Shvartser v. Lekser

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

KONSTANTIN SHVARTSER, Plaintiff, v. Civil Action No. 16-1199 (JDB) EVELINA LEKSER, Defendant.

ORDER

Currently before the court are [169] plaintiff Konstantin Shvartser’s motion for summary

judgment and [170] and [174] defendant Evelina Lekser’s cross-motions for summary judgment.

For the reasons explained below, the Court will deny these motions without prejudice until: (1) the

property that is the subject of this lawsuit (the “property”) is sold pursuant to the Court’s July 5,

2017 partition order, see July 5, 2017 Order [ECF No. 87], and (2) the claims in a related case—

which involves the same two parties and the property at issue here—are resolved, see Shvartser v.

Lekser, Civil Action No. 18-473 (JDB) (D.D.C. filed Feb. 28, 2018) (“Shvartser II”).

In this case, Shvartser seeks summary judgment on his claims against Lekser for breach of

fiduciary duty (Count I), fraud (Count II), conversion (Count III), unjust enrichment (Count IV),

and breach of contract (Count VII). See Statement of P. & A. in Supp. of Pl.’s Mot. for Summ. J.

(“Pl.’s MSJ”) [ECF No. 169-1] at 14–23. 1 As a remedy, he seeks (1) “the difference between the

balance on the original mortgage [on the property] at the time of [Lekser’s allegedly unlawful]

refinance and the balance of the new refinanced mortgage,” which he calculates to be $658,237.27,

1 As plaintiff notes in his motion, the remaining counts of the complaint—which seek a constructive trust (Count V), a permanent injunction (Count VI), and request for accounting (Count IX)—are “more accurately described as remedies.” See Pl.’s MSJ at 13 n.3. The Court has already entered judgment in plaintiff’s favor on Count VIII and ordered that the property be partitioned and sold. See Shvartser v. Lekser, 257 F. Supp. 3d 30, 37 (D.D.C. 2017). id. at 28; and (2) approximately $500,000 that Shvarster claims he transferred to Lekser for

renovations on the property that were never completed, see id. Shvartser also seeks summary

judgment on Lekser’s counterclaims for breach of contract (Count 1), misrepresentation (Count

2), “emotional pain and suffering,” which Shvartser correctly notes resembles a counterclaim for

intentional infliction of emotional distress (Count 3), and tortious interference (Count 4). See id.

at 24–28.

Defendant, proceeding pro se, cross-moves for summary judgment both as to plaintiff’s

claims, see Statement of P. & A. in Supp. of Def.’s Mot. for Summ. J. (“Def.’s MSJ as to Pl.’s

Claims”) [ECF No 170-1] at 6–10, and as to her own, see Def.’s Cross-Mot. for Summ. J. as

Against Pl. on All Counterclaims (“Def.’s MSJ as to Def.’s Countercls.”) [ECF No. 174] at 1.

Although defendant’s motions do not state the relief she seeks, her counterclaim seeks $6 million

in damages. See Def. Pro Se’s Verified Answer and Affirmative Defenses and Countercls. to

Verified Am. Compl. [ECF No. 53] at 21.

Shortly before the parties’ summary judgment motions were filed in this case, the Court

entered a temporary restraining order (and later a preliminary injunction) in Shvartser II. See

Shvartser v. Lekser, 308 F. Supp. 3d 260, 269 (D.D.C. 2018). That injunction prevented two

lenders (the “lender defendants”) with whom Lekser had refinanced the property in 2015 from

foreclosing on the resulting mortgage. See id. Shvartser’s complaint in Shvartser II asserts a claim

to quiet title to the property, alleging that the mortgage held by the lender defendants is void

because it was procured using a fraudulent power of attorney. See id. at 265. The lender

defendants responded “primarily that they were entitled to foreclose on the entire property”—

either because the mortgage was valid or, if it was invalid, through equitable subrogation—but

“also argued in the alternative that, at a minimum, they were entitled to a lien against Ms. Lekser’s

2 one half interest in the property.” See Mem. Op., Shvartser v. Lekser, Civil Action No. 18-473

(JDB) (D.D.C. Sept. 13, 2018) (“Sept. 13, 2018 Mem. Op.”) [ECF No. 82] at 7–8. Although the

Court found a likelihood of success on the merits of Shvartser’s quiet title claim, see Shvartser,

308 F. Supp. 3d at 265, and has since declined to reconsider that determination, see Sept. 13, 2018

Mem. Op. at 9, the Court has not yet adjudicated the underlying quiet title claim.

The outcome of that claim is likely to affect the issues in this case significantly. For

example, if the Court were to determine in Shvartser II that Shvartser’s one-half interest in the

property is unencumbered by the 2015 mortgage, then it is unclear why Shvartser would be entitled

to recover the alleged $658,237 differential between the value of that mortgage and the property’s

prior mortgage. And although Shvarster’s claims for approximately $500,000 in allegedly

misappropriated renovation funds depend less directly on the outcome of the quiet title claim in

Shvartser II, it nonetheless involves the same facts. Moreover, the two parties in this case are

currently engaged in mediation, see Sept. 12, 2018 Min. Entry, which further counsels against the

resolution of the parties’ summary judgment motions at this time.

The Court also notes—again—that despite the Court having ordered a partition and sale

over a year ago, Shvartser still has not yet sold the property in compliance with the Court’s order.

Because the damages flowing from any meritorious claims asserted by Shvartser against Lekser

(or vice versa) would most easily be satisfied using the proceeds of that sale, it is logical to defer

ruling on these claims until after the property has been sold and the various parties’ interests in

that property have been determined in Shvartser II or through mediation. See, e.g., July 5, 2017

Order ¶ 8 (directing that “all net proceeds of the sale [of the property] . . . shall be deposited with

the Clerk of Court pending the outcome of this litigation”). Then, and only then, can the Court

sufficiently address the various underlying contract and tort claims asserted in this action. See

3 United States v. W. Elec. Co., 46 F.3d 1198, 1207 n.7 (D.C. Cir. 1995) (noting that “a trial court

has inherent power to control the sequence in which it hears matters on its calendar”).

Accordingly, it is hereby

ORDERED that [169], [170], and [174] the parties’ cross-motions for summary judgment

are DENIED without prejudice to renewal consistent with this order.

SO ORDERED.

/s/ JOHN D. BATES United States District Judge Dated: September 18, 2018