Gudavadze v. Kay

• Court: U.S. District Court — Southern District of New York
• Writing for the Court: Richard J. Sullivan
• Citation: Gudavadze v. Kay, 556 F.Supp.2d 299 (S.D. N.Y. 2008)
• Decision Date: 30 May 2008
• Docket Number: No. 08 Civ. 3363(RJS).,08 Civ. 3363(RJS).
• Parties: Inna GUDAVADZE, et al., Plaintiffs, v. Joseph KAY and Emanuel Zeltser, Defendants.

556 F.Supp.2d 299

Inna GUDAVADZE, et al., Plaintiffs, v. Joseph KAY and Emanuel Zeltser, Defendants.

No. 08 Civ. 3363(RJS).

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

May 30, 2008.

Christopher K. Tahbaz, Esq., and Jennifer Cowan, Esq., Debevoise & Plimpton, LLP, New York, NY, for Plaintiffs.

Scott M. Himes, Esq., Stillman, Friedman & Shechtman, P.C., New York, NY, for Defendant Kay.

Harold M. Hoffman, Esq., New York, NY, for Defendant Zeltser.

MEMORANDUM AND ORDER

RICHARD J. SULLIVAN, District Judge:

Plaintiffs bring this action against Joseph Kay and Emanuel Zeltser, seeking, inter alia, declaratory and injunctive relief to prevent defendants "from interfering with Plaintiffs' efforts to ensure the lawful distribution of [Arkady Patarkatsishvili's] assets and the orderly administration of Mr. Patarkatsishvili's estate...." (Compl. ¶ 2.) Previously, this Court denied defense counsel's motion to dismiss— brought on behalf of defendant Zeltser— on the grounds of insufficiency of service and lack of personal jurisdiction without prejudice to renewal. (See May 8, 2008 Order at 1.) On May 9, 2008, Zeltser's defense counsel renewed his motion to dismiss and submitted a request to conduct certain expedited discovery.

For the following reasons, the Court denies both the motion to dismiss and the request to conduct expedited discovery.

I. BACKGROUND

Plaintiffs are the widow and daughters of Arkady Patarkatsishvili, a Georgian national believed to possess substantial assets who died unexpectedly in London on February 12, 2008. Plaintiffs allege that Kay and Zeltser have misrepresented themselves as authorized to act and to speak on behalf of Mr. Patarkatsishvili and his estate, in part by relying on documents which allegedly appear to be fraudulent or otherwise invalid. According to plaintiffs, by relying on such documents, defendants have taken control of at least one substantial asset allegedly owned by Mr. Patarkatsishvili's estate, and have attempted to seize control of other assets, thereby complicating plaintiffs' efforts to administer Mr. Patarkatsishvili's estate.

On April 21, 2008, plaintiffs submitted a request to preliminarily enjoin defendants from engaging in such conduct. On that date, the Hon. Loretta A Preska, District Judge, signed an Order to Show Cause (the "OSC") directing defendants (1) to show cause why a preliminary injunction should not issue enjoining defendants from acting or speaking on behalf of Mr. Patarkatsishvili's estate, until a court of competent jurisdiction bestowed such authority upon them, or from using certain documents to support their claims of authority to act on behalf of the estate, and (2) to produce to plaintiffs' counsel for inspection certain documents that they have allegedly relied on in holding themselves out as representatives of Mr. Patarkatsishvili's estate.¹

In his response to the OSC, Harold M. Hoffman ("defense counsel")—who had been hired by Zeltser's brother to represent Zeltser in this action—indicated that Zeltser had been detained by authorities in Belarus on March 12, 2008, and, therefore, had not received notice of this action or plaintiffs' application for preliminary relief.² Defense counsel also brought to the Court's attention that the United States Department of State has raised extremely troubling concerns regarding the conditions of Zeltser's confinement. Specifically, the Department of State has indicated that consular officers from the United States Embassy in Minsk have been denied proper access to Zeltser, a United States citizen; that Zeltser is "not receiving adequate medical care"; and that Zeltser has reported that he has been subject to "beatings" and is experiencing a "significant physical deterioration" during his detention in Belarus. (See Hoffman's May 18, 2008 Ltr. (attaching the Department of State's April 28, 2008 Diplomatic Note to the Embassy of Belarus).)

Defense counsel opposed plaintiffs' application for preliminary relief, and crossmoved to dismiss this action on the grounds of insufficient service of process and lack of personal jurisdiction over Zeltser.³ Specifically, defense counsel argued that "[t]he circumstances of Emanuel Zeltser's arrest, detention and torture are intimately tied to the conduct of [plaintiffs'] counsel and those acting in concert with them." (Def. Zeltser's OSC Mem. at 6.) Therefore, according to defense counsel, because plaintiffs and their counsel had allegedly helped to secure Zeltser's detention in Belarus, plaintiffs' service of the summons and complaint in this action did not comport with the requirements of due process. (See id. at 10.)

At the hearing regarding the OSC, after conceding that, "while imprisoned, Defendant Zeltser likely cannot harm Plaintiffs" (Pls.' OSC Reply at 10), plaintiffs withdrew their request for a preliminary injunction against Zeltser. (Tr. of Argument on May 8, 2008 ("May 8 Tr.") at 40.) Instead, plaintiffs sought a stay of the action against Zeltser, subject to certain continuing obligations upon defense counsel. (Pls.' OSC Reply at 10.) Thereafter, following extensive argument regarding defense counsel's motion to dismiss, the Court held that "the service effectuated here was reasonably calculated under the circumstances to apprise the defendant of the pendency of the proceeding. And so I find that there is personal jurisdiction." (May 8 Tr. at 53-54.) In an order issued that day, the Court formalized its ruling as follows:

Defendant Zeltser's cross-motion to dismiss the complaint on the basis of insufficient service of process and lack of personal jurisdiction is hereby DENIED without prejudice to renewal. The Court finds, for the reasons set forth on the record, that plaintiffs have established, on the basis of the record before the Court at this time, that the methods of service adopted by plaintiffs in regard to defendant Zeltser—namely, delivering the summons and complaint to Zeltser's residence by leaving a copy with the doorman and mailing a second copy to the residence—complied with Rule 4(e) of the Federal Rules of Civil Procedure as well as § 308(2) of New York's Civil Practice Law and Rules. Moreover, the Court finds that such service constituted "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections," and was "not substantially less likely to bring home notice than other of the feasible and customary substitutes." Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314-15 [70 S.Ct. 652, 94 L.Ed. 865] (1950); see Baker v. Latham Sparrowbush Assocs., 72 F.3d 246, 254 (2d Cir.1995) ("There is `no rigid formula as to the kind of notice that must be given; notice required will vary with circumstances and conditions.'") (quoting Walker v. City of Hutchinson, 352 U.S. 112, 115 [77 S.Ct. 200,1 L.Ed.2d 178] (1956)).

(May 8, 2008 Order at 1.)

The Court also indicated that defense counsel "may renew his motion to dismiss on the grounds of insufficient service and lack of jurisdiction by submitting a letter within two weeks of the date of this Order. The letter must set forth legal authority in support of Zeltser's renewed motion, requests, if any, to conduct discovery regarding the service issue, and specify reasons why such discovery would be necessary and/or helpful in resolving defendant's renewed motion to dismiss." (Id. at 2.) Specifically, the Court directed defense counsel to present authority in support of the proposition that the "complicity of plaintiffs' counsel in [procuring] the unavailability of the defendant is a basis for denying service and concluding that personal jurisdiction is not present." (May 8 Tr. at 39.)

The following day, on May 9, 2008, defense counsel submitted a letter renewing his motion and seeking to depose two attorneys—namely, Michelle Duncan, a partner at the London office of Cadwalader Wickersham & Taft LLP and former counsel to one of the plaintiffs, Inna Gudavadze, in this action; and Peter Goldsmith, the European Chair of Litigation for Debevoise & Plimpton LLP, plaintiffs' current counsel. By order dated May 9, 2008, the Court granted plaintiffs' request to submit a response to defense counsel's letter. (See May 9, 2008 Order.) The Court did not grant leave for defense counsel to submit a reply letter. (See id.) Nevertheless, following plaintiffs' submission of their response letter on May 14, 2008, defense counsel has submitted three additional letter briefs, which, including attachments, total forty pages in length. Plaintiffs have also submitted an additional, two-page letter, wherein they request a conference to set a briefing schedule to respond to defense counsel's various letters. (See Pls.' May 21, 2008 Ltr., at 1-2.)

II. DISCUSSION

A. Motion to Dismiss

"In the absence of service of process (or waiver of service by the defendant), a court ordinarily may not exercise power over a party the complaint names as defendant." Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999). "[T]he plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant." Tommy v. Int'l Ctr. for the Disabled, No. 02 Civ. 2461(DC), 2003 WL 1990532, at *3 (S.D.N.Y. Apr. 29, 2003) (internal quotation marks and citation omitted). For the following reasons, the Court denies defense counsel's renewed motion to dismiss, and adheres to its previous determination that service in this case constituted "`notice reasonably calculated, under the circumstances, to apprise [Zeltser] of the pendency of the action and afford [him] the opportunity to present [his] objections.'" Baker v. Latham Sparrowbush Assocs., 72 F.3d 246, 254 (2d Cir.1995) (quoting Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 84, 108 S.Ct. 896, 99 L.Ed.2d 75 (1988)) (additional internal quotation marks and citation omitted).

As noted supra, in...