United States District Court, D. Colorado
ORDER ON MOTION TO DISMISS
Michael E. Hegarty, United States Magistrate Judge.
the Court is Defendants Jonathan White, Matthew Scarlett, and
WJSM Enterprises, Inc.'s [d/b/a Alcohol by Volume, Inc.
(“ABV”)] Motion to Dismiss for Lack of Personal
Jurisdiction [filed November 19, 2018; ECF No. 16].
The matter is fully briefed, and the Court finds oral
argument would not materially assist the Court in its
adjudication of the motion. For the reasons that follow, the
Court grants the motion to dismiss Plaintiff's claims
WTI Partners (“WTI”), initiated this action on
August 31, 2018, then filed the operative Amended Complaint
against Defendants Gregory Ahn (“Ahn”), Jonathan
White (“White”), Matthew Scarlett
(“Scarlett”), Cult of 8, Inc.
(“CO8”), and Alcohol by Volume, Inc.
(“ABV”), alleging claims for breach of contract,
breach of fiduciary duty, unjust enrichment, fraud, and civil
conspiracy, and seeking a declaration as to its interests in
the entity Defendants and an accounting as to the royalties
and proceeds allegedly owed to WTI, which claims to have had
a purported equity share in CO8 and/or ABV. Am. Compl., ECF
White, and ABV (collectively, the “ABV
Defendants”) filed the present motion on November 19,
2018, arguing that WTI fails to demonstrate the Court's
personal jurisdiction over them because they are not
residents of nor have any financial or other contacts with
Colorado. Further, the ABV Defendants assert that although
Scarlett and White visited Colorado in 2015 to meet with
certain WTI officials, these meetings did not relate to any
loans or other financial matters concerning CO8 and/or ABV
but, rather, involved discussions with WTI partner, Robert
Niemeyer, regarding the creation of a new venture and/or
Scarlett's and White's concerns about potential
improper reporting by Ahn to WTI.
counters that the ABV Defendants' contacts with Colorado
are “actually substantial and directly connected to
this dispute.” Resp. 2. WTI contends that Scarlett and
White made several multi-day visits to Colorado to meet with
WTI and discuss business operations and financial records of
the enterprise at issue here, primarily stayed overnight at
Niemeyer's residence in Boulder, and corresponded with
WTI via telephone and email while sending various company
documents and financial reports to WTI in Colorado. WTI
asserts that it was during, and as a result of, these
visits/communications that it suffered the harms set forth in
the operative pleading. It also argues that the ABV
Defendants' activities were “inextricably
intertwined” with those of Ahn and CO8 and, thus, if
jurisdiction is proper over the latter Defendants, it should
be proper over the former.
Defendants reply that emails among Scarlett, White, and
Niemeyer in late 2015 reflect that Scarlett and White knew
nothing about Ahn's financial reporting to WTI until that
point and reported their suspicions at that time, and that
the bulk of communications with WTI involved the creation of
a new enterprise in which Niemeyer agreed to partner with
Scarlett and White. In other words, the ABV Defendants
contend that their few contacts with Colorado, particularly
with WTI, did not involve activities from which WTI claims it
Statement of Facts
following are factual allegations made by WTI in its
Complaint and offered by the parties for jurisdictional
is a Colorado general partnership whose partners are all
residents of and citizens of Colorado. WTI provides
investment funds and business counseling and makes personal
connections for other ventures throughout the United States
Steven Signer is currently the managing partner of WTI and
Robert Niemeyer (“Niemeyer”) is a majority
is a Nevada corporation with its principal place of business
located in Carmel, California.
Scarlett is an individual residing in and a citizen of
White is an individual residing in and a citizen of Arizona.
2010, at Ahn's request, WTI provided seed funding for
CO8, a seller and distributor of wine, in return for equity
ownership in CO8 and repayment of its investment with
Between 2010 and 2013, WTI invested $628, 500.00 in CO8. ECF
No. 7, ¶ 24. CO8 paid $270, 300.00 in interest on this
amount, but nothing toward the principal. Id. ¶
late 2014, CO8 and WTI agreed to amend the terms of their
2010 repayment agreement to provide for payment of royalties
to WTI on Alias-branded wines sold by CO8 (the “Royalty
Terms”). Id. ¶¶ 37-39. WTI was
induced to amend the agreement based on withheld sales and
revenue information about CO8's other wine brands.
Id. ¶ 41.
White, and Scarlett traveled to Colorado in the second half
of 2011 to meet with WTI representatives. At that time, Ahn,
Scarlett, and White were employees of Cannonball Wine
Company, and the purpose of the meeting was to discuss
Cannonball's sales team and wine distribution. ECF No.
16-1, ¶ 3; ECF No. 21, ¶ 3.
early 2012, Scarlett and White formed ABV.
or about the same time, Scarlett and White joined with Ahn to
create an enterprise between CO8 and ABV pursuant to an Equal
Interest Agreement in which each individual would have
one-third interest in the enterprise. ECF No. 30-4,
¶¶ 10-11; ECF No. 30-5, ¶¶ 24-26.
Ahn, White, and Scarlett traveled to Colorado from January 30
to February 1, 2012 to meet with Signer and Niemeyer to
discuss a “new venture.” Ahn introduced White and
Scarlett to Signer as “individuals responsible for
sales at ¶ 8.” ECF No. 30-1, ¶ 6. Mr. Signer
met with the same individuals on at least one other occasion
during that period to discuss WTI's potential investment
in the new venture. Id. ¶ 7.
Thereafter, ABV and CO8 operated as though they were part of
one enterprise, with CO8 performing obligations of ABV and
paying debts of ABV. ECF No. 30-4, ¶ 15.
transferred trademarks, brands, labels, and equity to ABV for
no consideration, spent millions of dollars building and
protecting ABV's trademarks, and took out millions of
dollars in debt for the mutual, ...