United States District Court, D. Colorado
JOHN HISLOP, individually and derivatively on behalf of NATION ENERGY INC., DAVID N. SIEGEL, and ROBERT TELLES, as Trustee of DAVID N. SIEGEL FAMILY TRUST 2015, Plaintiff,
PALTAR PETROLEUM LIMITED, an Australian corporation, MARC BRUNER, MICHAEL CAETANO, CARMEN LOTITO, DARREL CAUSBROOK, ROBERT BULJEVIC, ROBERT MADZEJ, BELINDA NISBET, and DOES 1-20, Defendants.
Brooke Jackson United States District Judge.
are two matters before the Court. First, defendants have
filed several motions relating to personal jurisdiction. ECF
Nos. 46, 78, 80. Second, plaintiffs move for an order
requiring payment of service costs on defendants who evaded
service. ECF No. 86. For the reasons stated below, the
motions to dismiss are GRANTED under the doctrine of forum
non conveniens, and the motion for costs is DENIED.
lawsuit was brought by four plaintiffs: (1) John Hislop, a
Canadian citizen residing in England; (2) David Siegel, a
U.S. citizen residing in Florida; (3) the David N. Siegel
Family Trust 2015, a trust organized under Colorado laws; and
(4) Nation Energy, Inc., a Wyoming shell company (Hislop
filed derivatively on behalf of Nation Energy). Complaint,
ECF No. 1 at ¶¶20- 22, 209. There are eight
defendants: (1) Paltar Petroleum Limited, an Australian
corporation; (2) Marc Bruner, a resident of Switzerland; (3)
Michael Caetano, a resident of Canada; (4) Michael Lotito, a
resident of either Colorado (according to plaintiffs) or Utah
(according to defendants); (5) Darrel Causbrook, a resident
of Australia; (6) Robert Buljevic, a resident of Canada; (7)
Robert Madzej, a resident of Canada; and (8) Belinda Nisbet,
a resident of Canada. Plaintiffs also join Does 1-20 as
potential plaintiffs. Id. at ¶¶23-31.
2012, Paltar acquired oil and gas exploration permits issued
by the Northern Territory of Australia but lacked the
necessary funds for the exploration and development of the
permits. Id. at ¶2. So in 2015, Paltar and
Nation Energy agreed to a joint venture where Paltar would
execute the permits, and Nation Energy would provide the
funding. Id. at ¶3. To close the deal, Mr.
Hislop-the previous majority shareholder of Nation
Energy-agreed eventually to become a minority shareholder,
and Paltar would eventually take over as majority shareholder
of Nation Energy. Id. at ¶4. But Nation Energy
was supposed to benefit from the deal as well. In return for
Nation Energy's funding, Nation Energy's wholly-owned
subsidiary, Nation Energy (Australia) Pty Ltd. (“Nation
Australia”), was to earn interest in production
licenses issued to Paltar. Id. at ¶5. These
royalty deals were memorialized in a series of “earning
agreements” between Nation Australia and Paltar.
relationship turned sour when defendants became concerned
about Nation Energy's ability to provide funding for the
venture. Id. at ¶6. Plaintiffs believe the
concern was baseless because all parties understood at the
venture's inception that Nation Energy did not have the
funds to finance Paltar's operation. Id. Also,
plaintiffs claim that Nation Energy raised millions from
investors in 2016, but their fundraising efforts were
disrupted by defendants. Id.
response to the fundraising concerns, plaintiffs allege that
Paltar's chairman, Mr. Bruner, formulated a wrongful
scheme in March 2017 “to strip Nation Energy and Nation
Australia of the earning agreements and defraud Nation
Energy's minority shareholder and investors.”
Id. at ¶7. To execute the scheme, defendants
allegedly planned to declare a fraudulent default by Nation
Australia requiring them to surrender their interests to
Paltar. Id. This scheme was part of a larger plan
for Paltar to free itself of its contractual relationship
with Nation Australia so that Paltar could then enter into a
joint venture with one of Mr. Bruner's companies-Fortem
Resources, Inc. (“Fortem”). Id. Once the
secret scheme was in place, Mr. Bruner and his
co-conspirators fraudulently induced plaintiffs to use
plaintiffs' funds held in their lawyer's COLTAF trust
account to pay Paltar's and Nation Energy's
creditors. Id. at ¶8.
came the alleged wrongful takeover of Nation Energy's and
Nation Australia's boards of directors. From June 2016 to
April 2017, Nation Energy's board consisted of Mssrs.
Hislop, Siegel, and Causbrook. Id. at ¶9. Then
on April 27, 2017 Mr. Bruner unilaterally increased the size
of Nation Energy's board from three to seven and then
stacked the board with his co-conspirators. Id. Two
of those co-conspirators, Mr. Caetano-Fortem's chairman
and CEO at the time, and Mr. Lotito-one of Paltar's
officers, were appointed to the board. Id. (The
complaint does not name the other two alleged
“co-conspirators” that Mr. Bruner appointed to
the newly created directorships.) Once in control of Nation
Energy's board, Mr. Bruner ousted Mr. Siegel as chairman
of the board and Mr. Hislop as president and CEO.
Id. at ¶10. In their place, the board appointed
Mr. Caetano as chairman, president, and CEO; Mr. Lotito as
chief operating officer (“COO”); and Ms. Nisbet
as secretary. Id.
months later, “Bruner's Nation Energy Board”
ousted Siegel, Mssrs. Hislop, and Nation Australia's
then-CEO Andrew Logan from Nation Australia's board.
Id. at ¶11. After the ouster, Mr. Bruner
installed Mr. Caetano, Caetano's associate Mr. Madzej,
and Paltar director Causbrook to Nation Australia's
board; Mr. Caetano became board chair and CEO of Nation
Australia. Id. This same month, Mssrs. Caetano and
Lotito allegedly seized control of the COLTAF trust account
and replaced Mr. Siegel as the account manager. Id.
control of both boards, the conspiracy allegedly came to
life. Mssrs. Bruner, Caetano, Lotito, Causbrook, Nisbet, and
others formulated a deal among Paltar, Fortem, and Nation
Energy. Id. at ¶12. The plan called for Paltar
to issue a default notice to Nation Australia demanding
Nation Australia surrender its interest in the earning
agreements to Paltar. Id. Once surrendered, Paltar
would enter into a joint venture with Fortem to profit on the
Australian exploration permits. Id. If the plan
succeeded, both Nation Australia and Nation Energy would lose
their interests in future Australian petroleum revenue-the
sole purpose of their relationship with Paltar. Id.
2017 Paltar and Nation Energy had already prepared a
settlement agreement, and Paltar and Fortem had begun to form
and document their joint venture. Id. at ¶15.
To further the alleged conspiracy Mr. Bruner caused Paltar to
“declare a fraudulent ‘default' under the
earning agreements.” Paltar's reason for the
default was that Nation Australia failed to make its required
payments due under the earning agreements. Id. In
August 2017 Mr. Bruner's Nation Energy board voted to
approve “(1) the termination of the earning agreements,
(2) the execution of a settlement agreement with Paltar, and
(3) the surrender all of Nation Energy's and Nation
Australia's rights to Paltar”; Hislop and Siegel
objected. Id. at ¶16. Plaintiffs alleged that
defendants concealed from the dissenters the pending deal
between Paltar and Fortem, which created a conflict of
Caetano and Madzej then voted as Nation Australia directors
to approve the settlement with Paltar along with the
surrender and cancellation of the earning agreements.
Id. at ¶17. They executed both settlements and
cancellations causing Nation Energy irreparable harm.
Id. at ¶18.
brought this lawsuit to redress alleged fraud and
racketeering, breaches of fiduciary duties, and wrongful
conduct that cost Nation Energy to lose valuable assets.
Id. at ¶1. Plaintiffs allege six claims for
relief: (1) breach of fiduciary duty against Paltar; (2)
breach of fiduciary duty and violation of Wyoming Business
Corporations Act against the director defendants; (3) aiding
and abetting breach of fiduciary duty against Mr. Bruner; (4)
fraudulent concealment against Mssrs. Paltar, Bruner, Lotito,
and Causbrook; (5) civil RICO claims against all defendants;
and (6) violation of Colorado's Organized Crime Control
Act against all defendants.
STANDARD OF REVIEW
district court has authority to dismiss a case on forum non
conveniens grounds without first determining if it has
personal jurisdiction over the defendants. Archangel
Diamond Corp. Liquidating Tr. v. Lukoil, 812 F.3d 799,
803-04 (10th Cir. 2016) (citing Sinochem Int'l Co.
Ltd. v. Malaysia Int'l Shipping Corp., 549 U.S. 422,
425 (2007) (“[A] court need not resolve whether it has
authority to adjudicate the cause (subject-matter
jurisdiction) or personal jurisdiction over the defendant if
it determines that, in any event, a foreign tribunal is
plainly the more suitable arbiter of the merits of the
case.”)). In this case, I assume without deciding that
plaintiffs have met their burden of showing personal
jurisdiction under Rule 12(b)(2) because I conclude that the
motions to dismiss are more appropriate for resolution under
the doctrine of forum non conveniens.
the doctrine of forum non conveniens, a court “may, in
the exercise of its sound discretion, dismiss the case, even
if jurisdiction and proper venue are established.”
Yavuz v. 61 MM, Ltd., 576 F.3d 1166, 1172 (10th Cir.
2009) (quoting Am. Dredging Co. v. Miller, 510 U.S.
443, 447 (1994) (internal quotation marks omitted)).
“The burden is on the moving party to establish the
need for a forum non conveniens transfer . . .
.” Rivendell Forest Prod., Ltd. v. Canadian Pac.
Ltd., 2 F.3d 990, 993 (10th Cir. 1993). The moving party
typically must overcome the “strong presumption in
favor of hearing the case in the plaintiff's chosen forum
. . . .” Yavuz, 576 F.3d at 1172 (quoting
Gschwind v. Cessna Aircraft Co., 161 F.3d 602, 606
(10th Cir. 1998)). “A foreign plaintiff's choice of
forum, however, warrants less deference.”
Gschwind, 161 F.3d at 606.
are two threshold inquires that must be met before a court
may transfer a case to a foreign country under the doctrine.
Id. First, there must be an adequate and available
alternative forum. Archangel Diamond Corp. Liquidating
Tr. v. Lukoil, 812 F.3d 799, 804 (10th Cir. 2016). The
first requirement is typically met when all defendants
consent to the jurisdiction of the foreign court.
Gschwind, 161 F.3d at 606. Second, foreign law must
be applicable. Id. To answer this step, the district
court must apply the applicable conflict of law principles.
Archangel, 812 F.3d at 804. If there are some claims
governed by foreign law and others governed by domestic law,
the court must determine which claims predominate.
Id. (holding that even when a plaintiff asserts a
RICO claim governed by U.S. law, dismissal under forum non
conveniens was appropriate because Russian law applied to the
vast majority of the underlying disputes).
threshold requirements are satisfied, the district court goes
on to weigh private and public interest factors to determine
whether to dismiss the case. Id. The private
interest factors include:
(1) the relative ease of access to sources of proof; (2)
availability of compulsory process for compelling attendance
of witnesses; (3) cost of obtaining attendance of willing
non-party witnesses; (4) possibility of a view of the
premises, if appropriate; and (5) all other practical
problems that make trial of the case easy, expeditious and
Gschwind, 161 F.3d at 606. For the public interest
factors, courts weigh the following:
(1) administrative difficulties of courts with congested
dockets which can be caused by cases not being filed at their
place of origin; (2) the burden of jury duty on members of a
community with no connection to the litigation; (3) the local
interest in having localized controversies decided at home;
and (4) the appropriateness of having diversity cases tried
in a forum that is familiar with the governing law.
Id. Although the burden remains with the defendant
as the moving party, the burden of pleading the private and
public interest factors is lighter when dealing with a
foreign plaintiff. Gschwind, 161 F.3d at 606.