Khaldei v. Kaspiev

Filing 144

OPINION & ORDER #104405: For the foregoing reasons, the New Jersey writ and judgment of replevin cannot be enforced because Plaintiff has failed to demonstrate that service of process was validly effected. Accordingly, summary judgment on Count One of the complaint is entered in favor of Defendant. A conference will be held on Tuesday, June 24, 2014 at 11:00 A.M. in Courtroom 20-C to discuss each party's remaining claims, the status of expert discovery, and the appropriate course of action moving forward. (Signed by Judge John F. Keenan on 6/9/2014) (tn) Modified on 6/10/2014 (ca).

Case 1:09-md-02013-PAC Document 57

Filed 09/30/10 Page 1 of 45
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: June 9, 2014

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------X
UNITED STATES DISTRICT COURT
ANNA SOUTHERN KHALDEI,OF NEW YORK
EFIMOVNA DISTRICT
:
:
-----------------------------------------------------------x
Plaintiff,
:
In re FANNIE MAE 2008 SECURITIES
:
08 Civ. 7831 (PAC)
:
No. 10 MD 2013 (PAC)
LITIGATION
:
09 Civ. 8328 (JFK)
-against:
OPINION & ORDER
:
:
:
OPINION & ORDER
KALMAN KASPIEV,
:
-----------------------------------------------------------x
:
Defendant.
:
------------------------------X
HONORABLE PAUL A. CROTTY, United States District Judge:
Appearances

For Plaintiff Anna Efimovna Khaldei
BACKGROUND1
LAW OFFICE OF DANIEL J. ROTHSTEIN, P.C.
By: The early years of this decade saw a boom in home financing which was fueled, among
Daniel Rothstein
PORZIO, BROMBERG & NEWMAN P.C.
other things, by low interest rates and lax credit conditions. New lending instruments, such as
By: Joshua Abramson
subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans)
For Defendant Kalman Kaspiev
PROSKAUER ROSE LLP
kept the boom going. Borrowers played a role too; they took on unmanageable risks on the
By: Margaret Dale
Victoria Loughery
assumption that the market would continue to rise and that refinancing options would always be
available in the future. Lending discipline was lacking in the system. Mortgage originators did
JOHN F. KEENAN, United States District Judge:
not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the
In this diversity action, Plaintiff Anna Efimovna Khaldei,
originators sold their loans into the secondary mortgage market, often as securitized packages
a Russian citizen, and Defendant Kalman Kaspiev previously
known as mortgage-backed securities (“MBSs”). MBS markets grew almost exponentially.
cross-moved for partial summary judgment as to Count One of the
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly
complaint. The issue in both motions was the enforceability of
and home prices began to fall. In light of the changing housing market, banks modified their
a 2002 judgment of replevin obtained by Plaintiff against
lending practices and became unwilling to refinance home mortgages without refinancing.
Defendant in New Jersey state court. In its December 5, 2013
Opinion and Order, this Court concluded that an evidentiary
1

Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,

hearing was22, 2009. For purposes ofdetermine allegations in the Amended Complaint are taken as true.
dated June necessary to this Motion, all whether valid service of
1

process had been effected in the New Jersey action. See Khaldei
v. Kaspiev, No. 10 Civ. 8328, 2013 WL 6331794, at *5–6 (S.D.N.Y.
Dec. 5, 2013).
The evidentiary hearing was held over three days, primarily
to ascertain whether Defendant had lived at the address where
service was attempted on January 4, 2001.

After the hearing,

the parties submitted supplemental briefs, which the Court has
duly considered.

For the reasons that follow, the Court

concludes that Plaintiff has failed to prove that service of the
New Jersey replevin action was valid.

Accordingly, the 2002

judgment is unenforceable and summary judgment on Count One of
the complaint is entered in favor of Defendant.
I.
A.

Background

The 2002 Judgment

The Court presumes familiarity with the parties’ dispute,
the facts of which are set forth in prior opinions. See, e.g.,
Khaldei, 2013 WL 6331794, at *1–3.

Only the most pertinent

facts are recounted below.
In December 2000, Plaintiff initiated a lawsuit against
Defendant in New Jersey state court to recover photographs and
negatives originally entrusted to Defendant as the agent of
Plaintiff’s deceased father, World War II photographer Evgeny
Khaldei (“Evgeny”). (Compl. Ex. E.)
2

Plaintiff attempted to

serve Defendant at an address in Long Branch, New Jersey (the
“Long Branch Apartment”).

This apartment belonged to Marina

Otis, a woman with whom Defendant maintained a relationship.

In

the instant litigation, Defendant admits that he stayed at the
Long Branch Apartment sometimes, and that he used it in
connection with various matters, including his work with Evgeny.
But he represents that he never truly lived there, and was not
present at all during January 2001 because he had broken up with
Otis in or around the fall of 1999.
In an affidavit filed in the New Jersey court, the process
server stated that Otis (referred to both by name and as
Defendant’s wife) had accepted service of process on Defendant’s
behalf. (Rothstein S.J. Aff. Ex. 27.)
accepted the papers.

Otis denies that she had

Instead, she represents in a sworn

declaration to this Court that she found the papers taped to her
door. (Otis Dec. ¶ 11.)

She immediately sent the service papers

to the clerk of court in New Jersey along with a letter
explaining that Defendant no longer lived with her. (Id. Ex. 1.)
Notwithstanding her efforts, the Monmouth County Sherriff’s
Office tried to execute a writ of replevin at the Long Branch
Apartment in August 2001.

Otis told the officer that Defendant

no longer lived there. (Rothstein S.J. Aff. Ex. 37.)

3

Still relying on the January 4, 2001 alleged service,
Plaintiff obtained a judgment of replevin in New Jersey state
court on March 1, 2002. (Id. Ex. 36.)

Plaintiff did not pursue

her damages claims because she could not find Defendant, and the
court administratively dismissed the case. (Pl. S.J. Br. at 4.)
Defendant contends that he learned of the action against him at
some point “between 2003 and 2005,” but that when he inquired
about it at the New Jersey courthouse, a clerk told him that the
case had been dismissed. (Def. Br. at 7.)
Plaintiff’s counsel finally reached Defendant by telephone
in 2007, and they had several discussions about settling the
dispute. (Pl. Aff. ¶ 18.)

Those discussions bore no fruit.

In

2010, Plaintiff revived her New Jersey judgment against
Defendant and reasserted her damages claims.

In a letter to the

New Jersey court, Defendant requested that the case be
transferred to New York, where he has lived in a Manhattan
apartment since June 2001. (Rothstein S.J. Aff. Ex. 46.)
Plaintiff consented, the instant action was opened, and
Defendant retained pro bono counsel.
B.

The Parties’ Cross-Motions

In her Rule 56 motion, Plaintiff argued that she is
entitled to summary judgment “on her right to posses [sic] the
impounded photographs and negatives” by virtue of the 2002 New
4

Jersey judgment. (Pl. Br. at 5.)

Defendant cross-moved for a

declaration that the New Jersey judgment is unenforceable.

He

asserted that he was never properly served in New Jersey because
he did not live at the Long Branch Apartment when service was
attempted.
After determining that the principal question was
Defendant’s residence on or around January 4, 2001, this Court
concluded that the evidence before it was unclear on that
question.

An evidentiary hearing was scheduled “to determine

Defendant’s residential status as of January 2001, whether he
was on notice of the litigation prior to the entry of default
judgment, and any other facts that are relevant to the limited
jurisdictional question.” Khaldei, 2013 WL 6331794, at *6.
C.

The Evidentiary Hearing

The evidentiary hearing took place over three days, on
January 29, 31, and February 25, 2014.

Defendant was the only

person to testify at the hearing.
At first, Defendant testified that he never lived with Otis
in Long Branch. (Tr. at 13–14.)

He maintained that he instead

lived with his sister in Brooklyn from about 1994 until May 31,
2001, at which time he moved to an apartment in Manhattan. (Id.
at 10–11.)

Defendant stated that he did stay or visit with Otis

at various times during their relationship, but ceased doing so
5

upon their breakup in 1999. (Id. at 13.)

His testimony

regarding the timing of their breakup was imprecise. (Id.
(“about autumn-time”); id. at 39 (“August/September”); see Pl.
Ex. 4 ¶ 55 (“approximately July 1999”).)

And, at times,

Defendant indicated that he did indeed live with Otis for an
extended period. (Tr. at 106–08.)

However, he has never

admitted to living with her in or around the relevant period in
January 2001.
The documentary evidence in this case, much of which was
discussed at the hearing, provides some clues regarding
Defendant’s whereabouts.
•

The evidence includes:

Defendant’s amended 1997 tax return, filed in 2004,
which lists his home address at his sister’s Brooklyn
residence. (Pl. Ex. 24.)

•

Wire transfers sent by Defendant to Irina Balakina, the
mother of Evgeny’s son Efim. (Pl. Ex. 11, 17.)

On

these money orders, he listed his address as the Long
Branch Apartment.

At the hearing, Defendant testified

that he used this address not because he lived there,
but because he wanted to conceal the fact of his
breakup with Otis from Balakina. (Tr. at 49–50; accord
Pl. Ex. 4 ¶ 58.)

He further testified that he sent

these wire transfers from a Western Union in Long
6

Branch because he periodically stayed with his son at a
house in Sea Bright, New Jersey. (Tr. at 49–50.)
•

Defendant’s current driver’s license, which lists his
Manhattan address. (Def. Ex. A.)

This license was

issued on October 4, 2001, after the relevant time
period.

Defendant testified that his prior license

listed his sister’s Brooklyn address. (Tr. at 152.)
•

Otis’s sworn declaration, and her earlier letter to the
clerk of court in New Jersey, discussed previously.
(Otis Dec. & Ex. 1.)

•

Royalty statements from an entity known as Corbis.
Evgeny and Defendant had previously entered into a
licensing agreement with Corbis, whereby they supplied
Evgeny’s negatives to Corbis for scanning and licensing
to third parties in exchange for royalties. (Rothstein
S.J. Aff. Ex. 3.)

The Corbis royalty statements in the

summary judgment record were ostensibly sent to
Defendant at various times from 1998 to 2000.
(Rothstein S.J. Aff. Ex. 6, 11-12, 14-15, 19-20, 22.)
Plaintiff’s counsel introduced four of these royalty
statements into evidence at the hearing:

October 1999,

January 2000, April 2000, and July 2000. (Pl. Ex. 4.)
Defendant acknowledged receiving the first royalty
7

statement in October 1999, but not the three from 2000.
(Tr. at 33–36.)

He produced all four of them in this

litigation, although defense counsel speculated that he
may have received copies of them belatedly from Corbis.
(Id. at 37; accord id. at 141 (“[L]ater, they send me,
like, three or four statements at once to Brooklyn.”).)
There was very little testimony at the hearing regarding
the other question explicitly posed by the Court in its earlier
ruling, “whether [Defendant] was on notice of the litigation
prior to the entry of default judgment.” Khaldei, 2013 WL
6331794, at *6; see Tr. at 8; 53.

Plaintiff’s counsel

repeatedly asked Defendant if Otis gave him any court documents
after they reconciled. (Id. at 110–113.)

He testified that she

did not give him any papers, and that their reconciliation did
not occur until 2003, well after the judgment of replevin was
entered in New Jersey. (Id.)

Additionally, while there was

extensive discussion of unrelated litigation against Defendant
by other parties, no evidence was introduced to suggest that
Defendant knew of the pendency of the New Jersey replevin action
before judgment was entered in that action on March 1, 2002.
After the evidentiary hearing, the parties filed
simultaneous supplemental briefs.

Upon being served with

Plaintiff’s brief, defense counsel objected to that brief’s
8

references to certain exhibits not admitted into evidence at the
hearing.

The Court will resolve those objections before

proceeding to the jurisdictional question.
II.

The Dispute over the Admitted Evidence

At the outset, it is necessary to resolve the parties’
dispute over precisely which exhibits should be considered by
the Court in ruling on the instant matter.

By letter dated

March 27, 2014, Defendant asks the Court to strike or disregard
Plaintiffs’ Exhibits 5, 15–16, 19–21, 23, 27, and 41–45 on the
grounds that these exhibits were not admitted into evidence at
the evidentiary hearing or part of the summary judgment record
already before the Court.
At the hearing, this Court was quite clear that any
documents that the parties intended to rely upon in their posthearing submissions must either be admitted at the hearing or be
part of the summary judgment record.

As the Court noted,

THE COURT:
. . . A posthearing submission only
covers what took place at the hearing.
You could
summarize the facts at the hearing.
You could make
arguments as to what took place at the hearing, and
you can cite law that you think applies to what took
place at the hearing, but you can’t put new documents
in. . .
I’m not going to take submissions that
contain new documents that were not in evidence at the
hearing. That’s all I’m trying to say.
MR. ROTHSTEIN:
THE COURT:

Yes, I understand.

Thank you.
9

Thank you.

(Tr. at 116.)
The Court will not now reverse course on these ground
rules, which were understood and agreed to by all. 1

Accordingly,

documents submitted as exhibits to the parties’ summary judgment
briefing will be considered, as will exhibits received into
evidence at the hearing.

Plaintiffs’ Exhibits 19–21, 23, 27,

and 41–45 were neither submitted on summary judgment nor
admitted into evidence at the hearing, and so the Court will not
consider them.

The record reflects some ambiguity about whether

Exhibits 5 and 15 were admitted at the hearing; the Court will
consider these.

It will also consider Exhibit 16, a March 15,

2011 letter from Plaintiff’s counsel to the Court, to the extent
it is relevant.

Exhibit 16 was not admitted at the hearing but

is part of the case file. Cf. Hearing Tr. at 116 (“I’m not going
to take submissions that contain new documents that were not in
evidence at the hearing.” (emphasis added).)

1

Counsel’s repeated protest that documents should be belatedly
admitted into evidence because he was “limited by time” at the hearing
borders on the absurd. (ECF No. 143 at 2; see id. at 10–12.) Counsel
had more than four hours over three days to introduce evidence at the
hearing.

10

III. Plaintiff Has Not Demonstrated that Service of Process
Was Validly Effected
A.

Relevant Legal Standards

As this Court discussed in its December 5, 2013 Opinion, a
default judgment is void and cannot be enforced if the rendering
court did not have personal jurisdiction over the defendant.
See, e.g., City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d
114, 138–39 (2d Cir. 2011).

In the instant case, then, the New

Jersey judgment against Defendant is enforceable only if the
rendering New Jersey court had personal jurisdiction over him –
that is, only if he was properly served. See Sartor v.
Toussaint, 70 F. App’x 11, 13 (2d Cir. 2002) (summary order) (“A
judgment is void for lack of personal jurisdiction over the
defendant where service of process was not properly effected.”)
(citations omitted).

“Although there is no judicial discretion

when considering a jurisdictional question such as the
sufficiency of process, when confronted with equally reliable
but conflicting accounts, courts should resolve any doubts in
favor of the party seeking relief.” Am. Inst. of Certified Pub.
Accountants v. Affinity Card, 8 F. Supp. 2d 372, 375 (S.D.N.Y.
1998).
Despite arguing that the New Jersey judgment is void for
lack of personal jurisdiction, Defendant has made his motion
under Rule 56 rather than Rule 60.
11

His reason for this is

unclear.

Rule 60(b)(4) provides, in relevant part:

“On motion

and just terms, the court may relieve a party . . . from a final
judgment . . . [if] the judgment is void.” Fed. R. Civ. P.
60(b)(4); see, e.g., Local 78, Asbestos, Lead & Hazardous Waste
Laborers v. Termon Constr., Inc., No. 01 Civ. 5589, 2003 WL
22052872, at *3 (S.D.N.Y. Sept. 2, 2003) (“[A] default judgment
entered against the defendant by means of improper service is
void under Rule 60(b)(4).”).

Regardless of whether the New

Jersey judgment is a “default” judgment, as both parties refer
to it, it is unquestionably “final” as required by Rule
60(b)(4).

The rule applies even where the court hearing the

motion is not the same court that entered the default judgment.
See, e.g., MWH Int’l, Inc. v. Inversora Murten S.A., No. 11 Civ.
2444, 2012 WL 3155063, at *7–8 (S.D.N.Y. Aug. 3, 2012)
(concerning a judgment from the District of New Jersey); Avelar
v. J. Cotoia Constr., Inc., No. 11 Civ. 2172, 2011 WL 5245206,
at *2 (E.D.N.Y. Nov. 2, 2011) (rendering void a state court
default judgment).

Accordingly, the Court construes Defendant’s

motion as arising under Rule 60(b)(4). See Arista Records, Inc.
v. Musemeci, No. 03 Civ. 4465, 2007 WL 3124545, at *2 (E.D.N.Y.
Sept. 18, 2007), report and recommendation adopted, 2007 WL
3145861 (E.D.N.Y. Oct. 25, 2007) (construing defendant’s motion
as arising under Rule 60(b)(4) because he alleged that he was
12

never served with a summons or complaint); see also Trustees of
Local 531 Pension Fund v. Am. Indus. Gases, Inc., 708 F. Supp.
2d 272, 274–75 (E.D.N.Y. 2010).
This is potentially significant because the Second Circuit
has held that the burden of proof on a defendant’s Rule 60(b)(4)
motion depends upon the circumstances of the case.

Ordinarily,

a plaintiff bears the burden of demonstrating that service of
process was validly effected. MWH Int’l, 2012 WL 3155063, at *8
(quoting Triad Energy Corp. v. McNell, 110 F.R.D. 382, 385
(S.D.N.Y. 1986)); Arista Records, 2007 WL 3124545, at *2;
Nature’s First Inc. v. Nature’s First Law, Inc., 436 F. Supp. 2d
368, 373 (D. Conn. 2006); cf. “R” Best Produce, Inc. v. DiSapio,
540 F.3d 115, 126 (2d Cir. 2008).

However, “on a motion to

vacate a default judgment based on improper service of process
where the defaulting defendant had actual notice of the original
proceeding but delayed in bringing the motion, the defendant
bears the burden of proof to establish that the purported
service did not occur.” Burda Media, Inc. v. Viertel, 417 F.3d
292, 299 (2d Cir. 2005).

Although that phrasing is somewhat

ambiguous, both the cases cited by Burda and those that cite to
it clarify that the burden of proof only shifts where the
defendant was on notice of the original proceeding before the
entry of default judgment. See id. (citing Bally Export Corp. v.
13

Balicar, Ltd., 804 F.2d 398, 401 (7th Cir. 1986) (“If the
defendant, after receiving notice, chooses to let the case go to
a default judgment, the defendant must then shoulder the burden
of proof when the defendant decides to contest jurisdiction in a
postjudgment rule 60(b)(4) motion.”); Miller v. Jones, 779
F. Supp. 207, 210 (D. Conn. 1991); Rohm & Haas Co. v. Aries, 103
F.R.D. 541, 543–44 (S.D.N.Y. 1984) (“[I]t is not unfair to place
the burden on a defendant who has chosen to contest jurisdiction
after judgment under Rule 60(b) rather than at the time of trial
pursuant to Rule 12.”)); accord SEC v. Internet Solutions for
Bus., Inc., 509 F.3d 1161, 1163 (9th Cir. 2007) (“We join our
sister circuits in holding that a defendant moving to vacate a
default judgment based on improper service of process, where the
defendant had actual notice of the original proceeding but
delayed in bringing the motion until after entry of default
judgment, bears the burden of proving that service did not
occur.” (citing Burda, 417 F.3d at 299) (emphasis added); id. at
1166 n.6 (“Whether or not Shaw had notice of the default
judgment is irrelevant.

Under the rule we have adopted, we look

at whether the defaulting defendant had notice that suit had
been filed.” (emphasis in original)). But see GMA Accessories,
Inc. v. BOP, LLC, No. 07 Civ. 3219, 2008 WL 762782, at *1–*2 &

14

n.2 (S.D.N.Y. Mar. 20, 2008) (focusing on whether defendant
delayed after entry of default).
Turning to the substantive question, the parties previously
agreed that the Court should look to New Jersey law to determine
whether service was proper.

Plaintiff specifically relies on

New Jersey Court Rule 4:4–4(a)(1), which confers personal
jurisdiction where service is made by leaving a copy of the
summons and complaint “at the individual’s dwelling place or
usual place of abode with a competent member of the household.”
The parties also agree that the rule has been interpreted to
refer to where the individual is actually living on the date
service is attempted. (Def. S.J. Br. at 11; Oral Arg. Tr. at 3.)
See also Fid. & Deposit Co. of Md. v. Abagnale, 234 A.2d 511,
519 (N.J. Super. Ct. Law Div. 1967) (collecting cases).

This

includes “person’s permanent home, even if he or she is
temporarily staying elsewhere,” but does not extend to “a house
from which defendant is absent for an extended and continuous
period of time.” Bank of New York for the Benefit of the Asset
Backed Certificates Series 2007-2 v. Tross, 2011 WL 1584426, at
*4 (N.J. Super. Ct. App. Div. Apr. 28, 2011) (unpublished
opinion) (citations and internal quotation marks omitted).
The record is unclear as to whether process was served on
Otis personally, or whether the server instead taped the papers
15

to the front door. Compare Rothstein S.J. Aff. Ex. 27, with Otis
Dec. ¶ 11.

“Rule 4:4–4(a)(1) requires hand delivery to a

person, not merely to a place.” Slater v. Hardin, No. L-8574-09,
2014 WL 923337, at *3 (N.J. Super. Ct. App. Div. Mar. 11, 2014).
However, this requirement will not destroy otherwise-valid
service where the serving party has substantially complied with
the rule in a way that affords reasonable notice to the
defendant. See id. at *3–4; see also Sobel v. Long Island Entm’t
Prods., Inc., 747 A.2d 796, 800–01 (N.J. Super. Ct. App. Div.
2000).

Defendant notes the discrepancy, but does not challenge

the service on this basis. (Def. Br. at 4 n.5.)

He maintains

only that service was invalid because Defendant did not live
there. (Def. S.J. Br. at 11–13).

Accordingly, even if the

papers were taped to the door as Otis contends, Defendant will
be bound by the judgment if the Court determines that he
actually lived there on or around January 4, 2001.
B.

Plaintiff Bears the Burden of Proving Valid Service
of Process

At the outset, the Court notes that under the circumstances
of this case, the Second Circuit’s test for whose burden it is
to prove or disprove valid service of process is a circular one.
As explained above, the burden is ordinarily Plaintiff’s, but
can shift to Defendant upon a showing that he knew about the
underlying New Jersey litigation before judgment was entered.
16

The problem is that here, the question of service overlaps
entirely with the question of notice.

If Defendant lived at the

Long Branch Apartment, it follows that the service of process to
that address put him on notice of the litigation — in which case
he bears the burden of proving that he did not live there.
Similarly, if he did not live at the Long Branch Apartment in
January 2001, and was not otherwise on notice of the New Jersey
litigation, then it is the Plaintiff’s job to prove that
Defendant did live there.

Needless to say, this paradox adds

little value to the analysis.
Nevertheless, the Court concludes that Defendant did not
know about the New Jersey litigation before the final judgment
of replevin was entered.

Importantly, the Court observes that

in most cases where courts have shifted the burden to the
defendant to disprove service, including Burda, it was conceded
or uncontroverted that defendant had knowledge of the underlying
suit before the entry of judgment. See Burda, 417 F.3d at 299;
see also, e.g., De Curtis v. Ferrandina, 529 F. App’x 85, 86 (2d
Cir. 2013) (summary order); Concord Capital Mgmt, LLC v. Brecka,
No. 11 Civ. 5545, 2013 WL 706170, at *1–3 (S.D.N.Y. Feb. 27,
2013); Kulwa v. Obiakor OB/GYN P.C., No. 12 Civ. 1868, 2013 WL
504383, at *1 (E.D.N.Y. Feb. 8, 2013); 77 Charters, Inc. v. SYC
Realty LLC, No. 10 Civ. 1681, 2012 WL 1077706, at *3 (E.D.N.Y.
17

Feb. 27, 2012), report and recommendation adopted, 2012 WL
1078466 (E.D.N.Y. Mar. 30, 2012); Orix Fin. Servs., Inc. v.
Thunder Ridge Energy, Inc., 579 F. Supp. 2d 498, 505 (S.D.N.Y.
2008), aff’d in part and vacated in part on other grounds, 369
F. App’x 174 (2d Cir. 2010); Miller, 779 F. Supp. at 210.
Moreover, no evidence adduced at the evidentiary hearing leads
the Court to conclude that Defendant had actual notice of the
case in 2001 or 2002.

Accordingly, it is Plaintiff’s burden to

prove that the January 4, 2001 attempted service was valid.
C.

Plaintiff Has Not Met Her Burden

The Court has little difficulty concluding that Defendant
lived with Otis for at least some period before 2000.

Defendant

appeared to acknowledge this point at the evidentiary hearing.
(Tr. at 106–08.)

More important, Otis’s letter to the New

Jersey court clerk states that “Kalman Kaspiev, who is named in
the papers, no longer lives at this address.” (Otis Dec. Ex. 1.)
(emphasis added); see also Rothstein S.J. Aff. Ex. 37 (Otis
reportedly telling a deputy sheriff that “they no longer live
together”).

Thus, although the defense position is that Kaspiev

only “stayed” with Otis, this characterization is
inconsequential as a legal matter.

Labels aside, service of

process at the Long Branch Apartment was proper if Defendant
actually lived there on or around January 4, 2001.
18

This is a closer question.

As the Court noted previously,

much of the documentary evidence on this question is of limited
relevance because it precedes the crucial time period. See
Khaldei, 2013 WL 6331794, at *5.

On one hand, there is evidence

suggesting that Defendant did not live in the Long Branch
Apartment on or around January 4, 2001, including Defendant’s
own testimony.

At the hearing, Defendant was adamant that he

and Otis had broken up and were not speaking regularly in early
2001.

As a general matter, the Court found Defendant’s

testimony to be lacking in credibility, and there is good reason
to view his self-serving statements on the jurisdictional
question with skepticism.
But the record also includes documentary evidence from Otis
— both her 2001 letter to the New Jersey court and her sworn
affidavit in this case. (Otis Dec. & Ex. 1.)

In both documents,

Otis states unequivocally that Defendant did not live with her
during the relevant period.

Thus, this Court cannot conclude

that Plaintiff was living there without rejecting Otis’s
statements as false.

There is no real basis for the Court to

discard Otis’s representations, however, because Plaintiff did
not call Otis at the hearing to solicit her testimony or impeach
her credibility.

True, she has apparently reconciled with

Defendant, which could conceivably give her an incentive to
19

perjure herself to his benefit in her affidavit.

But there was

no obvious reason for her to lie to the New Jersey state court
in January 2001, unless her purported breakup with Defendant is
itself a lie.

Plaintiff’s submission implies that Kaspiev and

Otis may well have perpetrated such an elaborate, long-running
con. (Pl. Br. at 10–12.)

No compelling evidence exists to

support this theory, however.

In the absence of such evidence —

and of Otis herself — the Court credits her submissions.
Plaintiff looks to other evidence to support her contention
that Defendant still lived with Otis in January 2001.

The

documents that initially appear most damning are two wire
transfer receipts, one from February 2000 and another from
February 2001. (Pl. Ex. 11, 17.)

On these receipts, Defendant

listed his address as the Long Branch Apartment.

Defendant

testified that he did so not because he actually lived there,
but rather because he wanted to conceal the fact of his breakup
with Otis from Balakina, the recipient of the money. (Tr. at 49–
50; accord Pl. Ex. 4 ¶ 58.)

This is a dubious explanation,

substantially for the reasons set forth in Plaintiff’s posthearing brief, and the Court would be inclined to discredit it
but for one reason:

Defendant continued to list the Long Branch

Apartment address on wire transfers to Balakina in 2003 and
2005, long after his June 2001 move to Manhattan. (Rothstein
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Aff. Ex. 37, 39.)

There is no serious dispute, and the Court

makes the finding, that Defendant has lived in Manhattan since
June 2001. 2

Since Defendant continued to list the Long Branch

Apartment address on the Western Union transactions well after
moving to Manhattan, the Court is left to conclude that whatever
his reasons for doing so, they have little to do with his actual
residence. 3
Plaintiff also points to the fact that Defendant produced
royalty statements from Corbis dated October 1999, January 2000,
April 2000, and July 2000.

Defendant testified that he may have

received the October 1999 statement in Long Branch, but the
record is unclear about when Defendant first received the 2000
statements from Corbis. (Tr. at 35–37.)

Plaintiff speculates

that Defendant received them when they were sent, either because
he still lived with Otis or because she forwarded them to him.
Defendant testified that he did not get them in 2000 (Tr. at

2

There is abundant evidence in the record for this finding. See Def.
Ex. A (driver’s license); Def. Ex. B (lease); Pl. Ex. 35; Rothstein
S.J. Aff. Ex. 37; Tr. at 62–63; see also Pl. Br. at 2 (Plaintiff
acknowledging that Defendant moved to his Manhattan apartment “in June
2001”).
3

Indeed, Plaintiff makes a similar point in her brief: “In light of
Kaspiev’s pattern of stating one address while claiming to live in
another, his use of the Brooklyn address on several documents does not
show that he ever lived there.” (Pl. Br. at 16.) This point applies
with equal force to Defendant’s sporadic use of the Long Branch
Apartment address after 1999.

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35), which is consistent with a letter he wrote to Corbis dated
March 19, 2010, which states:
statements from 1998-1999.

“Corbis sent me royalty

Since 1999 however, Corbis

inexplicably stopped sending me these royalty statements.

I am

requesting that Corbis now send me royalty statements from the
year 2000 to the present date.” (Pl. Ex. 38.)

The defense brief

asserts that the 2000 statements produced in discovery were
forwarded by Corbis to Defendant in response to this letter.
(Def. Br. at 10.)

Adding to the confusion is the fact that

Plaintiff’s former counsel sent a letter to Corbis on May 1,
2000, requesting that Corbis direct all correspondence to him
rather than to Defendant.
request. (Pl. Ex. 30.)

Corbis agreed to comply with this

This makes it very unlikely that

Defendant actually received the July 2000 statement in July
2000, since that statement would have been directed instead to
Plaintiff’s counsel.

Bearing in mind that service was not

attempted until January 2001, the Court concludes that the
remaining two statements in dispute (January 2000 and April
2000) offer no real probative value.
Plaintiff’s post-hearing submission also sets forth, at
great length, purported inconsistencies in Defendant’s testimony
and other statements.

The Court agrees with Plaintiff that

Defendant was evasive and occasionally mendacious on the stand.
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However, this does not suffice to carry Plaintiff’s burden.
Even if the Court found that Defendant lied consistently
throughout the course of his testimony, it does not necessarily
follow that Defendant lived at the Long Branch Apartment on or
around January 4, 2001.

The documentary record is ambiguous at

best, and Otis’s unimpeached affidavit supports the defense
position.
Frankly, the Court is no closer to knowing Defendant’s true
whereabouts on January 4, 2001 than it was a year ago.

But as

discussed, the burden is not on Defendant; it is Plaintiff’s job
to demonstrate that service was valid.

In view of the ambiguous

record in this case, the Court must conclude that Plaintiff has
failed to show that Defendant lived with Otis at the Long Branch
Apartment in January 2001. See Nature’s First, 436 F. Supp. 2d
at 374; Affinity Card, 8 F. Supp. 2d at 375.
IV.

Plaintiff’s Alternative Arguments Do Not Compel
Enforcement of the New Jersey Default Judgment

In her initial summary judgment brief, Plaintiff argued
that Defendant could be bound by the New Jersey judgment on a
theory of “constructive notice.” See Pl. S.J. Br. at 9; see also
Rothstein Letter of Dec. 19, 2013 at 1–2.

This Court rejected

Plaintiff’s argument in its earlier rulings. See 2014 WL 114350,
at *1–2; 2013 WL 6331794, at *6.

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Now, in her post-hearing submission, Plaintiff offers a
novel theory of enforceability.

She contends that the New

Jersey judgment should be enforced because Defendant did
business as “Abcot,” a trade name registered with the Monmouth
County Clerk’s Office.

That registration lists the Long Branch

Apartment as Defendant’s address, making it a suitable address
for service of Abcot.

From there, Plaintiff posits that Otis

must be considered a suitable agent for service of process.

But

because Plaintiff sued Defendant in his individual capacity
(both here and in New Jersey state court), and because the New
Jersey judgment has nothing to do with Abcot, the issues
Plaintiff now raises are irrelevant.

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Her argument is rejected.

V.

Conclusion

For the foregoing reasons, the New Jersey writ and judgment
of replevin cannot be enforced because Plaintiff has failed to
demonstrate that service of process was validly effected.
Accordingly, summary judgment on Count One of the complaint is
entered in favor of Defendant.

A conference will be held on

Tuesday, June 24, 2014 at 11:00 A.M. in Courtroom 20-C to
discuss each party's remaining claims, the status of expert
discovery, and the appropriate course of action moving forward.

SO ORDERED.

Dated:

New York, New York
June 9, 2014

~i??::::J

United States District Judge

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