KASKEY, P.C. v. TOIDZE

Filing 13

MEMORANDUM AND ORDER THAT PLAINTIFF FILE IN THIS COURT, BY 12/1/2010, A MEMORANDUM, AS OUTLINED HEREIN; AND PLAINTIFF IS FURTHER ORDERED TO FILE A COPY OF THIS ORDER WITH THE DISTRICT COURT IN COOK V. TOIDZE AND UPON ALL PARTIES TO THAT ACTION. SIGNED BY HONORABLE LOUIS H. POLLAK ON 11/4/10. 11/4/10 ENTERED AND COPIES E-MAILED.(dp, )

KASKEY, P.C. v. TOIDZE

Doc. 13

IN THE UNITED STATES DISTRICT COURT F O R THE EASTERN DISTRICT OF PENNSYLVANIA

B R A V E R M A N KASKEY, P.C., P la in tif f , v. M A Y A TOIDZE, D e f e n d a n t.

C iv il Action No. 09-3470

M E M O R A N D U M ORDER N o v e m b e r __, 2010 Pollak, J.

P la in tif f Braverman Kaskey, P.C., ("BK") has entered an application for entry of d e f a u lt judgment against defendant Maya Toidze ("Toidze") pursuant to Federal Rule of C iv il Procedure 55(b)(2). Docket No. 12. BK, a Philadelphia law firm, commenced this d iv e rsity action to recover legal fees and expenses incurred in defending Toidze, who is a C a n a d ia n citizen, in litigation in Connecticut brought by various individuals who had m e m b e rs h ip and other interests in Maya's Meals LLC ("Maya's Meals"). See Cook v. T o id z e , No. 07-CV-712 (removed to D. Conn. May 4, 2007) ("Connecticut litigation"). Maya's Meals is a Delaware limited liability company authorized to transact business in C o n n e c tic u t that was formed in September 2005 to engage in the development, p ro d u c tio n , marketing, and sale of specialty food products. BK alleges that it executed a retainer agreement with Toidze under which Toidze 1

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agreed to compensate BK for its services by paying BK one percent (1%) of the o u ts ta n d in g equity interest in Maya's Meals for each $20,000 of billable time incurred by B K . See Docket No. 12 at 13-14 (copy of retainer agreement). The retainer agreement a lle g e d ly further provided that Toidze agreed to reimburse BK for the total amount of its o u t-o f -p o c k e t expenses. BK alleges that it has performed all obligations on its part p u rs u a n t to the retainer agreement, and that in so doing it has expended billable hours in th e sum of $350,324.50, equating to 17.52% of the equity interest in Maya's Meals, and h a s incurred unreimbursed costs in the amount of $26,951.45. BK further alleges that it f u rn is h e d monthly invoices to Toizde detailing its services, to which Toizde has never o b je c te d , and that Toizde has failed to pay BK for services rendered and is in breach of th e retainer agreement. B K 's complaint asserted four causes of action against Toidze: Breach of Contract (C o u n t I); Specific Performance (Count II); Account Stated (Count III); and Quantum M e ru it (Count IV). In this application for entry of a default judgment ("Application"), B K seeks judgment for an award of specific performance against Toidze of a 17.52% e q u ity interest in Maya's Meals, plus unreimbursed out-of-pocket costs in the amount of $ 2 6 ,9 5 1 .4 5 . B K 's Application states that it made several good faith but unsuccessful attempts (1 ) to serve original process of the summons and complaint by hand delivery and mail to d e f e n d a n t's last known address in Ontario, Canada, and (2) to locate defendant by

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searching telephone and address records. After these attempts, BK filed a motion for a lte rn a tiv e service by publication on December 29, 2009, which Magistrate Judge Angell g ra n te d on March 4, 2010. Pursuant to Judge Angell's order, BK placed notices of this c iv il action addressed to Toidze in the Legal Intelligencer, a legal newspaper serving P h ila d e lp h ia , and the Markham Economist & Sun, a newspaper serving the town of M a rk h a m and the York region of Ontario, Canada, the location of Toidze's last known a d d re s s . Toidze has failed to serve and file an answer or otherwise respond to the c o m p la in t. On May 10, 2010, BK requested that the Clerk of Court enter default against T o id z e pursuant to Federal Rule of Civil Procedure 55(a). On May 11, 2010, the Clerk of C o u rt entered default against Toidze. Plaintiff thereafter filed the present application for e n try of default judgment by this court. This court has taken judicial notice of and reviewed the filings in the Connecticut litig a tio n , which was commenced in state court and was then removed to the United S ta te s District Court for the District of Connecticut on May 4, 2007, and which, as of the d a te of this order, remains pending in Connecticut. See Federal Ins. Co. v. Richard I. R u b in & Co., Inc., 12 F.3d 1270, 1284 (3d Cir. 1993) (federal courts "have the power to ta k e judicial notice of . . . developments in related cases"). An amended complaint in the C o n n e c tic u t litigation was filed on October 27, 2010. Cook v. Toidze, No. 07-CV-712,

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Docket No. 105.1 The amended complaint was filed by plaintiffs Peter Cook, Thea Duell, a n d Aleksandar Milosavijevic-Cook, as individuals and on behalf of Maya's Meals, LLC. The defendants in the Connecticut litigation are Maya Toidze, who is the sole defendant in this action, and Alexandre Ivankine, Tim Toidze, and Alexandre Avroutine. According to the amended complaint, all of the individual plaintiffs and defendants own membership in te re s ts in Maya's Meals, with Maya Toidze owning a 25.389% interest. Id. ¶¶ 3-9.2 T h e amended complaint further alleges that Maya's Meals is governed by an o p e ra tin g agreement ("Operating Agreement"), id. ¶ 14, and that the Operating A g re e m e n t (1) sets forth conditions under which members of Maya's Meals may transfer th e ir interests in Maya's Meals and (2) grants other members a first and second right of p u rc h a s e for a membership interest upon the occurrence of an involuntary transfer event, id . ¶¶ 53-54. This court has not seen a copy of the Operating Agreement, and does not k n o w the exact language of its provisions governing transfer. However, the alleged e x is te n c e of such provisions raises questions regarding the appropriateness of granting B K one of the remedies it seeks in this litigation--an order from this court compelling T o id z e to transfer a 17.52% equity interest in Maya's Meals to BK.

The amended complaint was filed as part of plaintiffs' motion to substitute c o m p la in t, because an earlier filing of the amended complaint contained the wrong d o c u m e n t by mistake. Id. At the time of this order, the motion to substitute has not yet b e e n ruled upon. In addition, the amended complaint alleges that several other individuals who are n o t parties to the lawsuit own small membership interests in Maya's Meals. Id. ¶¶ 10-13. 4
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In addition, the alleged existence of such transfer provisions, along with the e x is te n c e of an ongoing lawsuit in Connecticut among the business partners in Maya's M e a ls, raises questions regarding whether any of the parties to the Connecticut litigation a re required parties in the present action. See Schulman v. J.P. Morgan Inv. Mgmt., Inc., 3 5 F.3d 799, 804 (3d Cir.1994) (federal courts may "raise sua sponte problem[s] of jo in d e r without motion of parties" (citing Finberg v. Sullivan, 634 F.2d 50, 55 (3d C ir .1 9 8 0 ) ) . Under Rule 55(b)(2), this court possesses the authority, prior to entering a default ju d g m e n t, to conduct hearings to determine damages, establish the truth of any allegation, o r to "investigate any other matter." Accordingly, it is hereby ORDERED that plaintiff f ile in this court, by December 1, 2010, a memorandum addressing the following: 1 . The current status of, and the nature of the relief sought, in Cook v. Toidze, No. 0 7 -C V -7 1 2 (removed to D. Conn. May 4, 2007); 2. The exact language of the Operating Agreement's provisions concerning tra n s f e r and whether such provisions render it inappropriate for this court to grant the re lie f requested in this action; 3 . Whether any or all of the parties in Cook v. Toidze are required parties in this litig a tio n under Federal Rule of Civil Procedure 19(a)(1) in light of: a) the contents of the Operating Agreement for Maya's Meals; b) the nature of the relief requested in this action; and/or

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c) the nature of the relief requested in the Connecticut litigation; 4 . Whether, in the interests of justice and judicial economy, this action should be tra n s f e rre d to the United States District Court for the District of Connecticut pursuant to 2 8 U.S.C. § 1404(a) or § 1406 for consolidation with the Connecticut litigation. Plaintiffs are further ORDERED to file a copy of this order with the district court in Cook v. Toidze and upon all parties to that action.

BY THE COURT:

_ _ /s/ Louis H. Pollak____ P o lla k , J.

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