Rodionov v Redfern

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Rodionov v Redfern 2018 NY Slip Op 30890(U) May 10, 2018 Supreme Court, New York County Docket Number: 651976/2016 Judge: Eileen Bransten Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 1] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NFW YORK: COivIMERCIAL DIVISION PART 3 --------------------------------------------------------------------)( SERGEY RODIONOV, ALEXANDER EZHKOV, Index No. Motion Seq. No, Plaintiff: 651976/2016 . ............... ~~~~~""""""""""""~~~~~~ "'""Q.91i_gQ~........ DECISION ANU ORDER -vWILLIAM REDFERN, FABIENNE DELAUNA Y, ELLEN WITTMAN, PETER VOLETSKY, NPK EKOLOGIA LLC, DUKE VENTURE FUND LLC Defendant HON. EILEEN URANSTEN: Defendant Peter Voletsky, Esq. brings Motion Sequence 001 to dismiss the complaint based upon CPLR §§ 321I(a)(l),3211(a)(5), 321 l(a)(7) and 3016(b). Defendants ·wmiam Donald Redfern, Fabienne Delaunay, bring l\tfotion Sequence 002 to dismiss the complaint based upon CPLR §§ 321l(a)(3),321l(a)(5),3211(a)(8), 321 l(a)(lO) and 327(a). Defendant Ellen Wittman Grossman seeks to dismiss the complaint on grounds of CPLR §§ 321 l(a)(3), 321 l(a)(5), 3211 (a)(7), 321 l(a)(lO) and 327(a). I. This is a fifty-page complaint filed by two unrelated Plaintiffs who have no connection to each other and, insofar as the Court is aware, no involvement \Vith each other aside from independent relationships with Defendant Donald Redfern. PlaintifTEzhkov is a resident of Russia who alleges to be the principal rnernber ofNPK Ekologia LLC ("NPK" or "NPK Ekologia"), a New York entity, Comp. at ft'l3, 8, J 7-18. 2 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 2] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL. 651976/2016 Page 2 of32 Plaintiff Rodionov is a resident of the Grand Duchy of Luxembourg who alleges to he the principal member of Duke Venture Fund, LLC ("Duke" or "Duke NY"), a New York entity. See Comp at ~i12, 9, 30. The nvo Plaintiffs, independently, knew Defendant Donald Redfern from prior business dealings and allege that Defendant Redfern, with the assistance of other co-conspirators, fraudulently hijacked their respective businesses. See id at iJJ, The court initially notes that the factual background is exceptionally confusing as it spends the first thirty-two pages examining the formation ofNPK, then Duke Venture, discussing the NPK Operating Agreement, then the Duke Operating AgTeement, before combining facts pertaining to both entities stating the grounds for the separate alleged frauds committed upon NPK and Duke, and which combines the damages to each LLC. See Generalzy Comp. The Plaintiffs proceed to state ten causes of action, both individua!Iy and derivatively. Many of these causes of action are pleaded against all the Defendants, collectively, vvithout regard to which Plaintiff experienced the harm alleged, 1 The Court's first endeavor, in this decision,. was to determine exactlv what conduct . " resulted in ham1 to Ezhkov and NPK from what conduct resulted in hann to Rodionov and Duke Venture Fund, The Court then endeavored to determine which damages alleged in the complaint 1,.vere suffered by NPK Ekoiogia and which damages were suffered by Duke Venture Fund, To 1 The confusion caused by this becomes apparent in Motion Sequence 001, It!fi·a. 3 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 3] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Pag1.~ 3 of32 that end, this Court \VilI first discuss the factual background ofNPK Ekologia. The Court will then discuss the factual background of Duke Venture Fund. From 2000 - 2015 Plaintiff Ezhkov and Defendant Redfern engaged in a business relationship. See Comp. at ~ii 17, 62. ln 2005, Defondant Redfern is alleged to have orchestrated the formation ofNPK Ekologia LLC naming Ezhkov the sole beneficial member of the LLC. Id at~~ 17-20. Defendant Redfern t:ngaged the services of Chartac Management Services Ltd, a Cyprus based company, to manage the day to day business affairs ofNPK Ekologia on behalf of Ezhkov. Id at ~21. Nicos Gavrielides (a/k/a Nikos Gavrielides), was the representative appointed by Chmtac Management to serve as both the Trustee and Manager of NPK Ekologia in Cyprus. Id at iJ21. It was not until 2008, however, that Ezhkov fom1ally signed an engagement agreernent. with Chartac, which placed his membership interest in trust for his benefit. Id at ~iJ23~24 Despite signing the agreement with Chartac Management, Ezhkov nonetheless met \Vlth Defendant Redfern on numerous occasions to further the business interests ofNPK Ekologia LLC. Id at ,-riI24, 63. From NPK's inception until discovery of the wTongdoing in 2015, Defendm1t Redfern ls alleged to have mastenninded a plot to convert funds from NPK Ekologia. Id at iJI To do so, Redfern caused to have executed two operating agreements. Ezhkov's copy of the operating agreement names Ezhkov, as the Member, and Defendant Voletsky, as the Mmmger, ofNPK Ekologia LLC. Id at ~42. The second copy of the Operating Agreement names a Jacqui Desmond, owner of Withean Ltd, an Irish corporation, as the Member with Nicos Gavrielides as 4 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 4] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 4 of32 the Manager. Id at if~[48, 70. Ezhkov claims not to have knovvn about the existence of the second operating agreement until recently. Pursuant to Ezhkov's copy of the NPK Operating Agreement dated March 15, 2005, Defendant Voletsky was to be the manager ofNPK Ekologia, LLC. 2 Id at iJ42. That Operating Agreement imposes a duty of loyalty on the part of the manager to act in the best interests of the corporation. Id at i!47. The Agreement further calls for ultimate Member approval of ce1tain enumerated actions, such as the issuance of a membership interest, or the sale or transfer of the business. Id at iJ~44-45. Failure to obtain member approval constitutes a breach of the Manager's contractual fiduciary duty. Id at iJ4146-47. Defendant Vo!etsky, ho\vever, denies signing the Operating Agreen1ent naming him as a manager ofNPK and argues that his sole role was to assist in NPK's corporate formation. See Bergson .1~{/irm. Ex. C Prior to this action, Voletsky had never met Ezhkov and argues that he formed NPK at the behest of Nicos Gavrielides. See Bergson Ajjirm Ex. C. Defondant Voletsky further argues that he resigned from any role in the corporation after its formation in 2005 and named Nicos Gavrieiides as the Member/tvfanager on March 9, 2005. 3 See Bergson ,;{[firm Exs. D-H 2 Plaintiffs contend that there is a second operating agreement discussed infra at I(A)(i). Exhibits D ~Hof the Bergson Affinnation contain copies of filing papers naming Nkos Gavrielides as the Initial Member, state that the LLC was organized by a Sharan Babala with Nicos Gavrielldes as the initial member, as well as an application for a federal ElN. ln addition, it should be noted that all papers were dated March 9, 2005, the same day as Defendant Voletsky's purported resignation. It should also be noted that the complaint alludes to an email in which Nicos Gawielides states he cannot serve as a manager of the corporation in his individual capacity. Comp. fl51 3 5 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 5] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 5 of32 i. Seizing Control ofNPK Despite meeting with Ezhkov regularly and having a Trustee in the form ofNkos Gavrlelides, Redfom is alleged to have executed a second operating agreement naming non~pruty Jacqui Desmond as the initial member and Nicos Gavrielides as manager of NPK Ekologia, LLC. Ezhkov alleges that Redfern would later orchestrate Jacqui Desmond's resignation as the Principal member ofNPK Ekologia and name Plaintiff Ezhkov as her replacement 4 See Comp, at i1~70-84, R(~dfem, claiming to be PlaintiffEzhkov, would later sell the P!alntitT's Membership in the LLC to a person by the name of Natalya Demidova, 5 Id at 'f,88-102. Plaintiff alleges that Membership of the LLC subsequently passed from Natalya Demidova to a person by the name of Andrey Strigin. kl at ~1J09. At or before that time, Defendant Wittman is alleged to have been named as a Manager of NPK Ekologia LLC. See id at iii! 150 (discussing that NPK Singapore was to be created at under the same conditions as NPK Ekologia LLC, nrunely \Vith Nicos Gavrielides as the m.ember/shareholder and Defendant Ellen Wittman as the manager). In 2013, the Redfern is alleged to have caused the formation of NPK Ekologia Pte, a Singapore Corporation, See id at ~U 48. In order to form NPK Singapore, the Defendants provided a corporate history ofNPK Ekologia LLC, the New York LLC, to the government of Singapore which lists Andrey Strigin as the Initial Member, Nicos Gavrieiides as the initial director, and reflects Natalya Demidova as the m.vner of corporate stock from 2005 - 2008, See id at 156-158. Aft.er 2008, Nicos Gavrielides became the ovvner ofNPK Singapore stock. Id 4 This raises a factual inconsistency in Plaintiff's Complaint, that being, if Redfern orchestrated a transfer of ownership from Jacqui Desmond to Ezhkov, then under what basis did Ezhkov have authority to enter into an operating agreement with Voletsky. Tbis is addressed in depth at Motion Sequence 001, infi·a. 5 Natalya Demidova is believed to be an Assistant in the Moscow office of Defendant Redfom. Comp. if89. 6 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 6] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODJONOV vs. REDFERN ET AL 65197612016 Page 6 of32 Andrey Strigin is, allegedly, ret1ected as the sole beneficial owner ofNPK Singapore and Defendant Wittman is the corporation's authorized correspondent. See Cornp. at ~~153-155; but see Comp. ~150 (stating NPK Singapore was to be created with Nicos Gavrielides as the Member/Shareholder and Defendant ·wittman as the M<.mager). PlaintiffEzhkov was aware of the formation of NPK Singapore in 2013, however, claims to have been una,va.re of the info1mation placed on the corporate formation documents. See id at ~149. On November 29, 2014, while NPK NY and NPK Singapore were under the control of Andrey Strigin, Andrey Strigin communicated with Nicos Gavrielides that Chartac Management was terminated, effective immediately, as the manager for NPK Ekologia. Comp. ~T~[l 77-179. Andrey Strigin then named a Cyprus based attorney, Nasos Panayotiou as the new Administrator of NPK Ekologia. See id at ~177. lL Conversion o,fFundsff·om NPK Ekologia LLC. Ezhkov alleges that Defendant Redfern first began to send instructions to transfer money from NPK' s accounts at the Bank of Cyprus into personal accounts controlled by himself and Defendant Delaunay. Comp. ~[iiJ61-169. These instructions were sent to, and approved by, Nicos Gavrielides in his capacity a trustee for the LLC. See id; see also Comp. ~~22-29. Defondant Redfern is also alleged to have taken money from NPK directly to finance his mvn business ventures. Id at ~iJ168-169. Nearly two million doHars ($2,000,000) and then three million euros (€3,000,000) is alleged to have been absconded \Vith through online banking. Id. Again, this \Vas accomplished under the gaze of both Ezhkov, who claims to have actively been 7 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 7] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 7 of32 engaged in the business, and Gavrielides, \Vho \Vas appointed to be the trustee to manage the business' assets. See Comp. at ~~22-29. Redfern is alleged to have fabricated bank statements up through 2015 for Plaintiff Ezhkov's files. Id at ~[128-139. Plaintiff Ezhkov alleges he discovered the fraud when attempting to change the adn1inistrator of NPK as part of a negotiated deal with the Bank of Cyprus. 6 Id at ~64. Now·here in the Complaint, however, is Ezhkov able to explain how this ruse was accomplished for a period of 10 years when NPK was left in the care Gavrielides, as the trustee and person managing the day to day affairs of the business, and was purportedly overseen by Ezhkov, as mvner. See id at i1~22-29. In 2014, despite Defendant Redfom's having no control or authority over NPK, the Plaintiff alleges Redfern entered the Bank of Cyprus, \Vith an unknovvn man, believed to be a Russian citizen, and presented this person as the new beneficial mvner of NPK. id at iil 82. Ezhkov fmiher alleges Redfern and the unknown Russian man had the express purpose of looting the remaining funds from tht.: N"PK Ekologia bank accounts. Id at ~183. Plaintiff Ezhkov alleges that he does not know what the current status ofNPK Ekologia's finances are and is unable to obtain updates frorn the current. trustee, Nasos Panayotiou, since his rnembership interest was taken away. 7 Id at 1181. 6 Ezhkov alleges that funds were frozen in the Cyprus bank as part of the Cypriot financial crises. Comp. at fi64. The deal Ezhkov alleges to have been negotiating would have freed the assets. 7 It should be noted that, absent a membership interest, the Co mt is unable to determine what right the Plaintiff has to view the finances ofNPK Ekologia under Cyprns' law. 8 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 8] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs, REDFERN ET AL. 651976/2016 Page 8of32 PlaintiffRodionov alleges that he has known Defondant Redfern since the rnid-1990's when Redfern acted as his investment manager, Cornp. ~14. In October of2010, Rodionov sought to protect fonds located in his wholly m.ivned Cyprus based company, Deede Trading Ltd. See Comp. ~30. Rodionov alleges that he, pursuant to a purchase agreement between Deede Trading Ltd and Duke Venture Fund, bought Duke Venture Fund LLC by transferring one mHlion dollars ($1,000,000) into a Bank of Cyprus Account on November 8, 2010. Id at ifJ0-33. This money was ultimately deposited in a \Vachovia Bank account, the so-called "Duke Wachovia Account" located in New York. 8 Id at if34. After this transfer, Plaintiff Rodionov received a certificate, signed by Defendant Wittman, stating he was now the m..vner of 1,000 shares of the Duke Venture Fund LLC. ld at ~~35-36. Defendant Redfern is alleged to have represented that this made PlaintiffRodionov the sole ov·mer of Duke· Venture Fund, LLC, Id at ~3 7. i. Seizing Control ofDuke Venture .Fund LLC Rodionov alleges he was presented \Vith an Operating Agreement naming him as the sole member of Duke Venture Fund LLC and naming Defendant Wittman as a l'vfanagero Comp at if52-53. This operating agreement listed certain enumerated acts, such as the dissolution of the LLC, which required approval by a member of the Duke Venture FumL Id at ~[,[55-56. 8 The Comi notes an inconsistency in the Complaint ff Duke Venture Fund was bought by Deede Trading, then the purchase price should have gone to tbe Sellor. Rodionov, hm.vever, alleges that the purchase prke went into a Wachovia bank account which remained an asset of Duke Venture Fund LLC. Tbere is no explanation for this inconsistency in the pleading. 9 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 9] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 9 of32 Defondant \Vittman, as manager, is alleged to have had a duty of loyalty to the members and to the LLC. Comp at ~58. Defendant Redfern hired Chartac l'.vlanagement Services, and specifically Nicos Gavrielides, to manage the affairs of Duke Venture Fund before its dissolution in 2016. Id at ~[~38-39. Rodionov alleges that Defendant Redfern then engaged in a fraudulent process whereby he caused membership in the LLC to be transferred to Natalya Demidova and finally to Andrey Strigin. Id at ~~103, l 05. Defendant Redfern is also aUeged to have orchestrated the creation of a Singapore affiliate of Duke Venture Fund LLC. Id at ir~f141-J47, This affiliate, Duke Property Pte. Ltd. ("Duke Singapore") named "Gavrielides and a Singapore citizen, Samuel Lim Lek Kiang," to the company's board of directors. Id at iu 42. An Italian resident of Singapore, Lucia Luchetti, was named as the secretary for Duke Singapore. Id. Despite knowing of the creation of Duke Singapore Rodionov alleges the company was formed without his consent and was finmded upon false inforrnation pertaining to Rodionov' s place of residence, Cmnp. at~~ 145-147. ii. Conversion of Funds fi"onz Duke Venture F'und LLC. Plaintiff Rodionov alleges that, "consistent with his use ofNPK NY's accounts at the Bank of Cyprus as his personal ATM, Redfern similarly transferred, or caused the transfor of: Duke NY's fonds to himself [and others]." Id at~ 176. No\vhere in the complaint is there some other specific as to tht: amount converted, the manner in which funds were converted, or how much money was placed into Duke Venture Fund Bank accounts. Plaintiff merely claims that the 10 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 10] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs, REDFERN ET AL. 651976/2016 Page 10 of32 one million dollars ($1,000,000) used in the purchase agreement and placed in the Duke Wachovia account provided the seed money for the LLC. See e.g. Comp. ~31. The Court reiterated its comment in footnote 7, \Vhich states there is an inconsistency in the Complaint If Duke Venture Fund was bought by Deede Trading, then the purchase price should have gone to the Sellor. Rodionov, however, alleges that the purchase price went into a Wachovia bank account \:Vhich remained an asset of Duke Venture Fund LLC after the purchase, thus making the effective purchase price of Duke Venture Fund zero dollars. There is no explanation for this inconsistency, iii. End ofDuke Venture Fund On November 29, 2014, non-party Andrey Strigin, purporting to be the owner of Duke NY, is alleged to have sent a notice to Nicos Gavrielides tennina.ting Chaiia.c Management's employ and hiring Nasos Panayotiou, a Cyprus based attorney, to manage Duke Venture Fund LLC. Comp. at 4"[178. Ultimately, Duke Venture Fund was dissolved on April 1, 2016 without Rodionov's knowledge or consent Id at ~1i!J9, 185. A. Claims Against Defemi.ant Voletsky-.1Uotion Sequence 001 Defendant, Pt.~ter Voletsky, Esq" brings Motion Sequence 001 to dismiss causes of action for fraud, fraudulent inducement, breach of contract, breach of the hnplied covenant of good faith, breach of fiduciary duty, and unjust enrichment/breach of constructive trust pursuant to ' CPLR §§ 321 l(a)(l), 321 l(a)(S), 321 l(a)(7) and 3016(b) against the Defendants. 11 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 11] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 11 of32 Both Plaintiffs state causes of action, individually and derivatively, against Defendant Voletsky fbr fraud (Count 1), fraudulent inducement (Count 2), and unjust enrichment/breach of constrnctive Tmst (Count 10). Plaintiff Ezhkov, only, states additional causes of action against Defondant Voletsky for breach of contract (Com1t 5), breach of the implied covenant of good faith and fair dealing (Count 6), and breach of fiduciary duty (Count 8), The Court first examines Voletsky's argument that the Plaintiffs cannot assert both direct and derivative claims before turning to the specific causes of action alleged against Voletsky. i. Plaintiff>;' Capacity to bring a suit Individually and Derivatively Defendant Voletsky first argues the Plaintiffs are unable to bring both an individual and a der1vative suit against him given that the hmms occurred to the Plaintiffa' respective LLCs. See e.g Yudell v. G'ilbert, 99 AD.3d 108, 113 (1st Dep't 2012) (Stating that "a plaintiff asserting a derivative claim seeks to recover for injury to the business entity [and a] plaintiff asserting a direct claim seeks redress for injury to him or herself individually"), Plaintiffs argue, however, that the nature of the harm inflicted gives rise to both direct and derivative claims. See e.g. Fellner v. 1\.1orimoto, 52 A. .D3d 352, 353---54 (1st Dep't 2008) (holding "where a VvTOngdoer has breached an obligation to a shareholder which is independent of arty duty ovving the corporation, the shareholder has an individual cause of action") citing lvlatter ofRudey v Landmarks Preserv. Comrnn. of City ofN Y, 137 AD2d 238, 244 (1988). It is well established that "an individual shareholder has no right to bring an action in his ovln name, and in his ov1.rn behalt: for a wrong committed against the corporation!' Gen. .i'vfotors Acceptance Corp. v. Kalk>Hein, 101 A.J).2d 102, 105---06 (Pt Dep't 1984). 12 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 12] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 12of32 In order to distinguish a derivative claim from a direct one, the court considers "(1) who suffored the alleged hann (the corporation or the suing stockholders, individually); and (2) \Vho would receive the benefit of any recovery or other remedy (the corporation or the stockholders individually)" See Serino v. Lipper, 123 A.D.3d 34, 40 (l st Dep't 2014) citing Yudell v. Gilbert, 99 A.D.3d 108 (1 't Dep't 2012). If the "harm is confused with, or embedded in the corporation, then it cannot separately stand." See Serino, 123 A.D.3d at 40 (1st Dep't 2014). In this instance, Plaintiff Ezhkov has laid a sufficient foundation to assert both direct claims and derivative claims. Ezhkov sufficiently pleaded facts which would lead one to believe a fraud was committed on Ezhkov directly by inducing him to put money into NPK bank accounts; once the money was in an NPK bank account, Ezhkov has a derivative claim where the money was removed frorn NPK Ekologia's bank accounts without his, or the manager's, consent See e.g. Fellner 52 A,D,3d at 353--54. Similarly, the claims arising from breach of contract can be asserted directly by Ezhkov as he was harmed directly by the loss of control over NPK. See •.J e.g. u•. Voletsky argues Plaintiffs have failed to plead that there has been a sufficient demand made upon the members ofNPK Ekoiogia pursuant to the New York Business and Corporations Law §626(c). Where, however, the complaint pleads facts sufficient to indicate demand would have been futile, either by a showing that the majority of members were interested parties to the transaction, or that the members failed to inform themselves sufficiently about the transaction, or that the members failed to exercise their business judgment, the requirement of a demand is excused by the court. See Bansbach v, Zinn, 1KY3d1, 9 (2003). Taking all the facts alleged in the comp[aint as true, there is a sufficient basis to state that any demand rnade by the Plaintiffs 13 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 13] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL. 651976/2016 Paue 13 of 32 t> upon the Members of the LLC's would have been futile. See Leon v. Afartinez, 84 NS.2d 83, 87 (1994). There is no allegation in the complaint that Defondant Voletsky was, in any way, com1ected to Duke Venture Fund. Absent a factual basis which ties Vo!etsky to Duke Venture Fund, Plaintiff Rodionov is unable to assert either direct or derhrative claims against Defondant Voletsky. See e.g. See Myers v. Schneiderman, 30 N.Y.3d l, 11 reargument denied, 30 N.Y3d 1009 (2017)0 Alone this \Varrants dismissal of Rodionov's claims against Voletsky. ii. Plaint~fjs' Claims for F'raud (Count 1) and Fraudulent Inducement (Count 2) Defendant Voletsky argues that the Plaintiffs' claims for fraud and :fraudulent inducement fail on three grounds. The court first addresses the argument that the Complaint fails to be pleaded with sufficient particularity against tbe Defendants. The court then addresses the statute of limitations argument before turning to the issue as to whether these causes of action are rnere.ly duplicative of a breach of contract a. CPLR 3211 (a}(5) --- Statute ofLimitations Plaintiffs' fraud claims allege that "the Individual Defondants created, or caused to be created, the NY LLC's for their own benefit" upon "representations that were materially false when made." Comp. ~~ 188, 190, 1.98, 200. The Plaintiffs aHege that the Individual Defendants, collectively, caused forged or fraudulent documents pertaining to both NPK Ekologia LLC and Duke Venture Fund, LLC to be created, caused fake bank statements to be sent to the Plaintiffs, opem~d bank accounts and used them to conduct unauthorized transfers to themselves or others, 14 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 14] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 14 of32 caused the administration ofNPK Ekologia and Duke Venture Fund to be changed from Chartac Management to another company, and ultimately caused the dissolution of Duke Venture Fund. 1d at ~191, 201. The alleged frauds against the Plaintiffs '<Nere committed from both NPK's and Duke's fonnation through 2015, See Comp, ~~ 62. From the time offom1ation onward, the Plaintiffs allege they were unavilare separate operating agreernents were put into effect from those actually signed by the Plaintiffs, that they received false bank statements for years, that bank accounts were opened without their knowledge, and that it was not until late 2015, after Chartac had been dismissed, that the Plaintiffs learned they could not make any changes to the way the businesses were nm, See Comp. ~~ 42, 52, 111-134,180, The statute of limitations for fraud states that an action must be commenced either within 6 years, or v.ithin two years of the time the plaintiff discovered the fraud, or could have discovered the fraud. while using reasonable diligence, whichever is greater. See CPLR 213(8). The inquiry as to whether a plaintiff could, with reasonable diligence, have discovered the fraud mms on whether the plaintiff was "possessed of knowledge of facts from which the fraud could be reasonably inforred." Sargiss v. lvfagarelli, 12 N.Y.3d 527, 532 (2009) citing l!,rbe v Lincoln Rochester Trust Co,, 3 N,Y,2d 321, 326 (1957). "Where it does not conclusively appear that a plaintiff had knmvledge of facts from which the fraud could reasonably be inferred, a complaint should not be dismissed on motion and the question should be left to the trier of the facts," Id Here, the Plaintiff could have reasonably inferred a fraud. as early as November of2014 when Chartac was replaced as the LLC manager without the Plaintiff's consent See Comp. ~67(g), The Plaintiffs' fraud claims, having been filed in April of2016, are therefore timely. 15 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 15] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs" REDFERN ET AL. 651976!'2016 Page 15of32 b, Claims are Duplicative of the Breach of Contract Claim Plaintiffs claim that Defendant Voletsky made misrepresentations which induced the Plaintiffs to transfor money into the NY LLC acc.ounts. See Opp. Br. 23. Nothing in the complaint, however, suggests that Defendant Voletsky had any role in convincing the Plaintiffs to join either NPK or Duke, merely that Voletsky organized and managed NPK. S'ee generally Comp In fact, Plaintiffs solely attribute Defendant Redfern as being the one to induce the Plaintiffs into organizing or investing in either NPK or Duke. See Comp. ~16, 199, 203. Here the fraud claims arise from a breach of contract and are properly dismissed as duplicative of the breach of contract claim. S'ee Triad Int? Corp., 122 A.D.3d at 531 (1st Dep't 2014) (holding the fraud damages \Vere, in actuality, contract damages and therefore repleading would have been futile); see also Krantz v. Chateau Stores ofCanada Ltd, 256 AD.2d 186, 187 (1st Dep 't 1998) (holding that in order to plead a viable cause of action for fraud arising out of a contractual relationship, the plaintiff must have alleged a breach of duty which is collateral or extraneous to the contract between the parties); Comp. 4"[~[40-50, Compare Comp. ~~ 187-196, 197-207 with Comp. ~rn 229-241, The fraud claims are, therefore, dismissed. c. CPLR 3016(b) -Pleading Fraud with the Requisite Particularity The court now turns to Defendant Voletsky's argument that Plaintiffs' fraud claims against him are not stated \Vith the heightened particularity required by CPLR 3016(b) requiring that the "circmnstances constituting the wrong be stated in detail", CPLR 3016(b), The First Department has clarified that each defendant is entitled to have the pleading "specify the tortious conduct charged against each Defendant" Aetna Cas. & Sur. Co. v. Aferchants /vfut. fos, Co., 84 16 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 16] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODlONOV vs. REDFERN ET AL 651976/2016 Page 16 of32 A.D.2d 736, 736 (l't Dep't, 1981) (holding that causes of action were pleaded against all d(~fendants collectively vvithout any specification as to the precise tortious conduct charged to a particular defendant which failed to provide the Defendants notice as to "the material elements of each cause of action" pursuant to CPLR 3013). While the complaint does specify a series of alleged wrongs in the claim for fraud, the pleading asserts these wrongs collectively such that Defendant Voletsky is unable to defend against the specific occurrences of fraud a11eged against him. See id For instance, nowhere in the complaint does it appear that Defendant Voletsky had knowledge of the Duke Venture Fund transactions, yet nonetheless the claim for fraud attempts to proclaim that Defendant Voletsky must defend against this wrong. See Comp. ~ J88, Indeed, Plaintiff's own brief claims that Defendant Voletsky's role in NPK Ekologia LLC is a sufficient basis for the fraud claim but is utterly silent as to how Defendant Voletsky committed fraudulent actions pertaining to Duke Venture Fund, See Opp. Br. 22-23. Alone, this is enough to warrant disrnissal of all the claims against each cause of action alleged against all the Defendants. See Aetna Cas, & Sur. Co., 84 A.D.2d at 736 (Pt Dep't, 1981)" iii. Plaintiffs' claims for Breach of Contract (Count 5). Plaintiff Ezhkov alleges Defendant Voletsky breached the NPK Ekoiogia Operating Agreement by failing to seek Ezhkov's approval on c1..~rtain d1..~cisions involving NPK LLC, failing to manage NPK Ekologia in good faith, and violating his fiduciary duties, See Comp. ~~i 234-236; see also Ezhkov ,{(lid. Ex. D. The Court first examines whether the Plaintiff has stated a claim for breach of contract pursuant to CPLR 3211 (a)(7), before discussing whether 17 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 17] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs< REDFERN ET AL 651976/2016 Page 17of32 documentary evidence conclusively refutes the Plaintiffs' claims under CPLR 3211(a)(1). The court will then discuss the applicable statute oflimitations on a breach of contract claim. a, CPLR 3211 (a)(7.) ····Plaintiff's Failure to State a Claim The elements of a breach of contract claim include the "existence of a contract, perfom1ance, the defendant's breach, and resulting damages." See Harris v. S'eward Park Hous. Corp., 79 AD3d 425, 426 (1st Dep't 2010). Defendant Voletsky first argues that the Plaintiff could not state a cause of action where no contract existed. See Randall's Island Aquatic Leisure LLC v. City (~lNew York, 92 AD,3d 463, 463~64 (1st Dep't 2012). In response, plaintiffEzhkov supplied a signed Operating Agreement, dated ]\/larch 15, 2005, which purportedly contains Defondant Voletsky' s signature as the initial manager. See Ezhkm> Af/id Ex. D, Given that a contract is alleged to exist, a copy of that contract has been supplied by the Plaintifi: and the Plaintiff has sufficiently pleaded performance, breach, and damages in the form of a lost business and converted funds. See Leon, 84 N.Y2d. at 87-88, The Court finds the Plaintiff has sufficiently pleaded claims for breach of contract. Id b. CPLR 321! (a)(l) --- Defense Founded Upon Documentary Evidence Evt~n where the breach of contract claims are sufficiently pleaded, however, a dismissal of the claim is warranted under CPLR §321 l(a)(l), if documentary evidence conclusively establishes a defense to the asserted claims as a matter oflaw. See Leon, 84 N. Y .2d at 88. Defondant Voktsky's documentary evidence conclusively establishes that Ezhkov did not have the authority to enter into an Operating Agreement after the initlal frmnation of the 18 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 18] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 18of32 business, Defendant Voletsky states that he was contacted by smneom.: purporting to be Nicos Gavrieiides, requesting an LLC be established .in New York. VoletsAy ,1/Jirm. Ex. C; but see Ezhkoi,, Ajfld, ~[,] 15-l 6 (claiming documents containing the signature of G-avrielides are forgeries). Regardless of whether Nicos Gavrielides signed the initial letter which engaged Voletsky, the documentary evidence conclusively establishes Voletsky acted upon that representation by filing paperwork with non-party Blumberg Excelsior Corporate Services seeking to create an LLC. See "Voletsky Affirm. Ex. D On that filed papervvork, Defend.ant Voletsky named Nicos Gavrielides as the initial member ofNPK Ekologia LLC. See ViJletsky Affirm Ex. D. Sharon Babala, of Blumberg Excelsior Corporate Services, subsequently relied upon those representations to draft and file the Articles of Organization with New York's Department of State on March 9, 2005 naming Nicos Gavrielid.es as the initial Member. Voletsky AjJirm. Exs. E~ G. Plaintiff's own copy of the Certificate of Organization dated l\r1ay 6, 2013, names Nicos Gavrielides, not Ezhkov, as the initial member of the LLC. S'ee Ezhkov Ajfid Ex. E. lt is well settled that the complaint is not entitled to favorable inferences where it contains "factual claims flatly contradicted by documentary evidence". See A:fyers v. Schneiderman, 30 N.Y.3d 1, 11 rearb"'tonent denied, 30 N.Y.3d 1009 (2017) (finding there were no reasonable countervailing factual issues which would preclude a determination on the law). Absent any indication that Nicos Gavridides transforred his membership interest to Plaintiff Ezhkov in 2005, the earliest date PlaintiffEzhkov admits he entered into an agreement with Gavrielides concerning NPK Ekologia LLC was April 21, 2008. See Comp. ~~ 81-88. Therefore, the court finds that documentary evidence supplied by both parties flatly contradicts 19 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 19] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODlONOV vs. REDFERN ET AL 651976/2016 Page 19 of32 the complaint See lvfyers 30 N, Y3d at 11. The Court finds that the Plaintiff did not have the authority to enter into the 2005 NPK Operating Agreernent with Defendant Voletsky and dismissal under CPLR 3211(a)(1) is justified as the documentary evidence conclusivt..~ly establishes Ezhk:ov had no mvnership interest in NPK Ekologia from its fom1ation through 2008. See Leon, 84 N.Y.2d. at 87-8K Dismissal is tht..~rdore warranted, c. CPLR 3211 (a)(5) ~Statute of Limitations Even had the Operating Agreement been valid, Defondant Voletsky also seeks to dismiss lhe breach of contract claim vvhere the applicable statute of limitations has expired. A cause of action arising from a contractual obligation or liabillty shall have a six~year statute oflimitations See CPLR §213(2). '"Except in cases of fraud where the statute expressly provides othenvise, the statutory period of limitations begins to nm from the time when liability for '\.Vrong has arisen even though the injured party may be ignorant of the existence of the ·wrong or injury." E(v- Cruik<;hank Co. v, Bank ofAkmtreal, 81 N.Y.2d 399, 403 (1993). Plaintiffs argue, without any citation, that Defendant Voletsky breached contractual duties owed to the Plaintiff afler April 13, 2010. Opp. Br. p24. The Cornplaint first alleges that Voletsky breached sections SA and 5,5 of the operating agreement in March of 2005, when a second operating agreement was signed between nonparties Jacqui Desmond and Nicos Gavrielides. See Comp. ~~48-50, 67(a), 70-75, 79-83, 235. Even crediting the aHegation that Ezhkov sornehow had an ownership interest in NPK Ekologia prior to 2008, the claim for breach of contract during the transfer ofthe LLC to Jacqui Desmond remains subject to the 6-year statute of limitations provided for in CPLR §213(2). See 20 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 20] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 20 of32 E(y-Cruikshank Co,, 81 N.Y.2d at 403 (stating the period oflimitations begins to run from the time of the breach despite the ignorance of the party). Subsequent transfers of the NPK are alleged to have been effectuated by non-pa1ty Jacqui Desmond, Defendant Redfern, and NataLiya Demidova. Cornp. ~[79, 88, 89, 93, 94, 102. While a breaching party is to be held liable for foreseeable consequences arising from the breach, this does not alter the fact that the date of Defendant Ezhkov's alleged breach falls outside the applicable statute oflimitations. See e.g. Ashland.t\dgmt. Inc. v. Janien, 82 N.Y.2d 395, 403 (1993); Ely-Cruikshank Ca., 81 N.Y2d at 403. The Complaint next alleges that the Defendant breached his contractual fiduciary duties. S'ee Comp. ~~234-238, This breach, again, first occurred in 2005 1,vhen Defendant Voletsky is alleged to have allowed the second Operating Agreement between non~party Jacqui Desmond and Nicos Gavrielides to seize the company from Ezhkov. See Ezhkuv Affid ~nu 1-16. see also Ezhkov Af/id Exs. D, E. The Plaintiffs argue that the Defendant openly repudiated his fiduciary duties from 2005 through at least 2013. See Ezhkov Affid ii~ 11-16. see also Ezhkov Ajfid Exs. D, E. The open repudiation of the Defendant's fiduciary duties, resulted in harm to the Plaintiffs with the loss of funds held by NPK Ekologia LLC. Comp, ~i1240-241. The First Department, however, has specifically held that "the open repudiation doctrine, which tolls the statute of limitations when there is an ongoing fiduciary relationship between the parties, does not apply to claims for money damages." See A verick v, Glickenhaus, 201 7 N. Y. Slip Op. 30862(U) at *3 (April 27, 2017) citing ~Mailer of Clark, 146 A.D.3d 495, 496-497 (1st Dep't 2017); Cusimano v. Schnurr, 137 A.D.3d 527, 530 (1st Dep't 2016); Stern v. Afargan Stanley Smith Barney, 129 AJ).3d 619 (1st Dep't 2015). Given that the claims seek money 21 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 21] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs, REDFERN ET AL 651976/2016 Page 21 of32 damages and relate back to the initial breach in 2005, the Court holds the Plaintiffa' claims for breach of contract are time barred, Id iv. Breach of the .Implied Covenant of Good Faith and Fair Dealing (Count 6) and Breach of Fiduciary Duty (Count .:~) Plaintiffs also raise claims for breach of the Implied Covenant of Good Faith and Breach of Fiduciary duty. Specifically, "Voletsky.'s multiple, material breaches of the implied covenant. of good faith and fair dealing have deprived Ezhkov of the right to receive the benefits under the NPK Operating Agreement." Comp, ~248. A claim for breach oft.he implied covenant of good faith is properly dismissed as duplicative of a breach of contract claim where both claims "arise from the same facts and seek the identical damages for each alleged breach." Neto logic, Inc. v Goldman Sachs Grp., Inc., 110 A.D.3d 433, 433~34 (1 ;;t Dep't 2013) citing Arncan Holdings, Inc. v, Canadian imperial Bank ofCommerce, 70 AD.3d 423, 426 (1st Dept. 2010). Given that the claims for breach of the irnplied covenant of good faith and fair dealing are based on the same facts, and st:ek the same damages as the breach of contract claim, Plaintiffs claim for breach of the implied covenant of good faith and fair dealing is properly dismissed as duplicative. See Netologic, Inc., 110 A.D.3d at 433-34 (dismissing a claim for breach of the implied covenant of good faith as duplicative of a breach of contract claim), Sirni!arly, Plaintiffs' claims for breach of fiduciary duties also arise solely from the Operating Agreement See Comp. ~~[ 257-263. A claim for breach of fiduciary duty is properly dismissed as duplicative of a claim for breach of contract where there is no fiduciary duty independent of the contract William Km1fman Org,, Ltd. v. Graham & James LLP, 269 A.D.2d 22 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 22] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs, REDFERN ET AL 651976/2016 Page 22 of32 171, 173 (l st Dep't, 2000) (noting that a breach of fiduciary duty claim must be separate and distinct from the underlying breach of contract claim). Given that the ent1rety of the Plaintiffs' claim for breach of fiduciary duty discusses fiduciary duties arising from the operating agreement and the damages are the same as the bn.:ach of contract claim, the Plaintiffs claim for breach of fiduciary duty is dismissed as duplicative of the Plaintiffs breach of contract claims. ' ,_.ee w. .' v. Plaintiffs' claims for Unjust Enrichment/Breach of Constructive Trust (Count 10). 9 To state a claim for Unjust Enrichment, the Plaintiffs needed to plead \vith a sufficient degree of particularity how Defendant Voletsky was enriched, at PlaintiffEzhkov's expense, and that "it is against equity and good conscience to permit [Defendant Voletsky] to retain what is sought to be recovered," Afandarin Trading Ltd v. Wildem;tein, 16 N, Y.3d 173, 182 (2011). Plaintiff has failed tci sufficiently plead that Defendant Voletsky obtained any benefits from the Agreement whatsoever.. Similarly, in order to grant a constructive trust, the Plaintiff must have sufficiently pleaded the existence of "(I) a confidential or fiduciary relationship, (2) a promise, express or implied, (3) a transfer in reliance thereon, and (4) unjust enrichment" Reinhardt v. J()hn Famizy 9 This Court declines to rule on the Defondant's statute of limitations argument as it pertains to unjust enrichment/constructive trust. For the reasons stated in this section, this Court holds that the present pleading fails to state tbe elements of the claim with sufficient pmticularity as to when and if Defendant Voletsky obtained a benefit within the six-year statute oflimitations. See Sirico v. F.G.G Productions, 71 A.D.3d 429, 434 {1'1 Dep't 2010) (holding that there must be an act by which Defendant Voletsky was unjustly enriched within 6 years of filing the complaint); see also CPLR §213(1). 23 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 23] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs< REDFERN ET AL. 651976/2016 Page 23 of32 Tr, of1997, 21 Misc. 3d 1112(A) at *4 (Sup< Ct N. Y. Cty. 2008). While the Plaintiff has sufficiently pleaded the existence of a contractual fiduciary relationship and a promise, the Plaintiff has failed to plead the elements of a transfer in reliance thereon and resulting unjust enrichment Therefore, the Plaintiffs' Count 10 is dismissed as to Defendant Voktsky, B. !]~ims -~~1!It~tPt:fomfa!'lt~Ji@i!J~n!, Delau.nav, _g_!HL!YlH_nut_!~ - lVfotion Seqt_rn.nce 002. Defendants \Villiam Donald Redfern and Fabierme Delaunay bring Motion Sequence 002, to dismiss the complaint based upon CPLR §§ 3211(a)(3), 321 l(a)(S), 321 l(a)(8), 321 l(a)(lO) and 327(a). As part of motion sequence 002, Defendant Ellen \Vittman Grossman also seeks to dismiss the complaint under CPLR §§ 321 l(a)(3), 3211(a)(5), 321 l(a)(7), 321 l(a)(lO) and 327(a). Both Plaintiffs state causes of action against Defendants Redfern, Delaunay, and Wittman for fraud (Count 1), fraudulent inducement (Count 2), and unjust emichmenttbreach of constructive trust (Count 10). Plaintiff Rodionov states causes of action against Defondant Wittman, specifically, for breach of contract (Count 3), breach of the implied covenant of good faith (Count 4), breach of fiduciary duty (Count 7), Both Plaintiffs state a caust~ of action against Defendant Redfern, specifically, for aiding and abetting breach of fiduciary duty (Count 9), 24 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 24] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976i2016 Page 24 of32 i. CPLR 3211 (a)(8) -Lack ofPersonal Jurisdiction ofDefendants Rectfern and Delaunay. Defendants Redfern and Delaunay move to dismiss the complaint, arguing the court does not have jurisdiction over them as there is an insufficient nexus to New York and on the grounds that they were improperly served. Defendant Redfern is alleged to live in Cypms and Defendant Delaunay is alleged to live in France. See Rel(fern Afl ir~2-7; Delaunay.,{{l" 4"[~1-10. The Defondants \Vere purportedly served by "nail and mail" service in California. CPLR 308(4) describes nail and mail service as: \Vhere service under paragraphs one and t\VO cannot be made with due diligence, by affixing the summons to the door of either the actual place of business, dwelling place or usual place ofabode within the state lf the person to be served and by either mailing the summons to such person at his or her last known residence or by mailing the summons by first class mail to the person to be served at his or her actual place of business in an envelope bearing the legend "personal and confidential" and not indicating on the outside thereof, by return address or otherwise, that the communication is from an attorney or concerns an action against the person to be served, such affixing and mailing to be effected \Vithin twenty days of each other; proof of such service shall be filed with the clerk of the court designated in the summons within twenty days of either such affixing or mailing, ·vv'hichever is effected later; service shall be complete ten days after such filing, CPLR §308(4) (emphasis added). Plaiutiffs were aware that Defendants Redfern and Delmmay had multiple residences around the world. S'ee Ezhkov A...fl' ~[7; see also Rodionov Alf ~6. It is clear, however, that the Plaintiffs were unaware where the Defendants actually lived inasmuch as they attempted to effectuate service at a Nevv' York apartment, then at a home in California, before finally attempting to obtain service on the Defendants at an apartment in Russia. See .tzhkov Ajf ~7; Rodionov .{ff ~6; Redfern Ajf ~6-7; Delaunay Ajf ~~[1-10; Redfern Reply 4il" ~4. At a minimum, the atternpts at obtaining service in New· York, California, and even Russia indicate that the Plaintiffs were entirely unaware \Vhere the Defendants' actual divelling place, or usual place ofabode, was. Service 25 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 25] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERJ'\f ET AL. 651976/2016 Page 25 of32 upon what is believed to be the dwelling or abode is insufficient to effectuate service in New York State, See Feinstein v. Bergner, 48 N. Y.2d 234, 241 (1979) (holding that subsequent knowledge of the lawsuit was nonetheless insufficient where the Defendant was never properly served); CPLR 308(4) (emphasis added)o Thus, the court holds that service upon the parties was improper, and the claims against Defendants Redfern and Deia.una.y are dismissed. ii. CPLR 3211 (a)(3) ~Lack o_/Capacity to Sue The concept of a lack of capacity, addresses the parties' ab1lity to bring its claim into court and is without a concrete definition, Onty. Bd 7 of Borough of lvfanhattan v. Schaffer, 84 N.Y.2d 148, 155 ( 1994). The "'legal capacity to sue, or lack thereof, often depends purely on the litigant1s status, such as that of an infant, a.n adjudicated incompetent, a trustee, certain governmental entities or, as in this case, a business corporation." Sec. Pac. Nat. Bank v. Evans, 31 AJ).3d 278, 279 (1st Dep't 2006). a. Defendants' CPLR 3211 (a)(3) motion 1vith regard to Plaint{ffEzhkov, Defendants have made no argument as to why Plaintiff Ezbkov does not have capacity to assert his claims, Therefr)re, the court declines to determine whether Plaintiff Ezhkov had the capacity to sue. 26 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 26] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL. 651976/2016 Page 26 of32 b. Dejendants CPLR 3211 (a)(3) motion ';Vfth regard to Plaint{tf Rodionov. Defendants Redfern, Delaunay, and Wittman allege that PlaintiffRodionov lacks standing to assert claims, given that the complaint alleges an entity by the name of Deede Trading Ltd. entered into the Purchase and Sale Agreement for Duke Venture Fund, LLC. See e.g. Cornp. ~4[30-31. This argument is belied by PlaintiffRodionov's, and Defendant Redfem's, attachment of the same Certificates of Shares in Duke Venture Fund, LLC. See Radionov Ajfid Ex, A., Redfern AJjid Ex. B {t)eptember 14, 2016). These shares granted PlaintiffRodionov a personal interest in Duke Venture Fund LLC. This alone, establishes that Plaintiff Rodionov had an interest in the LLC on September 30, 2009. See id. Unlike similar cases involving corporate dissolution and the Plaintiff's capacity to bring a suit personally, here, the Plaintiff's mvnership in shares of the LLC establishes his capacity to bring a suit See e"g. S'ec. Pac. Nat. Bank, 31 .A.D.3d at 279 (noting that the despite.being dissolved the corporation was nonetheless ham1ed and narrowly questioning the individual plaintiffs capacity to bring a suit for that harm). Based upon Plaintiff Rodionov' s mvnership interest in shares of Duke Venture Fund LLC, this court finds that Plaintiff Rodionov does have the capacity to bring this lawsuit. Capacity to sue, ho\vever, is different from a Plaintiffs standing to file a suit See Cmty, Bd. 7 o.f Borough oflvfanhattan v. Schq/jer, 84 N.Y.2d 148, 155 (1994) (noting that standing to sue discusses a large question ofjusticiability); see also Sec. Pac. Nat. Bank v. Evans, 31 A.D,3d 278, 279 (1 5t Dep't 2006). "Standing means a plaintiff has suffered an injury in fact Only an aggrieved party has standing to bring a lawsuit Fmthemmre, in order to have standing a party 27 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 27] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 27 of32 must be involved in some genuine controversy." See Sec, Pac, Nat. Bankv. Evans, 31 A.D.3d 278, 283 (1st Dep't, 2006) (Catterson, J. and Mazzerelli J,P,, dissenting), Here, the purchase agreement for the Duke Venture Fund, LLC was entered into between Duke Venture Fund and Deede Trading Ltd. See Comp. ~~30-32. Because of that transfer, PlaintiffRodionov became the sole O\.Vner of 1000 units of Duke Venture Fund, LLC. Cornp. ~~35-38; see also Rodionov Ajf. E'.x. A. Plaintiff Rodionov was not, hovv'twer, induced in his individual capacity to enter the Purchase and Sale Agreement, but rather as a rnember of Deede Trading Ltd. See Comp. ~~30-32. Plaintiff Rodionov, therefore, lacks the standing to assert an individual claim of fraudulent inducement (Count 2) which rightfully should have been brought by Deede Trading, Ltd. See Cmnp. ~[,[30-32. Plaintiff Rodionov's claim for fraudulent inducement is therefore dismissed. iii. CPLR 327(a) ····Forum Non Conveniens Defendants Redfern, Delaunay, and Wittman also move under CPLR 327(a) on the grounds that New York is an inconvenient forum to hold the action. Factors to consider when deciding a motion to disrni.ss on CPLR 327(a) grounds include: "the bmden on New York courts, potential hardship to the defendant, the unavailability of an alternate forum, the residence of the parties, and the location of the events giving rise to the transaction at issue in the litigation, with no one factor controlling. Other factors may include the location of potential witnesses and documents and the potential applicability of foreign law. Unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed, even where the plaintiff is not a resident ofNe\:V York" See Elma!iach v. Bank of China Ltd., 110 A,D.3d 192, 208 (l st Dep't 2013), 28 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 28] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 28 of32 The decision of the Plaintiff to litigate in New York does not place a particularly substantial burden on this Court which, Plaintiff argues, is well equipped to handle cornplex commercial disputes involving foreign and domestic laws. See e.g. Georgia-Pac Corp. v. l1;fulthnark's Int'! Ltd., 265 A.D.2d 109, 112 (1st Dep't, 2000). a. Residency of the Parties Two of the four Defendants are not Nevv York residents, but are instead domiciled in Cyprus. See Redfern Ajf ,-r,r2-5; Delaunay Afl ~*![2-3. One Defendant, Fabienne Delaunay, resides in France when not at her domicile. See Delaunay A.fl ii~12-3. V/hile it is true, that Defendants Wittman and Voletsky are domiciled in the United States, Defendant Voletsky has been dismissed from this action on other grounds and Defendant \Vitt.man has also moved for dismissal pursuant to CPLR 327(a). Thus, the Defendants are not barred from seeking dismissal pursuant to CPLR 327(a) b, Availability of an Alternative Forum Plaintiffs argue that Cyprus is unavailable as an alternative forum merely because it does not recognize causes of action for aiding a11d abetting breach of fiduciary duty and breach of the implied covenant of good faith. Plaintiffs' argument, however, is a nonstarter vvith regard to these causes of action as they are properly dismissed -in a New York forum as v:vell. A claim for breach of the implied covenant of good faith is properly dismissed as duplicative of a breach of contract claim where both claims "arise from the same facts and seek the identical damages for each alleged breach." Netologic, Inc. v. Goldman Sachs Grp,, Inc., 110 29 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 29] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs, REDFERN ET AL. 651976/2016 Page 29 of32 A.D.3d 433, 433---34 (1st Dep't 2013) citing Amcan Holdings, Inc. v. Canadian Imperial Bank of Commerce, 70 A.D3d 423, 426 (1st Dept. 2010). Plaintiff's cause of action for breach of the implied covenant of good faith is merely duplicative of the cause of action for breach of contract as both are based on the same facts, and seek the same damages. Compaie Comp ~[,[208-22 with Comp. ~~221-228. Similarly, Plaintiffs' claims for breach of fiduciary duty also arise solely from the Operating Agreement See Comp. ~ii 250-256. A claim for breach of fiduciary duty is properly dismissed as duplicative of a claim for breach of contract where there is no fiduciary duty independent of the contract. Tf'illiam Kaufinan Org., Ltd. v_ Graham & James LLP, 269 AD.2d 171, 173 (1st Dep 't, 2000). Absent a breach of fiduciary duty, the Plaintiff's claims against Defendant Redfern for "aiding and abetting a breach of fiduciary duty" cam1ot stand. Given that the two causes of action were listed as one of the main reasons for denying a change of venue to Cypms, and that those causes of action would have been dismissed in New York regardless, this Court finds that there would be no substantial prejudice to the Defondant in having the case litigated in Cyprus, It is the burden of the P1aintiffa to persuade this court that the other forum is not a proper alternative forum for purposes of determining this motion. See e,g. Islamic Republic o,flran v. Pahlavi, 62 N.Y.2d 474, 481 (1984) (noting that even were the existence of no alternative forum a dispositive factor in detennining a dismissal on forum non conveniens grounds, the burden would be on the Plaintiff to prove this given that it was the Plaintiff's decision to litigate here in New York), Plaintiffs have failed to do so here. 30 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 30] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL 651976/2016 Page 30 of32 c. Location ofEvents and Potential Witnesses The Court must take into conskk~rntion the location of the events and potential witnesses. Elmaliach v. Bank o.lChina Ltd, 110 A.D.3d 192, 208 (1st Dep't 2013). The Court takes notice that both NPK and Duke Venture Flmd are both organized under the la\vs of New York. See Comp. iI~f 18, 30. The Operating Agreements for both LLCs are governed by New York law. See id at ~[,]41, 51. Further, money for Duke Venture Fund was transfem.~d into New York Wachovia and 'WeUs Fargo accounts after its formation. Id at ~[34. That is vvhere the connection to New York ends. After the initial formation of the LLCs, both were placed under the management ofNicos Gavrielides ofChartac Management, a Cyprus registered company. See id at i!~21-24, 38. Upon discovering the purported frauds, the Plaintiffs engaged in a preliminary investigation with the help of Chartac Managernent. S'ee Comp. at iJ66, 74, 76, 78. Nicos Gavriel1des, presumably operating from Chruiac in Cyprus, is alleged to have been managing these.corporations and in contact with Defendant Redfom throughout the relevant times. See id at ~~80-110. Nicos Gavrielides is alleged to have played .a role in the fraudulent creation of Singapore Corporations for both NPK Ekologia and Duke Venture Flmd. Id at i!t,!142, 150-153, 155. Bank accounts \'Vere opened in Cyprus for both NPK Ekologia and Duke Venture Fund. See id at ~,[26-27, 33. Through 2008 -2015 the Plaintiffa are alleged to have met with Bank of Cypms representatives, as well as Defendant Redfern. See id at ~[63. Banking for both LLC's was regularly conducted through the Bank of Cyprus. See id at,~ 94~95, 136, 139. The Defendants are also alleged to have made fraudulent transfers to themselves from the Bank of Cyprus Accom1ts. ld at iJiI161-166, 172, 176. 31 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 31] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs. REDFERN ET AL. 651976/2016 Page 31 of32 Finally, the Defendants are alleged to have orchestrated the transfor of managernent over NPK Ekologia LLC and Duke Venture Fund LLC from Chartac Management company to a person by the name of Na.sos Panayotiou, a Cyprns based attorney. See Comp. at ~ii J 77. Dismissal of this action on.forum non conveniens grounds is therefore appropriate given that the location of events and witnesses, the availability of an alternative forum, and the residency of the parties involved all point to Cyprus as a more convenient forum than the state of New York. Upon the foregoing background and analysis, it is hereby ORDERED Defendant Voletsky's Motion to Dismiss the Complaint in its entirety (Motion Sequence 001) is GR.1-\NTED in the follmving manner: l) Fraud (Count 1) is dismissed as duplicative of the breach of contract claim 2) Fraudulent inducement (Count 2) is dismissed as duplicative of the breach of contract 3) 4) 5) 6) claim. Breach of contract (Count 5) is dismissed \Vith prejudice pursuant to CPLR 321 l(a)(l) and CPLR 321 l(a)(5), Breach of the implied covenant of good faith and fair dealing (Count 6) is disrnissed as duplicative if the breach of contract claim. Breach of fiduciary duty (Count 8) is dismissed as duplicative of the breach of contract claim, Unjust Enrichment/Breach of Constructive Trust (Count l 0) is disrnissed as duplicative of the breach of contract claim. IT IS FURTHER ORDERED that, notwithstanding other deficiencies in the Complaint warranting dismissal of the Plaintiffs' claims with and without prejudice, Defendant Redfom's, 32 of 33 [*FILED: NEW YORK COUNTY CLERK 05/10/2018 03:30 PM 32] NYSCEF DOC. NO. 81 INDEX NO. 651976/2016 RECEIVED NYSCEF: 05/10/2018 RODIONOV vs, REDFERN ET AL 651976/2016 Page 32 of32 De!aunay's, and Wittman's Motion to Dismiss (Motion Sequence 002) is GRANTED with prejudice as New York is an inconvenient fornm to litigate the Plaintiffs' claims pursuant to CPLR 327. Dated: 33 of 33

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