Chigirinskiy v. Panchenkova

• Decision Date: 19 July 2018
• Docket Number: 14 Civ. 4410 (GWG)
• Parties: Shalva Pavlovich CHIGIRINSKIY, Plaintiff, v. Tatiana Romanovna PANCHENKOVA, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

319 F.Supp.3d 718

Shalva Pavlovich CHIGIRINSKIY, Plaintiff,

v.Tatiana Romanovna PANCHENKOVA, et al., Defendants.

14 Civ. 4410 (GWG)

United States District Court, S.D. New York.

Signed July 19, 2018

George Benaur, Benaur Law LLC, New York, NY, for Plaintiff.

Chelsea Elizabeth Mullarney, David B. Newman, Day Pitney, L.L.P., Jeffrey M. Eilender, Douglas Eric Grover, Joshua Wurtzel, Niall Diarmuid O'Murchadha, Vitali S. Rosenfeld, Schlam Stone & Dolan LLP, Jonathan Daniel Lupkin, Lupkin & Associates PLLC, Rebecca Claire Smithwick, Rakower Law, Joseph P. LaSala, McElroy, Deutsch, Mulvaney & Carpenter, LLP, New York, NY, for Defendants.

OPINION AND ORDER

GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE

Plaintiff Shalva Pavlovich Chigirinskiy brought this action in June 2014 against his former wife, Tatiana Romanovna Panchenkova, seeking to recover tens of millions of dollars worth of property allegedly belonging to Chigirinskiy. After the parties entered into a Settlement Agreement, the Court dismissed the case, retaining jurisdiction to enforce the Settlement Agreement. The parties have now each moved to enforce the Settlement Agreement.¹ Panchenkova also moves to seal portions of the moving papers and the Settlement Agreement submitted in conjunction with her motion to enforce.² The parties have also sought their fees and costs for filing this motion. For the reasons set forth below, Panchenkova's motion to enforce the Settlement Agreement is granted, Chigirinskiy's cross-motion is granted in part and denied in part, and Panchenkova's motion to seal is denied except as specified below. Both parties' requests for costs and fees are denied.

I. BACKGROUND

A. Pre-Settlement Background

The dispute about the Settlement Agreement arises from a series of legal actions between Panchenkova and Chigirinskiy in Russia and the United States relating to their marriage, family, and assets. On April 14, 2009, Chigirinskiy and Panchenkova "were divorced by a Divorce Decree of the Presnenskiy District Court of Moscow, Russia" (hereinafter the "Divorce Decree"). See Settlement Agreement, dated Jan. 18, 2018 (annexed as Ex. 2 to Eilender Decl.), at 1. On July 3, 2009, the Simonovsky District Court of Moscow, Russia, issued a judgment dividing the parties' marital property between them. Id. at 2. The judgment included a ruling that certain items were gifts from Chigirinskiy to Panchenkova and thus were solely owned by Panchenkova. Id. It also ordered Chigirinskiy to pay Panchenkova "an equalization payment." Id. at 2.

Litigation between Chigirinskiy and Panchenkova followed in both the United States and Russia. The Settlement Agreement reflects that the parties are still opposing each other in a case in Connecticut State Court regarding certain personal matters which, as explained in section IV below, we have ordered sealed (hereinafter the "Connecticut Case"). See id. at 3. In 2012, Panchenkova also initiated an action against Chigirinskiy in Connecticut State Court to enforce the judgment entered by the Simonovsky District Court (hereinafter the "Connecticut Enforcement Action"). Id. at 2. Lastly, Panchenkova initiated several proceedings in Russia to enforce the judgment that was entered in Russia against Chigirinskiy, which are now pending with the Moscow Inter-District Bailiff Service (the "Russian Enforcement Proceeding"). See id. at 2-3. As a result of Russian legal proceedings, Chigirinskiy and Panchenkova each own one-half interests in three apartments in St. Petersburg, Russia. See id. at 3.

In conjunction with the Russian Enforcement Proceeding, Chigirinskiy was assessed a fee by the Moscow Inter-District Bailiff Service of "over 52 million Russian Roubles," or approximately $900,000 (hereinafter the "Bailiff's Fee"). Id.; see also Pl. Mem. at 6; Eilender Decl. ¶ 8. The parties have submitted declarations from experts on Russian law describing the nature of this Fee.³ These experts agree that the Bailiff's Fee is a "penalty" or "sanction" imposed on the debtor in an enforcement proceeding that, once paid, is credited directly to the Russian federal government. See Rachkov Decl. ¶¶ 20-21 (describing the Bailiff's Fee as "a monetary penalty imposed on the debtor in case of non-execution of an execution document within the period established for a voluntary execution of the executive document," and that this fee, once paid, is "credited to the [Russian] federal budget"); Ryabchenko Decl. ¶¶ 5, 8 (describing the Bailiff's Fee as "a sanction imposed by the court bailiff, without a court ruling, by his own determination, upon the debtor who fails to comply, within the time period set by the court enforcement bailiff, with lawful demands of the court enforcement bailiff directed at execution of an enforcement document," and further noting that this fee represents "7% of every amount presented to the debtor by the bailiff with an instruction to pay the debt voluntarily within 5 days, and charged once the debtor has failed in that duty in the time period set by the law without good cause.") (emphasis omitted).⁴

On June 5, 2014, Chigirinskiy initiated the instant action seeking, among other things, to recover from Panchenkova "tens of millions of dollars of property that belongs to him," including "fine art, religious icons, antiques, unique and valuable decorative objects, jewelry and valuable antiques, and an historic library of Russian literature."⁵ See Complaint, dated June 5, 2014 (annexed as Docket # 4-1 to Defendant's Amended Notice of Removal, filed June 25, 2014 (Docket # 4) ("Am. Removal Not.") ) ("Compl."), ¶ 1; see also Settlement Agreement at 2. Chigirinskiy sought recovery of this property, or damages in the alternative. See Compl. ¶¶ 43-68, ad damnum; see also Second Amended Complaint, filed Feb. 1, 2016 (Docket # 126) ("SAC"), ¶¶ 53-116, ad damnum. Panchenkova thereafter asserted counterclaims against Chigirinskiy arising from, among other things, his purported failure to pay her as required by prior court orders, including pursuant to the Divorce Decree. See Amended Answer to the Second Amended Complaint and Counterclaims of Tatiana Romanovna Panchenkova, filed May 9, 2017 (Docket # 199) ("Am. Answer"), ¶¶ 76-170.

B. Settlement

On November 15, 2017, after several years of litigation, Panchenkova's counsel in this action wrote the Court stating that the parties had reached a settlement in principle of this matter, and anticipated "executing a written stipulation to that effect in the near future." See Letter from Jeffrey M. Eilender, filed Nov. 15, 2017 (Docket # 276). On December 13, 2017, however, Panchenkova's counsel filed another letter stating that the parties had come to an impasse with respect to one issue, and warned that "the Court's involvement may ultimately be needed to ascertain [the settlement's] specific terms with respect to the one issue that remains unresolved." Letter from Vitali S. Rosenfeld, filed Dec. 13, 2017 (Docket # 279), at *1.⁶

The Court held a conference on January 12, 2018. See Memorandum Endorsement of Letter from George Benaur, dated Dec. 20, 2017 (Docket # 284); Minute Entry for Pretrial Conference, dated Jan. 12, 2018. Following the conference, the parties reached a final Settlement Agreement, which was executed by Chigirinskiy on January 18, 2018, and by Panchenkova on January 19, 2018. See Settlement Agreement at 17.

The Agreement provides that each party releases all claims that they "ever had, now have, or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of execution of this Settlement Agreement" against the other party, and that each party covenants not to sue or maintain other legal actions against the opposing party, except for "claim[s] for breach[es] of this Settlement Agreement" and "claims or obligations arising from, relating to or at issue in the [Connecticut Case]." Id. §§ 8-11. The Agreement does not provide for any payments to be made by either party.

Regarding the Russian Enforcement Proceeding, section 4 of the Agreement specifies that the parties shall

within forty-five business days of the Settlement Agreement becoming effective, ... execute and exchange, through their respective counsel, any documents sufficient and necessary to dismiss and discontinue all such actions and proceedings with prejudice, with each of the Parties to bear its own costs and attorneys' fees pertaining to such actions and proceedings, and withdrawing any and all claims, motions, subpoenas, liens, costs, fees, and any other legal process pertaining to such actions and proceedings with prejudice and without costs.

Id. § 4. Section 4 also provides that "[i]n the meantime, neither party shall take any actions with respect to any of the Foreign Enforcement Proceedings and/or the Principal Russian Debt other than those designed to effectuate the dismissal with prejudice and discontinuance of such proceedings and/or those contemplated and intended by Section 7 of this Settlement Agreement."⁷ Id.

The Settlement Agreement includes as section 29 the following provision:

[t]he parties agree that the above is the full and complete agreement between the parties. The parties recognize that they have not agreed on how the above agreement impacts on the manner of terminating the [Russian Enforcement Proceeding], pending before the Russian Bailiff Service, or the fees imposed by the Russian Bailiff Service. The parties agree, however, that the impact of this manner of termination and of these fees is not a material term of the above agreement, that the above agreement is enforceable notwithstanding the dispute regarding the manner of termination and the fees imposed by the Russian Bailiff Service, and that either party may seek to resolve these issues by appropriate means, including an application to the Court in Chigirinskiy v. Panchenkova, 14 Civ. 4410 (S.D.N.Y.) (JPO) (GWG) to enforce the above agreement. Any

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