United States District Court, S.D. New York
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
For Kalimantano GmbH, a company under the laws of Germany, Tofik Davidoff, Konstantin Felde, both German Citizens, Plaintiffs: George Lambert, PRO HAC VICE, Law Offices of Leonard Suchanek, Washington, DC; Peter Alan Joseph, Law Offices of Peter Joseph, New York, NY.
For Johannes Schwegler, a German Citizen, Does from 1 to 100, Plaintiff, Defendant: George Lambert, PRO HAC VICE, Law Offices of Leonard Suchanek, Washington, DC.
For Motion in Time, Inc., a New York Corporation, Eddie Shamayev, doing business as Eddie Jewelry, Inc., doing business as Amrus Jewelry, Inc., Michael Shamayev, Boris Shamayev, David Shamayev, all four residents of New York State, Defendants: Jonathan H. Rosenthal, LEAD ATTORNEY, Malman, Malman & Rosenthal (FL), Hollywood, FL; Robert George Stahl, Stahl Farella, LLC, Westfiled, NJ.
Paul A. Engelmayer, United States District Judge.
OPINION & ORDER
Plaintiffs Kalimantano GmbH (" Kalimantano" ), Tofik Davidoff (" Davidoff" ), Konstantin Felde (" Felde" ), and Johannes Schwegler (" Schwegler" ) (collectively, " Plaintiffs" ) bring suit against defendants Motion in Time, Inc. (" MIT" ), Eddie Shamayev (" Eddie" ), Michael Shamayev (" Michael" ), Boris Shamayev (" Boris" ), and David Shamayev (" David" ) (collectively, " Defendants" ), alleging violations of the Racketeer Influenced and Corrupt Organizations Act of 1970 (" RICO" ), 18 U.S.C. § § 1961 et seq., and New York statutory and common law. Defendants move to dismiss the Amended Complaint, under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim. For the reasons that follow, the Court grants in part and denies in part Defendants' motion.
Kalimantano is a German company based near Frankfurt am Main, Germany (" Frankfurt" ). Am. Compl. ¶ 1. Since its founding in 2001, Kalimantano's principal business has been selling wholesale foodstuffs to customers within Germany. Id. Davidoff, one of Kalimantano's operating managers and principals, helped Kalimantano purchase luxury watches, and in so doing became acquainted with Defendants. Id. ¶ ¶ 2, 39.
MIT is a New York-based corporation founded in 2004. MIT's principal business is selling, buying, and reselling jewelry and watches, particularly luxury brands. MIT interacts with customers via its New York City store, its website www.motionintime.com, and direct email advertisements and solicitations. Id. ¶ 5.
The Amended Complaint refers to three transactions, in which, it is alleged, MIT deceived buyers of expensive watches. The Court addresses these transactions in chronological order.
A. The Tuleshov Transaction
In October or November 2010, the Amended Complaint alleges, Tokhtar Tuleshov
(" Tuleshov" ), a customer in Kazakhstan, ordered a Swiss watch from MIT through an agent named Yuri X (the " Tuleshov Transaction" ). Id. ¶ 31. Tuleshov negotiated for Yuri to hand-deliver a brand new Blancpain Tourbillon watch to him in Kazakhstan from MIT's New York store, for which Tuleshov would pay $65,000. Id. The Amended Complaint alleges that, approximately one day after Tuleshov paid the money and the watch arrived in Kazakhstan, the watch stopped working. Id. ¶ 32. Yuri took the watch to an authorized Blancpain dealer in Kazakhstan for repairs; the dealer determined that the watch was at least two years old and had already been repaired at least once. Id. ¶ 33. This dealer charged Tuleshov € 16,000 for the new repairs. Id. When Tuleshov attempted to return the watch to MIT, the Defendants refused to take back the item. They tried to convince Tuleshov not to pursue his claims against MIT. Id.
Tuleshov is neither a plaintiff in this action nor an employee of Kalimantano. The Amended Complaint argues, however, that Tuleshov's claim is properly considered among the allegations in this action, because he is alleged to have assigned to plaintiff Schwegler, an associate manager of Kalimantano, his claim for the damages arising from the purchase of the watch and for its repairs. Id. ¶ ¶ 30, 34.
B. The Frankfurt Transaction
The Amended Complaint centers on a different transaction: between Kalimantano and Michael Shamayev (on behalf of MIT) in January 2012 (the " Frankfurt Transaction" ). The Amended Complaint alleges that, in 2009, Davidoff began receiving promotional emails from MIT offering discounts on luxury watch brands. Id. ¶ 36. In December 2011, two years later, three of Davidoff's trading partners in Kazakhstan (" the trading partners" ) asked him to help them get a good deal on luxury watches. Davidoff, recalling the promotional emails he had received from MIT, arranged for his trading partners to travel to Frankfurt to meet with Michael to purchase a Swiss Patek Phillipe watch for € 143,000. Id. ¶ ¶ 39-42.
On January 4, 2012, Davidoff picked up Michael from the Frankfurt airport and brought him to the Hilton Hotel in Frankfurt. Id. ¶ 44. That same morning, Felde, an operating manager at Kalimantano, picked up the trading partners and brought them to the hotel lobby to meet Michael. Id. ¶ ¶ 45-46. There, Michael announced, allegedly for the first time, that he would accept payment only in cash for the watch. Id. ¶ ¶ 47-49. The trading partners then called their colleagues in Kazakhstan to arrange for cash withdrawals from banks within Frankfurt for accounts belonging to two of the partners, Nurgali Dossanbayev (" Dossanbayev" ) and Ruslan Azizov (" Azizov" ). Id. ¶ 50. To procure the cash, Dossanbayev and Azizov had to leave the hotel to visit various ATMs throughout Frankfurt. When Dossanbayev and Azizov returned to the hotel, Davidoff and Felde brought them to Michael's hotel room to complete the transaction. Id. ¶ 55. Dossanbayev and Azizov then gave Michael € 143,000 in cash for him to count. Michael then passed the Patek Phillipe watch, in a box, to one of the trading parties, representing that the watch was new, certified and in impeccable condition. Id. ¶ 57. Michael then gave Davidoff € 8,000 out of the € 143,000 total for
Davidoff's work as an intermediary for the sale, as well as to reimburse Kalimantano for buying Michael's round trip plane ticket and hotel room in Frankfurt. Id. ¶ 58. That evening, Michael, Davidoff, Davidoff's wife and Azizov celebrated the transaction over dinner at a restaurant in Frankfurt. Id. ¶ 59.
C. The Davidoff Transactions
On January 5, 2012, the day after the Frankfurt Transaction, Davidoff sought to make two more purchases from MIT on behalf of Kalimantano (the " Davidoff Transactions" ). Id. ¶ 62. The first was for another Patek Phillipe watch; the second was for an order of 500 Audemars Piguet Montoya watches. Id. Davidoff arranged for a wire transfer from Kalimantano's Commerzbank account for two separate down payments for the two purchases, one for $50,000 and one for $70,000. Id. ¶ 63. Davidoff planned to pay the balance of the two orders once he received the watches in Frankfurt. Id. ¶ 64. At some point during Davidoff's negotiations with Michael that day, Michael suggested that instead of waiting, Davidoff should immediately wire MIT $125,000, the remaining balance of the two orders. Davidoff agreed and arranged for another wire transfer of $125,000 from Kalimantano's bank account. Id. ¶ 65.
On January 6, 2012, Davidoff took Michael to the airport in the morning. Because of the tight schedule of Michael's trip, Davidoff did not believe Michael had time to deposit the € 135,000 in cash from the Frankfurt Transaction into a bank account. Id. ¶ 67. Plaintiffs assert that, accordingly, Michael would have had either to take the € 135,000 in cash through Customs and declare it, or fail to declare the cash and violate U.S. Customs laws. Before arriving at the airport, Michael requested that Davidoff help him catch his flight through a VIP lounge, because Davidoff had access to the lounge as a " known businessman in Frankfurt." Id. ¶ 68. At this point, Davidoff relates, he became suspicious that Michael was trying to circumvent Customs and might not be a bona fide dealer of luxury watches. Id. ¶ 70. After dropping Michael off at the airport, Davidoff went to Commerzbank to check on the status of the three wire transfers to MIT, for $50,000, $70,000 and $125,000. The $50,000 and $70,000 transfers had cleared, but the $125,000 transfer was still pending. Davidoff canceled the $125,000 wire and communicated to Michael that he would send it once MIT confirmed that the watches were ready for delivery. Id. ¶ 71.
Later in January, Davidoff repeatedly called MIT and the Shamayevs to ask about the status of the two orders. Id. ¶ 73. Each time, someone at MIT told Davidoff that the orders were not yet ready but would be at an unspecified later date. Id.
D. The Discovery that the Watch Sold to the Trading Partners Was Used
At some time after the trading partners returned to Kazakhstan with the Patek Phillipe watch, Dossanbayev and Azizov contacted Kalimantano and reported that the watch was used and appeared to have been repaired. Id. ¶ ¶ 74, 76. Dossanbayev and Azizov discovered this by taking the watch to an authorized retail shop in Kazakhstan, which traced the watch's identification number and discovered that the watch had been produced by Patek Phillipe in 2010, not 2011. Id. ¶ 75. The trading partners demanded that Davidoff and Kalimantano return the € 143,000 they had paid for the watch. Id. ¶ 78. The Kazakhstan partners gave the Patek Phillipe watch back to Felde, made him liable for the € 143,000, and assigned him all their claims arising from the Frankfurt Transaction. Id. ¶ 107. The Shamayevs and
MIT, however, denied that the watch was used; they refused to refund the € 135,000 that Michael had received for the watch. The Shamayevs also claimed--allegedly falsely--that they had never received the $50,000 and $70,000 that Kalimantano had paid on January 5, 2012. Id. ¶ 80.
E. The Threatening Phone Calls to Davidoff
At some point between the end of January 2012 and June 14, 2012, the Shamayevs in New York began to call Davidoff in Germany and threaten his safety if he did not stop seeking refunds from the Frankfurt and Davidoff Transactions. Id. ¶ 82. On June 14, 2012, Eddie called Davidoff at midnight in Germany, shouting obscenities and threatening to physically harm Davidoff and his family. Eddie also stated that he would contract for Davidoff's murder. Id. ¶ ¶ 83-86. On June 18, 2012, Kalimantano and Davidoff lodged a formal complaint against the Shamayevs with the Attorney General of Hessen Province in Germany. Id. ¶ 9.
F. The Defamatory Website
The Amended Complaint also alleges that David Shamayev, Eddie's son, created a fraudulent website at www.tofikdavidoff.com with the tagline " Tofik Davidoff: A Man You Can't Trust." Id. ¶ 93. There, the Shamayevs accused Davidoff of stealing the Patek Phillipe watch from the Frankfurt Transaction. Plaintiffs allege that this website defamed Davidoff and Kalimantano and damaged their business relationships in Germany.
G. Procedural History
On September 14, 2012, Plaintiffs filed the original complaint, Dkt. 1, bringing 12 causes of action and seeking damages, injunctive, and declaratory relief. On October 22, 2012, MIT filed a motion to dismiss. Dkt. 6.
On November 14, 2012, Plaintiffs filed an Amended Complaint. Dkt. 13. There, they allege 12 causes of action, namely: (1) civil RICO, in violation of: 18 U.S.C. § 1962(c), based on predicate acts of mail and wire fraud, 18 U.S.C. § § 1341 & 1343; money laundering, 18 U.S.C. § § 1956-1957; receipt and transportation of stolen moneys in excess of $5,000, 18 U.S.C. § § 2314-2315; witness tampering, 18 U.S.C. § § 1512-1513; and use of interstate commerce facilities in commission of murder-for-hire, 18 U.S.C. § 1958; (2) breach of contract; (3) conversion; (4) money had and received; (5) fraudulent conveyances; (6) fraud; (7) misrepresentation; (8) civil conspiracy; (9) unjust enrichment; (10) defamation; (11) interference with business relationships; and (12) injunctive relief.
On December 3, 2012, MIT moved to dismiss the Amended Complaint, Dkt. 15, and submitted an accompanying memorandum of law (" MIT Br." ). Dkt. 16. On December 27, 2012, Plaintiffs filed an opposition brief (" Kalimantano Br." ). Dkt. 18. On January 4, 2013, MIT filed a reply brief (" MIT Reply Br." ). Dkt. 21.
Also on December 27, 2012, Plaintiffs asked the Court to take judicial notice of two other proceedings involving MIT (" Kalimantano RJN Br." ). Dkt. 19. On December 28, 2012, MIT moved to strike that request, and to strike any facts from plaintiffs' brief that did not appear in the Amended Complaint (" MIT MTS Br." ). Dkt. 20.
On January 11, 2013, Plaintiffs filed a cross-motion to amend or correct the motion to strike and a motion for leave to supplement the Amended Complaint, along with an accompanying memorandum of law (" Kalimantano Cross-Motion Br." ), Dkt. 25, and a declaration from Tofik Davidoff (" Davidoff Decl." ), Dkt 24. On January 11, Plaintiffs filed their opposition to
MIT's motion to strike (" Kalimantano MTS Opp. Br." ). Dkt. 26. On January 21, 2013, MIT filed a reply brief in further support of that motion (" MIT MTS Reply Br." ). Dkt. 30. On January 28, MIT filed its opposition to the cross-motion to amend or correct the motion to strike and to supplement the pleadings (" MIT Cross-Motion Opp. Br." ). Dkt. 31. On January 29, 2013, Plaintiffs filed a reply in support of the cross-motion to amend or correct the motion to strike and the motion to supplement the pleadings (" Kalimantano Cross-Motion Reply Br." ). Dkt. 32.
On January 31, 2012, the Court held argument on these motions. See Transcript of January 31, 2013 Oral ...