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Samson Tug and Barge Company, Inc., An Alaska Corporation v. Timothy J. Koziol and Brett M. Clark

April 23, 2012

SAMSON TUG AND BARGE COMPANY, INC., AN ALASKA CORPORATION, PLAINTIFF,
v.
TIMOTHY J. KOZIOL AND BRETT M. CLARK,
DEFENDANTS.



The opinion of the court was delivered by: Sharon L. Gleason United States District Judge

ORDER DENYING DEFENDANT CLARK'S MOTION TO DISMISS

Before the court at Docket 8 is defendant Brett Clark's Motion to Dismiss. At Docket 14, plaintiff Samson Tug and Barge ("Samson") opposes. At Docket 18, Mr. Clark replies. At Docket 28, Samson surreplies. Oral argument on the motion was held on March 8, 2012.

FACTS AND PROCEDURAL BACKGROUND

The uncontroverted facts are as follows: Samson is an Alaska corporation transporting freight and other materials within Alaska and to Seattle by tug and barge.*fn1

General Environmental Management, Inc. is a Nevada corporation ("GEM Nevada"). In 2008 and 2009, GEM Delaware was a Delaware corporation and the primary operating subsidiary of GEM Nevada.*fn2 At all relevant times, defendant Timothy Koziol was the Chief Executive Officer (CEO) and Mr. Clark the Chief Financial Officer (CFO) of GEM Nevada. Both were and are residents of California*fn3 who have been to Alaska "only once or twice, and never in relation to the subject matter of this lawsuit."*fn4

In the fall of 2008, GEM*fn5 hired Samson to transport contaminated material from Kodiak, Alaska to Seattle, Washington.*fn6 After transporting the material in late 2008, Samson requested payment from GEM. In early 2009, Samson received some payments on the invoices, but these payments stopped in April 2009.*fn7 By October 2009, Samson was owed $559,678.43, including interest on the unpaid balance due.*fn8

In 2009, Samson's CFO Roslyn Dailey communicated with Mr. Clark about the outstanding balance. At least two of Ms. Dailey's communications were sent on Samson letterhead. That letterhead lists Samson's corporate headquarters address in Sitka, Alaska and includes the slogan "Alaskans Serving Alaskans."*fn9 On June 30, 2009, Ms. Dailey and Mr. Clark communicated via e-mail to schedule a phone call.*fn10 In this correspondence, which included a discussion of the time difference between Pacific Standard Time and Alaska Standard Time, Mr. Clark explicitly acknowledged that Ms.

Dailey was in Sitka, Alaska.*fn11

In September 2009, Ms. Dailey indicated that Samson intended to pursue a court action in Washington state court against GEM to recover the amount owed and sent GEM a draft complaint.*fn12 The caption of the draft complaint identifies Samson as "an Alaskan Corporation." Additionally, the body of that draft complaint describes Samson as "a duly licensed Alaska State Corporation"*fn13 and specifies that the action arises out of the contract to transport materials from Kodiak to Seattle.*fn14

On or about November 6, 2009, GEM Nevada and Samson executed a Settlement Agreement and Release ("Settlement Agreement"), in which GEM Nevada agreed not to dispute that it owed Samson $559,678.43 through November 1, 2009 and agreed to a payment plan to pay off the entire amount due by October 2010.*fn15 Also in the Settlement Agreement, Samson expressly released GEM Delaware from all liability for the amount due.*fn16 The Settlement Agreement contained language acknowledging

Samson's Alaskan connections.*fn17 The Settlement Agreement also provided that "any action to interpret or enforce the terms of this Agreement shall be brought in the Superior Court of King County, Washington."*fn18

Just before Samson executed the Settlement Agreement, it was provided with sworn declarations from Mr. Clark and Mr. Koziol as inducements to execute that document.*fn19 Mr. Clark's declaration was signed on November 4, 2009 in California under penalty of perjury under California law and begins with the statement:

1. I am over the age of 18 years and am presently employed with GENERAL ENVIRONMENTAL MANAGEMENT, INC. A Nevada Corporation ("GEM"). I am the current Chief Financial Officer of GEM, and am familiar with the assets and obligations of GEM and its affiliates.*fn20

Mr. Koziol's declaration was signed on November 5, 2009 in California, also under penalty of perjury under California law, and begins with a similar statement:

1. I am over the age of 18 years and am presently employed with GENERAL ENVIRONMENTAL MANAGEMENT, INC. A Nevada Corporation ("GEM"). I am the current Chief Executive Officer of GEM, and am familiar with the assets and obligations of GEM and its affiliates.*fn21

Both declarations express familiarity with "the assets and obligations of GEM and its affiliates" and contain the following identical language:

2. GEM has executed an Agreement with Samson Tug and Barge Company, Inc. ("Samson"), requiring the payment over time of the sums reflected therein, ("Agreement"). The Agreement includes the release of affiliated GEM companies upon execution thereof.

3. GEM has sufficient assets to assure repayment of the Samson obligation. The released affiliates have less asset value and income generation.

4. I understand that Samson is relying on the veracity of the representations contained herein as an inducement to execute the Agreement.*fn22

On November 23, 2009, GEM Nevada filed a Form 10-Q with the Securities and Exchange Commission for the quarter ending September 30, 2009.*fn23 The Form 10-Q reflects that as of that date GEM Nevada had a total stockholders' deficiency of $13,616,790 and a net loss for the first nine months of 2009 of $12,510,521.*fn24 On
November 25, 2009, GEM Nevada finalized an agreement to sell GEM Delaware and two of its other affiliates to a third party.*fn25 That agreement included a provision that GEM Nevada would fully assume GEM Delaware's obligation to Samson and obtain Samson's release of GEM Delaware.*fn26 The sale of GEM Delaware and its affiliates was completed on February 26, 2010 at a price of $14,000,000.*fn27 GEM Nevada's Form 10-Q dated May 24, 2010 states that the net gain to GEM Nevada included a $765,000 bonus to be paid to senior management.*fn28 By September 20, 2010, GEM Nevada had ceased doing business, according to an SEC filing dated September 20, 2010.*fn29

In the months after the execution of the Settlement Agreement and the sworn declarations of Mr. Clark and Mr. Koziol, GEM Nevada made payments totaling $45,000 to Samson toward the amount due. No payment has been made since March 2010.

On October 25, 2011, Samson filed the Complaint that initiated this action in Anchorage Superior Court, seeking the balance then due of over $600,000, including interest.*fn30 The Complaint alleges that Mr. Clark and Mr. Koziol's November 2009 declarations fraudulently and negligently misrepresented both GEM Nevada's ability to repay the debt owed Samson, and the asset value and income generation potential of released affiliates, including GEM Delaware, so as to induce Samson to enter into the Settlement Agreement with GEM Nevada and release GEM Delaware.*fn31

On December 28, 2011, Mr. Clark filed a Notice of Removal to this court under

28 U.S.C. § 1441, asserting diversity of citizenship and an amount in controversy in excess of $75,000.*fn32 Mr. Clark filed this Motion to Dismiss on January 3, 2012.*fn33 Mr. Koziol has not entered a formal appearance in this action, and default was entered against him on April 18, 2012.*fn34

DISCUSSION

Mr. Clark seeks dismissal of this action based on his assertion that this court lacks personal jurisdiction over both defendants. Alternatively, he asserts that Alaska is the wrong or inconvenient venue for this action, and the case should be transferred to the federal district court in California, or perhaps Washington.

I. Personal Jurisdiction

A federal district court may exercise personal jurisdiction over a non-resident defendant in a diversity action if jurisdiction is proper under the long-arm statute of the forum state and consistent with federal constitutional due process principles.*fn35 Alaska's long-arm statute, AS § 09.05.015, permits the exercise of personal jurisdiction "to the maximum extent permitted by due process under the federal constitution."*fn36 Although the state statute provides several specific grounds for jurisdiction,*fn37 it also contains a catch-all provision.*fn38 Therefore, a court "need not determine whether [a] case fits perfectly" within the statute's enumerated grounds for jurisdiction, if the court "conclude[s] that due process permits the exercise of jurisdiction" over the defendant.*fn39

Thus, "the statutory and constitutional requirements merge into a single due process test,"*fn40 such that an analysis of Mr. Clark's jurisdictional argument under the federal Due Process Clause is dispositive.

The United States Supreme Court has held that "[a] court may subject a defendant to judgment only when the defendant has sufficient contacts with the sovereign 'such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice.'"*fn41 Here, the parties agree that this court does not have general personal jurisdiction over the defendants for any and all disputes. But they disagree whether this court may exercise specific personal jurisdiction over the defendants with respect to this particular case.

In Mavrix Photo, Inc. v. Brand Technologies, Inc., the Ninth Circuit discussed the applicable quantum of proof:

In opposing a defendant's motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is proper. Where, as here, the defendant's motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss. The plaintiff cannot "simply rest on the bare allegations of its complaint," but uncontroverted allegations in the complaint must be taken as true. "[W]e may not assume the truth of allegations in a pleading which are contradicted by affidavit," but we resolve factual disputes in the plaintiff's favor.*fn42

"As a general rule, the exercise of judicial power is not lawful unless the defendant 'purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'"*fn43 Although courts "often use the phrase 'purposeful availment,' in shorthand fashion, to include both purposeful availment and purposeful direction . availment and direction are, in fact, two distinct concepts."*fn44 Purposeful availment is "most often used in suits sounding in contract," while purposeful direction "is most often used in suits sounding in tort."*fn45 As

this case involves allegations of tortious conduct, it is appropriate to use a purposeful direction analysis to analyze whether Alaska has specific personal jurisdiction over the defendants for this particular action.

The Ninth Circuit has developed a three-part test (the "Schwarzenegger test") to determine when a court may, consistent with due process, exercise personal jurisdiction over a defendant with respect to specific alleged tortious conduct:

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the ...


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