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Collins Financial Consulting, LLC v. Serbinin Law Firm, LLC

United States District Court, D. Colorado

January 25, 2017



          Scott T. Varholak United States Magistrate Judge

         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');">24');">24');">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.

         I. BACKGROUND

         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" name="FN1" id="FN1">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');">24');">24');">24, p. 6]. Ms. Bogomazov maintains that she is a member of Collins Financial, a fact Plaintiff disputes. [#20, ¶ 2; #24');">24');">24');">24, p. 3');">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');">24');">24');">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].

         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). [#20]. Jurisdiction is premised upon 28 U.S.C. § 133');">332, diversity of citizenship. [Id. at ¶ 1].

         On October 11, 2016, Defendants filed the instant Motion. [#24');">24');">24');">24]. Plaintiff responded on October 31, 2016 [#28], and Defendants filed their reply on November 7, 2016 [#33');">33]. The Court heard oral argument on December 13, 2016 [#36].


         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');">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');">24');">24');">24 (10th Cir. 2010) (quoting Smith v. United States, 1 F.3d 1090');">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, 2');">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.'” Robbins v. Oklahoma, 519 F.3d 124');">24');">24');">242, 124');">24');">24');">247 (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, 1149');">478 F.3d 1149, 1160 (10th Cir. 2007).

         III. ANALYSIS

         Defendants move to dismiss the Amended Complaint for lack of diversity jurisdiction. [#24');">24');">24');">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 in turn.

         A. Subject Matter Jurisdiction

         Jurisdiction is premised upon 28 U.S.C. § 133');">332, 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');">24');">24');">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 ...

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