National Union Fire Ins. Co. of Pitts. v. Kozeny

Citation115 F.Supp.2d 1231
Decision Date23 June 2000
Docket NumberNo. CIV. A. 00-B-383.,CIV. A. 00-B-383.
PartiesNATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Marlwood Commercial Inc., Omega Group Holdings Ltd., Pine Street Investment Ltd., Pinford Portfolio Inc., Helendale Trading Corp., and Telos Finance Ltd., Plaintiffs, v. Viktor KOZENY, Landlocked Shipping Company, Peak House Corporation, and Turnstar Limited, Defendants.
CourtU.S. District Court — District of Colorado

Frederick J. Baumann, Alan Wendell Anderson, Thomas John Dougherty, II, Rothgerber, Johnson & Lyons, LLP, Denver, CO, Stephen P. Younger, John Andrew Stephenson, Rebecca L. Noonan, Joshua Eli Burstein, Patterson, Belknap, Webb & Tyler, New York, NY, for National Union Fire Ins. Co, of Pittsburgh, PA, Marlwood Commercial, Inc.

Frederick J. Baumann, Alan Wendell Anderson, Thomas John Dougherty, II, Rothgerber, Johnson & Lyons, LLP, Denver, CO, Stephen P. Younger, John Andrew Stephenson, Rebecca L. Noonan, Patterson, Belknap, Webb & Tyler, New York, NY, Matthew N. Kaplan, Daniel J. Kramer, Schulte, Roth & Zabel, L.L.P., New York, NY, for Omega Group Holdings Ltd., Pine Street Investment Ltd., Pinford Portfolio Inc., Helendale Trading Corp. Telos Finance Ltd.

James E. Nesland, Paul Howard Schwartz, Cooley Godward LLP, Denver, CO, for Viktor Kozeny.

Paul R. Franke, III, Bradley J. Haight, Hall & Evans, Denver, CO, for Landlocked Shipping Co., Peak House Corp., Turnstar Ltd.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER

BABCOCK, Chief Judge.

Plaintiffs National Union Fire Insurance Company of Pittsburgh, Pa., Marlwood Commercial Inc. (Marlwood), Omega Group Holdings Ltd., Pine Street Investment Ltd., Pinford Portfolio Inc., Helendale Trading Corp., and Telos Finance Ltd., (collectively, Plaintiffs)assert ten claims against Turnstar based on an extensive pattern of alleged fraudulent conduct and breaches of fiduciary duty, resulting in a loss of more than $140 million. Plaintiffs move for a preliminary injunction and pre-judgment writ of attachment against Defendant Turnstar Limited (Turnstar) to prevent dissipation of Turnstar's assets. In addition, Plaintiffs move to extend the May 16, 2000 temporary restraining order and preliminary injunction issued against Defendants Kozeny, Landlocked Shipping Company, and Peak House Corporation to include four motor vehicles located in Aspen, Colorado. Based on the following findings of fact and conclusions of law, and after consideration of counsels' statements, briefs, and evidence presented at the June 22, 2000 hearing, I grant the motion for preliminary injunction against Turnstar pursuant to the Colorado Organized Crime Control Act, § 18-17-106(6). I grant in part and deny in part the motion to extend the May 16, 2000 temporary restraining order and preliminary injunction

I. Previous Proceedings

Plaintiffs filed this action on February 18, 2000 and requested an ex parte temporary restraining order (TRO) freezing property located in Pitkin County, Aspen, Colorado. I entered the TRO on February 18, 2000. Thereafter, Plaintiffs filed another TRO seeking to freeze the personalty located at the Aspen home. At an April 19, 2000 hearing, it was represented that the Aspen personalty was "for the most part" owned by "third parties" not before the Court. (Appendix 13, p. 15) Based on this representation, I denied the TRO as to the personalty. See id. at p. 25.

On May 4, 2000, Plaintiffs filed a: 1) first amended complaint adding Turnstar as a party defendant; and 2) motion for ex parte temporary restraining order directed to Turnstar prohibiting the transfer, sale, removal, or other disposition of personalty located at the Aspen property. On May 16, 2000, I granted the TRO against Turnstar based, in part, on an affidavit of John Christensen, Kozeny's interior decorator, in which Christensen averred that at Kozeny's direction, Christensen purchased millions of dollars in furnishings in Turnstar's name, a large portion of which was shipped to the Aspen property. See Appendices 61, 67.

On June 12, 2000, I issued Findings of Fact, Conclusions of Law and Order granting a preliminary injunction against Defendants Kozeny, Landlocked Shipping Company, and Peak House Corporation. See June 12, 2000 Order. I adopt and incorporate into this Order the findings of fact and conclusions of law contained in the June 12, 2000 Order. I now enter the additional following findings of facts and conclusions of law pertinent to Turnstar.

II.

Plaintiffs bring the following claims in this action:

                ---------------------------------------------------------------------------------------
                Claim No. Plaintiff Defendants Claim
                ---------------------------------------------------------------------------------------
                ONE         All        ALL         COCCA— § 18-17-104(1), CRS
                ---------------------------------------------------------------------------------------
                TWO         All        ALL         COCCA— § 104(2)
                ---------------------------------------------------------------------------------------
                THREE       All        KOZENY      COCCA— § 104(3)
                ---------------------------------------------------------------------------------------
                FOUR        All        ALL         COCCA— § 104(4) Conspiracy
                ---------------------------------------------------------------------------------------
                FIVE        All        LANDLOCKED  Aiding and Abetting COCCA— § 104(1)(2)(3)
                                       PEAKHOUSE   and (4) violations
                                       TURNSTAR
                ---------------------------------------------------------------------------------------
                SIX         All        KOZENY      Securities Exchange Act § 10(b) SEC Rule
                                                   10b-5 CONTROL PERSON
                ---------------------------------------------------------------------------------------
                SEVEN       All        KOZENY      Securities Exchange Act § 20(a)
                ---------------------------------------------------------------------------------------
                EIGHT       All        ALL         CIVIL CONSPIRACY
                ---------------------------------------------------------------------------------------
                NINE        All        KOZENY      BREACH OF FIDUCIARY DUTY
                ---------------------------------------------------------------------------------------
                TEN         All        KOZENY      BREACH OF FIDUCIARY DUTY—CONFIDENTIAL
                                                   RELATIONSHIP
                ---------------------------------------------------------------------------------------
                ELEVEN      All        KOZENY      TORTIOUS INTERFERENCE WITH
                                                   CONTRACT
                ---------------------------------------------------------------------------------------
                TWELVE      All        KOZENY      FRAUD-FALSE REPRESENTATION
                ---------------------------------------------------------------------------------------
                THIRTEEN    All        KOZENY      FRAUD-NON-DISCLOSURE OR CONCEALMENT
                ---------------------------------------------------------------------------------------
                FOURTEEN    All        LANDLOCKED  AIDING AND ABETTING FRAUD
                                       PEAKHOUSE
                                       TURNSTAR
                ---------------------------------------------------------------------------------------
                FIFTEEN     All        LANDLOCKED  FRAUDULENT TRANSFER
                                       PEAKHOUSE
                                       TURNSTAR
                ---------------------------------------------------------------------------------------
                SIXTEEN     All        KOZENY      NEGLIGENT MISREPRESENTATION
                                                   CAUSING FINANCIAL LOSS IN A BUSINESS
                                                   TRANSACTION
                ---------------------------------------------------------------------------------------
                
                ---------------------------------------------------------------------------------------
                SEVENTEEN   All        KOZENY      INDUCEMENT OF A BREACH OF FIDUCIARY
                                                   DUTY [MINARET AND/OR
                                                   OILY ROCK]
                ---------------------------------------------------------------------------------------
                EIGHTEEN    All        LANDLOCKED  AIDING AND ABETTING A BREACH OF
                                       PEAKHOUSE   FIDUCIARY [OWED BY MINARET
                                       TURNSTAR    AND/OR OILY ROCK]
                ---------------------------------------------------------------------------------------
                NINETEEN    All        ALL         UNJUST ENRICHMENT
                ---------------------------------------------------------------------------------------
                TWENTY      All        ALL         CONSTRUCTIVE TRUST
                ---------------------------------------------------------------------------------------
                TWENTY-ONE  All        KOZENY      ACCOUNTING
                ---------------------------------------------------------------------------------------
                

III.

Turnstar Limited
A. Jurisdiction

As an initial matter, Turnstar contends that this Court may not exercise personal jurisdiction over it. I disagree.

"To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment." Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453, 455 (10th Cir.1996) quoting Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1074 (10th Cir.1995). By enacting its long-arm statute, § 13-1-124, C.R.S., "the Colorado legislature intended to extend the jurisdiction of [its] courts to the fullest extent permitted by the due process clause of the United States Constitution." Le Manufacture Francaise Des Pneumatiques Michelin v. District Court, 620 P.2d 1040 (Colo.1980). See also Waterval v. District Court, 620 P.2d 5 (Colo.). Because Colorado case law extends its jurisdiction to the limits of the federal constitution, "[my] only concern is whether ... maintenance of the suit ... would ... offend the due process clause of the Fourteenth Amendment." Kuenzle, 102 F.3d at 455 (Wyoming long-arm statute) quoting Shanks v. Westland Equip. & Parts. Co., 668...

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