Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 1 of 10
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
CORNWALL MANAGEMENT LTD and OLEG
SOLOVIEV a/k/a OLEG VALENTINOVICH
E l E("1 R 0 \ !C \ L;' FI L [ D
DOC #: ___~Iv-rl',:-;:--
DAT [ FllED:..-.:...ID=-+1/~111~,.....'1=-\3_
12 Civ. 8551
OPINION & ORDER
THOR UNITED CORP. a/k/a THOR UNITED
CORPORATION, JOHN DOE THOR ENTITIES,
ATLANT CAPITAL HOLDINGS, LLC, OLEG
BATRACHENKO a/k/a OLEG BATRATCHENKO,
a/k/a O.V. BATRACHENKOV, PETER KAMBOLIN,
NORTH 3RD DEVELOPMENT, LLC and ABRAHAM
Plaintiffs Cornwall Management Ltd. ("Cornwall U) and Oleg
ev ("Soloviev u
) bring this diversi
defendants Thor United Corp., John Doe Thor Entities
(collectively, "ThorU), Atlant Capit Holdings, LLC ("AtlantU),
Oleg Batrachenko ("Batrachenko U), Peter Kambolin ("Kambolin"),
North 3rd Development, LLC ("North 3rd Development ll
) , and
Abraham Bennun ("Bennun ll
) , alleg
common law fraud related to
the sale of a real estate investment property in Williamsburg,
Brooklyn ("the Williamsburg propertyll) .
Atlant and Kambolin move to dismiss the amended complaint
pursuant to Fed. R. Civ. P. 12 (b) (1)
jurisdiction, and pursuant to Fed. R. C
. P. 12 (b) (6) for
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 2 of 10
failure to state a cl
upon which relief can be granted.
Bennun and North 3rd Development also move to dismiss the
insufficiency under Rule 12 (b) (6)
Cornwall and Soloviev move for leave to amend the complaint, for
alternative service on Batrachenko, and for jurisdictional
discovery concerning Batrachenko.
For the reasons that follow, the requisite diversity of
citizenship among the parties is lacking, the court has no
subject matter jurisdiction over this action, and therefore the
2007, Cornwall (represented by Soloviev) 1
entered into two contracts wi
Thor (represented by
Batrachenko), pursuant to whi
Cornwall lent Thor a total of
$2.2 million for the development of the Williamsburg, Brooklyn
property. See Am. Compl. ~~ 37-41. Thor and its affiliate
company Atlant (represented by defendants Batrachenko and
Kambolin respectively) subsequently promised in a July 2010
arrangement ("the 2010 Arrangement") to repay the 2007 contract
loans from the sale proceeds of the Williamsburg property if
This section refers to the Amended Complaint ("Am. Compl."), dated
26, 2013, as well as to the parties' affidavits in support of their
defendant Batratchenko's domicile. A court
udicating a 12(b) (I) motion "may resolve disputed factual issues by
reference to evidence outside the pleadings, including affidavits."
_A_ _ _ ~ _ __ ~L-____"~-d..~~~...~C.o~~a.: _
...~l~a~nc.d=, 494 F.3d 71, 77 n.4 (2d Cir.
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 3 of 10
Cornwall and Soloviev agreed to extend the loans and re
from taking legal action.
Id. ~~ 52, 58. Cornwall and Soloviev
sed Kambolin and Batrachenko to make
this proposal" and draft
the 2010 Arrangement.
Id. ~ 53.
The gravamen of the Amended Complaint is that the
defendants engaged in fraud by entering into the 2010
Arrangement, a contract which they had no intent to perform.
ld. ~ 61. Cornwall and Soloviev allege that Kambolin and
Batrachenko concurrently negotiated a "short" sale (i.e., for
less than its value) of the Williamsburg property to Bennun and
the defendants now refuse to repay the loans although they have
sufficient funds to do so. See id. ~~ 62-71.
sclosed their plans to short sell the Williamsburg
property, plaintiffs would have commenced earlier legal actions
to recover their monies."
ld. ~ 128.
Cornwall and Soloviev are both foreign
is a Nevis corporation with its princ
place of business in
Charlestown, Nevis, while Soloviev is a Russian citizen who
Id. ~~ 9-10.
In the Amended Complaint, Cornwall and Soloviev allege that
Batrachenko is a United States citizen who resides in New Jersey
and is the co-founder and principal of Thor USA, a New York
corporation, and other affiliated companies.
Id. ~~ 11, 14.
Atlant is a Delaware limited liability company with its
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 4 of 10
business in New York, New York, and North 3rd
Development LLC ig a New York limit
liability company with its
principal place of bus
ss in New York, New York.
rd. ~~ 13,
16. Kambolin and Bennun are Uni
States citizens who reside
in New York, New York.
Id~~_ ~~ 15, 17.
1 jurisdiction pursuant to 7 U.S.C.
§ 25(c), 28 U.S.C. §§ 1331, 1332(a), and 1367(a).
7 U.S.C. §
25(c) grants district courts juri
ction for private rights of
action under the Commodities Exchange Act ("CEA ff
concerns and regulates dealings in commodities. Neither the
real estate is a commodity.2 The parties make no
mention or argument
question or supplemental
jurisdiction in their papersi no support for any such concept is
giveni and those recitals in the amended complaint are
considered abandoned. The sole issue is whether there is
Atlant and Kambolin contend that dismissal is appropriate
because Batrachenko is a U.S. citizen domiciled abroad in
Russia, and there
the court does not
28 U.S.C. § 1332.
In response, Cornwall and Soloviev argue that
2 Commodities are defined in 7 U.S.C. § la(9): they are primarily agricultural
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 5 of 10
Batrachenko is domiciled in New York, so
"A case is properly dismissed for lack of subject matter
under Rule 12(b) (1) when
strict court lacks
the statutory or constituti
power to adjudicate it."
Makarova v. U.S., 201 F.3d 110, 113 (2d Cir. 2000).
28 U.S.C. § 1332 grants the
strict courts jurisdiction
over cases between "citizens of a State" and"c
subjects of a foreign State." United States citizens domiciled
abroad are not "citizens of a State. U
are not "citizens or
subjects of a foreign State. U
Thus, a suit naming such persons
as parties cannot be based on diversity. See Creswell v.
Sullivan & Cromwell, 922 F.2d 60, 68-69 (2d
the courts have
Though we are unclear as
United States citizens who are domiciled
abroad are neither citizens of any state of
the United States nor citizens or subjects
of a foreign state, and § 1332 (a) does not
such persons are
Congress's rationale for not granting United
specific and requires the conclusion that a
suit by or against Unit
domiciled abroad may not be premised on
See §mith v. _g_~rterl 545 F.2d
909 (5th Cir.), s:..ert:____denied/ 431 U.S. 955,
97 S.Ct. 2677
see also 1 Moore's
those it accords
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 6 of 10
-~..- - -..- -..-----.--~-------.
Wright, A. Miller
Practice and Procedure,
§ 3621, at 577 78
& E. Cooper,
though most of
the plaintiffs are citizens
therefore, since not all of the pI
are entitled to sue in
I court based
on the diversity statute, plaintiffs may not
fendant challenges a
aintiff's grounds for
diversity, the plaintiff must prove "by a preponderance of the
evidence that it exists." Makarova, 201 F.3d at 113.
action in which jurisdiction is premised on diversi
ity must exist at the t
the action is
commenced." Universal Licens
v. Paola del
S . . A., 293 F.3d 579, 581 (2d
For purposes of diversity jurisdiction, it is domicile that
izenship. Domicile is the
ace where one has
"his true fixed home and principal establishment, and to which
whenever he is absent, he has the intention of returning."
v. Fortuna, 157 F.3d 945, 948
(2d Cir. 1998)
13B Charles A. Wright, Arthur R. Miller & Edward H. Cooper,
Federal Practice and Procedure, § 3612 at 526 (2d ed. 1984).
res (1) the party's presence in the state; (2)
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 7 of 10
the intent to remain in that state indef
u Nat'l Artists
. Co. v. Weavi
, 769 F. Supp. 1224, 1227 (S.D.N.Y. 1991)
To determine domicile, consider the "totality of the
or is conclusive, although the
of a married person's spouse and children (if the
couple has not
National Artists, 769 F. Supp. at 1228.
The parties' views are at odds about Batrachenko's
domicile, and ordi
ly we do not reso
issues of fact on
motions, but reserve them for t a l . In this case, however, no
genuine issues of fact are raised, because it is apparent that
their submissions refer to different time periods.
Cornwall and Soloviev assert that Batrachenko is domiciled
in New York. They allege that Batrachenko has four current
s in the United States (two in New Jersey and two in
New York), and claim
in New Jersey, where he has a
current driver's license. Thompson Decl. ~~ 2 4. They submit
considerable documentary evidence
he had dealings in New
York from 2005 through 2009/ did some business t
and has some lit
ion there. Plaintiffs also contend that
Batrachenko is domiciled in New York because that is where his
second wife/ Tatiana Smirnoff Zayes Batrachenko, and his
daughter, Jane Batrachenko/ reside. Plaintiff Soloviev states:
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 8 of 10
I have known the Defendant, aleg Batrachenko
represented to me
that he was a permanent
resident of New York, New York in the United
States; that he lived in New York with his
wife, Tatiana Smirnoff,
and daughter Jane
that his wife, Tatiana
Smirnoff sat on
Thor Uni ted Corp.
the board of
("Thor USA") .
Soloviev Decl. ~ 4.
Like much of
aintiff's factual submissions, that one is
It disregards (probably through ignorance) the
unequivocal evidence that the Batrachenkos were divorced in
1999, and he understandably no longer is domiciled with her. He
now lives in Moscow. Def
Peter Kambolin declares:
knew aleg Batrachenko' s ex
wife Tatiana Smirnoff when Batrachenko lived
married, and am aware that he divorced her
in December 1999.
the United States
with aleg Batrachenko over the years,
that he current
resides in Russia,
In addition, based on my conversations
father owned at 24/1
Frunzenskaya Naberezhnaya, Apt. 60, Moscow,
Russia, which is located in the Khamnoviki
neighborhood in Moscow.
4. I also know that he lives with two of his
children[,] Maxim, age 5, and Karina, age 7.
5. Karina at tends private school in Moscow,
in the Kuntsevskiy district of
I also know
that Batrachenko's current
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 9 of 10
Priogovskaya Street, building I,
I declare under penalty of perjury that the
foregoing statements are true and correct.
Kambolin Reply Decl. ~~ 2-6.
On August 30, 2012 the Moscow Ci
Court upheld the
st ct court of Moscow, including
"the individual O.V. Batrachenko, who
resides in the jurisdiction of Khamovniki district court of
Moscow." See Ex. 6 to Am. Compl. at 4.
Batrachenko is a U.S. citizen domicil
in Moscow, Russia,
and this court has no more jurisdiction over the subject matter
of this case than it does over a multitude of business
ions in New York between
ted States citizens who do
not reside in separate states.
There being no subject matter j
sdiction over this
action, plaintiffs' related motions
leave to further amend
complaint (Dkt. No. 44), to
insufficiency (Dkt. Nos. 9 and 30), perform alternat
on Batrachenko (Dkt. No. 22), and for expanded jurisdictional
discovery (Dkt. No. 48) are deni
s Atlant Capital HoI
and Kambolin's motion
(Dkt. No. 30) is grant
,and the amended complaint is dismissed
Case 1:12-cv-08551-LLS Document 55 Filed 10/08/13 Page 10 of 10
for lack of subject matter jurisdiction. The pending related
motions (Dkt. Nos. 9, 22, 30, 44, and 48) are also dismissed.
clerk is di
to enter judgment accordingly.
Dated: New York, New York
October S, 2013
LOUIS L. STANTON