United States District Court, E.D. Wisconsin
Stadtmueller, U.S. District Judge.
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.
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)).
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).
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
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
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). 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.
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.
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.
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).
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 ...