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Gorokhovsky v. Stefantsova

United States District Court, E.D. Wisconsin

July 31, 2019

VLADIMIR GOROKHOVSKY and IGOR KAIUROV, Plaintiffs,
v.
ELEANORA STEFANTSOVA, Defendant.

          ORDER

          J.P. Stadtmueller, U.S. District Judge.

         The operative complaint in this matter was filed on April 26, 2019. (Docket #4). On June 20, 2019, Defendant Eleanora Stefantsova (“Stefantsova”) filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b), claiming a lack of personal jurisdiction, standing, and a failure to state a claim. (Docket #13). The above-captioned Plaintiffs' response would have been due on July 11, 2019. Civ. L.R. 7(b). On June 28, 2019, Plaintiffs filed a motion for an extension of time, requesting an additional thirty days to respond, which Defendant opposed on July 5, 2019. (Docket #21, #22). On July 8, 2019, Plaintiffs filed a motion to exceed the page limit prescribed in this district's Civil Local Rule 7(f). (Docket #23). The very next day, Plaintiffs filed their response to the motion to dismiss, which consisted of 30 pages of briefing and 57 pages of supplemental material, including affidavits and an exhibit list, which will not be considered at this stage except as necessary to assess personal jurisdiction. (Docket #25). The timely and length-compliant opposition effectively mooted Plaintiffs' pending motions for an extension of time and an enlargement of pages. Plaintiffs also filed a confusing “opposition in support of Plaintiffs' joint response and memorandum of law and facts in opposition to motion to dismiss.” (Docket #29). This submission contains substantially the same information as the complaint and the response to the motion to dismiss, albeit in greater (and occasionally conflicting) detail. In light of its general redundancy and contravention of Civil Local Rule 7(f), this submission will not be considered. For the reasons stated below, Defendant's motion to dismiss will be granted in part and denied in part.

         1. LEGAL STANDARDS

         Defendant moves to dismiss Plaintiffs' complaint on various grounds, including Federal Rule of Civil Procedure (“FRCP”) 12(b)(2). Under FRCP 12(b)(2), a party may move to dismiss on the ground that the court lacks jurisdiction over him or her. Fed.R.Civ.P. 12(b)(2). “The plaintiff bears the burden of establishing personal jurisdiction when the defendant challenges it.” N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014). However, in cases such as this one, where the matter is decided on a motion to dismiss and without an evidentiary hearing, the plaintiff “‘need only make out a prima facie case of personal jurisdiction.'” Id. (quoting Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002)).

         Unlike some other challenges to a plaintiff's complaint, when questions of personal jurisdiction arise, the court may consider affidavits and other evidence outside the pleadings. Purdue Research Found. v. Sanofi- Synthelabo, S.A., 338 F.3d 773, 782-83 (7th Cir. 2003). Indeed, the court can “accept as true any facts contained in the defendant's affidavits that remain unrefuted by the plaintiff.” GCIU-Employer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009). Nevertheless, the court will “accept as true all well-pleaded facts alleged in the complaint and resolve any factual disputes in the affidavits in favor of the plaintiff.” Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012).

         2. RELEVANT ALLEGATIONS

         Plaintiffs Vladimir Gorokhovsky (“Gorokhovsky”) and Igor Kaiurov (“Kaiurov”) (collectively, “Plaintiffs”) have been colleagues and friends since the mid-1990's. Gorokhovsky is a citizen and resident of Wisconsin, and has spent his career working as an international transactional lawyer within the state. Kaiurov is an international businessman based out of Russia, who currently resides in Wisconsin and operates a business in the state.

         In mid-2007, Gorokhovsky was contacted by one of Kaiurov's business partners, Yan Berezin (“Berezin”). Berezin was married to the defendant, Stefantsova, and they lived together in Shanghai, China. Stefantsova sought a lawyer because she was being sued by a former partner, James DelMonte (“DelMonte”) in connection with a real-estate issue in Russia. Eventually, Stefantsova retained Gorokhovsky to evaluate a potential counterclaim against DelMonte.

         Gorokhovsky was based in Wisconsin throughout these discussions, and it was understood that he would conduct future work in the state of Wisconsin. The retainer agreement between Gorokhovsky and Stefantsova contained a forum selection clause that provided that disputes arising from the agreement would be handled in Wisconsin court, under Wisconsin laws. However, the agreement appears to have never been signed. See (Docket #25-5, #29-2, #33-2 at 23, and #34-2 at 23).[1] On February 14, 2008, Stefantsova wired Gorokhovsky a $60, 000.00 retainer. Upon receipt of the retainer, Gorokhovsky began conducting research and evaluating the case. At one point, Stefantsova expressed interest in visiting Wisconsin and Gorokhovsky drafted a letter of invitation to assist in obtaining a visa, but Stefantsova ultimately decided against the visit. Gorokhovsky kept Stefantsova apprised of his findings, and around March 28, 2008, Stefantsova decided not to pursue the defamation lawsuit. On March 31, 2008, Gorokhovsky provided a final bill for his services, and wired back $42, 204.90 to Stefantsova, which was the unused portion of his retainer. He closed her file that same day.[2]

         After their attorney-client relationship terminated, Gorokhovsky's communications with Berezin and Kaiurov ceased entirely. They did not contact him, and they ignored his communicative overtures. It was not until March, 2019, a full eleven years later, that Gorokhovsky learned what happened. Kaiurov explained that he had stopped working and speaking with Gorokhovsky because Stefantsova told Kaiurov and Berezin that Gorokhovsky had stolen $40, 000.00 from her-in other words, that he had never refunded her retainer. Berezin had also told this to two other people, one of Gorokhovsky's friends, and one of Gorokhovsky's prospective clients, causing him a loss in business and reputation. It is not alleged that Stefantsova told this to anyone other than Kaiurov and Berezin.

         As it happens, Kaiurov was also wronged by Stefantsova. In 2013, while visiting Stefantsova in Shanghai, she induced Kaiurov to invest $450, 000.00 in a real estate venture there. However, a few years later, she sold the venture, and refused to pay him back in full. He only managed to recoup $200, 000.00 of his initial investment.

         3. ANALYSIS

         Personal jurisdiction refers to a court's power over parties, in contrast to its subject-matter jurisdiction, which is its power over certain types of claims. When, as here, the Court exercises diversity jurisdiction over a case, the Court will exercise personal jurisdiction over a nonresident defendant only if a court of the state in which it sits would do so. Purdue, 338 F.3d at 779. This is technically a two-part analysis, where the Court first asks whether Wisconsin's long-arm statute, Wis.Stat. § 801.05, encompasses Defendant's conduct, then considers whether exercising personal jurisdiction in the case at hand would comport with principles of due process. Id. Wisconsin's longarm statute is comprehensive, and is intended to be “liberally construed in favor of the exercise of jurisdiction.” Fed. Rural Elec. Ins. Corp. v. Inland Power & Light Co., 18 F.3d 389, 391 (7th Cir. 1994).

         Wis. Stat. § 801.05(5)(a) provides that a Court has jurisdiction over actions that arise “out of a promise, made anywhere to the plaintiff. . .by the defendant to. . .pay for services to be performed in this state by the plaintiff.” Gorokhovsky alleges that Stefantsova “retained the above-named Plaintiff to evaluate of her possible counter action” and that she wired him $60, 000.00, which was “intended as fixed retainer to pursue her defamation claim.” (Docket #4 at 7). Gorokhovsky alleges that upon receipt of these funds, he “conducted due diligence and case evaluation, ” and all the information that he collected “was provided to Stefantsova.” Id. Effectively, Stefantsova made a promise to pay Gorokhovsky for services that he ...


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