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8 United States District Court 9 Central District of California

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11 VOLODYMYR BRAYCHENKO, Case № 2:23-cv-05607-ODW (MARx)

12 Plaintiff,

ORDER DENYING DEFENDANT’S

13 v.

MOTION TO DISMISS [11]

14 VLADIMIR A. RODINOFF,

15 Defendant.

16 17 I. INTRODUCTION 18 Plaintiff Volodymyr Braychenko brings this action against Defendant Vlad 19 Rodinoff for breach of contract. (Notice of Removal Ex. 1 (“Compl.”), ECF No. 1.) 20 Rodinoff now moves to dismiss this action pursuant to Federal Rule of Civil 21 Procedure (“Rule”) 12(b)(2) and 12(b)(6). (Mot. Dismiss (“Motion” or “Mot.”), ECF 22 No. 11.) For the following reasons, the Court DENIES Defendant’s Motion.1 23 II. BACKGROUND 24 The following facts are taken from Braychenko’s Complaint. See Ashcroft v. 25 Iqbal, 556 U.S. 662, 678 (2009) (stating that well-pleaded factual allegations are 26 accepted as true for purposes of a motion to dismiss). 27

28 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 In October 2020, Rodinoff2 held approximately $536,025.72 of cryptocurrency 2 in a digital wallet on Braychenko’s behalf. (Compl. ¶ 9.) In December 2020, 3 Braychenko became aware that the balance of the digital wallet containing the 4 cryptocurrency had depleted to zero. (Id. ¶ 10.) Braychenko confronted Rodinoff, 5 who claimed that the digital wallet “was hacked.” (Id.) Despite Braychenko’s 6 repeated requests, Rodinoff “refused to provide Plaintiff with any evidence of 7 investigation, or actual proof that the digital wallet was hacked, and the 8 cryptocurrency was stolen.” (Id. ¶ 11.) 9 On May 10, 2022, “to resolve the dispute over the $536,025.72 of Plaintiff’s 10 funds,” Braychenko and Rodinoff executed a repayment agreement (the 11 “Agreement”). (Id. ¶ 12.) Rodinoff executed the Agreement while residing in Los 12 Angeles, California. (Compl. ¶ 1, Ex. 1 (“Agreement”) 11, ECF No. 13; Reply 13.) 13 Under the terms of the Agreement, Rodinoff promised to “provide compensation to 14 [Braychenko] in the amount of 50% of the value of the stolen cryptocurrency as of 15 December 16, 2020, the date of the theft.” (Id. at 12.) Based on the cryptocurrency’s 16 value at the time of the theft, Rodinoff agreed to pay Braychenko a total of 17 $268,012.86, with a one-time payment of $64,012.86 due within thirty days of the 18 Agreement’s execution and the remaining $204,000 to be paid in monthly increments 19 of $17,000. (Id.) Rodinoff made the initial payment on August 29, 2022 20 (approximately eighty days after it was due) but failed to make any subsequent 21 monthly payments. (Compl. ¶¶ 14–15.) 22 On June 7, 2023, Braychenko filed this action in the Superior Court for the 23 State of California, County of Los Angeles, bringing one count for breach of contract. 24 (See Notice of Removal (“NOR”) ¶ 1; Compl. ¶¶ 17–22.) On July 12, 2023, Rodinoff 25 removed the action to federal court under 28 U.S.C. § 1441(a) on the basis that this 26

2 In his Complaint, Plaintiff mistakenly refers to Defendant as both Vladimir A. Rodionov and 27 Vladimir A. Rodinoff. Defendant’s correct legal name is Vlad A. Rodinoff. (Mot. 1 n.1.) 28 3 Pinpoint citations to the Agreement between Braychenko and Rodinoff refer to the pagination supplied by the CM/ECF system. 1 civil action is between a citizen of a State and a citizen of a foreign state, and the 2 amount in controversy exceeds $75,000 exclusive of interest and costs. (NOR ¶ 9 3 (citing 28 U.S.C. § 1332(a)).) 4 Defendant now moves to dismiss this action pursuant to Rule 12(b)(2), for lack 5 of personal jurisdiction, and Rule 12(b)(6), for failure to state a claim upon which 6 relief can be granted. (See generally Mot.)4 7 III. LEGAL STANDARD 8 Federal courts have the power to exercise personal jurisdiction to the extent 9 permitted by the laws of the states in which they sit. Fed. R. Civ. P. 4(k)(1)(A). 10 “California’s long-arm jurisdictional statute is coextensive with federal due-process 11 requirements.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800–01 12 (9th Cir. 2004); see Cal. Civ. Proc. Code § 410.10. When this is the case, the court 13 inquires whether the defendant “ha[s] certain minimum contacts with [the forum state] 14 such that the maintenance of the suit does not offend ‘traditional notions of fair play 15 and substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) 16 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)); Glencore Grain Rotterdam 17 B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir. 2002). A non- 18 resident defendant may be subject to either general or specific personal jurisdiction. 19 Fed. Deposit Ins. Corp. v. British-Am. Ins. Co., 828 F.2d 1439, 1442 (9th Cir. 1987). 20 When a party seeks dismissal under Rule 12(b)(2) for lack of personal 21 jurisdiction, the plaintiff bears the burden of demonstrating that the exercise of 22 personal jurisdiction is proper. Menken v. Emm, 503 F.3d 1050, 1056 (9th Cir. 2007). 23 When, as here, a motion to dismiss for lack of personal jurisdiction is based on written 24 materials rather than an evidentiary hearing, “the plaintiff need only make a prima 25 facie showing of jurisdictional facts.” Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 26 1990). “[U]ncontroverted allegations in the complaint must be taken as true,” and any 27 4 The Court does not find it necessary to rely on the declarations Rodinoff attaches to his Reply in 28 resolving this Motion. Accordingly, the Court OVERRULES Braychenko’s objections to the Reply declarations as moot. (See Pl.’s Objs., ECF No. 23.) 1 conflicts between the facts in the parties’ affidavits are resolved in the plaintiff’s favor. 2 Schwarzenegger, 374 F.3d at 800. However, “bare bones assertions of minimum 3 contacts with the forum or legal conclusions unsupported by specific factual 4 allegations will not satisfy a plaintiff’s pleading burden.” Swartz v. KPMG LLP, 5 476 F.3d 756, 766 (9th Cir. 2007) (internal quotation marks omitted). Random, 6 fortuitous, or attenuated contacts will not be sufficient to establish specific personal 7 jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) 8 A court may also dismiss a complaint under Rule 12(b)(6) for lack of a 9 cognizable legal theory or insufficient facts pleaded to support an otherwise 10 cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 11 (9th Cir. 1988). To survive a dismissal motion, a complaint need only satisfy the 12 minimal notice pleading requirements of Rule 8(a)(2)—a short and plain statement of 13 the claim. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual 14 “allegations must be enough to raise a right to relief above the speculative level.” Bell 15 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). That is, the complaint must 16 “contain sufficient factual matter, accepted as true, to state a claim to relief that is 17 plausible on its face.” Iqbal, 556 U.S. at 678 (internal quotation marks omitted). The 18 determination of whether a complaint satisfies the plausibility standard is a “context- 19 specific task that requires the reviewing court to draw on its judicial experience and 20 common sense.” Id. at 679. A court is generally limited to the pleadings and must 21 construe all “factual allegations set forth in the complaint . . . as true and . . . in the 22 light most favorable” to the plaintiff. Lee v. City of Los Angeles, 250 F.3d 668, 679 23 (9th Cir. 2001). However, a court need not blindly accept conclusory allegations, 24 unwarranted deductions of fact, and unreasonable inferences. Sprewell v. Golden 25 State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). 26 27 28 1 IV. DISCUSSION 2 Rodinoff moves to dismiss this action pursuant to Rule 12(b)(2), for lack of 3 personal jurisdiction, and Rule 12(b)(6), for failure to state a claim upon which relief 4 can be granted. (See generally Mot.) 5 A. Timeliness of Rodinoff’s Motion 6 As a preliminary matter, Braychenko first argues that the Court should 7 automatically deny Rodinoff’s Motion and award sanctions against Rodinoff for 8 violating the Court’s Local Rules. Specifically, Braychenko argues that Rodinoff 9 violated the requirement that the notice of motion “shall be filed with the Clerk not 10 later than twenty-eight (28) days before the date set for hearing.” (See Opp’n Mot. 7– 11 8, ECF No. 14 (quoting C.D. Cal. L.R. 6-1).) Braychenko further contends, citing 12 Local Rules 7-12 and 7-13, that the Court may award sanctions against Rodinoff for 13 his late filing. (Id.) Given this Motion’s hearing date of August 14, 2023, Rodinoff’s 14 notice of motion was due no later than July 17, 2023. Rodinoff filed his Motion on 15 July 19, 2023. (Mot.) Thus, Rodinoff filed his Motion two days late. 16 The Court first notes that Local Rule 7-12, which only applies to the timely 17 filing of “required documents,” does not apply to initial motion filings such as the one 18 at issue here. Accordingly, Local Rule 7-13, which authorizes the Court to impose 19 sanctions for the late filing of required documents, is equally inapplicable. Although 20 Local Rule 6-1 applies to initial motion filings, the rule also vests the Court with 21 authority to modify the twenty-eight-day time-period between the filing of a notice of 22 motion and the scheduled hearing date. See C.D. Cal. L.R. 6-1 (“Unless otherwise 23 provided by rule or order of the Court . . . .”). Having considered the filing delay of 24 Rodinoff’s Motion, the Court finds that no significant prejudice resulted from 25 Rodinoff’s delayed filing, and the Court accepts Rodinoff’s Motion. However, the 26 Court reminds the parties that all future filings must comply with orders of this Court 27 and the Local Rules. 28 1 B. Personal Jurisdiction 2 A non-resident defendant may be subject to either general or specific personal 3 jurisdiction.5 Fed. Deposit Ins. Corp., 828 F.2d at 1442. To determine whether a 4 defendant’s contacts with the forum state are sufficient to render the exercise of 5 specific jurisdiction reasonable, the Ninth Circuit applies a three-prong test: (a) the 6 nonresident defendant purposefully directs activities or consummates some transaction 7 with the forum-state, or performs some act by which he personally avails himself of 8 the privilege of conducting activities in that forum; (b) the claim arises out of or 9 relates to the defendant’s forum-related activities; and (c) the exercise of jurisdiction 10 comports with fair play and substantial justice, i.e., it is reasonable. Schwarzenegger, 11 374 F.3d at 802. 12 In contract cases, the first prong is satisfied by “evidence of the defendant’s 13 actions in the forum, such as executing or performing a contract there.” Id. “[P]rior 14 negotiations and contemplated future consequences, along with the terms of the 15 contract and the parties’ actual course of dealing . . . must be evaluated in determining 16 whether the defendant purposefully established minimum contacts within the forum.” 17 Burger King, 471 U.S. at 479. 18 There is substantial evidence here tying Rodinoff’s conduct to California and 19 demonstrating that he availed himself of the privilege of conducting activities in this 20 forum. Primarily, Rodinoff executed the Agreement in Los Angeles while he resided 21 in California. (See Agreement 11; Reply 13.) Further, certain obligations imposed on 22 5 Although not addressed by the parties in their briefing, service of summons upon persons 23 voluntarily present in the forum state “suffice[s] to confer jurisdiction, without regard to whether the defendant was only briefly in the State or whether the cause of action was related to his activities 24 there.” Burnham v. Superior Ct., 495 U.S. 604, 612 (1990). “From the court’s perspective, service 25 of process asserts jurisdiction over the person.” Rockefeller Tech. Inv. (Asia) VII v. Changzhou SinoType Tech. Co., Ltd., 9 Cal. 5th 125, 139 (2020). In this case, on June 12, 2023, Plaintiff 26 personally served Rodinoff at his private residence, located in Los Angeles, California. (Decl. Mark Angert ISO Opp’n Mot. (“Angert Decl.”) ¶ 3, ECF No. 14-1; Req. Judicial Notice ISO Opp’n Mot. 27 Ex. A (“Proof of Service”), ECF No. 14-8.) From these facts, it appears that service would have 28 conferred this Court with jurisdiction over Rodinoff. However, because the parties do not address this argument, the Court does not consider it. 1 Rodinoff by the Agreement, including the initial payment of $64,012.86, were to be 2 performed while Rodinoff was still a California resident. (See id.) Braychenko also 3 alleges that Rodinoff breached the Agreement in part by failing to submit the initial 4 payment when it was due, meaning that the first instance of the alleged breach 5 occurred while Rodinoff was still in California. (Compl. ¶ 14.) Finally, the 6 underlying theft of the cryptocurrency occurred while the accountholder, Rodinoff, 7 was a resident of California, and Rodinoff “reported the theft of the cryptocurrency to 8 the Beverly Hills Police Department.” (Agreement 11.) Rodinoff’s later relocation to 9 Florida in July 2022 does not void this Court’s jurisdiction over him. Rodinoff’s 10 continued presence in California during the critical time that he executed the 11 Agreement “can in no sense be viewed as random, fortuitous, or attenuated.” Burger 12 King, 471 U.S. at 480 (internal quotation marks omitted). 13 Second, a plaintiff’s claims are related to defendant’s forum-related activities 14 “if, but for a defendant’s forum-related activities through which a defendant purposely 15 avails itself of the forum, the plaintiff would not have suffered injury.” Callaway Golf 16 Corp. v. Royal Canadian Golf Ass’n, 125 F. Supp. 2d 1194, 1204 (C.D. Cal. 2000) 17 (internal quotation marks omitted) (citing Ballard v. Savage, 65 F.3d 1495, 1500 18 (9th Cir. 1995)); see Ballard, 65 F.3d at 1500 (“The question, therefore, is this: but for 19 [Defendant’s] contacts with . . . California, would [Plaintiff’s] claims against 20 [Defendant] have arisen?”). As discussed previously, Rodinoff purposefully availed 21 himself of the benefits of the state of California when he entered into the Agreement 22 with Braychenko. Accordingly, the but-for test is clearly satisfied because had 23 Rodinoff not done so, Braychenko would not have a claim for injuries that resulted 24 from the Rodinoff’s alleged breach of the Agreement. 25 Finally, a court’s personal jurisdiction over a case must not offend “traditional 26 notions of fair play and substantial justice.” Int’l Shoe, 326 U.S. at 316. After the 27 plaintiff establishes the first two prongs of the Ninth Circuit’s test for specific personal 28 jurisdiction, the burden shifts to the defendant to present a compelling case that it 1 would be unreasonable to require the defendant to defend himself in the forum state. 2 Schwarzenegger, 374 F.3d at 802; Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 3 2008) (“[Defendant] must come forward with a ‘compelling case’ that the exercise of 4 jurisdiction would not be reasonable.” (quoting Burger King, 471 U.S. at 476–78)). 5 Seven factors are weighed to determine reasonableness, none of which are dispositive: 6 1) the extent of the defendant’s purposeful interjection into the forum 7 state’s affairs; 2) the burden on the defendant; 3) conflicts of law between 8 the forum and defendant’s home jurisdiction; 4) the forum’s interest in 9 adjudicating the dispute; 5) the most efficient judicial resolution of the dispute; 6) the plaintiff’s interest in convenient and effective relief; and 10 7) the existence of an alternative forum. 11 12 Roth v. Garcia Marquez, 942 F.2d 617, 623 (9th Cir. 1991). 13 Three factors—the first, second, and sixth—favor reasonableness. Rodinoff 14 interjected himself into California’s affairs when he executed the Agreement in 15 California while domiciled in the State. Under the second factor, the Court also finds 16 that, considering Rodinoff’s former and current connections to California, it would not 17 be an unfair burden on Rodinoff to defend the action in this forum. Further, 18 Braychenko’s interest in convenient and effective relief favors a finding of 19 reasonableness favor a finding of reasonableness. 20 Three factors—the third, fourth and fifth—are neutral. Under the third factor, 21 Rodinoff does not raise, nor does there appear to be any, material conflict of law 22 between California and Florida that implores a finding of unfairness. Next, although 23 California has an interest in enforcing contracts executed by its residents, Rodinoff is 24 no longer domiciled in California. Accordingly, “this factor seems to be a toss-up.” 25 Roth, 942 F.2d at 624. Lastly, efficient judicial resolution of the controversy is neutral 26 as it focuses on the location of the evidence and witnesses, see Harris Rutsky & Co. 27 Ins. Svcs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1133 (9th Cir. 2003), and, 28 1 although there is likely to be evidence and witnesses in the forum where Rodinoff 2 executed the Agreement, Rodinoff himself now resides in Florida. 3 Finally, “[w]hether another reasonable forum exists becomes an issue only 4 when the forum state is shown to be unreasonable.” CollegeSource, Inc. v. 5 AcademyOne, Inc., 653 F.3d 1066, 1080 (9th Cir. 2011). Rodinoff has made no such 6 showing here. 7 Therefore, on balance of the factors, it is reasonable to subject Rodinoff to 8 specific jurisdiction in this forum.6 See Harris Rutsky, 328 F.3d at 1134 (finding that 9 defendant failed to present a compelling case against personal jurisdiction where 10 balance of factors was “essentially a wash”). 11 C. Failure to State a Claim Upon Which Relief Can Be Granted 12 Rodinoff next argues that the Complaint should be dismissed because 13 Braychenko fails to sufficiently plead a claim for breach of contract. (Mot. 10–14.) 14 To plead a breach of contract claim, a plaintiff must “plausibly allege the existence of 15 a valid contract, which requires: (1) parties that are capable of contracting; (2) their 16 consent; (3) a lawful object; and (4) ‘[a] sufficient cause or consideration.’” Marks v. 17 UMG Recordings, No. 22-55453, 2023 WL 4532774, at * 1 (9th Cir. July 13, 2023) 18 (internal citations omitted) (quoting Cal. Civ. Code § 1550). “Consideration is ‘[a]ny 19 benefit conferred, or agreed to be conferred, upon the promisor, . . . to which the 20 promisor is not lawfully entitled, or any prejudice suffered, or agreed to be suffered, 21 by such person, other than such as he is at the time of consent lawfully bound to 22 suffer, as an inducement to the promisor.’” Id. (quoting Cal. Civ. Code § 1605). Here, 23 Rodinoff argues that there are insufficient allegations supporting that Braychenko 24 offered any consideration in the Agreement, thereby making it invalid and 25 unenforceable. (Mot. 12.) 26 27

28 6 Having found that Rodinoff is subject to specific jurisdiction in this forum, the Court need not address the parties’ arguments regarding general jurisdiction. 1 California recognizes that forbearance, or declining to pursue legal remedies, is 2 a valid form of consideration. See Levine v. Tobin, 210 Cal. App. 2d 67, 69 (1962). 3 “The promise to forbear may . . . be implied as well as express,” but “mere 4 forbearance to sue without agreement to forbear, or the mere act of forbearance if not 5 given for the promise does not constitute a consideration.” Anglo Cal. Nat’l Bank of 6 S.F. v. Far West Lumber Co., 152 Cal. App. 2d 284, 286–87 (1957). 7 The facts pleaded in the Complaint, which the Court accepts as true for 8 purposes of this Motion, imply that Braychenko’s promise to forbear from bringing 9 legal action was Rodinoff’s incentive to enter into the Agreement. First, Braychenko 10 pleads that the parties “entered into [the A]greement to resolve the dispute over the 11 $536,025.72 of Plaintiff’s funds.” (Compl. ¶ 12.) Thus, the Agreement’s purpose—to 12 resolve the dispute between the parties—was to avoid the risk of Braychenko pursuing 13 legal action to recover the stolen cryptocurrency. Second, in the Agreement itself, 14 Rodinoff acknowledges possessing $536,025.72 of Braychenko’s cryptocurrency, and 15 promises to compensate Braychenko fifty percent of the stolen funds. It can be 16 reasonably inferred from the Agreement and the facts pleaded in the Complaint that, in 17 exchange for Rodinoff’s promised future “refund” payments, (Agreement 12), 18 Braychenko promised to forbear bringing legal action against Rodinoff to recover the 19 cryptocurrency (as he does here after Rodinoff allegedly breached the Agreement). 20 Therefore, considering the above, Braychenko sufficiently pleads the existence 21 of a valid contract to satisfy the requirements of Rule 8(a). See Iqbal, 556 U.S. at 678 22 (holding that a “claim has facial plausibility when the plaintiff pleads factual content 23 that allows the court to draw the reasonable inference that the defendant is liable for 24 the misconduct alleged”). 25 26 27 28 1 Vv. CONCLUSION 2 For the reasons discussed above, the Court DENIES Defendant’s Motion to 3 || Dismiss. (ECF No. 11.) 4 5 IT IS SO ORDERED. 6 7 December 5, 2023 g “oe ak

10 OTIS D.’ GHT, II

UNITED STATES,DISTRICT JUDGE

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