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Veljkovic v. Radisson Hospitality, Inc.

United States District Court, D. Minnesota

March 26, 2019

Alexis Veljkovic and Nicholas Dimic, Plaintiffs,
Radisson Hospitality, Inc., a Domestic Entity Doing Business in the United States, Defendant

          Robert J. Pavich and John Pavich, Pavich Law Group PC, and David M. Cialkowski, Zimmerman Reed LLP, for Plaintiffs.

          Moxila A. Upadhyaya, James D. Baldridge, and Katherine W. Morrone, Venable LLP, and Barbara P. Berens and Erin K. Fogarty Lisle, Berens & Miller PA, for Defendant.



         This is a dispute about real property in Belgrade, Serbia, and whether Radisson Hospitality (a Minnesota-based hotel corporation) committed tortious acts with respect to that property. Radisson has moved to dismiss Plaintiffs' suit, arguing that it is effectively identical to a lawsuit that Plaintiffs (unsuccessfully) pursued in the Northern District of Illinois and the Seventh Circuit Court of Appeals a little over a year ago. In that litigation, both the District Court and the Seventh Circuit found that Plaintiffs' claims, which are rooted in decades-old property confiscations by Serbia's former communist government, would be best resolved by a special Serbian tribunal called the “Serbian Restitution Agency” (“SRA”), and that dismissal was thus appropriate under the equitable doctrine of “forum non conveniens.”

         After carefully reviewing the record and applicable case law, the Court will dismiss Plaintiffs' claims, too. Specifically, the Court finds that a large part of Plaintiffs' case is barred by res judicata, and, to the extent that Plaintiffs' case is not amenable to a res judicata dismissal, an independent review of the record confirms that dismissal on the basis of forum non conveniens is appropriate in the District of Minnesota, just as it was in the Northern District of Illinois. The Court explains its reasoning at greater length below.

         I. BACKGROUND

         It is well established that, in deciding a motion to dismiss, a court may consider the allegations in the complaint, along with “public records and materials embraced by the complaint, and materials attached to the complaint.” C.H. Robinson Worldwide, Inc. v. Lobrano, 695 F.3d 758, 764 (8th Cir. 2012) (applying this standard in the context of a motion to dismiss on res judicata grounds). Moreover, when deciding a case on the basis of forum non conveniens, a court may also consider declarations, affidavits, and other documentary materials. See BP Chem. Ltd. v. Jiangsu Sopo Corp., 285 F.3d 677, 680 (8th Cir. 2002) (approving the district court's consideration of “the parties' proffered affidavits, testimony, and documentary materials . . . in deciding . . . questions of personal jurisdiction and forum non conveniens”); Polanco v. H.B. Fuller Co., 941 F.Supp. 1512, 1514 (D. Minn. 1996) (considering “the pleadings as well as extra-pleading material submitted by both parties” when deciding a motion to dismiss on forum non conveniens grounds); accord Transunion Corp. v. PepsiCo, Inc., 811 F.2d 127, 130 (2d Cir. 1987) (“Motions to dismiss for forum non conveniens may be decided on the basis of affidavits.”). As such, in describing the background of this case, the Court cites to the whole body of evidence that the parties have presented to the Court.

         A. Factual Background

         This case centers around 73, 000 square feet of land in downtown Belgrade, Serbia, which Plaintiffs refer to as the “Old Mill property” because of a steam mill that sat upon the property for decades. (See Compl. [Doc. No. 1] ¶ 8.) Prior to 1945, an entity entitled the “Vracar Cooperative” owned this property. (Id.) The Vracar Cooperative was, in turn, owned (in large part) by Plaintiffs' families, the Veljkovic and Dimic families. (Id.) However, in 1947, the communist government of Josep Broz Tito (in what was then called Yugoslavia) declared two members of the Veljkovic family “enemies of the state” for allegedly engaging in commerce with Nazi occupiers during World War II. (Id. ¶ 9.) As punishment, Tito's government confiscated “all of” the Veljkovics' “property assets and ownership assets, ” including the Old Mill property. (Id.; see also Compl., Ex. 4 [Doc. No. 1-4] (“2009 Serbian Court Ruling”) (providing detailed background on the convictions of Vojislav Veljkovic and Stojan Veljkovic).) Decades following that confiscation, in 1995, “corrupt municipal bureaucrats” sold the Old Mill property to a group called the “Koling Company, ” which was apparently “controlled by cronies of [then-Serbian dictator] Slobodan Milosevic.” (Compl. ¶ 13.)

         After Milosevic was removed from power in 2000, Vojislav Veljkovic's son (and Stojan Veljkovic's nephew), Bogdan Veljkovic, “returned to Serbia [from the United States, where he was also a citizen] and began to wage a very public battle to reclaim his family's name and property and ownership interests, ” including the Old Mill property. (Id. ¶ 18; see also ¶¶ 35-39 (describing the various public officials, including former U.S. Senator Mark Kirk, that Bogdan Veljkovic enlisted to advocate on his family's behalf).)

         Bogdan Veljkovic's efforts were not initially successful. (See, e.g., Compl. ¶¶ 17-23.) However, by the mid-2000s the Serbian government began to officially recognize the wrongfulness of its past property confiscations. (Id. ¶ 24.) In so doing, the Serbian government attempted to create a restitution system that balanced the reasonable expectations of current property holders with the need to compensate victims of decades-old wrongs. (See generally Kovacevic Dec. [Doc. No. 24-3] ¶¶ 19-34.)

         As a first step, Serbia passed a “First Rehabilitation Law” in 2005, which allowed an individual affected by the property confiscations (or their heirs) to seek an annulment of the underlying conviction on which the confiscation was based; once this annulment, or “rehabilitation, ” was received, the 2005 law stated, a forthcoming “special law” would provide for restitution. (See Nikolic Supp. Dec. [Doc. No. 29-4] ¶ 7; Kovacevic Dec. ¶¶ 4-5.) A few years after the passage of this law, Bogdan Veljkovic, on behalf of his (now deceased) father and uncle, successfully applied for “rehabilitation.” (See Kosic Dec. [Doc. No. 24-1] ¶ 2.) That is, on November 13, 2009, Bogdan Veljkovic received a judgment from a regional court in Serbia that “annulled” the 1947 convictions of his father and uncle, as well as “all the legal ramifications of those rulings.” (2009 Serbian Court Ruling at 1.)

         The effect of this decision is murky. Although Bogdan Veljkovic's Serbian counsel claims (in an unsworn declaration from 2015) that this ruling “restor[ed] the Veljkovic family rights of ownership” in the Old Mill property (see Kosic Dec. ¶ 4), the decision says nothing to that effect on its face, and instead focuses entirely on the history behind the Veljkovics' 1947 criminal convictions, and why those convictions lacked legal support. (See generally 2009 Serbian Court Ruling.) Moreover, two Serbian attorneys specializing in this area of law attest, under oath and with supporting documentation, that this 2009 “rehabilitation ruling” constituted a mere “prerequisite” to applying for restitution (and/or restoration of property ownership) from a tribunal called the “Serbian Restitution Agency” (“SRA”), which was created under a “Second Rehabilitation Law” enacted in 2011. (See Nikolic Supp. Dec. ¶¶ 7-16; Kovacevic Dec. ¶¶ 6-17.) As one of these attorneys put it: “A final and binding decision of the [SRA] determining the right to restitution of property rendered under the [Second Rehabilitation Law] is the sole means of redress with respect to restitution of property which was confiscated on the territory of Serbia and transferred into national, state, or cooperative property after World War II, and which decision would then constitute a document suitable for registration of ownership under Serbian law.” (Id. ¶ 34 (emphasis added).) This interpretation of the 2009 decision is further buttressed by current Belgrade land records, which do not state that Bogdan Veljkovic, the Vracar cooperative, or anyone associated with Plaintiffs currently owns the Old Mill property. (See 2015 Belgrade Land Records [Doc. No. 12-2].)

         Unfortunately for Bogdan Veljkovic, though, at the same time he was attempting to reclaim his ownership rights to the Old Mill property, the property's then-owner (the Koling Company) was preparing to sell the property to a different private company. Although the details of this sale are not entirely clear, sometime between 2005 and 2008 the Koling Company sold the Old Mill property to either a Serbian holding company called “Prigan” or an Austrian real estate company called “Soravia, ” so that Soravia/Prigan could “develop a world-class hotel on the extremely valuable and prime real estate on which the Old Mill [was] located.” (Compl. ¶¶ 25-29.)[1] Although Bogdan Veljkovic (and his supporters in government) warned these entities against further developing the Old Mill property until the Veljkovic rights in the land had been conclusively determined (Compl. ¶¶ 32-43), in 2009 Soravia/Prigran obtained development financing from the Austrian Erste Bank Group and the European Bank for Reconstruction and Development. (See Compl., Ex. 8 [Doc. No. 1-8] (“Soravia Press Release”).) Two years later, on October 20, 2011, Prigan entered into an “international management agreement” with a Danish company called “Rezidor Hotels APS” to build a “Radisson Blu” hotel on the Old Mill property. (See Compl., Ex. 9 [Doc. No. 1-9] (“Rezidor Management Agreement”).) This Agreement described Prigan as the hotel's “owner” and Rezidor APS as the hotel's “operator, ” and imposed various standards on the hotel's construction. (Id. at 5.) For instance, many features of the guest rooms were to be modeled after the “Radisson Blu Hotel” at the Zurich airport in Switzerland. (Id. at 12.)

         Plaintiffs allege that, not only did Rezidor's involvement with the Old Mill property “deter[] many would be supporters, and discourage[] formerly active supporters, from publicly supporting the Veljkovic family efforts to reclaim the Old Mill property” (Compl. ¶ 50), but that decisions concerning this hotel came from Radisson Hospitality's “offices in Minnesota, ” where Radisson is headquartered. (See, e.g., id. ¶¶ 45-46, 53-62.) Plaintiffs support this contention by alleging that Rezidor APS is a “wholly owned subsidiary” of Radisson Hospitality. (Id. ¶ 45.) However, the Management Agreement was signed and executed in Denmark and Serbia between Rezidor and Prigan (see Rezidor Management Agreement at 37), and the “list of professional consultants” attached to the Agreement, including the hotel's “main” designers and contractors, were all either Serbian or German companies. (Id. at 41-42.) Further, the November 7, 2011 Rezidor press release announcing the Belgrade hotel only contains references to European employees of Rezidor and Soravia. (See Compl., Ex. 10 [Doc. No. 1-10] (“Rezidor Press Release”).) More still, Radisson Hospitality's Vice President of Owner Relations and Retention, Judd Wadholm, who works in the company's Minnetonka, Minnesota office, submitted an affidavit confirming that “Radisson Hospitality, Inc. is not the owner, operator, or developer of the Radisson Blu Hotel [in Belgrade], ” and that “Radisson Hospitality, Inc.'s mere involvement with the hotel is as a master licensor of the Radisson brand name.” (Wadholm Dec. [Doc. No. 12-1] ¶ 4.)

         Nonetheless, a few years after Rezidor and Soravia/Prigan began developing this “Radisson Blu” hotel on his family's ancestral land, Bogdan Veljkovic turned to the SRA for a remedy. Specifically, in January 2014, Bogdan and his sister Katarina Veljkovic Beigbeder (a duel French/Serbian citizen currently residing in France) submitted “18 claims for restitution” to the SRA. (See Nikolic Dec. [Doc. No. 12-2] ¶ 14; Kovacevic Dec. ¶ 18.) Although it was unlikely that the SRA would return the Old Mill property to the Veljkovics, and/or other former shareholders in the Vracar Cooperative, because of the subsequent transfers described supra, and because of the difficulty in returning land to a (now defunct) corporate entity, the SRA could still provide the “rightful” Old Mill property owners up to 500, 000 euros ($565, 000) in Serbian government bonds, if it deemed their ownership claim(s) meritorious. (See generally Nikolic Dec. ¶¶ 6-16; Kovacevic Dec. ¶¶ 19-34.)

         As best the Court can tell, the Veljkovics' 18 claims remain pending before the SRA.

         B. The First Veljkovic Litigation (“Veljkovic I”)

         In 2014 or 2015, though, Bogdan Veljkovic decided that his family should also file a tort suit against Radisson Hospitality and Rezidor APS in United States federal court.[2]Bogdan Veljkovic's theory of the case was that Radisson and Rezidor “conspired” with Prigan and Soravia (and presumably their financiers) to “trespass on” and “convert” land that they should have known was not theirs (based on the 2009 Serbian Court Ruling and Bogdan's public advocacy), and that the companies should accordingly pay the “rightful owners” of the Old Mill property (i.e., the Veljkovics and Dimics) some form of damages, ranging from the “fair market value” of the property to “a percentage of the expected future profits to be earned” from the new hotel. (See, e.g., N.D.Ill. Compl. [Doc. No. 12-1] ¶ 63.)

         However, because Bogdan Velkojvic knew that, as an American citizen permanently residing in Serbia, he could not serve as a “foreign plaintiff” in a federal action based on diversity jurisdiction, see Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989), he and his sister (Katarina) decided to grant Bogdan's son, Plaintiff Alexis Veljkovic, who was then a U.S. citizen living in Illinois, “all rights in the [Old Mill] property, including ownership rights, ” so that Alexis could collect damages and serve as a plaintiff in this suit. (See 2d Pavich Dec. [Doc. No. 40] (containing affidavits from both Bogdan and Katarina Veljkovic attesting that they transferred their ownership rights to Alexis “to give him the legal status he needed to pursue this claim, ” albeit without any supporting written documentation or assignment).) Moreover, because the Dimic family also owned a significant stake in the Vracar Cooperative (which, again, was technically the original owner of the Old Mill property), Bogdan Veljkovic and his U.S. counsel enlisted Plaintiff Nicholas Dimic, a Canadian citizen currently residing in France, to serve as a plaintiff, too. (See N.D. Ill. Compl. ¶ 4.)[3]

         Shortly thereafter, on May 5, 2015, Plaintiffs Veljkovic and Dimic filed a six-count complaint in the United State District Court for the Northern District of Illinois, asserting claims against Radisson Hospitality Inc (then called “Carlson Hotels, Inc.”) and Rezidor Hotel Group AB (collectively “Defendants”) for trespass, conversion, civil conspiracy, unjust enrichment, violations of the Minnesota Deceptive Trade Practices Act (“MDTPA”), and “constructive trust.” Although Defendants jointly moved to dismiss Plaintiffs' complaint on a number of grounds, Judge Samuel Der-Yeghiayan granted the motion solely on forum non conveniens. In a relatively perfunctory decision, issued on September 27, 2016, Judge Der-Yeghiayan found that (1) “[a]lthough Plaintiffs may not be able pursue exactly the same tort claims . . . before the SRA [against Defendants] and the relief afforded may not be precisely the same, the SRA presents some similar remedies and presents an[] alternative and adequate forum, ” and (2) “Plaintiffs' claims can clearly be most ...

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