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HANLEY v. OMARC

May 4, 1998

EDWARD T. HANLEY, et al., Plaintiffs,
v.
OMARC, INC., et al., Defendants.



The opinion of the court was delivered by: ALESIA

MEMORANDUM OPINION AND ORDER

 Before the court is defendants Omarc, Inc. and Allan Meltzer's motion (1) to dismiss plaintiff's case for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a); (2) to transfer venue pursuant to 28 U.S.C. § 1404(a); and (3) to dismiss defendant Allan Meltzer for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). For the reasons that follow, the court (1) denies defendants' motion to dismiss for improper venue; (2) grants defendants' motion to transfer venue; and (3) denies defendants' motion to dismiss for lack of personal jurisdiction.

 I. BACKGROUND

 Defendant Omarc, Inc. ("Omarc") was a New Jersey corporation with its principal place of business in Atlantic City, New Jersey. From 1967 through 1996, Omarc owned and operated a restaurant/bar in Atlantic City. From 1967 through 1978, the restaurant/bar was called "The Lemon Tree." From 1978 through 1995, the restaurant/bar was called "Aubrey's." From 1995 through 1996, the bar was called "Cheetah's." Although the restaurant/bar changed its name, it was always owned and operated by Omarc. Omarc sold its interest in Cheetah's in 1996, the same year in which Omarc was dissolved.

 Omarc's sole business was running the restaurant/bar in Atlantic City. At the restaurant/bar, Omarc employed approximately twenty to twenty-five individuals. Omarc owned no property and had no offices, business locations, facilities, or company agents in Illinois. Omarc's officers never attended any meetings in Illinois which related to the operation of the restaurant/bar. Omarc has never maintained an office, telephone number, or been liable for taxes in Illinois.

 At the time of incorporation, Omarc had three shareholders, Martin Meltzer ("Martin"), Richard Okonow ("Okonow"), and defendant Allan Meltzer ("Meltzer"), who all owned equal shares of the corporation's stock. Martin is a New York resident; Okonow is a Florida resident; and Meltzer is a New Jersey resident. From 1979 through 1996, Meltzer was President of Omarc. His responsibilities included managing Omarc's restaurant/bar in Atlantic City.

 From 1980 through 1990, Omarc entered into certain collective bargaining agreements ("the agreements") with the Hotel Employees Restaurant Employees Unions, AFL-CIO, Locals 491 and 54 ("the Locals"). The Locals are located in New Jersey. The agreements were executed in New Jersey. The agreements required Omarc to make contributions on behalf of certain employees of the restaurant/bar to the Hotel Employees and Restaurant Employees International Union Welfare and Pension Funds ("the Funds"). The Funds are multiemployer plans which are administered in Naperville, Illinois. The contributions to the Funds were drawn on Omarc's funds and paid by checks drafted in New Jersey. The payments were delivered to the Funds on a monthly basis during the periods of January 1, 1980 through December 31, 1983 and January 1, 1992 through December 31, 1993.

 During the mid-1990's, the Locals performed audits of Omarc's business records to determine whether Omarc accurately reported the names of employees who were eligible for contributions under the agreements. All of the audits of Omarc's business records occurred in New Jersey. After conducting the audits, the Locals contacted Meltzer and told him that there were nine employees who were eligible for contributions in 1992 and 1993. Eight of these nine employees reside in either New Jersey or New York.

 Plaintiff Edward Hanley ("Hanley") is a trustee for the Funds. Hanley, along with thirty-three other trustees and the Funds, have filed a two-count complaint against defendants Omarc and Meltzer. Generally, plaintiffs allege that defendants have violated section 515 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1145, and section 301 of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185. This court has subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132.

 Count I of the complaint is against defendant Omarc. Count I alleges that Omarc entered into four different collective bargaining agreements covering the period of January 1, 1980 through August 31, 1993. Under the agreements, Omarc was required to pay employee benefits in the form of monthly contributions to the Funds, to submit monthly reports to the Funds, and to keep accurate records of the employees covered by the agreements. Plaintiffs allege that Omarc breached the agreements by failing to make the required monthly contributions and by omitting and failing to report accurately certain eligible employees for whom monthly contributions were due.

 Count II is against defendant Meltzer and makes the same allegations against Meltzer that Count I makes against Omarc. Count II is pleaded in the alternative to Count I.

 In response to plaintiffs' complaint, defendants Omarc and Meltzer have filed a motion to dismiss or, in the alternative, to transfer venue. Within defendants' motion are three separate motions: (1) a motion to dismiss plaintiff's case for improper venue; (2) a motion to transfer venue; and (3) a motion to dismiss defendant Allan Meltzer for lack of personal jurisdiction. The court addresses each of these motions in turn.

 II. DISCUSSION

 A. Motion to dismiss for improper venue

 Defendants have moved to dismiss this case for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a), arguing that this district is an improper venue because this court lacks personal jurisdiction over either Omarc or Meltzer. Plaintiffs argue that venue is proper in this district because the Funds are administered here.

 ERISA has a special venue provision. 29 U.S.C. § 1132(e)(2). Section 1132(e)(2) provides that venue is proper in the district court (1) where the plan is administered; (2) where the breach took place; (3) where a defendant resides; or ...


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