Gannon Int'l v. Blocker
| Decision Date | 14 January 2011 |
| Docket Number | Case No. 4:10CV0835 JCH |
| Parties | GANNON INTERNATIONAL, LTD, et al. Plaintiffs, v. WALTER BLOCKER, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on Defendants Ignition Growth Management, LLC, and Sandalwood Investment Limited's Motion to Dismiss Plaintiffs' First Amended Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2), or, in the Alternative, to Dismiss in Favor of Arbitration (Doc. No. 53), filed on June 11, 2010, and Defendant Walter Blocker's Motion to Dismiss Pursuant to Rule 12(b)(4) and (5) (Doc. No. 56), and Defendant Walter Blocker's Motion to Dismiss Plaintiffs' First Amended Complaint Under Rule 12(b)(6) (Doc. No. 59), filed June 14, 2010. These matters are briefed and ready for disposition.
Plaintiff Gannon International ("Gannon International"), a Missouri corporation with its principal place of business in St. Louis, Missouri, owns one-hundred percent (100%) of Plaintiff Gannon Pacific Company ("Gannon Pacific"). ("FAC", ¶2).1 Gannon Pacific, a Missouri corporation with its principal place of business in St. Louis, Missouri, owns ninety-nine percent (99%) of Plaintiff Gannon Company (Hong Kong) Limited ("Gannon Hong Kong"). (Id., ¶3). Gannon Hong Kong, a Hong Kong corporation, owns one-hundred percent (100%) of Plaintiff Gannon Vietnam Company Limited ("Gannon Vietnam"). (Id., ¶4). Gannon Vietnam, a Vietnamese corporation, owns approximately eight-nine percent (89%) of nominal defendant Gannon Brewery Joint Stock Company ("Gannon Brewery"). (Id., ¶5). Gannon Brewery is a Vietnamese Joint Stock Company. (Id., ¶10). Defendant Walter Blocker ("Blocker"), is a United States citizen residing in Vietnam, and he is the former Chief Executive Officer, General Director, and Legal Representative of Gannon Vietnam. (Id., ¶¶ 6-7). Defendant Ignition Capital Partners ("Ignition") is a limited liability company organized under the laws of the State of Washington with its principal place of business in Seattle, Washington. (Id., ¶ 8). Defendant Sandalwood Investment Limited ("Sandalwood") is a Hong Kong corporation wholly owned by Ignition. (Id., ¶ 9).
Plaintiffs allege that, in May 2007, Blocker caused a wire transfer of $415,000 (USD) from Gannon Hong Kong's bank account to the personal bank account of Blocker's wife, Doan Phuong Ly. (Id., ¶ 17). Plaintiffs allege that no officer or employee of Gannon International authorized this transaction, and that the transaction was not for a legitimate business purpose. (Id., ¶ 18). Plaintiffs further allege that, in February 2009, Blocker caused an unauthorized wire transfer of $40,000 (USD) from Gannon Hong Kong's bank account to the personal bank account of Gannon International's former Chief Financial Officer, Bob Greene ("Greene"), to enable the former CFO to pay his mortgage. (Id, ¶¶ 19-20; Doc. No. 46-1).
Currently, Plaintiffs are building a brewery in Vietnam as a result of a joint venture with Anheuser-Busch InBev ("ABI"). (FAC, ¶ 22). Plaintiffs formed Gannon Brewery to operate the brewery and obtain the land. (Id.). Plaintiffs allege that, without authorization, Blocker entered intoa long-term leasehold agreement for a parcel of land on Plaintiffs' behalf. (Id.). Plaintiffs also allege that Blocker has refused to provide them with full access to the books and records of Gannon Hong Kong and Gannon Vietnam, including all documents associated with the Gannon Vietnam and ABI agreement that permits Gannon Vietnam to distribute ABI products in Vietnam. (Id., ¶¶ 25-26).
In a letter dated April 2, 2010, Ignition and Sandalwood terminated their Letter of Intent in acquiring Gannon Brewery. (Id., ¶ 28). In the April 2, 2010 letter, Ignition and Sandalwood stated that they were terminating their efforts to acquire Plaintiffs' brewery project in Vietnam. (Id.). Plaintiffs allege that, on April 19, 2010, Defendants executed a Share Subscription and Shareholders Agreement ("the Agreement") whereby Gannon Vietnam sold a large part of its interest in Gannon Brewery to Ignition and Sandalwood. (Id., ¶ 29). The parties to the Agreement are Sandalwood, Gannon Vietnam, Doan Phuong Ly, Joint Stock Company, and Blocker. (Doc. No. 28-5, pp. 2, 5). Blocker signed the Agreement as the legal representative of Joint Stock Company and Gannon Vietnam. (Doc. No. 28-5, p. 5). In an e-mail dated April 29, 2010, Blocker resigned from Gannon Vietnam. (FAC, ¶ 30).
In a letter dated May 5, 2010 (the "Capital Call Letter") and addressed to Gannon Vietnam, Darrell Wayne Walker, in his capacity as the General Director and Legal Representative of Gannon Brewery, requested capital call contributions from Plaintiffs. (Id., ¶ 31; Doc. No. 1-3). The Capital Call Letter was from Darrell Walker, legal representative of Gannon Brewery and employee of Ignition and Sandalwood, and addressed to the legal representative of Gannon Vietnam. (Id.). Blocker forwarded the Capital Call Letter to Gannon International. (FAC, ¶31). Plaintiffs responded to the Capital Call Letter, but did not provide any financing in response. (Id.).
On May 6, 2010, Plaintiffs filed their original complaint. (Doc. No. 1). On May 11, 2010, Plaintiffs had the original complaint personally served upon Blocker in Vietnam. (Doc. Nos. 15, 631).
This Court granted Plaintiffs leave to file their First Amended Complaint, which was filed on May 27, 2010. (Doc. No. 46). In Count I, Plaintiffs allege that Blocker breached his fiduciary duties "by wrongfully transferring Gannon Hong Kong funds to his wife and to Gannon International's former Chief Financial Officer..., by interfering or threatening to interfere with the contractual and business relationships of Plaintiffs, by refusing to give Plaintiffs access to the books and records of Gannon Hong Kong and Gannon Vietnam; by attempting to involuntarily dilute Plaintiffs' interest in Gannon Brewery Joint Stock Company; and by committing knowing fraud and deceit upon Plaintiffs through the Capital Call letter.... " (FAC, ¶ 35). In Count II, Plaintiffs charge that Blocker committed fraud by transferring Gannon Hong Kong funds into the personal accounts of his wife and Gannon International's former CFO. In Counts III and IV, Plaintiffs assert claims for unjust enrichment and conversion against Blocker in connection with the unauthorized transfers of Gannon Hong Kong funds. In Count V, Plaintiffs charge that Blocker, Ignition, and Sandalwood knowingly committed fraud upon Plaintiffs by sending them the Capital Call Letter which contained false representations. In Count VI, Plaintiffs allege that Blocker, Ignition, and Sandalwood tortiously interfered with the business relationships between Gannon and its prospective investors of Gannon Brewery. In Count VII, Plaintiffs charge that "Ignition and Sandalwood... knowingly and intentionally aided, abetted, and participated in Blocker's breach of his fiduciary duties and his duty of loyalty to Plaintiffs[.]" (FAC, ¶ 77). In Count VIII, Plaintiffs allege that Blocker, Ignition, and Sandalwood violated § 10(b) of the Securities and Exchange Act of 1934 by making "materially misleading and false statementsto Plaintiffs in the days and weeks preceding the Capital Call which were intended to lead Plaintiffs to believe that no capital calls or further efforts to alter the ownership structure of Gannon Brewery... would be undertaken." (FAC, ¶ 80). In Count IX, Plaintiffs assert a civil conspiracy claim against all Defendants. In Count X, Plaintiffs moves for a declaratory judgment; and, in Count XI, Plaintiffs seek a constructive trust.
A. Personal Jurisdiction
In Missouri, to obtain personal jurisdiction over a non-resident defendant, the plaintiff must make a prima facie showing that (1) the cause of action arose out of an activity covered by Missouri's long-arm statute, and (2) the defendant had sufficient minimum contacts with Missouri to satisfy the due process requirements. Johnson v. Arden, 614 F.3d 785, 794 (8th Cir. 2010)(citing In re Marriage ofBerry, 155 S.W.3d 838, 840 (Mo. Ct. App. 2005)). "Missouri's long-arm statute, Mo. Rev. Stat. § 506.500, confers jurisdiction to the extent allowed by the Due Process Clause." Johnson, 614 F.3d at 794 ().2 Under this standard, personal jurisdiction exists "only if the contacts between the defendant and the forum stateare sufficient to establish that the defendant has purposefully availed himself of the benefits and protections of the forum state." Johnson v. Woodcock, 444 F.3d 953, 955 (8th Cir. 2006). "The Eighth Circuit examines the following five factors to determine whether these constitutional requirements for personal jurisdiction have been met: (1) the nature and quality of the defendant's contacts with the forum state; (2) the quantity of contacts; (3) the relationship between the cause of action and the contacts; (4) the forum state's interest in providing a forum for its residents; and (5) the convenience of the parties." Insituform Techs. v. Reynolds, Inc., 398 F. Supp. 2d 1058, 1066 (E.D. Mo. 2005)(citing Digi-Tel Holdings, Inc. v. Proteq Telecomm, Inc., 89 F.3d 519, 522-23 (8th Cir. 1996)). The Court looks at all of the factors in the aggregate and examines the totality of the circumstances in making a personal jurisdiction determination. Northrup King Co. v. Compania Productora Semillas Algodoneras, S.A., 51 F.3d 1383, 1388 (8th Cir. 1995).
"A court obtains general jurisdiction 'against a defendant who has continuous and systematic contacts with the forum state, even if the injuries at issue in the lawsuit did not arise out of the defendant's activities directed at the forum.'" Johnson, 614 F.3d 794...
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