431 F.Supp.3d 1121
D. Haw.2020Background
- Plaintiffs Greys Avenue Partners, LLC (GAP) and Castle Resorts & Hotels, Inc. (Castle) entered negotiations with New Zealand entity GAIL (owned by Aaron Coupe) to convert a New Zealand office building into a hotel; Defendant Colin Theyers was GAIL’s director and negotiated with Plaintiffs.
- Theyers met Castle/GAP representatives in New Zealand and traveled to Honolulu twice to finalize terms, execute a Heads of Agreement (HOA) and effect a share transfer in Ascent Industries 33 Ltd. (Ascent).
- In Honolulu Theyers allegedly represented the mortgage on the Property was about $14.8M (not $18.7M), promised title could be transferred, promised safeguards for GAP’s $4M contribution and accounting access, and induced GAP/Castle to commit funds and pre-opening services.
- GAP expended about $2.9M and Castle expended/committed over $250,000; Plaintiffs allege misrepresentations, fraud, conversion, securities law violations, and a civil RICO claim.
- Theyers moved to dismiss for lack of personal jurisdiction, improper venue (and forum non conveniens), and failure to state claims; the court denied the motion in full but permitted Plaintiffs leave to seek to file a Second Amended Complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction (specific jurisdiction) | Theyers purposefully directed tortious and securities-related conduct at Hawai‘i: traveled to Hawai‘i, made material misrepresentations to Hawai‘i residents, executed HOA/share transfer, induced reliance and payments | Theyers is a New Zealand resident; contacts insufficient; visits were at Plaintiffs’ invitation and the agreements were NZ-centered | Denied — court finds minimum contacts via purposeful direction and purposeful availment; pendent jurisdiction over related claims |
| Venue / forum non conveniens | Venue proper under 28 U.S.C. §1391(b)(2) because substantial acts/omissions (misrepresentations, executions, reliance) occurred in Hawai‘i; forum clauses are permissive | Venue improper; parties’ contracts contain forum-selection clauses pointing to New Zealand warranting dismissal/transfer | Denied — venue is proper; forum-selection clauses are permissive ("nonexclusive jurisdiction"); defendant failed to show dismissal appropriate under forum non conveniens |
| Failure to plead fraud with particularity (Rule 9(b)) | Plaintiffs say the FAC, exhibits, and forthcoming amendment supply needed detail and will seek leave to amend | Fraud claims insufficiently particular under Rule 9(b) | Denied without prejudice — court declines to dismiss on present record, allows Plaintiffs to move for leave to amend by court-ordered deadline |
| Failure to state RICO / securities claims (Rule 12(b)(6)) | Plaintiffs allege securities violations and civil RICO based on the alleged fraud and misappropriation; seek to amend and add detail | Theyers contends plaintiffs have not alleged a security or requisite RICO elements | Denied for now — court reserves merits review, permits amendment and cautions plaintiffs that deficiencies raised may be considered on future motions |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (establishes minimum contacts test for due process)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment and contacts from long‑term contractual relationships)
- Walden v. Fiore, 571 U.S. 277 (forum contacts must be linked to the defendant’s forum‑related conduct)
- Freestream Aircraft (Bermuda) Ltd. v. Aero Law Group, 905 F.3d 597 (Ninth Circuit: purposeful direction where defendant traveled to forum and committed tortious acts)
- Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (plaintiff bears burden on jurisdiction; resolve factual disputes for plaintiff at dismissal stage)
- Atlantic Marine Constr. Co. v. U.S. Dist. Court for the W. Dist. of Texas, 571 U.S. 49 (forum‑selection clause and forum non conveniens framework)
- Picot v. Weston, 780 F.3d 1206 (purposeful availment analysis)
- CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066 (reasonableness inquiry in specific jurisdiction analysis)
- Paccar Int’l, Inc. v. Commercial Bank of Kuwait, S.A.K., 757 F.2d 1058 (inducement of reliance in forum can satisfy minimum contacts)