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GCIU-Employer Retirement Fund v. Coleridge Fine Arts

United States District Court, D. Kansas

July 8, 2019

GCIU-EMPLOYER RETIREMENT FUND AND BOARD OF TRUSTEEES OF THE GCUI-EMPLOYER RETIREMENT FUND, Plaintiffs,
v.
COLERIDGE FINE ARTS, et al. Defendants.

          MEMORANDUM AND ORDER

          ERIC F. MELGREN UNITED STATES DISTRICT JUDGE.

         Plaintiffs GCIU-Employer Retirement Fund and its Board of Trustees (“Plaintiffs” or “the Fund”) bring this action against two Irish companies, Coleridge Fine Arts (“Coleridge”) and Jelniki Limited (“Jelniki”). Plaintiffs seek to collect withdrawal liability payments under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”). Defendants previously moved for dismissal under Fed.R.Civ.P. 12(b)(2) asserting that the Court lacked personal jurisdiction. The Court agreed and dismissed the case.

         On appeal, the Tenth Circuit Court of Appeals agreed that it did not appear that there was a basis for personal jurisdiction. The circuit, however, reversed the dismissal because it found that this Court should have allowed jurisdictional discovery. Upon remand, the parties conducted limited discovery.

         Defendants are again before the Court moving for dismissal on the basis that the Court lacks personal jurisdiction. The Court finds that there are insufficient minimum contacts by Defendants and that Plaintiffs' injuries do not arise from Defendants' contacts. Thus, the Court grants Defendants' Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 39).

         I. Factual and Procedural Background [1]

         Plaintiff GCUI-Employer Retirement Fund is a multiemployer pension plan. Plaintiff Board of Trustees is made up of the present trustees who are the named fiduciaries of the Fund. The Fund is primarily funded by contributions remitted by multiple participating employers as a result of negotiated collective bargaining agreements (“CBAs”).

         Defendant Coleridge is a corporation domiciled in the Republic of Ireland. Defendant Jelniki is a company domiciled in the Republic of Ireland. Coleridge is a wholly-owned subsidiary of Jelniki.

         Coleridge wholly-owned Greystone Graphics, Inc. (“Greystone), a Kansas corporation, as of 2002. A collective bargaining agreement (“CBA”) bound Greystone to make contributions to Plaintiff Fund. In February 2011, Greystone ceased doing business and is now a defunct corporation. Its cessation of business effectuated a complete withdrawal from the Fund.

         On April 15, 2013, a default judgment was entered by the United States District Court in the Central District of California against Greystone, JDV, Co., [2] Greystone Investment Company, and Coleridge Design and Imaging, Inc., in the amount of $4, 454, 092.02 in withdrawal liability.

         In 2014, Plaintiffs filed suit against Coleridge and Jelniki asserting that they were affiliated with Greystone and Coleridge Design and Imaging, Inc., and were liable for the withdrawal liability. Defendants filed a Motion to Dismiss (Doc. 39) asserting that the Court lacked personal jurisdiction over the foreign defendants. Defendants submitted an affidavit to the Court in which Eugene Reynolds, director and shareholder of Coleridge, averred that Defendants Coleridge and Jelniki never had direct control over the daily affairs of Greystone. Defendants had separate budgets, payroll, and business records from Greystone. Defendants did not have the authority to make business decisions related to Greystone and did not conduct business on behalf of Greystone. Similarly, Greystone did not conduct business on behalf of Defendants. The Court agreed that there was no personal jurisdiction over Coleridge and Jelniki and dismissed the case.

         On appeal to the Tenth Circuit Court of Appeals, the circuit found that the record “[fail[ed] to show that either Coleridge or Jelniki had sufficient minimum contacts with the forum to permit the federal courts to exercise specific personal jurisdiction.”[3] The Tenth Circuit, however, found that this Court abused its discretion when it did not permit Plaintiff to conduct further discovery on the personal jurisdiction issue. The circuit remanded the case directing the Court to permit jurisdictional discovery on the “question of whether Coleridge and Jelniki, either directly or through their owners, directors, or agents, were involved in the day-to-day management of Greystone.”[4]

         The parties conducted discovery and the following facts come from this additional discovery. Kevin Walsh is an owner and member of the Board of Directors of Coleridge and Jelniki. Walsh has served on Coleridge's Board of Directors for thirty years. He also served as Coleridge's Managing Director.

         When Walsh was deposed, he testified that he visited Greystone's facility in Kansas City approximately four times between 1998 and 2005.[5] He did not visit Kansas City after 2005. Walsh testified that Coleridge paid for his travel to Kansas City, and that he made those trips on behalf of Coleridge.

         Walsh stated that he would communicate with Greystone's General Manager (“GM”) James Lloyd via phone and electronic mail. When visiting Greystone on the approximate four occasions, [6] Walsh met with Lloyd and would discuss any concerns that Lloyd had. In addition, Walsh would meet with other Greystone employees. Walsh stated that he had no involvement in the day-to-day operation of Greystone and did not have the ability to tell Lloyd how to run the company.

         James Lloyd was the Chief Financial Officer (“CFO”) and General Manager of Greystone. Lloyd was also on Greystone's Board of Directors. He was not on Coleridge's or Jelniki's board, and he did not receive any renumeration from Coleridge or Jelniki.

         As CFO, Lloyd was responsible for the accounting and books. As GM, Lloyd was responsible for leading a management team and making decisions related to Greystone's production and marketing. Lloyd set the financial goals for Greystone. Walsh could ask questions about the projections, but he did not offer advice or input. Lloyd approved travel expenses, equipment purchases, and day-to-day business expenses. He did not need approval from anyone to make decisions.

         Lloyd testified that Greystone sent supplies to Coleridge three or four times. The supplies were purchased by Greystone in the United States. Lloyd did not know if Coleridge reimbursed Greystone.

         Greystone did not own its facility in Kansas City. It leased it from Greystone Investment Company. JDV Co. owned Greystone Investment Company. JDV is a wholly owned subsidiary of Coleridge.

         Lloyd and Walsh testified that, in 2000, Coleridge provided a loan to Greystone in the amount of $250, 000.[7] Lloyd made the request for a loan to Eugene Reynolds, another owner and member of the Board of Directors of Coleridge and Jelniki. Lloyd and Reynolds discussed the terms of the loan. Reynolds testified that JDV Co. made the loan to Greystone. There are no loan documents. Reynolds and Walsh stated that the loan was expected to be paid back, but Greystone was never able to make any payments.

         Reynolds met with Lloyd multiple times a year during the duration of Lloyd's employment with Greystone. Reynolds testified that Greystone paid for his flights when he would travel to Kansas City for business.[8] In addition, he testified that he used a Greystone credit card and that he stayed at an apartment that Greystone paid for.

         In 2007, Greystone and union employees negotiated a CBA. Lloyd testified that Reynolds was involved in the negotiating of the 2006/2007 CBA in an advisory capacity. Lloyd also stated that he discussed with Reynolds withdrawal liability during the 2006/2007 negotiations. Lloyd had the ultimate authority to approve a union contract.

         There is a one-page agreement, dated March 15, 2007, signed by Reynolds and several members of the union. In this agreement, it states that “Greystone and Local 16-C have agreed to a meeting between the Union's committee and Eugene Reynolds to give the Union the opportunity to communicate their concerns directly to the owner. The undersigned agree that this meeting is not a negotiation session and that all comments are off the record.”[9]

         During Reynolds' deposition, he was asked about this agreement. He stated that he does not recall that the meeting ever took place. He also stated that “off the record” meant that it was completely unofficial and that it was not a negotiation session. Reynolds was asked about the statement communicating their concerns directly to the owner and whether it was accurate that his “capacity in this meeting was as the owner of Greystone.” He responded, “representing the owners.”

         On June 15, 2007, a letter was sent to the union on Greystone letterhead. Reynolds signed this letter. He stated that someone at Greystone had drafted the letter for Reynolds to send because communications had broken down and a strike had either started or was imminent.

         In 2011, when Greystone withdrew from the Fund, Reynolds was Greystone's President and sat on its Board of Directors. Lloyd and Reynolds were involved in the winding down of Greystone. Reynolds, through Dollard Packaging, pays for the storage facility in which Greystone's corporate records are currently stored. Greystone's physical assets were ...


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