Dmitriev v. Mann
| Decision Date | 06 April 2022 |
| Docket Number | Civil Action No. 21-40068-NMG |
| Parties | Petr DMITRIEV, et al., Plaintiffs, v. Andrei MANN, et al., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Kenneth C. Pickering, Lauren Sparks, Mirick, O'Connell, DeMallie & Loungee, LLP, Worcester, MA, for Plaintiffs.
George Lambert, Law Office, Sunny Isles Beach, FL, for Defendant Andrei Mann.
Sean T. Carnathan, O'Connor, Carnathan and Mack LLC, Burlington, MA, for Defendant Michael Hellman.
This case arises from claims that Andrei Mann ("Mann"), with the assistance of Michael Hellman ("Hellman") (collectively, with Mann, "defendants"), enticed plaintiffs to loan money to Mann under false pretenses. Plaintiffs assert claims for fraud, breach of contract, civil conspiracy, conversion and unjust enrichment. Pending before the Court are motions to dismiss by each defendant.
As set forth in the complaint, Mann was known to plaintiffs, all of whom are Russian nationals, as a successful businessman from a respected family. Using that reputation, plaintiffs allege that Mann, often with the assistance of Hellman, convinced them to loan him large sums of money or to entrust funds to him. Rather than invest or safeguard those funds, however, Mann deposited them into his own personal accounts and those of his children with no indication of ever repaying plaintiffs. Almost all of plaintiffs’ interactions with Mann occurred in Russia. They contend that, in 2018, Mann absconded to the United States to evade civil and criminal liability in Russia, where he faces ongoing bankruptcy proceedings.
Hellman, the only party who lives in Massachusetts, allegedly facilitated Mann's fraud by, among other things, creating numerous business entities in Massachusetts for the receipt of funds and falsely reassuring plaintiffs that Mann would repay the debts. According to the plaintiffs, Hellman provided an air of legitimacy to their interactions with Mann by representing that he was a Massachusetts attorney and notary public. Although all the plaintiffs allegedly had dealings with Hellman, only three assert claims against him. Both Mann, who resides in New York, and Hellman are naturalized American citizens.
Collectively, plaintiffs seek to recover approximately 17 Million Dollars. Plaintiffs filed their complaint in June, 2021 and defendants responded with the two pending motions to dismiss in August, 2021.
To survive a motion under Fed. R. Civ. P. 12(b)(6), the subject pleading must contain sufficient factual matter to state a claim for relief that is actionable as a matter of law and "plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible if, after accepting as true all non-conclusory factual allegations, the court can draw the reasonable inference that the defendant is liable for the misconduct alleged. Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011).
When rendering that determination, a court may not look beyond the facts alleged in the complaint, documents incorporated by reference therein and facts susceptible to judicial notice. Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011). A court also may not disregard properly pled factual allegations even if actual proof of those facts is improbable. Ocasio-Hernandez, 640 F.3d at 12. Rather, the necessary inquiry focuses on the reasonableness of the inference of liability that the plaintiff is asking the court to draw. Id. at 13. The assessment is holistic:
the complaint should be read as a whole, not parsed piece by piece to determine whether each allegation, in isolation, is plausible[.]
Hernandez-Cuevas v. Taylor, 723 F.3d 91, 103 (1st Cir. 2013), quoting Ocasio-Hernandez, 640 F.3d at 14.
Both defendants argue primarily that plaintiffs have failed to include sufficient factual material in their complaint to survive the pending motions, particularly regarding their claims for fraud. See Fed. R. Civ. P. 9(b) ( ); Rodi v. S. New England Sch. Of Law, 389 F.3d 5, 15 (1st Cir. 2004). Prior to addressing that argument, however, the Court must determine what law governs the complaint to determine whether the claims are plausibly pled under the applicable law. The parties disagree on that issue: plaintiffs and Hellman assert that Massachusetts law governs while Mann contends that Russian law applies.
A federal court sitting in diversity applies the choice of law rules of the forum state. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). This Court therefore relies upon Massachusetts law in that analysis. See Levin v. Dalva Brothers, Inc., 459 F.3d 68, 73 (1st Cir. 2006).
The first step in a choice of law analysis is to determine whether an actual conflict exists between the substantive laws of the interested jurisdictions ....
Reicher v. Berkshire Life Ins. Co. of Am., 360 F.3d 1, 4 (1st Cir. 2004). That first step therefore requires that the substantive laws of the interested jurisdictions, here Massachusetts and the Russian Federation, are known. See Lambert v. Kysar, 983 F.2d 1110, 1114 (1st Cir. 1993) (). The interpretation and application of Massachusetts law by this Court is commonplace and presents no problem but the discernment and interpretation of Russian law is an entirely different matter.
Federal courts have discretion when determining the contours of foreign law pursuant to Fed. R. Civ. P. 44.1. A court "may consider any relevant material or source" and is permitted, but not required, to conduct its own research. Fed. R. Civ. P. 44.1 ; see Mackley v. Sullivan & Liapakis, No. 98-cv-8460, 2001 WL 1658188, at *4 (S.D.N.Y. Dec. 27, 2001). It can also direct the parties to brief a particular question with respect to the relevant foreign law and/or demand a more "complete presentation [of that law] by counsel". See Mackley, 2001 WL 1658188, at *4, 2001 U.S. Dist. LEXIS 21723, at *4 ; see also Fed. R. Civ. P. 44.1, Advisory Committee's Note ("[T]he court is free to insist on a complete presentation [of the relevant foreign law] by counsel."); Pfizer Inc. v. Elan Pharm. Research Corp., 812 F. Supp. 1352, 1361 (D. Del. 1993) ().
Furthermore, although the First Circuit Court of Appeals has yet to render an opinion on the matter, several other circuits have held that whichever party is seeking the application of foreign law has the burden of proving the relevant legal principles thereof. See, e.g., McGee v. Arkel Int'l, LLC, 671 F.3d 539, 546 (5th Cir. 2012) (); Baker v. Booz Allen Hamilton, Inc., 358 F. App'x 476, 481 (4th Cir. 2009) (); Ferrostaal, Inc. v. M/V Sea Phoenix, 447 F.3d 212, 216 (3d Cir. 2006) (); Mut. Serv. Ins. Co. v. Frit Indus., Inc., 358 F.3d 1312, 1321 (11th Cir. 2004) (); Esso Standard Oil S.A. v. S.S. Gasbras Sul, 387 F.2d 573, 581 (2d Cir. 1967) ().
Here, Mann is the party seeking to invoke Russian law but he has provided no material to help this Court define its contours. Koshani v. Barton, 374 F. Supp. 3d 695, 710 (E.D. Tenn. 2019) (). As a general matter:
Id. Such is the case here, where that determination would be "premature" due not only to the failure of the parties to provide a "full and reliable statement" of the foreign law in question but also to the undeveloped factual record. Chan, 424 F. Supp. 3d at 152. Contrast Chan, 424 F. Supp. 3d at 152 (...
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