Court Opinion

ID: 4908188
Source: CourtListenerOpinion
Date Created: 2021-09-03 14:08:52.532754+00
Date Added: 2024-06-11T08:13:00.888986
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1893-19

PJSC ARMADA and
ARSENAL ADVISOR,
LTD.,

          Plaintiffs-Appellants,

v.

ALEXY KUZOVKIN, ALLA
ROITMAN, and YEFIM
ROITMAN,

     Defendants-Respondents.
___________________________

                   Argued May 20, 2021 – Decided September 3, 2021

                   Before Judges Hoffman, Suter, and Smith.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Bergen County, Docket No. L-0197-19.

                   Corinne McCann Trainor argued the cause for
                   appellants (Fox Rothschild, LLP, attorneys; Ely Goldin
                   and Corinne McCann Trainor, of counsel and on the
                   briefs; Allison L. Hollows, on the briefs).

                   Jeffrey Fleischmann argued the cause for respondent
                   Alexy Kuzovkin.
            Peter Slocum argued the cause for respondents Alla
            Roitman and Yefim Roitman (Lowenstein Sandler,
            LLP, attorneys; Christopher S. Porrino and Peter
            Slocum, on the brief).

PER CURIAM

      Plaintiffs PJSC Armada (Armada) and Arsenal Advisor Ltd. (Arsenal)

appeal from two Law Division orders, dated June 28, and December 2, 2019,

that dismissed their complaint with prejudice against defendants, Alla Roitman,

Yefim Roitman, and Alexy Kuzovkin. In the June 28, 2019 order, the motion

court dismissed plaintiffs' claims against the Roitmans for failure to state a claim

upon which relief can be granted under Rule 4:6-2(e) and on forum non

conveniens grounds; additionally, it dismissed Arsenal's claims for lack of

standing. In the December 2, 2019 order, the court dismissed plaintiffs' claims

against Kuzovkin for lack of personal jurisdiction.

      We conclude the motion court erred in dismissing plaintiffs' complaint

with prejudice, as its dismissal at this stage did not represent an adjudication on

the merits. Thus, any dismissal of plaintiffs' claims should have been without

prejudice to afford plaintiffs the opportunity to amend their complaint. We

further conclude the motion court's dismissals on jurisdictional grounds were

premature; instead, the court should have permitted discovery on the questions

                                                                              A-1893-19
                                         2
of personal jurisdiction and forum non conveniens. Finally, we conclude the

motion court erred in dismissing plaintiffs' claims pursuant to Rule 4:6-2(e).

Accordingly, we reverse and remand for discovery and to allow plaintiffs to

amend their complaint.

                                      I.

                                      A.

      Because this appeal comes to us on a Rule 4:6-2 motion to dismiss, we

accept the facts alleged in the complaint as true, granting plaintiff "every

reasonable inference of fact." Green v. Morgan Props., 215 N.J. 431, 452 (2013)

(quoting Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746

(1989)). Thus, we begin with a summary of the facts pled by plaintiffs.

      Plaintiff Armada is a public joint-stock company formed and registered in

the Russian Federation, with its principal place of business in Moscow.

Armada's stock trades on the Moscow Interbank Currency Exchange. At all

relevant times, Armada served as the parent company of a consortium of

companies which, at its peak in 2012, ranked as one of the top five software

developers in Russia, with combined annual sales of approximately RUB 5.579

million (or $184 million under the 2012 prevailing exchange rate).

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                                      3
      Plaintiff Arsenal, a corporation formed under the laws of the British

Virgin Islands, was the principal shareholder of Armada.       Armada's other

shareholders included major American, European, and Russian financial

institutions.

      Defendant Kuzovkin led Armada's management team and, from 2012 to

2014, engaged in a fraudulent scheme to siphon money and technology from

Armada for his personal benefit. Kuzovkin's illegal scheme involved: 1) the

transfer of Armada funds to shell companies under the guise of software

development contracts; 2) the formation of a competitor company, Programmy

Produkt LLC, which poached business and employees from Armada; and 3)

usurious lending between Armada and three of its wholly owned subsidiaries.

Russian banks facilitated Kuzovkin's scheme by allowing him to transfer the

profits of his schemes into shell companies and offshore accounts.

      In late 2013, Armada's shareholders commenced corporate and legal

proceedings in Russia to oust Kuzovkin and the other Armada managers from

their posts, eventually succeeding in 2014; however, Kuzovkin fled to Austria,

leaving Armada's offices completely empty. Before fleeing to Austria, in the

fall of 2013, Kuzovkin purchased $8,500,000 worth of real estate in Austria and

Russia using the embezzled funds. This included an October 18, 2013 purchase

                                                                         A-1893-19
                                       4
of a luxury Moscow apartment owned by defendant Alla Roitman, a New Jersey

citizen living in Mahwah. On that same day, Kuzozkin also used embezzled

funds to purchase an automobile parking spot associated with the apartment

from Alla Roitman's father, Yefim Roitman, also a New Jersey citizen.

      In August 2017, plaintiffs obtained permission from the United States

District Court for the District of New Jersey, pursuant to 28 U.S.C. § 1782, to

subpoena Alla Roitman for information related to her sale of the Moscow

property to Kuzovkin. In response to the subpoena, Alla Roitman produced one

document, an agreement of sale dated October 18, 2013. Her counsel explained

a cash transaction facilitated the sale, with Kuzovkin dropping off cash in a

Moscow safe deposit box and Alla Roitman retrieving it after the agreement of

sale was signed.

      The agreement of sale, written in Russian, lists the sale price as

₽27,560,978 rubles, which equaled approximately $1,000,000 in United State s

dollars (USD).     The fair market value of the apartment, however, was

approximately $3,500,000 USD, and plaintiffs allege Kuzovkin actually paid the

equivalent of $3,700,000 USD for the apartment and parking spot via the safety

deposit box, with the sales agreement misrepresenting the sale price to conceal

the embezzled funds Kuzozkin used to pay.

                                                                         A-1893-19
                                      5
        Plaintiffs allege Alla and Yefim Roitman intentionally concealed the true

sale price with Kuzovkin "to assist Kuzovkin in his embezzlement and siphoning

of assets away from Armada and its shareholders." The Roitmans were aware

of Kuzovkin's embezzlement and misconduct, and by assisting him with this

fraudulent transfer, they became active participants in Kuzovkin's illegal

scheme.

                                        B.

        On January 9, 2019, plaintiffs filed their Law Division complaint,

asserting six causes of action: (1) breach of fiduciary duty against Kuzovkin

only; (2) aiding and abetting breach of fiduciary duty against the Roitmans only;

(3) common law fraud against all defendants; (4) fraudulent transfer against all

defendants;1 (5) civil conspiracy against all defendants; and (6) racketeering, in

violation of the New Jersey Racketeer Influenced and Corrupt Organizations

Act2 (NJRICO). For relief, plaintiffs "demand[ed] judgment in their favor in an

amount in excess of $3,700,000, along with an award of costs and any other

relief that this Court deems necessary, just and appropriate."

1
   After receiving the Roitman's motion to dismiss, plaintiffs voluntarily
withdrew the count for fraudulent transfer.
2
    N.J.S.A. 2C:41-1 to -6.2.
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                                        6
      In May 2019, the Roitmans filed a motion to dismiss, which the motion

court granted on June 28, 2019. In a written opinion, the court stated tha t, per

Rule 4:6-2(e), the complaint failed to state a claim upon which relief could be

granted because the factual allegations were insufficient to establish plaintiffs'

causes of action against the Roitmans. The court further found Arsenal lacked

standing to assert its claims against the Roitmans because Arsenal's claimed

injury arose solely from its status as shareholder of Armada. Additionally, the

court determined the claims against the Roitmans should be dismissed on forum

non conveniens grounds. The court found that New Jersey was a "demonstrably

inappropriate" forum, that Russia would provide an adequate alternative, and

that the relevant public and private interest factors favored dismissal. Though

the court's opinion stated each individual claim against the Roitmans was

dismissed without prejudice, the order granting the Roitmans' motion to dismiss

stated the complaint was dismissed with prejudice.

      On September 23, 2019, Kuzovkin filed a separate motion to dismiss,

asserting plaintiffs' complaint failed to state a claim upon which relief could be

granted per Rule 4:6-2(e), and the court lacked personal or subject matter

jurisdiction over him per Rule 4:6-2-(b). Plaintiffs opposed the motion and also

submitted a proposed amended complaint, requesting the opportunity to file the

                                                                            A-1893-19
                                        7
amendment.     The court granted Kuzovkin's motion, dismissing plaintiffs'

complaint with prejudice, concluding that Kuzovkin was not subject to personal

jurisdiction in New Jersey.

      Plaintiffs now appeal the orders that dismissed their complaint against all

three defendants. Plaintiffs argue the motion court's with-prejudice dismissal of

their complaint was in error, as the court prematurely ruled on dispositive issues

without permitting plaintiffs to engage in jurisdictional discovery, establish an

evidentiary record relative to Kuzovkin's contacts with New Jersey, or amend

their complaint to provide supplemental facts. We agree.

                                       II.

                                       A.

      At the outset, we find the motion court erred in dismissing plaintiffs'

complaint with prejudice. We assume the court's basis for dismissing plaintiffs'

claims against the Roitmans with prejudice was its application of forum non

conveniens because the court stated in its written opinion that its dismissal of

those claims for failure to state a claim was without prejudice. Similarly, in its

subsequent order, the court dismissed the claims against Kuzovkin with

prejudice after concluding it lacked personal jurisdiction over Kuzovkin.

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                                        8
      "Generally, a dismissal that is 'on the merits' of a claim is with prejudice,

but a dismissal that is 'based on a court's procedural inability to consider a case'

is without prejudice." Alan J. Cornblatt, P.A. v. Barow, 153 N.J. 218, 243

(1998) (quoting Watkins v. Resorts Int'l Hotel & Casino, Inc., 124 N.J. 398, 415-

16 (1991)). A dismissal based upon lack of jurisdiction is not an adjudication

on the merits. Exxon Rsch. & Eng'g. Co. v. Indus. Risk Insurers, 341 N.J. Super.

489, 519 (App. Div. 2001); Egg Harbor Care Ctr. v. Scheraldi, 455 N.J. Super.

343, 355-56 (App. Div. 2018); see also R. 4:37-2(d) (excepting dismissal for

lack of jurisdiction from other types of dismissals that act as an adjudication on

the merits).

      Dismissals based on a lack of personal jurisdiction or on forum non

conveniens grounds, which too concerns jurisdiction, therefore should be

without prejudice, affording litigants the ability to amend their pleadings to cure

jurisdictional defects.   Plaintiffs here should have been allowed such an

opportunity.

      Notwithstanding this error, we further conclude the motion court

prematurely decided these jurisdictional questions and instead should have

permitted discovery on these issues.

                                                                              A-1893-19
                                         9
                                       B.

      Forum non conveniens is an equitable doctrine allowing a court to decline

jurisdiction "whenever the ends of justice indicate a trial in the forum selected

by the plaintiff would be inappropriate." Aguerre v. Schering-Plough Corp.,

393 N.J. Super. 459, 474 (App. Div. 2007) (quoting D'Agostino v. Johnson &

Johnson, Inc., 225 N.J. Super. 250, 259 (App. Div. 1988), rev'd on other

grounds, 133 N.J. 516 (1993)). Dismissal of an action based on the doctrine of

forum non conveniens falls within the discretion of the trial court, and that

decision will not be overturned unless we find an abuse of discretion. In re

Vioxx Litig., 395 N.J. Super. 358, 364 (App. Div. 2007) (citing Kurzke v. Nissan

Motor Corp., 164 N.J. 159, 165 (2000)).

      The first inquiry by the court on a dismissal application based on forum

non conveniens is whether there is an adequate alternative forum for the case

where the defendant is amenable to service of process and the subject matter of

the dispute may be litigated. Varo v. Owens-Illinois, Inc., 400 N.J. Super. 508,

519-20 (App. Div. 2008). "An alternative forum will be deemed inadequate if

'the remedy offered by the other forum is clearly unsatisfactory.'" Yousef v.

Gen. Dynamics Corp., 205 N.J. 543, 557 (quoting Piper Aircraft Co. v. Reyno,

454 U.S. 235, 254 n.22 (1981)).

                                                                           A-1893-19
                                      10
      If an adequate alternative forum exists, the court must consider and weigh

both public and private interest factors set forth in Gulf Oil Corp. v. Gilbert, 330

U.S. 501, 508-09 (1947), to determine whether the plaintiff's choice of forum is

appropriate for the matters at issue. Kurzke, 164 N.J. at 165-66. The public

interest factors are as follows:

             (1) the administrative difficulties which follow from
             having litigation "pile up in congested centers" rather
             than being handled at its origin, (2) the imposition of
             jury duty on members of a community having no
             relation to the litigation, (3) the local interest in the
             subject matter such that affected members of the
             community may wish to view the trial[,] and (4) the
             local interest "in having localized controversies
             decided at home."

             [Aguerre v. Schering-Plough Corp., 393 N.J. Super.
             459, 474 (App. Div. 2007) (quoting D'Agostino, 225
             N.J. Super. at 263).]

The private interest factors are:

             (1) the relative ease of access to sources of proof, (2)
             the availability of compulsory process for attendance of
             unwilling witnesses and the cost of obtaining the
             attendance of willing witnesses, (3) whether a view of
             the premises is appropriate to the action[,] and (4) all
             other practical problems that make trial of the case
             "easy, expeditious and inexpensive," including the
             enforceability of the ultimate judgment.

             [Ibid. (quoting D'Agostino, 225 N.J. Super. at 263).]

                                                                              A-1893-19
                                        11
      "Ordinarily, a plaintiff's choice of forum will be honored by a court that

has jurisdiction over a case[,]" Yousef, 205 N.J. at 557, albeit "a foreign

plaintiff's choice deserves less deference[,]" Vioxx Litig., 395 N.J. Super. at 365

(quoting Piper Aircraft, 454 U.S. at 256). Therefore, "[a] plaintiff's choice of

forum may not be defeated upon a mere balance of conveniences. [U]nless the

balance is strongly in favor of the defendant, the plaintiff's choice of forum

should rarely be disturbed." Yousef, 205 N.J. at 558 (citations and internal

quotation marks omitted) (second alteration in original). Ultimately, a court

should not dismiss based on forum non conveniens unless its assessment of the

Gulf Oil factors shows the plaintiff's choice of forum is "'demonstrably

inappropriate.'" Id. at 557 (citing Kurzke, 164 N.J. at 171-72).

      Our Supreme Court has long recognized that the decision on forum non

conveniens is better made when it is "reserved until discovery has proceeded

sufficiently to enable the court to make a better-informed assessment of the

private-and public-interest factors." D'Agostino v. Johnson & Johnson, Inc.,

115 N.J. 491, 494 n.1 (1989). "Although the factors set forth in Gulf Oil are of

central importance, pre-discovery is ordinarily an inappropriate point in the

litigation at which to consider them." Kurzke, 164 N.J. at 172.

      Thus the Court has said:

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                                       12
            As a general rule, a motion for dismissal due to forum
            non conveniens should not be heard unless the movant
            has made a good faith effort to obtain discovery and can
            provide the court with a record verifying that discovery
            is unreasonably inadequate for litigating in the forum
            chosen by the plaintiff. Mere speculation about
            potential inadequacies ordinarily is not a sufficient
            basis to deny the plaintiff the choice of forum.

            [Id. at 168.]

Only in a limited number of cases, in which "the burden to a defendant will be

so grossly unfair and obvious on the face of the pleadings," can a defendant

move pre-discovery on these grounds. Ibid.

      The motion court determined this was such a case where "there is no need

to conduct discovery regarding the appropriateness of [p]laintiffs' choice of

forum, as the [c]omplaint sets forth all sufficient facts to determine that New

Jersey is 'demonstrably inappropriate.'" We disagree.

      A grossly unfair burden to the Roitmans is not obvious from the face of

plaintiffs' complaint. Alla and Yefim Roitman are New Jersey citizens residing

in Bergen County. Without discovery revealing contrary information, it is

unclear how it would be demonstrably inappropriate or unduly burdensome for

the Roitmans to litigate this matter in their home forum.

                                                                         A-1893-19
                                      13
      Moreover, the pleadings do not sufficiently establish that Russia will offer

an adequate alternative forum. The record is devoid of evidence showing the

Roitmans are amenable to service in Russia or that Russian law offers a

satisfactory remedy to resolve plaintiffs' claims against the Roitmans. That

plaintiffs had already commenced proceedings against Kuzovkin in Russia does

not guarantee they could do so against the Roitmans, New Jersey residents who,

unlike Kuzovkin, had no direct connection to Armada.

      We therefore conclude the motion court mistakenly exercised its

discretion by prematurely considering the public and private interest factors,

rather than permitting discovery. Indeed, proper evaluation of those factors

required discovery as well. Without the benefit of discovery, the motion court's

conclusions about lack of access to the sources of proof and the suit's

unrelatedness to New Jersey were purely speculative.

                                       C.

      We likewise find the motion court erred by finding it lacked personal

jurisdiction over Kuzovkin without first permitting discovery on the issue.

      The question of personal jurisdiction involves a mixed question of law

and fact. Zahl v. Eastland, 465 N.J. Super. 79, 92 (App. Div. 2020). We will

not disturb a trial court's factual findings concerning jurisdiction if they are

                                                                            A-1893-19
                                      14
supported by substantial credible evidence. Rippon v. Smigel, 449 N.J. Super.

344, 358 (App. Div. 2017). We review de novo the legal aspects of personal

jurisdiction. Ibid. (citing Mastondrea v. Occidental Hotels Mgmt. S.A., 391 N.J.

Super. 261, 268 (App. Div. 2007)). Moreover, "[a] trial court's interpretation of

the law and the legal consequences that flow from established facts are not

entitled to any special deference [on appeal]." Manalapan Realty, L.P. v. Twp.

Comm. of Manalapan, 140 N.J. 366, 378 (1995).

      New Jersey courts "may exercise in personam jurisdiction over a non-

resident defendant 'consistent with due process of law.'" Bayway Refin. Co. v.

State Utils., Inc., 333 N.J. Super. 420, 428 (App. Div. 2000) (alterations omitted)

(quoting R. 4:4-4(b)(1)). Our courts exercise jurisdiction over nonresident

defendants "to the uttermost limits permitted by the United States Constitution."

Avdel Corp. v. Mecure, 58 N.J. 264, 268 (1971); Jardim v. Overley, 461 N.J.

Super. 367, 377 (App. Div. 2019).

      A two-part test governs the analysis of personal jurisdiction:

(1) defendant must have "certain minimum contacts" with the forum state, and

(2) maintaining the suit in that state cannot offend "traditional notions of fair

play and substantial justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)

(quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). "[T]he requisite quality

                                                                             A-1893-19
                                       15
and quantum of contacts is dependent on whether general or specific jurisdiction

is asserted . . . ." Citibank, N.A. v. Est. of Simpson, 290 N.J. Super. 519, 526

(App. Div. 1996).

      General jurisdiction exists when the plaintiff's claims arise out of the

defendant's "continuous and systematic" contacts with the forum state.

Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 416 (1984);

Baanyan Software Servs., Inc. v. Kuncha, 433 N.J. Super. 466, 474 (App. Div.

2013). For general jurisdiction to attach, a defendant's activities must be "so

continuous and systematic as to render [it] essentially at home in the forum

State." FDASmart, Inc. v. Dishman Pharm. & Chems., Ltd., 448 N.J. Super.

195, 202 (App. Div. 2016) (alteration in original) (citation omitted) (quoting

Daimler AG v. Bauman, 571 U.S. 117, 127 (2014)).

      Specific jurisdiction is available when the "cause of action arises directly

out of a defendant's contacts with the forum state . . . ." Waste Mgmt., Inc. v.

Admiral Ins. Co., 138 N.J. 106, 119 (1994). In examining specific jurisdiction,

the "minimum contacts inquiry must focus on 'the relationship among the

defendant, the forum, and the litigation.'" Lebel v. Everglades Marina, Inc., 115

N.J. 317, 323 (1989) (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)).

The minimum contacts requirement is satisfied if "the contacts resulted from the

                                                                            A-1893-19
                                       16
defendant's purposeful conduct and not the unilateral activities of the plaintiff."

Ibid. (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98

(1980)). "In determining whether the defendant's contacts are purposeful, a

court must examine the defendant's 'conduct and connection' with the forum

state and determine whether the defendant should 'reasonably anticipate being

haled into court [in the forum state].'" Bayway Refin. Co., 333 N.J. Super. at

429 (alteration in original) (quoting World-Wide Volkswagen Corp., 444 U.S.

at 297).

      "Although the plaintiff bears the burden of demonstrating facts that

support personal jurisdiction, courts are to assist the plaintiff by allowing

jurisdictional discovery unless the plaintiff's claim is clearly frivolous." Rippon,

449 N.J. Super. at 359 (quoting Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d

446, 456 (3d Cir. 2003)). We have stated that "discovery is permitted and may

be necessary to resolve the jurisdictional issues." Maine v. SeKap, S.A. Greek

Coop. Cigarette Mfg. Co., S.A., 392 N.J. Super. 227, 243 (App. Div. 2007).

When "a plaintiff presents factual allegations [suggesting] with reasonable

particularity the possible existence of the requisite contacts between [the party]

and the forum state, [the] plaintiff's right to conduct jurisdictional discovery

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                                        17
should be sustained." Rippon, 449 N.J. Super. at 359 (quoting Toys "R" Us, 318

F.3d at 456) (alterations in original).

      Below, the motion court determined it lacked personal jurisdiction over

defendant Kuzovkin because Kuzovkin did not have sufficient minimum

contacts with New Jersey to establish specific jurisdiction nor a continuous or

substantial connection to New Jersey to establish general jurisdiction. The court

highlighted Kuzovkin's lack of connection with the state:

             Kuzovkin is a Russian national who resides in Russia.
             There is no evidence that Kuzovkin ever entered the
             state of New Jersey. Armada was incorporated in
             Russia and maintains its principal place of business in
             Moscow.      The Roitmans, who were previously
             dismissed from this case, were the nexus between New
             Jersey and Kuzovkin. The apartment that was allegedly
             used for money laundering is also located in Russia.

      However, as we conclude in this opinion, the motion court's dismissal of

the Roitmans was premature; thus, Kuzovkin's purported connection to New

Jersey remains. The complaint alleges Kuzovkin conspired with New Jersey

residents, which necessarily would involve contacts and communications

extending into New Jersey. Indeed, plaintiffs attached a letter from the Russian

real estate agency that handled the sale of the Moscow apartment and parking

space, which states, "All material terms of the transactions, including the price

of real estate objects . . . were determined by the parties on their own." These

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                                          18
facts, if true, may be sufficient to establish specific jurisdiction over Kuzovkin.

See Lebel v. Everglades Marina, Inc., 115 N.J. 317, 324 -30 (1989) (finding

sufficient minimum contacts where an out-of-state defendant intentionally

"telephoned the [resident-plaintiff] buyer in New Jersey to iron out the details

of [a] contract, mailed the contract to the buyer in New Jersey for signing in

New Jersey, and received payment from the plaintiff, who defendant knew was

a New Jersey resident.").

      Additionally, plaintiffs' proposed amended complaint alleges Kuzovkin

frequently travelled to the United States, including New Jersey, to publicize

Armada and seek capital from the U.S. investment community, and met with

brokers in Jersey City. The motion court should have allowed plaintiffs to

amend their complaint to cure its jurisdictional defects. These facts too, if true,

may be sufficient to establish our courts' jurisdiction over Kuzovkin.

      At this stage, however, we do not know the veracity of the facts alleged

in plaintiffs' complaint.    Discovery is necessary to resolve the disputed

jurisdictional issues. We do not express an opinion as to whether personal

jurisdiction exists in this case, but rather only conclude that plaintiffs have

presented sufficient factual allegations suggesting with reasonable particularity

the possible existence of the requisite contacts between Kuzovkin and New

                                                                             A-1893-19
                                       19
Jersey. See Rippon, 449 N.J. Super. at 359. Therefore, the motion court should

have permitted jurisdictional discovery. Its decision to dismiss for lack of

personal jurisdiction without the benefit of discovery was in error.

                                       III.

      Because we determined the dismissal of plaintiffs' complaint should have

been without prejudice, we again note that plaintiffs should have been afforded

the opportunity to amend their complaint and attempt to overcome the factual

deficiencies that led the motion court to dismiss their complaint for failure to

state a claim under Rule 4:6-2(e). However, we also conclude that plaintiffs'

unamended complaint stated sufficient factual allegations to survive defendants'

motion to dismiss, and the motion court erred in ruling otherwise.

      We apply a de novo standard when reviewing a dismissal of a complaint

for failure to state a claim under Rule 4:6-2(e). MTK Food Servs., Inc. v. Sirius

Am. Ins. Co., 455 N.J. Super 307, 311 (App. Div. 2018). "[O]ur inquiry is

limited to examining the legal sufficiency of the facts alleged on the face of the

complaint." Printing Mart, 116 N.J. at 746. "At this preliminary stage of the

litigation[,]" we are "not concerned with the ability of plaintiffs to prove the

allegation contained in the complaint." Ibid. Rather, "we accept as true the facts

alleged in the complaint[,]" and afford plaintiffs "every reasonable inference i n

                                                                            A-1893-19
                                       20
their favor." Craig v. Suburban Cablevision, 140 N.J. 623, 625-26 (1995).

Nevertheless, we will "dismiss the plaintiff's complaint if it has failed to

articulate a legal basis entitling plaintiff to relief." Sickles v. Cabot Corp., 379

N.J. Super. 100, 106 (App. Div. 2005).

      To survive a motion to dismiss under Rule 4:6-2(e), a plaintiff need not

prove the case, but need only "make allegations which, if proven, would

constitute a valid cause of action." Kieffer v. High Point Ins. Co., 422 N.J.

Super. 38, 43 (App. Div. 2011) (quoting Leon v. Rite Aid Corp., 340 N.J. Super.

462, 472 (App. Div. 2001)). On such a motion, plaintiff is entitled to "every

reasonable inference of fact." Printing Mart, 116 N.J. at 746 (citing Indep. Dairy

Workers Union v. Milk Drivers Local 680, 23 N.J. 85, 89 (1956)).

      A reviewing court must "search[] the complaint in depth and with

liberality to ascertain whether the fundament of a cause of action may be gleaned

even from an obscure statement of claim, opportunity being given to amend if

necessary." Ibid. (quoting Di Cristofaro v. Laurel Grove Mem. Park, 43 N.J.

Super. 244, 252 (App. Div. 1957)). This review should be "at once painstaking

and undertaken with a generous and hospitable approach." Ibid.

      A motion to dismiss should only be granted in "the rarest of instances."

Kieffer, 422 N.J. Super. at 43 (quoting Printing Mart, 116 N.J. at 771-72). Only

                                                                              A-1893-19
                                        21
where "even a generous reading of the allegations does not reveal a legal basis

for recovery" should the motion be granted. Ibid. (quoting Edwards v. Prudential

Prop. & Cas. Co., 357 N.J. Super. 196, 202 (App. Div. 2003)).

      On this appeal, plaintiff does not argue the motion court erred in

dismissing every count in its complaint for failure to state a claim. Rather,

plaintiff only contends the court's dismissal of the following claims against the

Roitmans for failure to state a claim were in error: aiding and abetting breach

of fiduciary duty (count two), civil conspiracy (count six), and racketing in

violation of NJRICO (count seven). Below, we address only the claims that

plaintiffs argue the motion court erred in dismissing, though we note plaintiffs

may attempt to cure the other dismissed claims when amending their complaint

on remand.

                                       A.

      Liability for aiding and abetting "is found in cases where one party 'knows

that the other's conduct constitutes a breach of duty and gives substantial

assistance or encouragement to the other so to conduct himself.'" State ex rel.

McCormac v. Qwest Commc'ns Int'l, Inc., 387 N.J. Super. 469, 481 (App. Div.

2006) (quoting Judson v. Peoples Bank & Tr. Co., 25 N.J. 17, 29 (1957)). "[T]he

mere common plan, design or even express agreement is not enough for liability

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                                      22
in itself, and there must be acts of a tortious character in carrying it into

execution." Id. at 483 (citing Restatement (Second) of Torts § 876(b) cmt. d

(Am. Law Inst. 1979)). Additionally, there must be proof of the underlying tort

committed by the principal. Id. at 484.

      A plaintiff proves a claim for aiding and abetting by showing the

following:

             (1) the party whom the defendant aids must perform a
             wrongful act that causes an injury; (2) the defendant
             must be generally aware of his role as part of an overall
             illegal or tortious activity at the time that he provides
             the assistance; (3) the defendant must knowingly and
             substantially assist the principal violation.

             [Id. at 483-84 (quoting Tarr v. Ciasulli, 181 N.J. 70, 84
             (2004)).]

      Aiding and abetting liability focuses on "whether a defendant knowingly

gave substantial assistance to someone engaged in wrongful conduct, not

whether the defendant agreed to join the wrongful conduct." Podias v. Mairs,

394 N.J. Super. 338, 353 (App. Div. 2007) (alteration in original) (citations,

internal quotations, and emphasis omitted). Determining how much assistance

is considered substantial is fact-sensitive. Ibid.

      In our view, plaintiffs' complaint states a claim for aiding and abetting

against the Roitmans. The facts alleged establish the necessary elements for this

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tort:   1) Kuzovkin breached his fiduciary duty to Armada by wrongfully

embezzling its assets; 2) the Roitmans were aware of Kuzovkin's embezzlement

scheme; and 3) the Roitmans knowingly assisted Kuzovkin carry out his scheme

by intentionally misrepresenting the sale price of the Moscow apartment,

enabling Kuzovkin to launder the embezzled funds undetected. As stated in the

complaint, the Roitmans' role in coordinating, concealing, facilitating, and

receiving embezzled funds amounts to substantial assistance to Kuzovkin's

underlying wrongdoing.

                                       B.

        Civil conspiracy occurs when "a combination of two or more persons act[]

in concert to commit an unlawful act, or to commit a lawful act by unlawful

means…." Banco Popular N. Am. v. Gandi, 184 N.J. 161, 177 (2005) (quoting

Morgan v. Union Cnty. Bd. of Chosen Freeholders, 268 N.J. Super. 337, 364

(App. Div. 1993)). The principal elements of a civil conspiracy are the parties'

agreement "to inflict a wrong against or injury upon another, and an overt act

that results in damage."     Ibid. (quoting Morgan, 268 N.J. Super. at 364).

Plaintiffs are "not required to provide direct evidence of the agreement between

the conspirators[,]" and may prove the existence of such an agreement through

circumstantial evidence. Morgan, 268 N.J. Super. at 364-65.

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      We likewise find plaintiffs' complaint states a claim for civil conspiracy

against defendants. Plaintiffs allege the Roitmans and Kuzovkin plotted and

agreed to forge a sale agreement that deliberately understated the actual price

Kuzovkin paid for the apartment to conceal the transfer of embezzled funds. It

further alleges defendants carried out this plan.        Thus, according to the

complaint, defendants agreed to secretly move stolen property and successfully

did so through a sham transaction. Thus, the complaint states a viable claim

against all defendants for civil conspiracy.

                                        C.

      Plaintiffs' complaint alleges defendants violated NJRICO, specifically

N.J.S.A. 2C:41-2(c), and asserts a civil claim against them as permitted by

N.J.S.A. 2C:41-4(c). N.J.S.A. 2C:41-2(c) provides: "It shall be unlawful for

any person employed by or associated with any enterprise engaged in or

activities of which affect trade or commerce to conduct or participate, directly

or indirectly, in the conduct of the enterprise’s affairs through a pattern of

racketeering activity or collection of unlawful debt." To prevail on a civil

NJRICO claim under this section, a plaintiff must prove the following five

elements:

            (1) the existence of an enterprise; (2) that the enterprise
            engaged in or its activities affected trade or commerce;

                                                                          A-1893-19
                                       25
            (3) that defendant was employed by, or associated with
            the enterprise; (4) that he or she participated in the
            conduct of the affairs of the enterprise; and (5) that he
            or she participated through a pattern of racketeering
            activity.

            [State v. Ball (Ball I), 268 N.J. Super. 72, 99 (App. Div.
            1993).]

      "'Enterprise' is broadly defined to include all kinds of entities, as well as

'any individual' and any 'group of individuals' who are 'associated in fact

although not a legal entity.'" Fairfax Fin. Holdings Ltd. v. S.A.C. Cap. Mgmt.,

L.L.C., 450 N.J. Super. 1, 38 (App. Div. 2017). An

            enterprise . . . must have an "organization." The
            organization of an enterprise need not feature an
            ascertainable structure or a structure with a particular
            configuration.     The hallmark of an enterprise's
            organization consists rather in those kinds of
            interactions that become necessary when a group, to
            accomplish its goal, divides among its members the
            tasks that are necessary to achieve a common purpose.
            The division of labor and the separation of functions
            undertaken by the participants serve as the
            distinguishing marks of the "enterprise" because when
            a group does so divide and assemble its labors in order
            to accomplish its criminal purposes, it must necessarily
            engage in a high degree of planning, cooperation and
            coordination, and thus, in effect, constitute itself as an
            "organization."

            [State v. Ball (Ball II), 141 N.J. 142, 162 (1995).]

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                                       26
      NJRICO defines a racketeering act to include any of the enumerated

crimes in N.J.S.A. 2C:41-1(a). Those enumerated crimes include theft, forgery

and fraudulent practices, money laundering, and receiving stolen property. A

pattern of racketeering activity is defined with two components: (1) at least two

incidents of racketeering conduct (predicate acts); and (2) the conduct must have

"the same or similar purposes, results, participants or victims or methods of

commission or are otherwise interrelated by distinguishing characteristics and

are not isolated incidents." N.J.S.A. 2C:41-1(d).

      N.J.S.A. 2C:41-2(d) provides: "It shall be unlawful for any person to

conspire . . . to violate any of the provisions of this section." To establish an

NJRICO conspiracy, a plaintiff must show that (1) "a defendant agreed to

participate directly or indirectly in the conduct of the affairs of the enterprise by

agreeing to commit, or to aid other members of the conspiracy to commit, at

least two racketeering acts[,]" and (2) the defendant "acted knowingly and

purposely with knowledge of the unlawful objective of the conspiracy and with

the intent to further its unlawful objective." Ball II, 141 N.J. at 180 (quoting

Ball I, 268 N.J. Super. at 99-100).

      We conclude plaintiffs' complaint properly states a private cause of action

against defendants under NJRICO. The complaint alleges Alla Roitman, Yefim

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                                        27
Roitman, and Kuzovkin were associated together for the common purpose of

laundering Kuzovkin's embezzled funds. It asserts they performed separate

functions in this coordinating scheme. The three defendants may encompass an

NJRICO "enterprise" and also participants in the enterprise. This enterprise's

activities affected trade or commerce in New Jersey by transferring up to

$3,700,000 of embezzled funds into the state. Finally, the complaint alleges

multiple racketeering acts, including theft of Armada's assets, the creation of a

fraudulent sales agreement, money laundering, and receiving stolen property, all

done intentionally for a common purpose.

      Thus, the complaint establishes the five elements for liability under

N.J.S.A. 2C:41-2(c). Likewise, these same facts set forth a claim under N.J.S.A.

2C:41-2(d) for an NJRICO conspiracy.

                                        D.

      Finally, we address plaintiffs' contention that the motion court erred by

dismissing Arsenal's claims against defendants on the basis that Arsenal, being

a shareholder of Armada, lacked standing. This ruling by the motion court was

not in error.

      "A corporation is regarded as an entity separate and distinct from its

shareholders. It is a principle of corporation law that '[r]egard for the corporate

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                                       28
personality demands that suits to redress corporate injuries which secondarily

harm all shareholders alike are brought only by the corporation.'" Strasenburgh

v. Straubmuller, 146 N.J. 527, 549 (1996) (citations omitted). New Jersey

follows the "American rule," whereby stockholders who suffer injuries to their

stock that are the same as all other stockholders "may not recover for the injury

to [their] stock alone, but must seek recovery derivatively on behalf of the

corporation." Id. at 550 (quoting Cowin v. Bresler, 741 F.2d 410, 414 (D.C. Cir.

1984)).

      However, if a particular shareholder suffers an injury distinct from the

injuries suffered by other shareholders, a direct suit may be brought under the

"special injury" exception. Delray Holding, LLC v. Sofia Design & Dev. at S.

Brunswick, LLC, 439 N.J. Super. 502, 510 (App. Div. 2015) (citations omitted).

"A special injury exists 'where there is a wrong suffered by [a] plaintiff that was

not suffered by all stockholders generally or where the wrong involves a

contractual right of the stockholders, such as the right to vote.'" Strasenburgh,

146 N.J. at 550 (quoting In re Tri-Star Pictures, Inc., 634 A.2d 319, 330 (Del.

1993)).

      Plaintiffs contend their complaint alleges a special injury to Arsenal, as it

states Arsenal expended significant resources in removing Kuzovkin from

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                                       29
Armada and attempting to thwart his embezzlement scheme. However, the

claims brought by Arsenal in the complaint relate only to Kuzovkin allegedly

laundering embezzled funds through an undervalued property purchase. The

injury to Arsenal from this transaction derives solely from Arsenal's status as a

shareholder of Armada. Moreover, plaintiffs do not claim Arsenal's broader

efforts to remove and prosecute Kuzovkin were more strenuous than the actions

taken by all of Armada's shareholders collectively.

      We therefore agree with the motion court in finding Arsenal did not state

a claim upon which relief can be granted in the complaint. However, because

we hold plaintiffs, on remand, must be allowed to amend their complaint,

plaintiffs have the opportunity to plead further facts that may reveal a true

special injury to Arsenal. This is true too for the other claims dismissed by the

motion court, yet not reargued by plaintiffs here on appeal.

      Reversed and remanded. We do not retain jurisdiction.

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