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Allen & Vellone, P.C. v. Pino

United States District Court, D. Colorado

March 18, 2014

ALLEN & VELLONE, P.C., a Colorado Corporation, and STRAUS & BOIES, LLP, Plaintiffs,
v.
LAURENCE J. PINO, ENVERGENT CORPORATION, and JOHN DOE CORPORATION, Defendants.

ORDER

RAYMOND P. MOORE, District Judge.

This matter is before the Court on Defendant Laurence J. Pino's Motion to Dismiss for Lack of Personal Jurisdiction (ECF No. 10) (the "Motion"). The Motion has been fully briefed, and the parties appeared in a non-evidentiary hearing before this Court on January 16, 2014. (ECF No. 43.) As set forth below, the Court GRANTS the Motion without prejudice to Plaintiffs' right to re-file.[1] Below, the Court sets forth its reasoning.

I. FACTS

The relevant facts, taken in the flight most favorable to Plaintiff from the Amended Complaint, are as follows:

During the relevant time period that is at issue in this lawsuit, Laurence J. Pino acted as the CEO and President of Dynetech Corporation ("Dynetech"). On April 16, 2008, Dynetech and GlobalTec, LLP ("GlobalTec"), executed a class action settlement agreement in Denver, Colorado, which provided for the payment of the class action plaintiffs' attorneys' fees and expenses by GlobalTec and Dynetech, as "secured by the Security Agreements." Plaintiffs herein were the attorneys in the referenced class action to whom payments were owed. Security Agreements were also executed that same day, which granted Plaintiffs a security interest in GlobalTec and Dynetech's "goodwill, contracts, accounts receivable, furniture, fixtures, inventory, equipment, and all other tangible or intangible personal property now owned or hereafter acquired by Debtor and used in connection with its business, and all proceeds and products therefrom." The Security Agreements also provided that "[i]f any of the Collateral shall be sold, then the proceeds of such sale shall become collateral." Dynetech made the payments as per the Settlement Agreements for 9 months, but then defaulted on August 1, 2009, with a remaining balance of $1, 050, 000.00.

The Amended Complaint alleges that "in March of 2009, Defendant Pino, through his control of Dynetech, sold a substantial portion of its property, which was subject to the security agreements, to HBK Investments and Optionetics in exchange for forgiveness of debt and a $3, 000, 000 cash payment." In August of 2009, Dynetech completed the sale of more of Plaintiffs' collateral without notifying Plaintiffs. No further payments were made to Plaintiffs. On October 1, 2009, Dynetech merged with Tellegenix Corporation ("Tellegenix"), and approximately a week later, Tellegenix filed for Chapter 11 bankruptcy. Later, the bankruptcy was converted to Chapter 7 and a trustee was appointed. The Amended Complaint relates that on February 22, 2011:

the Bankruptcy Court approved the sale of Estate property to an insider, Defendant Pino, subject to all liens, claims, encumbrances, and interests... The insider purchasing the assets from the bankruptcy estate was Envergent Corporation, which is a corporation, controlled by its President, Pino. Defendant Pino was also the former President of Tellegenix Corporation, and is thus an insider of the bankruptcy Debtor.

On October 5, 2011, the Trustee filed a Complaint on behalf of the bankruptcy estate against Plaintiffs and others, asserting claims to avoid lien and preferential transfers. In April 2012, the bankruptcy court approved a settlement between the Trustee and Plaintiffs "wherein a settlement sum was paid to the Trustee but the Plaintiffs' liens were allowed and acknowledged as valid, enforceable, and continuing in the property purchased by Defendant Pino through Envergent." The bankruptcy court ultimately held that there was no applicable automatic stay affecting the lien retained by Plaintiffs.

Plaintiffs commenced the instant suit in Colorado state court on June 20, 2013, and Defendant Pino filed a Notice of Removal removing the action to this Court based on diversity. (ECF No. 1.) In the Amended Complaint, Plaintiffs set forth seven claims for relief: enforcement of lien and request to foreclose, civil conspiracy, two counts of fraudulent transfer, conversion, common law fraud, and aiding and abetting fraud. As to Defendant Pino's individual conduct, Plaintiffs specifically allege the following:

• "Defendant Pino caused Dynetech to transfer the Property with actual intent to hinder, delay or defraud its creditors, including Plaintiffs." (Am. Complaint at 6.)
• "Defendant Pino is liable for the acts taken by both Dynetech and Tellegenix as the President of the companies with authority to sell the assets and authority to determine which creditors would be paid." ( Id. )
• "Defendant Pino is liable for the damage suffered by Plaintiffs for his failure to compensate Plaintiffs from the proceeds." ( Id. )
• "Defendant Pino directed Tellegenix to transfer the Collateral and failed to compensate Plaintiffs with the proceeds received from that sale." ( Id. at 7.)
• "By consummating the sale of the Plaintiff's collateral without authorization or payment to Plaintiffs, Defendant Pino exercised ...

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