Case 2:14-cv-02889-KJM-AC Document 22 Filed 07/10/15 Page 1 of 6

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BRIAN R. KATZ
2 California State Bar No. 88895
Attorney At Law
3 4364 Town Center Boulevard, Suite 207
4 El Dorado Hills, CA 95762
Telephone: 916-933-5266
5 Facsimile: 916-933-7866
E-Mail: Brian@Katzbusinesslaw.com
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7 Attorney For: MyECheck, Inc.
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA - SACRAMENTO DIVISION
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12 MYECHECK, Inc., aCalifornia } CASE NO. 2-14-cv-02889-KJM-AC
corporation, }
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}
14 } PLAINTIFF’S OPPOSITION TO
Plaintiff, } MOTION TO DISMISS AND
15 } PLAINTIFF’S REQUEST FOR
16 -- vs. -- } LEAVE TO AMEND COMPLAINT
}
17 SWEETSUN INTERTRADE, INC., }
SEVEN MILES SECURITIES, TITAN } Date: July 24, 2015
18
INTERNATIONAL SECURITIES, INC., } Time: 10:00 a.m.
19 SCOTTSDALE CAPITAL ADVISORS } Courtroom: 3
CORPORATION, and Does 1 -- 20, }
20 Inclusive, } Judge: Hon. Kimberly J. Mueller
21 } Trial Date: n/a
Defendants. } Action Filed: December 11, 2014
22 _________________________________ /
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Plaintiff, MyECheck, Inc., hereby submits the following Opposition to Defendant
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Scottsdale Capital Advisors Corporation’s [“SCOTTSDALE”] Motion to Dismiss.
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PLAINTIFF’S OPPOSITION TO MOTION TO DISMISS AND PLAINTIFF’S REQUEST FOR LEAVE TO
AMEND COMPLAINT
 Case 2:14-cv-02889-KJM-AC Document 22 Filed 07/10/15 Page 2 of 6

Plaintiff respectfully requests that it be granted leave to amend the Complaint to

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2 state a claim for damages against SCOTTSDALE pursuant to U.C.C. § 8-115 (2).
3 Plaintiff’s Opposition and Request for Leave to Amend is based on this pleading,
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the concurrently filed Declaration of Brian R. Katz, and such further evidence, oral or
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documentary, that may be presented at the hearing on this matter.
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8 STATEMENT OF FACTS
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In late 2011, defendant SWEETSUN INTERTRADE, INC. [“SWEETSUN”]
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represented to Plaintiff that SWEETSUN had purchased a promissory note that Plaintiff had
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12 issued to Tangiers Investors, L.P.. That promissory note was secured by a convertible

13 debenture of shares of stock in Plaintiff.

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Based on SWEETSUN’s representation, that later was discovered to be false, Plaintiff
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issued 255,000,000 shares of stock as directed by defendant SWEETSUN to Defendant Titan
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17 International Securities, Inc.

18 In 2012 and 2013, SWEETSUN provided fraudulently created documents that caused
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Plaintiff’s transfer agent to issue an additional 1,185,000,000 shares of Plaintiff’s stock.
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In October 2013, Plaintiff learned that SWEETSUN had not actually purchased the
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22 promissory note from Tangiers, and that SWEETSUN had fraudulently caused the issuance

23 of the additional million-plus shares of Plaintiff’s stock. Plaintiff also learned that a
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significant portion of those fraudulently issued shares had been deposited with defendant
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SCOTTSDALE.
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PLAINTIFF’S OPPOSITION TO MOTION TO DISMISS AND PLAINTIFF’S REQUEST FOR LEAVE TO
AMEND COMPLAINT
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On or about November 13, 2013, plaintiff MyECheck notified defendant

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2 SCOTTSDALE that the issuance of the shares in MyECheck had been obtained
3 fraudulently and was being cancelled, and plaintiff requested that defendant
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SCOTTSDALE freeze trading in those shares.
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SCOTTSDALE did freeze trading in MyECheck’s shares for some period of time,
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7 however, on January 16, 2014, plaintiff MyECheck received an e-mail from defendant
8 SCOTTSDALE stating that they would not continue a freeze in trading in the shares
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without a Court-issued temporary restraining order.
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Following the initiation of this litigation, Plaintiff learned that SCOTTSDALE had
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12 conducted an inquiry into the validity of the shares in question, and concluded that they were

13 valid – despite having received written notice from the President of Plaintiff MyECheck, the
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issuer, that the shares were fraudulently issued.
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SCOTTDALE’S MOTION TO DISMISS
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SCOTTSDALE’s Motion to Dismiss requests the Court to dismiss Plaintiff’s
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19 complaint as to SCOTTSDALE pursuant to Federal Rules of Procedure 12(b)(1) and

20 12(b)(6) or Rule 12(d). SCOTTSDALE alleges that Plaintiff’s claims against

21 SCOTTSDALE are non-justiciable because (1) a judgment against SCOTTSDALE would
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not redress any harm to Plaintiff, (2) Plaintiff’s alleged prior inaction rendered Plaintiff’s
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24 claims against SCOTTSDALE moot, (3) the relief sought against SCOTTSDALE is

25 impossible to obtain, (4) Plaintiff lacks standing under the federal Declaratory Judgments
26 act, and (5) Plaintiff is guilty of laches.
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PLAINTIFF’S OPPOSITION TO MOTION TO DISMISS AND PLAINTIFF’S REQUEST FOR LEAVE TO
AMEND COMPLAINT
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POINTS AND AUTHORITIES
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1. Plaintiff Can State A Valid Claim for Damages Against
3 SCOTTSDALE Pursuant to U.C.C. § 8-115 (2).
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The relevant portion of U.C.C. § 8-115 (2) states that:
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A securities intermediary that has transferred a financial asset
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pursuant to an effective entitlement order, or a broker or other
7 agent or bailee that has dealt with a financial asset at the
direction of its customer or principal, is not liable to a person
8 having an adverse claim to the financial asset, unless the
9 securities intermediary, or broker or other agent or bailee:

10 ...

11 (2) acted in collusion with the wrongdoer in violating the rights

of the adverse claimant;
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14 A. SCOTTSDALE is Subject to the Standard of
U.C.C. § 8-115 (2)
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U.C.C. § 8-102 (14) defines a “securities intermediary” as “(i) a clearing
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18 corporation ; or (ii) a person, including a bank or broker, that in the ordinary course of its

19 business maintains securities accounts for others and is acting in that capacity.”
20 Additionally, U.C.C. § 8-115 (2) includes in its purview any “broker or other agent or
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bailee that has dealt with a financial asset at the direction of its customer or principal.” As
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SCOTTSDALE admits, it is “a registered broker dealer that clears and sells restricted
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24 stock,” [SCOTTSDALE’s Motion to Dismiss, Points and Authorities, page 3, line 15] and
25 has dealt with Plaintiff’s stock at the direction of SWEETSUN [SCOTTSDALE’s Motion
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to Dismiss, Points and Authorities, page 4, line 8]. Therefore, SCOTTSDALE is subject
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to the standards stated in U.C.C. § 8-102 (14).
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PLAINTIFF’S OPPOSITION TO MOTION TO DISMISS AND PLAINTIFF’S REQUEST FOR LEAVE TO
AMEND COMPLAINT
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B. SCOTTSDALE Acted in Collusion with

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SWEETSUN By Continuing To Trade in the
2 Shares.
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4 As SCOTTSDALE admitted in the Points and Authorities in its Motion to Dismiss,

5 SCOTTSDALE was aware that Plaintiff had raised issues of stock fraudulently issued to
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SWEETSUN. [SCOTTSDALE’s Motion to Dismiss, Points and Authorities, page 5, line
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7]. Pursuant to a request from Plaintiff, SCOTTSDALE ceased trading the fraudulently
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9 issued stock for a period of approximately 7 weeks. However, despite the issues with the

10 stock in question, SCOTTSDALE resumed trading of the stock, claiming that it had all
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been sold by January 2014.
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SCOTTSDALE claims that it relied on documents from the parties that certified the
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14 legitimacy of the stock to SCOTTSDALE’s satisfaction. SCOTTSDALE subsequently

15 provided those documents to Plaintiff’s attorney. The documents, raise more questions
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than answers as shown in the Declaration of Brian R. Katz. Among these issues is the fact
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that the numbers of shares shown on the purported corporate resolutions of issuance, do not
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19 match the numbers of shares that SWEETSUN claimed were issued.

20 Further, Thomas Russell claims to have proof of SWEETSUN’s payment to

21 Tangiers for portions of the original promissory note between Plaintiff and Tangiers. As
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proof of payment, Mr. Russell provided to a copy of a check from Mr. Russell’s own trust
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24 account to Tangiers, that was dated approximately two years after the date of

25 SWEETSUN’s alleged purchase of the promissory note from Tangiers.

26 Furthermore, it is troubling that SCOTTSDALE, which holds itself out as a
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reputable securities clearing and trading entity, would resume trading of fraudulently
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PLAINTIFF’S OPPOSITION TO MOTION TO DISMISS AND PLAINTIFF’S REQUEST FOR LEAVE TO
AMEND COMPLAINT
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issued stock on the basis of suspect documents contrary to clear direction from Plaintiff.
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2 As a result of SCOTTSDALE’s clearance and subsequent trading of the fraudulently issued
3 shares of Plaintiff’s stock, Plaintiff was damaged in an amount to be determined through
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discovery and trial.
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Therefore, there is sufficient evidence of SCOTTSDALE’s collusion with
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7 SWEETSUN in violation of U.C.C. § 8-115 (2) to warrant amending the complaint.
8 Plaintiff should be allowed to amend it complaint to state a claim against SCOTTSDALE
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pursuant to U.C.C. § 8-115 (2).
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12 Based on the foregoing, it is respectfully requested that SCOTTSDALE’s Motion to

13 Dismiss be Denied and that Plaintiff be granted leave to amend its complaint.
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Respectfully Submitted,
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17 Dated: July 9, 2015

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MYECHECK, INC., Plaintiff
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By:
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/s/ Brian R. Katz
23 BRIAN R. KATZ #88895
24 Attorney at Law
4364 Town Center Blvd., Suite 207
25 El Dorado Hills, CA 95762
26 Attorney for Plaintiff: MYECHECK, INC.
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PLAINTIFF’S OPPOSITION TO MOTION TO DISMISS AND PLAINTIFF’S REQUEST FOR LEAVE TO
AMEND COMPLAINT