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Koster v. Grafova

United States District Court, N.D. Alabama, Southern Division

May 15, 2019

ELENA GRAFOVA Defendant/Counterclaim Plaintiff.



         This case contains all the hallmarks of a Hollywood blockbuster: divorce, deception, courtroom drama, and hundreds of thousands of dollars exchanging hands across international borders. Federal courts rarely involve themselves in divorce or family proceedings, but this case more than makes up for the lack of such cases up to this point.

         While the divorce action is not pending here, the case before this court stems from the complicated relationship between Albert Koster and Elena Grafova. The two began a romantic relationship, eventually marrying, and quickly thereafter developed a business relationship relating to Mr. Koster's Euroboor entities.

         Neither Mr. Koster nor Ms. Grafova heeded the age-old advice to avoid mixing business with pleasure. Both their marriage and their business relationship deteriorated. Mr. Koster and his Euroboor entities sued Ms. Grafova for accessing protected business financial information without authorization, disclosing confidential business data and financial records without authorization, and trespassing Euroboor's chattel relating to Euroboor's computer systems and files. Ms. Grafova countersued Mr. Koster and the Euroboor entities for fraudulent inducement to move to the United States, conversion of her personal belongings, fraudulent inducement to enter into an agreement to loan Euroboor FZC money, and breach of that loan agreement.

         Mr. Koster, Euroboor B.V., Euroboor USA, and Euroboor FZC (collectively “Plaintiffs”) have filed two motions to dismiss Ms. Grafova's counterclaims. Euroboor B.V., Euroboor USA, and Mr. Koster raise four grounds for the dismissal of Ms. Grafova's counterclaims: (1) the court should dismiss Ms. Grafova's conversion claims under forum non conveniens; (2) the court should dismiss Ms. Grafova's conversion claim under the international abstention doctrine; (3) the court lacks subject matter jurisdiction over Ms. Grafova's fraudulent inducement claims because they are not yet ripe; and (4) Ms. Grafova failed to plead fraud with the particularity required under Federal Rule of Civil Procedure 9(b). (Doc. 68). Euroboor FZC raises three of the same grounds for dismissal-forum non conveniens, ripeness, and Rule 9(b)-and no additional grounds. (Doc. 70).

         The parties fully briefed the motions.[1] The motions are now ripe for review. For the reasons discussed below, the court will GRANT IN PART and DENY IN PART Mr. Koster, Euroboor B.V., and Euroboor USA's motion to dismiss, (doc. 68), and will DENY in its entirety Euroboor FZC's motion to dismiss, (doc. 70).

         I. Background

         On June 1, 2014, Ms. Grafova entered into an “Employment Contract for an Indefinite Period of Time” with Euroboor B.V. as Marketing Sales Manager of the Eastern European Territories. (Doc. 56 at 4). She worked in the Liedschendam office in The Netherlands. Ms. Grafova claims she also performed Chief Financial Officer duties as soon as she began working for Euroboor.

         On September 26, 2014, Ms. Grafova married Mr. Koster.

         Ms. Grafova alleges that Mr. Koster “was looking for cash-flow to operate his family of Euroboor companies” and that he “was aware that Ms. Grafova had substantial independent wealth.” (Doc. 56 at 4). In January 2015, Mr. Koster requested that Ms. Grafova provide financial assistance to expand Euroboor. Ms. Grafova agreed to loan Euroboor $175, 000 with a 6% interest rate on January 15, 2015. Mr. Koster continued to solicit money from Ms. Grafova, stating that he needed loans “to create cash flow for his family of Euroboor companies.” (Id. at 5).

         After acquiring more loans from Ms. Grafova, Mr. Koster decided to create a Euroboor entity in the United States known as Euroboor USA. Mr. Koster used Gregory Bryant of Bryant Law Group P.C. to apply for a State of Alabama Certificate of Registration for Euroboor USA. Mr. Koster again sought loans from Ms. Grafova. He offered her a 20% ownership stake in Euroboor FZC in addition to 6% interest payments on the money Ms. Grafova had loaned Euroboor in February 2015.[2] In May 2015, Ms. Grafova accepted Mr. Koster's offer and became a 20% shareholder in Euroboor FZC. Later, Ms. Grafova learned that Mr. Koster offered her an ownership interest because “it was a prerequisite to obtaining further loans from her for Euroboor FZC.” (Doc. 56 at 6).

         On June 11, 2015, Euroboor USA received its State of Alabama Certificate of Registration, which authorized Euroboor USA to conduct business in Alabama beginning on August 1, 2015.

         Throughout summer 2015, Mr. Koster continued to seek loans from Ms. Grafova to Euroboor FZC. Ms. Grafova alleges that Mr. Koster offered to pay the loaned money back in full and to pay Ms. Grafova quarterly interest payments. In exchange for additional loans, Mr. Koster promised to give Ms. Grafova more management responsibilities at Euroboor, particularly with Euroboor USA. Following this offer, Ms. Grafova made two more loans to Euroboor FZC: $560, 000 on September 26, 2015, and $140, 000 on December 7, 2015. Both loan agreements stated that Euroboor FZC would make quarterly payments to Ms. Grafova with an interest rate of 6% “over the principal sum and/or the remaining debt” to begin on January 1, 2016, with the repayment of the principal due on December 31, 2019.

         In early 2016, Mr. Koster, as President and CEO of Euroboor B.V. and Euroboor USA, suggested that Ms. Grafova become the CFO of Euroboor USA. Mr. Koster told her that Euroboor USA would sponsor her as its CFO for three years and Euroboor B.V. would cover her travel and relocation costs. Ms. Grafova agreed to move to Birmingham, Alabama to work as Euroboor USA's CFO.

         In early 2017, Euroboor B.V., Euroboor USA, and Mr. Koster began the process to file a petition to obtain an L-1 work visa for Ms. Grafova. Several months later, Ms. Grafova indicated that she no longer wished to relocate to the United States or to become CFO. Mr. Koster reassured Ms. Grafova that she had the qualifications necessary to serve as CFO, that she could live in the United States for three years, and that Euroboor B.V. would cover her relocation expenses. Ms. Grafova again agreed to move to Birmingham as CFO.

         Euroboor USA filed the petition to obtain an L-1 work visa for Ms. Grafova on July 19, 2017. Mr. Koster signed the employer support letter filed with the petition. On September 12, 2017, Ms. Grafova's L-1 work visa was approved. She obtained her visa on October 26, 2017. On October 30, 2017, Ms. Grafova entered the United States on her L-1 visa and began working as Euroboor USA's CFO. Her visa allowed her to remain until September 11, 2020, as long as Euroboor USA employed her as CFO.

         Ms. Grafova purchased a home in Birmingham. She packed 35 boxes filled with her belongings at Mr. Koster's home in The Netherlands to be shipped to the United States, which Ms. Grafova alleges were worth over $250, 000. Ms. Grafova also left at Mr. Koster's house a motorcycle and its accessories and a Venetian vase, all to be shipped to the United States. Mr. Koster and Euroboor B.V. assured Ms. Grafova that they would ship her belongings to the United States. Ms. Grafova coordinated this shipment with Mr. Koster and “other Euroboor employees, including an employee named ‘Dagmar.'” (Doc. 56 at 10). On October 31, 2017, Mr. Koster emailed Ms. Grafova to inform her that her belongings were being shipped and would arrive the next week.

         On or around November 6, 2017, Mr. Koster allegedly requested that Ms. Grafova transfer funds from Euroboor FZC to his personal bank account. Ms. Grafova refused. Mr. Koster then cancelled her shipment of boxes. Further, “Mr. Koster immediately thereafter began taking measures that made it difficult for Ms. Grafova to successfully perform her job duties at Euroboor USA, including refusing to provide her an adequate work space.” (Doc. 56 at 11).

         Ms. Grafova then began to worry that Mr. Koster would not honor her loan agreements. Mr. Koster refused to pay any of the money due to Ms. Grafova under the loan agreements. On November 28, 2017, Ms. Grafova emailed Mr. Koster that she was accelerating the loan agreements because of the numerous violations of the agreements and non-payment of interest that was due quarterly.

         Two days later, Euroboor USA terminated Ms. Grafova as CFO.

         Because Ms. Grafova now lacked employment, she hired an immigration attorney to file an application so she could remain in the United States. Ms. Grafova's son, who lives in The Netherlands, met with Mr. Koster to reclaim Ms. Grafova's motorcycle, accessories, and vase. Mr. Koster refused to return the belongings and “violently forced Ms. Grafova's son to leave his home.” (Doc. 56 at 13). On December 1, 2017, Mr. Koster told Ms. Grafova that he had recalled her boxes back to The Netherlands.

         On December 21, 2017, Euroboor B.V. placed Ms. Grafova on a leave of absence.

         On December 22, 2017, Euroboor B.V. and Mr. Koster filed the underlying action against Ms. Grafova.[3] (Doc. 1). They alleged ten causes of action: violation of the Federal Computer Fraud and Abuse Act, violation of Alabama's Digital Crime Act, trespass to chattels, tortious interference with business and contractual relations, defamation and defamation per se, conversion, negligence and wantonness, breach of fiduciary duty and duty of loyalty, fraud, and breach of contract of the relevant employment agreement.

         On January 4, 2018, Euroboor B.V. terminated Ms. Grafova's June 1, 2014 indefinite employment agreement. Ms. Grafova disputes the validity of her termination by Euroboor.

         Also in January 2018, Ms. Grafova filed for divorce from Mr. Koster in the Rotterdam District Court in The Netherlands. (Doc. 69 at 15).

         At some point, Mr. Koster told Ms. Grafova she could pick up her belongings on April 25, 2018. So, Ms. Grafova traveled to The Netherlands and hired movers. The movers delivered more than 35 boxes to Ms. Grafova's home. But Ms. Grafova immediately noticed that her most valuable belongings-including expensive clothing, family heirlooms, and art, worth a total exceeding $150, 000-were missing. She also noticed that her personal documents, family pictures, and personal diary were missing. Ms. Grafova still has not recovered these belongings.

         On August 6, 2018, Ms. Grafova filed an amended counterclaim against Euroboor B.V., Mr. Koster, Euroboor USA, Inc., and Euroboor FZC. (Doc. 56). She alleged four causes of action. Count One alleges that Euroboor B.V., Euroboor USA, and Mr. Koster fraudulently induced Ms. Grafova to move to the United States to work for Euroboor USA. Count Two alleges that Euroboor B.V. and Mr. Koster converted Ms. Grafova's personal belongings. Count Three alleges that Euroboor B.V., Mr. Koster, and Euroboor FZC fraudulently induced Ms. Grafova to secure loans to Euroboor FZC. Count Four alleges that Euroboor FZC and Mr. Koster breached the loan agreement between Euroboor FZC, through Mr. Koster, and Ms. Grafova.

         II. Standard of Review

         Mr. Koster, Euroboor B.V., Euroboor USA, and Euroboor FZC raise four arguments why Ms. Grafova's counterclaims should be dismissed: forum non conveniens, the international abstention doctrine, lack of subject matter jurisdiction, and failure to plead fraud with particularity. The court will review the standard for each ground.

         a. Forum non conveniens

         The doctrine of forum non conveniens ensures that “the trial is convenient.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 (1981). Generally, the court respects the plaintiff's choice of forum. As the Supreme Court noted, “unless the balance [of public and private interest factors] is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). But the court may, in its discretion, dismiss the case “when an alternative forum has jurisdiction to hear the case, and when trial in the chosen forum would ‘establish . . . oppressiveness and vexation to a defendant . . . out of all proportion to plaintiff's convenience,' or when the ‘chosen forum [is] inappropriate because of considerations affecting the court's own administrative legal problems.'” Piper Aircraft Co., 454 U.S. at 256 (quoting Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947)).

         When a U.S. citizen chooses to sue in the United States, “it is reasonable to assume that this choice is convenient.” Piper Aircraft, 454 U.S. at 256. When a foreign citizen chooses to sue in the United States, the court gives the claimant's choice of forum less deference. See Id. (“When the plaintiff is foreign, however, this assumption is much less reasonable. . . . [A] foreign plaintiff's choice deserves less deference.”).

         To move to dismiss on the basis of forum non conveniens, the party must show “(1) that an adequate alternative forum is available; and (2) that the private and public interest factors weigh in favor of dismissal.” Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 951 (11th Cir. 1997). Courts construe adequate alternative forums broadly. “An adequate forum need not be a perfect forum.” Satz v. McDonnell Douglas Corp., 244 F.3d 1279, 1283 (11th Cir. 2001). The Supreme Court held that an alternative forum is only inadequate when the remedy it provides “is no remedy at all.” Piper Aircraft Co., 454 U.S. at 254. “[S]ome inconvenience or the unavailability of beneficial litigation procedures similar to those available in the federal district court does not render an alternative forum inadequate.” Satz, 244 F.3d at 1283 (quoting Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d 822, 829 (2d Cir. 1990)).

         Courts have no exhaustive list of factors exists to consider whether an action should be dismissed under forum non conveniens. See King v. Cessna Aircraft Co., 562 F.3d 1374, 1381- 82 (11th Cir. 2009) (“These factors are not exhaustive or dispositive, and courts are free to be flexible in responding to cases as they are presented.”). But in Gilbert, the Supreme Court provided some factors for courts to consider. See 330 U.S. at 508-09. Private interest factors include (1) “the relative ease of access to sources of proof, availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses;” (2) the “possibility of view of premises, if view would be appropriate to the action;” (3) “all other practical problems that make trial of a case easy, expeditious, and inexpensive”; (4) “questions as to the enforceability of a judgment if one is obtained”; and (5) the “relative advantages and obstacles to a fair trial.” Id. at 508. Public interest factors include (1) “[a]dministrative difficulties . . . for courts when litigation is piled up in congested centers instead of being handled at its origin”; (2) the burden of imposing jury duty “upon the people of a community which has no relation to the litigation”; (3) the benefit of holding a trial in the view of the community “[i]n cases which touch the affairs of many persons”; (4) “a local interest in having localized controversies decided at home”; and (5) avoiding conflict of laws problems. Id. at 508- 09.

         For a motion to dismiss under forum non conveniens, courts are not limited in the types of evidence they may consider without converting the motion to a motion for summary judgment. See Kolawole v. Sellers, 863 F.3d 1361, 1370 (11th Cir. 2017) (considering expert testimony in analyzing forum non conveniens); Vaz Borralho v. Keydril Co., 696 F.2d 379, 387 (5th Cir. 1983) (affirming the district court's dismissal for forum non conveniens after reviewing affidavits, deposition testimony, and pleadings).

         b. International abstention doctrine

         Generally, a federal court must exercise the jurisdiction conferred upon it. See Turner Entm't Co. v. Degeto Film GmbH, 25 F.3d 1512, 1518 (11th Cir. 1994) (“Federal courts have a ‘virtually unflagging obligation' to exercise the jurisdiction conferred upon them.” (quoting Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976))). But the Eleventh Circuit has established principles under which “the prudent and just action for a federal court is to abstain from the exercise of jurisdiction” regarding some private international disputes. Id. The three goals of international abstention are (1) international comity, (2) “fairness to litigants, ” and (3) “efficient use of scarce judicial resources.” Id.

         International comity refers to respecting “the acts of our fellow sovereign nations.” Turner Entm't Co., 25 F.3d at 1518. The Supreme Court recognized international comity as “the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws.” Hilton v. Guyot, 159 U.S. 113, 163 (1895).

         As noted by the Eleventh Circuit,

[g]eneral comity concerns include: (1) whether the judgment was rendered via fraud; (2) whether the judgment was rendered by a competent court utilizing proceedings consistent with civilized jurisprudence; and (3) whether the foreign judgment is prejudicial, in the sense of violating American public policy because it is repugnant to fundamental principles of what is decedent and just.

Turner Entm't Co., 25 F.3d at 1519 (internal citations omitted).

         As to fairness to litigants, the court considers “(1) the order in which the suits were filed; (2) the more convenient forum; and (3) the possibility of prejudice to parties resulting from abstention.” Turner Entm't Co., 25 F.3d at 1521-22 (internal citations omitted). Generally, “the court first assuming jurisdiction . . . may exercise that jurisdiction to the exclusion of other courts.” Colo. River Water Conservation Dist., 424 U.S. at 818; cf. Ronar, Inc. v. Wallace, 649 F.Supp. 310, 318 (1986) (“When as in this case the foreign action is pending rather than decided, comity counsels that priority generally goes to the suit first filed.”).

         The Eleventh Circuit identified four factors relevant to efficiency of judicial resources: “(1) the inconvenience of the federal forum; (2) the desirability of avoiding piecemeal litigation; (3) whether the actions have parties and issues in common; and (4) whether the alternative forum is likely to render a prompt disposition.” Turner Entm't Co., 25 F.3d at 1522 (internal citations omitted).

         c. Subject matter jurisdiction

         Ripeness “raises [a] . . . basic question of jurisdiction that cannot be waived and goes to the very heart of the ‘case or controversy' requirement of Article III.” Fla. Ass'n of Rehab. Facilities, Inc. v. Fla. Dep't of Health & Rehab. Servs., 225 F.3d 1208, 1227 n.14 (11th Cir. 2000); see also Beaulieu v. City of Alabaster, 454 F.3d 1219, 1227 (11th Cir. 2006) (“Article III of the Constitution limits the jurisdiction of the federal courts to actual cases or controversies and requires us to consider whether a plaintiff's claims are ripe.”). Whether an action is a case or controversy is a basic question of subject matter jurisdiction. See Provident Life & Accident Ins. v. Transamerica-Occidental Life Ins., 850 F.2d 1489, 1491 (11th Cir. 1988) (“[T]his court does not have subject matter jurisdiction over the issue presented unless the issue is a ‘case or controversy.'”). So, “[a] motion to dismiss the complaint based on ripeness implicates Federal Rule of Civil Procedure ...

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