U.S. Litigation over a Russian Real Estate Project

Moscow, Russia

After the collapse of the Soviet Union in 1989, many U.S. businesses sought new opportunities in Russia.

One was Ellerbe Becket Construction Services, Inc. (Ellerbe), a Minneapolis-based firm that offered architectural, engineering and construction management services. To assist them in this effort, it hired Nicholas Loukianoff, a Russian-American citizen who was bilingual in English and Russian.

One of the potential projects for Ellerbe was a Korea-Russia Trade Center in Moscow, and Ellerbe asked Loukianoff to help find a site in Moscow for such a building. However, the potential Korean client decided not to proceed, and the building was not built.

Nevertheless, Mr. Loukianoff’s company sued Ellerbe in federal court in San Francisco, California for damages under various legal theories. I was the principal lawyer for Ellerbe in this case.

During the pre-trial discovery, I took the deposition of Mr. Loukianoff’s expert witness, a newly minted Russian real estate agent. I did so by telephone from my office in Minneapolis to Ellerbe’s Moscow office with the English-Russian interpreter in Moscow. During the course of my examination, I asked him something like, “Private real estate transactions in Russia have only been happening in the last several years, right?” He did not agree with that statement and mentioned Russia’s sale of Alaska to the U.S. in 1867. That comment still makes me chuckle.

Several weeks before the trial was scheduled to start in January 1999, the court granted Ellerbe’s motion for summary judgment on three of plaintiff’s claims. Thus, the only claims left for trial were breach of contract and quantum meruit (reasonable value of services).[1]

At the start of the trial, the court granted other Ellerbe motions to exclude certain plaintiff’s evidence at trial, including a new damage theory (1% of the total built-out cost of the Center that was never built).[2] As a result, the potential value of plaintiff’s case collapsed, and the case immediately settled with a very modest payment by Ellerbe.

I still wish that I had obtained a trip to Moscow for this case.


[1] Memorandum Decision & Order, NAL Associates, Inc. v. Ellerbe Becket Construction Services, Inc., No. C-97-0997 (N.D. Cal. Jan. 8, 1999).

[2] Order , NAL Associates, Inc. v. Ellerbe Becket Construction Services, Inc., No. C-97-0997 (N.D. Cal. Jan. 26, 1999).

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As a retired lawyer and adjunct law professor, Duane W. Krohnke has developed strong interests in U.S. and international law, politics and history. He also is a Christian and an active member of Minneapolis’ Westminster Presbyterian Church. His blog draws from these and other interests. He delights in the writing freedom of blogging that does not follow a preordained logical structure. The ex post facto logical organization of the posts and comments is set forth in the continually being revised “List of Posts and Comments–Topical” in the Pages section on the right side of the blog.

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