Collins Financial Consulting, LLC v. Serbinin Law Firm, LLC et al
ORDER denying 24 Motion to Dismiss for Lack of Jurisdiction, for Failure to Join a Necessary and Indispensable Party, or Alternatively to Stay Proceedings, by Magistrate Judge Scott T. Varholak on 1/25/2017. (slibi, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 16-cv-02099-STV
COLLINS FINANCIAL CONSULTING, LLC,
SERBININ LAW FIRM, LLC, and
Magistrate Judge Scott T. Varholak
This matter comes before the Court on Defendants’ Motion to Dismiss for Lack of
Subject Matter Jurisdiction, for Failure to Join a Necessary and Indispensable Party, or
Alternatively to Stay Proceedings (the “Motion”) [#24]. The Motion is before the Court
on the Parties’ consent to have a United States magistrate judge conduct all
proceedings in this action and to order the entry of a final judgment [#25, 27]. This
Court has carefully considered the Motion and related briefing, the case file, the
applicable case law, and the arguments of counsel at the December 13, 2016 motions
hearing. For the following reasons, the Court DENIES the Motion.
According to the Amended Complaint, Collins Financial Consulting, LLC (“Collins
Financial”) is a member-managed Colorado Limited Liability Company with two
members: Attila Kovács, a citizen of Hungary, and Konstantin Kharin, a citizen of
Russia. [#20, ¶ 2]. Defendant Serbinin Law Firm, LLC is a Colorado professional
limited liability company with one member: Igor Serbinin, a citizen of Colorado. [Id. at ¶
3]. Defendant Alexander Timofeev is a citizen of Colorado. [Id. at ¶ 4] 1
Collins Financial is a holding company and does not actively transact business in
the state. [#20 at ¶ 7]. About March 18, 2005, Collins Financial became the owner of
an 18.6 percent interest in J.S.C. Reagenty Vodokanala, a chemical plant located in the
city of Yekaterinburg, Sverdlovsk Region, Russian Federation. [Id.]. This interest is
worth approximately one million dollars. [Id.].
On May 17, 2016, Collins Financial brought suit in the Arbitration Court of
Sverdlovsk Region, City of Yekaterinburg, Russia, for rescission of a sale of shares in
the chemical plant (the “Russian Arbitration”). [Id. at ¶ 8]. A defendant in the Russian
Arbitration, Olga Bogomazov, is a citizen of Russia.
[#24, p. 6].
maintains that she is a member of Collins Financial, a fact Plaintiff disputes. [#20, ¶ 2;
#24, p. 3].
On July 7, 2016, Ms. Bogomazov, purporting to act on Collins Financial’s behalf,
appointed Defendant Timofeev as Collins Financial’s Director and Corporate Secretary,
giving him authority to file documents with the Colorado Secretary of State. [#24-1, p.
7]. In addition, Ms. Bogomazov, again purporting to act on Collins Financial’s behalf,
appointed Defendant Serbinin Law Firm to be Collins Financial’s registered agent, and
relocated Collins Financial’s corporate office to Serbinin Law Firm’s business address.
[Id. at p. 8].
Both Mr. Serbinin and Mr. Timofeev have dual citizenship and are citizens of both the
United States and Russia. [#24, p. 6 n.2].
According to the Amended Complaint, after these appointments, the Defendants
undertook a series of events designed to steal Collins Financial’s corporate identity.
[#20, ¶¶ 11-12]. First, on July 18, 2016, Defendants used a forged Collins Financial
seal to, amongst other things, purport to withdraw Collins Financial’s claims in the
Russian Arbitration and revoke Collins Financial’s attorneys’ representation in that
arbitration. [Id. at ¶ 13]. Second, on July 19, 2016, Defendants filed documents with
the Colorado Secretary of State placing Defendant Serbinin Law Firm as Collins
Financial’s registered agent and naming the firm’s address as Collins Financial’s office
address. [Id. at ¶ 14]. Defendants then took the documents that they filed with the
Colorado Secretary of State and filed those documents in the Russian Arbitration. [Id.
at ¶ 15].
The Amended Complaint brings Colorado state law claims for civil theft (Count
1), civil conspiracy (Count 2), violation of the Colorado Organized Crime Control Act
(“COCCA”) (Count 3), and declaratory judgment (Count 4).
premised upon 28 U.S.C. § 1332, diversity of citizenship. [Id. at ¶ 1].
On October 11, 2016, Defendants filed the instant Motion.
responded on October 31, 2016 [#28], and Defendants filed their reply on November 7,
2016 [#33]. The Court heard oral argument on December 13, 2016 [#36].
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(7) allows for the dismissal of a case if a
party fails to join a required party under Rule 19 of the Federal Rules of Civil Procedure.
In order to dismiss a case pursuant to Rule 12(b)(7), the Court must find that: (1) the
party is a required person under Rule 19(a), (2) joinder of the party is infeasible under
Rule 19(b), and (3) dismissal is appropriate based on “equity and good conscience.”
Fed. R. Civ. P. 19(b); see also Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Intrawest
ULC, No. 13-CV-00079-PAB-KMT, 2014 WL 1016072, at *2 (D. Colo. Mar. 14, 2014);
Entek GRB, LLC v. Stull Ranches, LLC, No. 11-cv-01557, 2013 WL 1283811, at *1 (D.
Colo. Mar. 27, 2013). “The proponent of a motion to dismiss under 12(b)(7) has the
burden of producing evidence showing the nature of the interest possessed by an
absent party and that the protection of that interest will be impaired by the absence.”
Citizen Band Potawatomi Indian Tribe of Okla. v. Collier, 17 F.3d 1292, 1293 (10th
Cir.1994); see also 5C Charles Alan Wright et al., Federal Practice & Procedure, § 1359
(3d ed. 2003) (“In reviewing a Rule 12(b)(7) motion, a court must accept all factual
allegations in the complaint as true”). The moving party may satisfy this burden “by
providing affidavits of persons having knowledge of these interests as well as other
relevant extra-pleading evidence.” Collier, 17 F.3d at 1293 (internal quotation omitted).
“A Rule 12(b)(7) motion will not be granted on the vague possibility that persons who
are not parties may have an interest in the action.” Nat'l Union, 2014 WL 1016072, at
*2 (internal quotation omitted).
Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a complaint
for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6).
In deciding a motion under Rule 12(b)(6), a court must “accept as true all well-pleaded
factual allegations . . . and view these allegations in the light most favorable to the
plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (quoting Smith v.
United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). Nonetheless, a plaintiff may not
rely on mere labels or conclusions, “and a formulaic recitation of the elements of a
cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
“To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Plausibility
refers “to the scope of the allegations in a complaint: if they are so general that they
encompass a wide swath of conduct, much of it innocent, then the plaintiffs ‘have not
nudged their claims across the line from conceivable to plausible.’”
Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Twombly, 550 U.S. at 570).
“The burden is on the plaintiff to frame a ‘complaint with enough factual matter (taken as
true) to suggest’ that he or she is entitled to relief.” Id. (quoting Twombly, 550 U.S. at
556). The ultimate duty of the court is to “determine whether the complaint sufficiently
alleges facts supporting all the elements necessary to establish an entitlement to relief
under the legal theory proposed.” Forest Guardians v. Forsgren, 478 F.3d 1149, 1160
(10th Cir. 2007).
Defendants move to dismiss the Amended Complaint for lack of diversity
[#24, pp. 5-10].
Alternatively, Defendants argue that the Amended
Complaint fails to state a claim with respect to the civil theft and civil conspiracy counts.
[Id. at pp. 10-12]. Finally, in the event that the Court does not dismiss the Amended
Complaint, Defendants ask the Court to stay these proceedings pending the outcome in
the Russian Arbitration. [Id. at 12-15]. The Court addresses each of these arguments
A. Subject Matter Jurisdiction
Jurisdiction is premised upon 28 U.S.C. § 1332, diversity of citizenship. [#20, ¶
1]. Three issues arise with respect to the Court’s subject matter jurisdiction. First,
Defendants raise the possibility that, because both Mr. Serbinin, as the sole member of
Defendant Serbinin Law Firm, and Defendant Timofeev have dual citizenship with the
United States and Russia, complete diversity may not exist. [#24, p. 6 n.2]. Second,
Defendants argue that Ms. Bogomazov must be joined to the lawsuit and, once joined,
complete diversity does not exist. [Id. at 8-10]. Finally, Defendants raise the possibility
that the amount in controversy may not exceed $75,000. [Id. at 10].
1. Complete Diversity of Current Parties
“[D]iversity jurisdiction attaches only when all parties on one side of the litigation
are of a different citizenship from all parties on the other side of the litigation.” Depex
Reina 9 P’ship v. Texas Int’l Petroleum Corp., 897 F.2d 461, 463 (10th Cir. 1990).
“Where aliens from foreign states are on both sides of the case, the requirement of
complete diversity is lacking.” Oteng v. Golden Star Res., Ltd., 615 F. Supp. 2d 1228,
1234 (D. Colo. 2009). A limited liability company is a citizen of the states or countries of
which its members are citizens, and is not a citizen of the state in which it was
organized unless one of its members is a citizen of that state.
See, e.g., Hale v.
Mastersoft Int’l Pty. Ltd., 93 F. Supp. 2d 1108, 1112 (D. Colo. 2000); Grynberg v. Tellus
Operating Co., No. 14-cv-2535-WJM-KMT, 2015 WL 2024271, at *4 (D. Colo. Apr. 30,
Pursuant to the rule that a limited liability company is a citizen of the countries of
which its members are citizens, based upon the allegations in the complaint, Plaintiff is
a citizen of Russia and Hungary. [#20, ¶ 2]. Mr. Serbinin, as sole member of Serbinin
Law Firm, and Mr. Timofeev are both citizens of Colorado. [Id. at ¶¶ 3-4]. But, they
maintain dual citizenship with Russia.
[#24, p. 6 n.2].
The question, therefore, is
whether these dual citizenships render Defendants citizens of Russia, thereby
destroying complete diversity.
While the Tenth Circuit has not decided the issue, “a large number of courts hold
as to individuals who have dual citizenship that it is only the American citizenship that
counts, so long as the person is domiciled here.” Oteng, 615 F. Supp. 2d at 1235
(collecting cases). This Court adopts this rule. Thus, because Mr. Serbinin, as sole
member of Defendant Serbinin Law Firm, and Mr. Timofeev are both citizens of
Colorado domiciled in Colorado, the Court finds that they are only citizens of Colorado
for diversity purposes. Accordingly, as the case is currently styled, complete diversity
2. Ms. Bogomazov as a Required Party
Defendants argue that Ms. Bogomazov is a required party and must be joined as
a defendant in this lawsuit. Ms. Bogomazov is a citizen of Russia. [#24-2, p. 8] As a
result, if Ms. Bogomazov were added as a defendant in this lawsuit, complete diversity
would not exist and the Court would be divested of jurisdiction.
As indicated above, Federal Rule of Civil Procedure 12(b)(7) allows for the
dismissal of a case if a party fails to join a required party under Rule 19 of the Federal
Rules of Civil Procedure. Pursuant to Federal Rule of Civil Procedure 19(a), a party is a
required party if:
(A) In that person’s absence, the court cannot accord complete relief
among existing parties; or
(B) That person claims an interest relating to the subject of the action and
is so situated that disposing of the action in the person’s absence
as a practical matter impair or impede the person’s ability to
protect the interest; or
leave an existing party subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent obligations because
of the interest.
Defendants argue that the “Court could not possibly afford complete relief among
the parties in [Ms. Bogomazov’s] absence as her authority to cause documents to be
filed is directly at issue.” [#24, pp. 8-9]. Defendants fail to explain, however, why the
fact that Ms. Bogomazov’s authority may be relevant to the lawsuit prohibits the Court
from being able to afford complete relief among the parties in her absence.
Defendants further argue that Ms. Bogomazov claims an interest in the lawsuit
and that disposing of the action without her would impair or impede her ability to protect
that interest. [Id. at p. 9]. Once again, however, Defendants fail to provide any support
for this assertion. Although Defendants argue that “[d]isposing of this case must, out of
sheer necessity, require a determination of [Ms.] Bogomazov’s ownership interest or
authority over [Collins Financial]” [#33, p. 3], Defendants have failed to explain how
such a result would have any precedential impact upon Ms. Bogomazov or how this
lawsuit could impair her interest, if any, in Collins Financial. Nor can the Court discern
any such impact or impairment.
Defendants’ reliance on N. Arapaho Tribe v. Harnsberger, 697 F.3d 1272, 1279
(10th Cir. 2012) is unpersuasive. In Harnsberger, “the sole issue raised” by the lawsuit
was whether certain land in the State of Wyoming was “Indian country” and thus not
subject to state governance and taxation. Id. at 1276-77. The Tenth Circuit affirmed a
finding that the Eastern Shoshone Tribe was a required party under Rule 19(a),
because “whether a particular tract of land is or is not Indian country has significant
implications for the governance of that land and the events occurring upon it” and such
a finding would have required the Eastern Shoshone to “assume greater jurisdiction
over it.” Id. at 1279. Here, Defendants have failed to offer any affirmative obligations
Ms. Bogomazov would acquire or any rights she would forfeit as a result of the Court’s
resolution of Plaintiff’s claims.
Instead, Defendants primarily argue that Ms. Bogomazov must be indispensable
because the Defendants were merely acting as agents for Ms. Bogomazov. [#24, pp. 67]. Defendants fail, however, to cite any cases for this proposition. Indeed, contrary to
Defendants’ argument, “[c]ourts have consistently concluded that ‘Rule 19 does not
require joinder of principal and agent.’” Dennis v. Wachovia Sec., LLC, 429 F.Supp.2d
281, 290 (D. Mass. 2006) (quoting Depriest v. BASF Wyandotte Corp., 119 F.R.D. 639,
640 (M.D. La. 1988)); see also Milligan v. Anderson, 522 F.2d 1202, 1205 (10th Cir.
1975) (citing Cass v. Sonnenblick-Goldman Corp., 287 F. Supp. 815, 818 (E.D. Pa.
1968) for the proposition that “even though a principal and his agent are both involved in
allegedly wrongful acts, they both are not necessarily indispensable parties to an action
arising out of those acts”).
This is especially true in this case where the Amended Complaint alleges that the
Defendants were independent tortfeasors. Specifically, the Amended Complaint alleges
that the Defendants conspired to steal Plaintiff’s identity, conspired to forge a Collins
Financial seal, conspired to create forged documents using that forged seal, and
conspired to file those forged documents with the Colorado Secretary of State and the
Russian Arbitration. [#20, ¶ 11]. “It has long been the rule that it is not necessary for all
joint tortfeasors to be named as defendants in a single lawsuit.” Temple v. Synthes
Corp., Ltd., 498 U.S. 5, 7 (1990); see also Yates v. Portofino Equity & Mgmt. Co., No.
08-cv-00324-PAB-MJW, 2009 WL 416441, at *2 (D. Colo. Feb. 19, 2009) (“A long line
of precedent holds that joint tortfeasors are not indispensable under Rule 19—a plaintiff
may generally choose whether to sue all joint tortfeasors collectively or pursue claims
against any one of them.”). The fact that Colorado has abolished the doctrine of joint
and several liability for torts except in certain limited circumstances does not change
this analysis. See Yates, 2009 WL 416441, at *3 (“[E]ven assuming Colorado’s system
of comparative fault applies in this case, I discern no reason to stray from the general
rule that joint tortfeasors are permissive parties and need not be joined in one action
under Rule 19. . . . Additionally, a corporation and its agents may both be liable for
concurrent torts.”). Accordingly, the Court finds that Ms. Bogomazov is not a required
party and complete diversity exists. 2
3. Amount in Controversy
For the Court to have subject matter jurisdiction based upon diversity of the
parties, the “matter in controversy [must] exceed the sum or value of $75,000,
exclusive of interests and costs.” 28 U.S.C. § 1332(a). In cases initiated in federal
court, to determine whether the amount in controversy exceeds $75,000, the Court must
look at the complaint and determine whether it contains factual allegations sufficient to
establish the required amount in controversy. See Baker v. Sears Holdings Corp., 557
Because the Court finds that Ms. Bogomazov is not a required party, the Court need
not address the remaining two requirements for compulsory joinder.
F. Supp.2d 1208, 1211 (D. Colo. 2007). In such cases, the amount claimed by the
plaintiff is presumed to be sufficient to support diversity jurisdiction. See id. at 1212.
Here, Defendants assert that “it is impossible to fathom” that re-filing of the
documents with the Colorado Secretary of State caused more than $75,000 in
damages. This statement, however, unduly restricts the nature of the allegations in this
case. The Amended Complaint alleges that Defendants improperly had the Russian
Arbitration dismissed. [#20, ¶¶ 11, 19 & 30(f)(i)]. The Russian Arbitration involved a
dispute over the divestiture of Plaintiff’s interest in the chemical plant, purportedly worth
approximately one million dollars. [Id. at ¶¶ 7-8]. Thus, if the Amended Complaint’s
allegations are true, Defendants’ actions could have resulted in losses nearing one
million dollars. As a result, the amount in controversy requirement has been met. 3
Accordingly, because complete diversity exists and the amount in controversy exceeds
$75,000, the Court DENIES the Motion to Dismiss for lack of subject matter jurisdiction.
B. Failure to State a Claim
Defendants move to dismiss Counts One and Two for failure to state a claim.
Specifically, Defendants argue that the Amended Complaint fails to allege that the
Defendants themselves took any property from Plaintiff, as required for the civil theft
[#24, p. 10-11].
Similarly, Defendants argue that because the Amended
Complaint fails to assert that Defendants have taken any property from the Plaintiff, the
civil conspiracy claim also fails. [Id. at 12].
Moreover, Plaintiff’s COCCA claim has the potential for treble damages. See Colo.
Rev. Stat. § 18-17-106(7).
1. Civil Theft
Colorado Revised Statutes section 18-4-405 provides a civil cause of action for
victims of theft. See Itin v. Ungar, 17 P.3d 129, 133-34 (Colo. 2000). To state a claim
for civil theft, Plaintiff must allege that: (1) Defendants knowingly obtained control over
its property without authorization, and (2) Defendants did so with the specific intent to
permanently deprive Plaintiff of the benefit of the property. Huffman v. Westmoreland
Coal Co., 205 P.3d 501, 509 (Colo. App. 2009). Here, the Amended Complaint alleges
that Defendants took over control of Collins Financial itself. [#20, ¶¶ 11 & 13] Further,
the Amended Complaint alleges that Defendants filed fraudulent paperwork in the
Russian Arbitration, causing the Russian Arbitration to be dismissed. [Id. at ¶¶ 11, 13 &
30(f)(1)]. Through the Russian Arbitration, Collins Financial was attempting to reacquire
its primary asset, an asset which Plaintiff alleges was wrongfully diverted from Collins
Financial. Such allegations adequately assert a civil theft cause of action.
Defendants assert that “[t]here are absolutely no allegations that the named
Defendants ever created or filed any documents suggesting that they (individually)
purported to own any interest in [Collins Financial] (and therefore they have not
undertaken any action to exercise control over the Company’s interest in the Russian
chemical plant).” [#24, p. 10] (emphasis in original). But, the Amended Complaint
adequately alleges that Defendants obtained control over Collins Financial without
authorization. Specifically, the Amended Complaint alleges that Defendants: (1) placed
Defendant Timofeev in the position of Manager/Director of Collins Financial, (2) placed
Defendant Serbinin Law Firm as the Registered Agent, and (3) terminated the Russian
Arbitration which involved Plaintiff’s attempt to reacquire its primary asset.
allegations adequately satisfy the requirement that Defendants knowingly obtained
control over Collins Financial’s property without authorization.
The fact that Defendants may have been acting on another’s behalf does not
change the analysis. Colorado’s civil theft statute derives from the criminal theft statute.
See generally Itin, 17 P.3d at 133-34. Interpreting the criminal statute, the Colorado
Court of Appeals has held that “it is not necessary that a defendant maintain absolute
control over the stolen property for his or her own personal use.” People v. Witek, 97
P.3d 240, 244 (Colo. App. 2004). This only makes sense; a mother who steals a car for
her son is no less guilty of theft than one who steals the car for her own use. Thus, the
fact that Ms. Bogomazov may have been the ultimate beneficiary of Defendants’ alleged
actions does not invalidate the civil theft claim. Accordingly, the Court DENIES
Defendants’ Motion to Dismiss the civil theft claim.
2. Civil Conspiracy
There are five elements for a civil conspiracy claim in Colorado. See Jet Courier
Serv., Inc. v. Mulei, 771 P.2d 486, 502 (Colo. 1989). To establish a civil conspiracy in
There must be (1) two or more persons, and for this purpose a corporation
is a person; (2) an object to be accomplished; (3) a meeting of the minds
on the object or course of action; (4) one or more unlawful overt acts; and
(5) damages as the proximate result thereof.
Id. (internal quotation omitted). Defendants’ Motion does not challenge the first three
elements. As demonstrated above, the Amended Complaint has adequately alleged a
claim for civil theft, the unlawful act of the conspiracy claim. 4 Thus, the only remaining
Defendants’ argument in support of dismissing the civil conspiracy claim is not entirely
clear. At times, it appears that Defendants are only arguing that the civil conspiracy
question is whether the Amended Complaint adequately alleges damages as the
proximate result of the conspiracy.
On this point, Defendants argue that “nothing that the Defendants are alleged to
have done changed anything about the ownership (or identity) of” Collins Financial.
[#24, p. 12]. Contrary to Defendants’ argument, the Amended Complaint alleges that
Defendants conspired: (1) to place Mr. Timofeev as the company’s Manager, (2) to
place Mr. Serbinin as the company’s registered agent, and (3) to forge documents to
dismiss Plaintiff’s claims in the Russian Arbitration.
[#20, ¶ 25].
Complaint sufficiently alleges damages as a result of these alleged actions of the
conspiracy. Specifically, the Amended Complaint alleges that the Russian Arbitration
was dismissed as a result of Defendants’ actions. [#20, ¶¶ 11, 13, 15]. Accordingly,
because the Amended Complaint adequately alleges all of the elements for a civil
conspiracy claim, the Court DENIES the Motion to Dismiss the civil conspiracy claim.
C. Motion to Stay
Finally, Defendants move the Court for a stay of all proceedings pending
resolution of the Russian Arbitration.
[#24, pp. 13-14].
“Federal courts have the
inherent power to stay an action based on the pendency of a related proceeding in a
foreign jurisdiction.” Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Kozeny, 115 F.
Supp.2d 1243, 1246 (D. Colo. 2000). This inherent power, however, must be balanced
claim is derivative of the civil theft claim and, to the extent the civil theft claim fails, so
too does the civil conspiracy claim. [#33, p. 11] (“If the Court determines that there has
been no theft, as a matter of law, then there is nothing actionable for conspiracy which
is a derivative claim.”). This argument fails, because the Court has found that the
Amended Complaint states a cause of action for civil theft. Because Defendants may
be asserting that the Amended Complaint fails to allege damages, however, the Court
will address that issue below.
against the federal courts’ strict duty to exercise the jurisdiction conferred upon them by
Congress. Id. As a result, federal courts have shown reluctance to decline jurisdiction.
In determining whether to stay litigation in the event of parallel litigation in an
international forum, courts have considered numerous factors.
See id. at 1246-47.
These include: 1) similarity of parties and issues involved in the foreign litigation; 2)
judicial efficiency; 3) the adequacy of relief available in the alternative forum; 4) issues
of fairness and convenience to the parties, counsel and witnesses; 5) the possibility of
prejudice to any of the parties; and 6) the temporal sequence of the filing of the actions.
Id. at 1247. Weighing these factors, the Court concludes that a stay is not warranted.
First, the instant case involves different parties and, to some extent, different
issues. Neither of the defendants is a party to the Russian Arbitration. While the
Russian Arbitration may decide the rightful owner of Collins Financial, it will not decide
whether Defendants committed civil theft, civil conspiracy or violations of COCCA.
Thus, while a favorable ruling for Ms. Bogomazov in the Russian Arbitration could
impact Plaintiff’s claims in this litigation, an unfavorable ruling for her would not
ultimately resolve the issues raised here. 5
Second, judicial efficiency supports denying the request to stay the proceedings.
Neither party has provided an anticipated time-frame for completion of the Russian
Arbitration. As a result, at this point, any stay would be indefinite. Such a result runs
contrary to the efficient administration of justice.
The Court finds it unnecessary to resolve whether any decision regarding the
ownership of Collins Financial in the Russian Arbitration would be binding on this Court.
Third, both the inadequacy of relief in the alternative forum and issues of fairness
counsel against staying this matter.
Defendants are not parties to the Russian
Arbitration and it is not clear that a Russian court could obtain jurisdiction over either of
the defendants. As a result, Plaintiff cannot obtain relief against Defendants in the
Russian Arbitration, and delaying the instant litigation indefinitely would be unfair to
The Court acknowledges the possibility of some prejudice to Defendants by
allowing this case to proceed.
Defendants may face some prejudice by having to
defend themselves in this action without the potential benefit of the Russian Arbitration’s
conclusion regarding Ms. Bogomazov’s ownership of Collins Financial.
“defendants always are burdened when they are sued, whether the case ultimately is
dismissed, summary judgment is granted, the case is settled, or a trial occurs.”
Breckenridge v. Vargo & Janson, P.C., No. 16-cv-01176-WJM-MEH, 2016 WL 7015702,
at *2 (D. Colo. Nov. 28, 2016). This factor does not outweigh those factors that support
denying the stay.
While this case was brought after the Russian Arbitration, the Court finds that the
timing of the litigation neither supports nor counsels against a stay of the proceedings.
This is not a case where the instant matter was filed in retaliation for the filing of the
Russian Arbitration or in an attempt to forum shop. Rather, the Amended Complaint
was filed, in part, based upon alleged fraudulent actions undertaken by Defendants in
relation to the Russian Arbitration. As a result, the timing of the litigation does not
impact the Court’s decision on the request to stay the proceedings.
As a final point, the Court notes that this case and the Russian Arbitration both
involve disputes between private parties.
There is no indication that the Russian
government has any interest in either of the cases, or that moving forward with this case
will somehow impact international relations. As a result, after weighing all of the factors
set forth above, and mindful of the Court’s duty to exercise jurisdiction conferred by
Congress, the Court DENIES the request to stay the proceedings.
For the foregoing reasons, the Court DENIES Defendants’ Motion.
DATED: January 25, 2017
BY THE COURT:
s/Scott T. Varholak
United States Magistrate Judge
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