AKISHEV et al v. KAPUSTIN et al
Filing
377
ORDER that the MOTION to Dismiss, MOTION to Dismiss for Lack of Jurisdiction by EMPIRE UNITED LINES, CO., INC. and MICHAEL HITRINOV 320 is DENIED. Signed by Judge Noel L. Hillman on 9/29/2016. (tf, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
ARDAK AKISHEV, et al.,
Plaintiffs/Cross-Claim
Plaintiffs,
V.
Civil Action No.
13-7152(NLH)(AMD)
MEMORANDUM
OPINION & ORDER
SERGEY KAPUSTIN, GLOBAL AUTO,
INC., MICHAEL HITRINOV, EMPIRE
UNITED LINES, CO., INC., et al.,
Defendants/Cross-Claim
Defendants.
APPEARANCES:
ANNA V. BROWN
MARIA TEMKIN
BROWN & TEMKIN, LLC
1700 MARKET STREET
SUITE 1005
PHILADELPHIA, PA 19103
On behalf of plaintiffs/cross-claim plaintiffs
JON WERNER
LYONS & FLOOD LLP
ONE EXCHANGE PLAZA
55 BROADWAY, SUITE 1501
NEW YORK, NY 10006
On behalf of cross-claim defendants Michael Hitrinov and
Empire United Lines, Co., Inc.
HILLMAN, District Judge
This case initially arose out of the claims of
plaintiffs, a group of twenty-one victims from Russia, who
described a “bait-and-switch” fraudulent scheme masterminded
and operated by defendants, Sergey Kapustin, several of his
business associates, and his corporate entities, through
deceptive online advertising aimed at luring international
customers to wire funds for automobile purchases and then
switching to higher prices, misrepresenting mileage, condition
and location and ownership of these vehicles, extorting more
funds, and failing to deliver the paid-for-vehicles.
A tortured procedural history, including the bankruptcies
of Kapustin and the corporate entities which were dismissed by
this Court as fraudulent, and the entry of default judgment
against Kapustin and the corporate entities (hereinafter
“Global defendants” or “Global cross-claim plaintiffs”) for
fraud and RICO violations, among other claims, has led to the
present motion of Michael Hitrinov a/k/a Michael Khitrinov and
Empire United Lines, Co., Inc. (the “EUL defendants”) to
dismiss plaintiffs’ cross-claims against them.
Plaintiffs’
cross-claims against the EUL defendants arose when the Global
defendants assigned their cross-claims against the EUL
defendants to plaintiffs.
The Global entities had filed an action in the U.S.
District Court for the Eastern District of New York (the “EDNY
action”) for breach of contract, conversion, and replevin
against the EUL defendants.
The Global entities then filed
cross-claims against the EUL defendants in this case.
The
cross-claims asserted in this case were identical to the
claims in the EDNY action, but were limited to the vehicles
purchased by five plaintiffs.
The Global entities also
alleged that the EUL defendants seized the 16 vehicles located
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at the time in Elizabeth, New Jersey without any legal or
equitable right.
The EDNY action was dismissed, and the
Global entities then amended their cross-claims here to
include all claims in the EDNY action, including replevin of
the Elizabeth Vehicles, and to include Sergey Kapustin as a
plaintiff individually.
Thus, through the assignment of the Global entities’
claims against the EUL defendants, the 21 plaintiffs who were
victims of Kapustin’s and the Global entities’ fraud are now
prosecuting the claims of the Global entities against the EUL
defendants.
The EUL defendants have moved to dismiss these
claims on several bases, including improper service and lack
of subject matter jurisdiction.
The cross-claim plaintiffs
have opposed the EUL defendants’ motion.
Without having to delve into the vast and complex
procedural history of this case, the Court finds that the
issues regarding service of process on the EUL defendants, can
be cured by the cross-claim plaintiffs serving (or re-serving)
the EUL defendants with the First Amended Cross-Claim
Complaint (“FACCC”) in accordance with Federal Civil Procedure
Rule 4.
See Fed. R. Civ. P. 4(m) (“If a defendant is not
served within 90 days after the complaint is filed, the court—
on motion or on its own after notice to the plaintiff—must
dismiss the action without prejudice against that defendant or
order that service be made within a specified time. But if the
plaintiff shows good cause for the failure, the court must
3
extend the time for service for an appropriate period.”);
Petrucelli v. Bohringer & Ratzinger, 46 F.3d 1298, 1308 (3d
Cir. 1995) (explaining that under Rule 4(m), the district
court must first determine whether good cause exists for
failure to serve, and if good cause exists, the district court
must extend the time for service).
Because good cause for the
service issues exists, the cross-claim plaintiffs shall serve
the FACCC on the EUC defendants within 30 days of the date of
this Opinion.
Once the cross-claim plaintiffs have served the EUL
defendants with the FACCC, 1 the EUL defendants may answer or
otherwise respond to the FACCC as permitted under the rules. 2
See Grand Entm't Grp., Ltd. v. Star Media Sales, Inc., 988
F.2d 476, 492 (3d Cir. 1993) (“A district court's power to
assert in personam authority over [a defendant] is dependent
not only on compliance with due process but also on compliance
with the technicalities of Rule 4.”).
Therefore, for good cause having been shown,
IT IS on this
29th
day of
September
, 2016
1
The Court notes that relaxed personal service is justified
when a defendant has actively evaded service and there is
clear evidence that the defendant actually received the papers
at issue. Gambone v. Lite-Rock Drywall Corp., 124 F. App'x
78, 80 (3d Cir. 2005).
2
Until the issues concerning service of the FACCC are
resolved, the Court cannot address substantively defendants’
other bases for the dismissal of the FACCC.
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ORDERED that the MOTION to Dismiss, MOTION to Dismiss for
Lack of Jurisdiction by EMPIRE UNITED LINES, CO., INC. and
MICHAEL HITRINOV [320] be, and the same hereby is, DENIED; and
it is further
ORDERED that cross-claim plaintiffs shall serve the First
Amended Cross-Claim Complaint in accordance with Federal Civil
Procedure Rule 4 within 30 days.
At Camden, New Jersey
s/ Noel L. Hillman_
NOEL L. HILLMAN, U.S.D.J.
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