United States District Court, D. Colorado
T. Varholak United States Magistrate Judge
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
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]
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.].
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].
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].
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].
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].
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].
STANDARD OF REVIEW
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
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).
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).
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.
Subject Matter 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].
Complete Diversity ...