVES HOLDINGS LTD; JAVELIN LTD; LEXADMIN TRUST
REG; ST VINCENT TRUST COMPANY LTD; ST VINCENT TRUST SEVICE
LTD; WINWARD ISLES TRUST COMPANY LTD; SELBOURNE TRUST
COMPANY LTD; PELICAN TRUST COMPANY LTD; JEEVES GROUP ASIA
LTD; WACHOVIA SECURITIES INCORPORATED; JOHN DOES −10;   1
JEEVES COMPANY LTD; ORANGEBURG METAL TREATMENT CO LLC;
METARIZON LLC, f/k/a Metarrizon Solutions Incorporated;
RANDOLPH ANDERSON; JONATHAN SANDIFER; PATRICK KELLEY; ROBERT
BRADENBURG; NIGEL THOMAS TEBAY; JOANNA OVERFIELD BODELL,

                  Defendants,

KEVIN CAMPBELL,

                  Party−in−Interest.
Appeal from the United States District Court for the District of
South Carolina, at Charleston. David C. Norton, Chief District
Judge. (2:07-cv-00593-DCN)

Argued:   September 23, 2010          Decided:   January 14, 2011

Before NIEMEYER and KEENAN, Circuit Judges, and Jerome B.
FRIEDMAN, United States District Judge for the Eastern District
of Virginia, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Steven Soulios, RUTA & SOULIOS LLP, New York, New York,
for Appellant.    Alisa Joy Roberts, KUBLI & ASSOCIATES, PC,
Vienna, Virginia, for Appellees. ON BRIEF: F. Truett Nettles,
II, THE NETTLES LAW OFFICE, LLC, Charleston, South Carolina, for
Appellant.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

          Charles Hsin, one of the defendants in this case in which

Alan M. Grayson and The AMG Trust claim damages from an alleged

fraudulent stock loan scheme, seeks to set aside a multi-million

dollar default judgment entered against him.                                  He contends that

he    was    never     properly        served     and      that    the       judgment,            in   any

event, is void for lack of subject matter jurisdiction because

the plaintiff lacks standing to bring the fraud claims.                                                 In

addition, Hsin contends that the district court violated Federal

Rule of Civil Procedure 54(b) in certifying the default judgment

as    a     final    judgment      before       liability          of       all    of       the    other

defendants          involved      in    the    scheme       was     determined;              that      the

amount of the default judgment was manifestly unjust; and that

the    district       court       erred    in     failing         to    hold       a    hearing         on

damages.

          As to subject matter jurisdiction, Hsin bases his argument

on the fact that a parallel action making the same allegations

has been filed by the trustee in the bankruptcy of Derivium

Capital,      LLC,     a    firm       involved       in   the    scheme.              We   conclude,

however,       that     Hsin’s         argument        relates         to    the       doctrine        of

prudential standing, not Article III standing.                                    Accordingly, we

do not consider the merits of this argument in deciding whether

to set aside the default judgment.                          See Lujan v. Defenders of

Wildlife,       504        U.S.    555,       560-61       (1992)       (stating            that       the

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requirements        for   Article     III     standing          are     injury       in    fact,

causation, and redressability).

       As to Hsin’s claim that he was not properly served in this

case, we affirm for the reasons given by the district court.

The district court found that Hsin was served in accordance with

New York leave-and-mail procedure.                  See N.Y. Civ. Practice Law &

Rule § 308(2); Fed. R. Civ. P. 4(e)(1) (allowing service per

state rules).         First, it found that, in accordance with Rule

4(e)(1) and New York Civil Practice Law and Rule § 308(2), the

plaintiffs mailed the summons and complaint to Hsin at his last

known residence address at 99 Campbell Avenue, Williston Park,

New York, on June 19, 2007, via first-class mail.                                Hsin’s own

affidavit     states      that   he    last       lived    at     99       Campbell       Avenue.

Moreover,     the    plaintiffs       demonstrated          that       after     a    diligent

search, they were unable to uncover any other address for his

residence.

       Second, the district court found, again in accordance with

Rule 4(e)(1) and New York Civil Practice Law and Rule § 308(2),

that the plaintiffs served Hsin at his place of business by

delivering a copy of the summons to Nicole Ingrahm, a person

there of suitable age and discretion.                        The record shows that

Hsin    was   the     founder      and      CEO     of    First        Federal       Group    of

Companies,     Inc.,       which      was     the        parent       of     several       other

companies, including First Federal Capstone Ventures, LLC.                                   The

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plaintiffs obtained the address for First Federal Group from its

website, which gave 515 Madison Avenue, 21st Floor, New York,

New York 10022, as the company’s address.                     When a professional

process    server     went    to    515    Madison        Avenue,   the      building’s

directory indicated that the 21st floor was occupied by First

Federal   Capstone,     a    subsidiary        of   First    Federal    Group.       The

process server went to the office on the 21st floor and there

spoke with Nicole Ingrahm, who told the process server that Hsin

had an office there.         She also told the process server that “she

believed that Mr. Hsin had just left for a trip to Hong Kong,

China,    and   she   did    not    know    when     he     would   return.”        That

information was corroborated by a telephone conversation that

the process server had had earlier that day with Hsin.                            As the

process    server     related      it,    after     calling    Hsin     on    a    listed

telephone number, “I personally spoke with a man with an Asian

accent    who   identified      himself        as   Charles     Hsin.        Mr.    Hsin

informed me that he was at the airport and was about to fly to

Hong Kong, China.       Mr. Hsin asked me to send my delivery to Hong

Kong.”    After receiving the information about Hsin from Ingrahm,

the process server handed the summons and complaint to Ingrahm,

who the process server observed was a person of suitable age and

discretion.

     For these reasons, we reject Hsin’s claim that he was not

properly served.       We decline to consider Hsin’s other arguments,

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which he did not raise in the district court and which, in any

case, go to the merits of the defaulted claims.

     Accordingly, we affirm the district court’s order, dated

May 12, 2009, denying Hsin’s motion to set aside the default

judgment, and we affirm the final judgment entered June 9, 2009.

                                                         AFFIRMED

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