Marcia N. Cole, Representative of the Estate of Joseph E. Cole v. Nick J. Mileti
133 F.3d 433
6th Cir.
1998
Check Treatment

*1 scrupulous independent sive investiga- at S.Ct. at 2782. Unfortu and ter.” Id. rejection options they nately, majority’s of the De tion of their to insure that act in the slip op. plan the of partment opinion, of Labor’s best interests the beneficiaries.” expla Leigh, 727 ignores this call for deference without F.2d at 125-26. Because Defen- that, dants did not do even their actions nation. as complaint alleged Plaintiffs’ stated a cause stated, court in previously As the district pursuant of action to ERISA and should not adopt reject instant case declined to or have been dismissed. O’Neill, Otterloo, analysis used Van Grindstaff, Ultimately, proposed may and that above. See Defendants be correct in explained F.Supp. at 550. their assertion that the election for NAC underlying legal nothing issue discussed those Directors was other than a normal election, analysis foregoing cases and the was irrele- “course of affairs” and that “this is actually allege dispute, thinly Plaintiffs had failed to a labor vant because veiled as an so, fiduciary they prevail by “an duties.” Id. ERISA claim.” If can abuse Specifically, properly using appropriate provided at 551. the court ob- tools 1108(c)(3) Procedure, permits served that 29 U.S.C. Federal Rules of Civil such as (directed officers, employer repre- agents, (summary judgment) and other rule 56 and 50 verdict). employee to serve as fiduciaries of Their chosen tool before the sentatives dis- id., court, however, 12(b)(6), plans, benefit and that the mere fact that trict was rule fiduciary allega- two hats” does not cre- that has this court to take all “wear[s] per Bracy Id. at tions ate a se violation of ERISA. Plaintiffs as true. Cf. — U.S. -, -, Gramley, (quoting Kuper, 66 F.3d at Because (“It (1997) both O’Neill and Otterloo concerned L.Ed.2d well be Van petitioner ... something management more than entrench- will be unable to obtain something generally support finding evidence sufficient to the district court ment — case, plus,” judicial id. at actual in the trial of named “entrenchment 550—the bias his court’s decision not to answer the we hold that he has made a sufficient show- district statutory question “good ... construction made sense to establish cause” for discov- case). (habeas allegation ery.”) given its failure to find an fidu- ciary vantage, from that breach. Viewed

conclusion announced both district majority appears correct. This

court and the deception.

manifestation is a

Contrary majority’s reading narrow (which complaint again mirrors that of court), clearly the document av- district COLE, Representative of Marcia N. ers that the individual Defendants used their Cole, Joseph E. Estate power perpetuate voting contractual and Plaintiff-Appellee, NAC, NAR, agreements lease between other businesses the individual Directors By voting owned. J.A. at 23-24. MILETI, Defendant-Appellant. Nick J. shares to entrench themselves and

ESOP’s No. 96-4214. despite goal achieve this self-interested (or risk) of foreseeable result labor unrest Appeals, United States Court of consequences might diminish and other Sixth Circuit. stock, complaint alleg- of NAR value 23, 1997. Submitted Oct. expense es that acted at the Defendants plan participants. This constitutes Decided Jan. “plus” has element. As the Seventh Circuit explained, might possible to “Where it be loyalty, they

question the fiduciaries’ are engage minimum in an inten-

obliged at a

435 *2 (briefed), Kohrman, producer. He was a California ie resident at R. Cohen Joshua OH, Krantz, Cleveland, negotiation for Plain- all relevant to the of this times Jackson & surety agreement. Cole continued to live tiff-Appellee. throughout project. Cleveland the Streamers (briefed), Hilliard, OH, Albert A. Yannon He therefore Ohio resident he when Defendant-Appellant. *3 executed this contract. When “Streamers” early at in failed the box office Mileti MERRITT, WELLFORD, and Before: began negotiating buy with Cole to out his MOORE, Judges. Circuit corporation. February share On J., MERRITT, opinion delivered the of the lawyer Cole’s sent Mileti a written court, MOORE, J., joined. in which integrating agreement. draft their Thereaf- WELLFORD, 438-39), (pp. J. delivered ter, telephone concerning Septem- calls dissenting opinion. separate agreement exchanged ber were be- tween California and Ohio. The record also MERRITT, Judge. Circuit August contains a letter dated ease, ap- diversity Mileti In this negotiations refers to these and to Cole’s judgment peals favor resignation. subsequently signed Mileti Cole, Magistrate, plaintiff arguing that contract California and sent it back to asserting personal jurisdic- improperly after parties executed it. where Cole him, erroneously applied tion over Ohio’s agreed governed that the contract would “be of limitations to a breach of contract and in accordance with the laws of construed governed by action California law. We con- the State of California.” jurisdiction Magistrate clude that had properly applied repay Mileti failed to the loan June over Mileti and Ohio’s stat- contract, required by as so Cole ute of limitations. sporadic payments to

continued make Bank when the Bank him to until sued I. recover the balance. Cole settled that dis- dispute surety agree- arises from a This $310,000. pute Bank with the for He eventu- plaintiff’s ment between defendant Mileti and diversity ally brought this action in the decedent, In Joseph Mileti co- Cole. May Northern District of Ohio on Alt- produced picture a motion with Robert years alleged nine after the breach. Cole’s organized man called “Streamers” and widow, Cole, Marcia was substituted as Distributors, Inc., Streamers plaintiff in this action after Cole died on corporation, purchase to and dis- California 8,1995. January tribute the film. Cole was an initial investor corporation. purchased hun- in the He two rejected court Mileti’s After the district stock, shares of lent dred Streamers person- for lack of motion to dismiss this suit $475,000, corporation and became one of its jurisdiction, parties consented to the al To his invest- officers and directors. fund jurisdiction of a U.S. and filed ment, Equitable Cole secured a loan from summary judg- motions for simultaneous of Baltimore. The film was not a Bank summary Magistrate granted ment. The buy Mileti offered to Cole’s share success. concluding Ms. after judgment to Cole exchange for corporation Cole’s personal jurisdiction finding existed and resignation as an officer and director. Ac- by California’s the action was not barred cordingly September parties on limitations. written four-year statute of On surety agreement at issue executed the a final stipulations, entered his stock and indebt- which Cole transferred against damages judgment Mileti Mileti, agreed who in return edness $988,861.89 prejudgment interest and 16,1985. repay the Bank June $470,728.66. appealed Magis- Mileti directly pursu- to this Court judgment associates in trate’s Mileti and Cole were business 636(c)(3) Cleveland, and Fed.R.Civ.P. 1970s. In Mileti ant to 28 U.S.C. 73(c). where he a mov- moved to California became here, If, trans- as a nonresident defendant

II. by negotiating executing acts business Magis argues that the Mileti first telephone via calls and letters to contract jurisdiction assertion of trate’s resident, pur- then the defendant has unfair therefore fundamentally him was posefully availed himself of the forum per whether To determine unconstitutional. continuing obligation in creating a Ohio. See jurisdiction exists over a nonresident sonal Rudzewicz, Corp. Burger King defendant, courts the law of the 462, 475-76, 479, state, lim subject to the constitutional (1985); Compu 85 L.Ed.2d 528 CompuServe v. Patter process. its of due Serve, 1263-64; American Greet Cir.1996); son, Cohn, ings Corp. v. Matthews, Theunissen v. Cir.1988); In-Flight Corp. Devices v. Van *4 (6th Cir.1991). The below there (6th Air, Inc., 220, 228, Dusen 235 long-arm properly applied the Ohio stat fore Cir.1972). Furthermore, if of the cause ac ute, provides: which contract, is for of that as it is tion personal jurisdic- A exercise court here, naturally then the cause of action arises directly person who acts tion over a from defendant’s activities Ohio. See arising agent, as to a cause of action 1267; CompuServe, In-Flight 89 F.3d at De- person’s: from the vices, Finally, 466 F.2d at 229. when we find (1) Transacting any business in this purposefully that a defendant like Mileti state---- availed himself of the forum and that directly cause of action arose from that con- 2307.382(A)(1). Although § Ohio Rev.Code tact, presume specific we assertion of recently Supreme held this the Ohio Court jurisdiction proper. Compu- personal portion of not reach to the the statute does Serve, 1268; 89 National Bank F.3d First Clause, limits of the Due Process see Gold Co., Louisville v. Brewer Tire 680 J.W. Christiansen, 232, v. 70 St.3d 638 stein (6th Cir.1982). 1123, light F.2d 1126 In (1994) curiam), 541, (per n. 1 our N.E.2d 545 precedent, this we have no doubt that inquiry central is whether Mileti established Magistrate’s jurisdiction assertion of over certain minimum business contacts with Ohio fundamentally Mileti was fair and constitu- so that the exercise of v. tional. See McGee Ins. Life jurisdiction him over did not offend “tradi- Co., 2 355 U.S. 78 S.Ct. play tional notions of fair and substantial (1957); CompuServe, L.Ed.2d 223 89 F.3d at justice.” See International Shoe Co. v. 1268; Devices, 235-36; In-Flight 466 F.2d at Washington, 326 66 S.Ct. U.S. Machine, Southern 401 F.2d at 380. 158, 90 95 L.Ed. has established a Sixth Circuit III. three-part specific test to determine whether A complex more issue arises from jurisdiction exists over a nonresident defen Magistrate improperly Mileti’s claim that the First, dant like must Mileti. defendant applied longer, Ohio’s rather than Califor purposefully privilege himself of the avail shorter, nia’s statute of limitations to this state; conducting activities within the forum dispute, governed contract in sub which is second, the cause of action must arise from stance California law. review this We there; third, activities defendant’s Donovan, de novo. v. issue Holmes consequences the acts of the defendant or (6th Cir.1993). 732, 735 caused must have a sub defendant enough provides fifteen-year stantial the forum connection with Ohio law statute of jurisdiction state to make exercise of limitations for breach of a written contract. its § fundamentally pro fair. 2305.06. Nation Ohio Rev.Code California law Co., Tryg four-year wide Mut. Int’l Ins. Co. Ins. 91 vides statute limitations. Cal. addition, Cir.1996); § F.3d 794 Ma 337. In Southern Civ.Proc.Code Ohio’s Inc., now-repealed previously borrowing chine Co. v. Mohasco Industries statute (6th Cir.1968). 374, 381 sitting apply F.2d courts Foods, Inc., Judy’s if of limitations it was foreign state’s Cir.1989) Ohio’s, (affirming appli- than Ohio Rev.Code. the district court’s shorter Tennessee). 2305.20, legislature got rid of but the Ohio cation of a similar rule There 5, 1965. See provision question on November no that this rule is fair is both Co., Workman, Tire & Rubber Loughan v. Firestone constitutional. Sun Co. v. See Oil (5th Cir.1980) (citing n. 9 729 & F.2d 108 S.Ct. Inc., Lines, (1988) (“[T]he Greyhound 11 Ohio Thigpen v. L.Ed.2d 743 Constitution does (1967)). App.2d N.E.2d 107 application of not bar State’s stat- that in ute of limitations to claims their sub- is well-established governed by stance are and must be the law diversity must sitting courts State.”); Charash, of a different the forum state. Klax choice-of-lawrules of Mfg. Electric on Co. Stentor repeal Accordingly, given the of Ohio’s 85 L.Ed. statute, properly borrowing (1941); College, 14 v. Oberlin Charash applied Ohio’s statute of limitations to allow (6th Cir.1994). not Mileti does contract, Cole’s action for breach of even Rather, proposition. he errone dispute this though California law would have barred the judicial ously the Ohio courts have contends however, argues, same claims. Mileti old borrow ly preserved the effect Ohio’s precedent compels opposite Sixth Circuit statute, notwithstanding fact that the *5 Citing Phelps from v. conclusion. dicta legislature repealed the statute over Ohio (6th McClellan, Cir.1994), 30 F.3d 658 he thirty years ago. Consequently, ar Mileti argues says the law in this Circuit that the gues, choice of law rules still Ohio’s preserved Ohio common law has the Ohio to California’s below borrow borrowing Admittedly, Phelps statute. did it of limitations when conflict shorter statute effect, language contain to that id. at longer ed with statute. Ohio’s language unnecessary was Supreme adopted Court has The Ohio Phelps resolution of because Ohio’s statute (Second) Laws as Restatement of Conflict of shorter, longer, conflicting not than the governing law for Ohio conflicts issues. Furthermore, in this dicta our Court state’s. Steinreich, 299, v. 73 Ohio St.3d 652 Lewis Phelps apparently in overlooked the fact that (1995); Mfg. Morgan v. Biro N.E.2d borrowing legislature repealed its Ohio Inc., Co., 474 N.E.2d 15 Ohio St.3d thirty years ago statute over (1984). a conflict arises be- 288-89 When Supreme replaced had that rule Court limitations, two statutes of tween states’ 142(2) (Second) § of the Restatement with provides: Restatement prop- The decision below Laws. Conflict of if not An action will be maintained it is 142(2). § erly requirements followed by the statute of limitations of the barred forum, though it even would be barred argues Finally, Mileti of limitations of another state. the statute applied Magistrate below should have Cali (Second) of limitations because the Laws fornia’s statute Restatement Conflict of 142(2). 142(2) govern their requires parties chose California law to thus Section precedent provides limitations contract. Sixth Circuit courts to Ohio’s statute of held in In two recent cases we have brought to of contract actions otherwise. clauses incor that contractual choice-of-law even if the action would be time-barred law, procedural porate only not Males v. & substantive another state. See W.E. Gates Associates, of limitations. provisions such as statutes 29 Ohio Misc.2d 504 N.E.2d Com.Pl.1985) 662; Charash, (Ohio (applying Phelps, 30 that the express Absent an statement fifteen-year statute of limitations to a Ohio’s limitations parties another state’s contract action that would have intended breach of statute); apply, procedural law of five-year statute to Virginia’s been barred an action governs time restrictions on Mahalsky v. 461 F.2d Salem Tool cf. (6th Cir.1972) breach, par while the law chosen (holding this rule does credit); their contract. Mackey governs the terms of deny not full faith and v. ties parties’ 662. As the the contract actual Phelps, 30 F.3d at and the course concluded, fifteen-year Ohio’s ... dealing below must be evaluated deter against Mi- mining of limitations allowed this action purposefully whether the defendant contract, though parties leti for breach of established minimum contacts within the govern to its substantive chose California law forum.” Id. at 105 S.Ct. at 2185-86. Further, terms. activity unilateral of those “[t]he relationship who claim some with a non Accordingly, we affirm the satisfy resident defendant cannot the re judgment below. quirement of contact with the forum Helicopteros State.” Nacionales de Co WELLFORD, Judge, dissenting. Circuit lombia, Hall, 408, 417, 104 S.A. v. I the assertion of believe that S.Ct. 80 L.Ed.2d jurisdiction over Mileti offends “traditional (1984).... justice.” play notions of fair and substantial Washington, give plenary International v. 326 We Shoe Co. review the district regarding personal jurisdic 90 L.Ed. 95 court’s decision Patterson, CompuServe, Mileti from moved to California Ohio tion. Inc. v. (6th Cir.1996). correspondence in 1979. Calls and between Cole bears the Mileti in establishing jurisdiction California and Cole Ohio took burden of over Mile- place resulting subject in the con- ti in Id. Greetings Ohio. See also American Cohn, parties agreed tract which Corp. would be con- Cir. strued in with California accordance law. It must “[T]he defendant be amenable plaintiff sought was not until 1994 that the long-arm to suit under the forum stat state’s responsible process hold Mileti for breach of contract requirements ute and the due I.A.A.F., in Ohio. Reynolds Constitution.” Cir.1994), quoted Compu Shoe, the seminal case on Serve, 89 F.3d at 1262. This court must subject personal jurisdiction, involved *6 examine the limits of the statute and due personal jurisdiction an assertion of in Wash- process. ington over a company nationwide shoe allegation company based on the that the majority sets out the tests this court doing business that state. Jurisdiction situations, adopts in they these are usual- foreign corporation doing over a degree some ly applied corporations conducting some entirely of business within a state involves modicum of business the forum state. jurisdictional different considerations than CompuServe involved individual conduct- personal jurisdiction over a nonresident indi- business, Flashpoint Develop- an internet with few vidual contacts within the forum ment, placed Compu- which software on corporation’s state. conducting Even system Serve’s communications in Ohio. The single activity or “isolated items of activities” agreement in CompuServe provided that were not considered to be sufficient to estab- governed, Ohio law and defendant “transmit- personal jurisdiction lish if it maintained no CompuServe.” ted 32 master software files to business, property, agency in the state. CompuServe, dispute at 1261. The F.3d Shoe, 326 U.S. at 66 S.Ct. CompuServe deceptive case involved at 158-59. Tryg Nationwide Mut. Ins. v.Co. actions, practices ongoing trade unlike the — (6th Cir.1996), Int’l Ins. 91 F.3d 790 also single transaction involved herein. There- corporate involved a defendant. Nationwide fore, CompuServe support argu- does not held, among things, other that: reasonably ment that Mileti “should [have] existence of a contract anticipate[d] being [T]he with a citizen haled into court” in Ohio. state, alone, standing the forum (quoting Burger King will not Id. at 1263 Corp. v. personal jurisdiction Rudzewicz, suffice to confer 105 S.Ct. (1985)). foreign Rather, Burger King, defendant. 85 L.Ed.2d 528 Rather, Ohio, U.S. at S.Ct. 2185. I believe Mileti’s contacts after his “prior negotiations contemplated departure, fu- to have been “attenuated.” consequences, ture along Compare Reynolds, with the terms Id. Communications, Inc. v. Man Health (D.C.Cir. COMPANY, Corp., ner TICKET TOLEDO Plaintiff-Appellant, involving ease the issue Each

jurisdiction over a nonresident defendant EXPRESS, INC., ROADWAY facts. must be decided on its own Most Defendant-Appellee. have involved the eases we have examined No. 96-3412. against manufac- tort claims nonresident suppliers, or breach of contract turers or Appeals, United States Court of claims. Circuit. Sixth

Argued June 1997. functions of the minimum The two related 8, Decided Jan. protects a requirement contacts are that it litigating in from the burden of prevents the an inconvenient forum and out, reaching through their

states from

courts, imposed “beyond the limits on sovereigns coequal their status as

them system.”

in a Volks World-Wide Woodson, Corp. v.

wagen 62 L.Ed.2d 490 Greetings, at 1169.

American

This is a ease between two individuals. corporation not involve an Ohio whose

does with nonresidents occasion

activities I

special interests or concerns Ohio. shown

would find that Mileti has not been any connec- plaintiff to have “substantial have

tion” in or with nor that he would “reasonably led to believe that he was

been *7 processes

subjecting himself to the Greetings, jurisdiction.” American

[Ohio]

839 F.2d at 1169. reasons, per- I believe foregoing

For the jurisdiction in resi-

sonal Ohio over California Mileti offends notions of fairness

dent

equity Accordingly, I DIS- this case. because Mileti’s motion to dismiss

SENT granted. Plaintiff has sim-

should have been

ply proof. failed her burden