United States District Court, D. Nevada
ROBERT L. CITROEN, LAW CORP., Plaintiff,
MICRON OPTICS, INC., Defendant.
C. JONES United States District Judge
case arises out of the alleged breach of an assigned
settlement agreement. Pending before the Court is a Motion to
Dismiss Counterclaim (ECF No. 13).
AND PROCEDURAL HISTORY
Facts Alleged in the Complaint
April 1, 2014, Plaintiff Robert L. Citroen, Law Corp.
(“RLC”) entered into an agreement (“the
Agreement”) with Defendant Micron Optics, Inc.
(“Micron”). (Compl. ¶ 10, ECF No. 1-1, at
4). Under the Agreement, Micron was to pay RLC $12, 500 per
quarter for ten years. (Id. ¶ 12). Micron made
seven payments from July 1, 2014 to January 1, 2016 but
failed to make the April 1, 2016 payment or any payment
thereafter. (Id. ¶ 13).
Facts Alleged in the Counterclaim 1.Citroen's Business
Robert L. Citroen was a member of Micron's board of
directors since sometime prior to 2000 until November 4,
2011. (See Answer & Countercl. ¶ 12, ECF
No. 5). In or around 2004, Micron Optics International A.G.
(“MOIAG”) was formed as a Liberian entity to
resell Micron's products in Asia. (Id. ¶
14). MOIAG's stock was held equally by Karlsson &
Bergkvist (Schweiz) A.B. (“K&B”) and
Metallikon A.G. until 2014. (Id.). K&B is a
Swiss entity controlled by Andrei Csipkes and owned by
Csipkes's mother, and Metallikon is a Liberian entity
owned or controlled by Citroen. (Id. ¶¶
15-16). Csipkes was Micron's Chief Oprating Officer from
2000 to 2015. (Id. ¶ 19). Citroen failed to
disclose his interest in Metallikon or Csipkes's interest
in K&B to Micron's officers, directors, or
shareholders. (Id. ¶ 17). MOIAG profited from
its relation with Micron and distributed those profits to its
shareholders Metallikon and K&B. (Id. ¶
18). As owner or controller of Metallikon, a shareholder of
MOIAG, Citroen profited when MOIAG did while also serving as
a director of Micron as well as its legal counsel.
(Id.). In 2007, Citroen and Csipkes formed Technica,
S.A. to manufacture optical products and components for
Micron in China, and Technica's stock was held equally by
Metallikon and K&B until 2014. (Id. ¶ 20).
Citroen failed to disclose his or Csipkes's interests in
Technica to Micron's officers, directors, or
shareholders. (Id. ¶ 21). Technica profited
from its relation with Micron and distributed those profits
to its shareholders Metallikon and K&B. (Id.
¶ 21). As owner or controller of Metallikon, a
shareholder of Technica, Citroen profited when Technica did
while also serving as a director of Micron as well as its
legal counsel. (Id.). Metallikon and K&B
transferred their interests in Technica to other entities in
July 2014. (Id. ¶ 20).
Citroen's Federal Convictions
was a member of the State Bar of California from 1978 until
he voluntarily resigned in 2008 two months before pleading
guilty to federal crimes related to passport fraud.
(Id. ¶¶ 9, 22-26). Citroen failed to
disclose his convictions to Micron's officers, directors,
or shareholders and continued to provide legal advice to
Micron and to charge it for those services, totaling $132,
233.70. (Id. ¶¶ 25-29).
about April 1, 2014 Micron entered into the Agreement with
Metallikon and K&B under which those entities would sell
their MOIAG stock to Micron for $100, 000. (Id.
¶ 32). The Agreement also represented the settlement of
a purported debt owed by MOIAG to S.A. des Establissements
Karoly (“SADEK”) for various services.
(Id. ¶ 33). Under the Agreement, Micron would
assume a settled amount of $500, 000 in debt to SADEK,
payable in quarterly installments of $12, 500.
(Id.). The same day, SADEK assigned its interest in
the Agreement to RLC, acknowledging that RLC, as SADEK's
subcontractor, had provided the most vital services to MOIAG.
(Id. ¶ 34). “In other words, the
purported obligation and debt owed by MOIAG (operated by
Csipkes and Citroen) to SADEK, which supposedly resulted from
services performed by [RLC], was passed along as a debt and
obligation to Micron.” (Id. ¶ 35).
Citroen failed to disclose his and RLC's interests in the
Agreement to Micron's directors or shareholders.
(Id. ¶¶ 36-37). Micron made seven
quarterly payments under the Agreement but stopped making
payments after March 2016 when it discovered Citroen's
2008 resignation from the State Bar of California, his
federal convictions, and his control, ownership, and/or
financial interests in Metallikon, MOIAG, and Technica, none
of which he had previously disclosed. (Id.
Procedural History and the Present Motion
sued Micron in state court for breach of contract, unjust
enrichment, conversion, anticipatory breach, and
misrepresentation. Micron removed, answered, and filed
counterclaims against RLC for breach of contract, contractual
and tortious breach of the implied covenant of good faith and
fair dealing, unjust enrichment, breach of fiduciary duty,
fraud in the inducement, and constructive fraud. Micron also
listed counterclaims against Robert L. Citroen in his
personal capacity for tortious breach of the implied covenant
of good faith and fair dealing, unjust enrichment, breach of
fiduciary duty, fraud in the inducement, constructive fraud,
and aiding and abetting fraud. RLC answered the Counterclaim
and has asked the Court to dismiss the counterclaims brought
against Citroen in his personal capacity.