United States District Court, N.D. Illinois, Eastern Division
VINCENT E. JACKSON, Plaintiff,
N'GENUITY ENTERPRISES, CO. and ALFRED BOWEN, Defendants.
OPINION AND ORDER
JOAN H. LEFKOW, District Judge.
Plaintiff Vincent E. Jackson filed this suit against N'Genuity Enterprises, Co. ("N'Genuity") and Alfred Bowen for breach of fiduciary duty and violations of Arizona state law. Bowen has moved to dismiss under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3). (Dkt. 13.) For the reasons stated below, the motion to dismiss is denied.
I. N'Genuity's Formation and Jackson's 2009 Suit
In April 2001, Jackson and Bowen's wife, Valerie Littlechief, formed N'Genuity, a wholesale food distributor. N'Genuity is an Arizona corporation with its principal place of business in Arizona. (Dkt. 1 ("Compl.") ¶¶ 6, 8.) Littlechief, an Arizona citizen, served as N'Genuity's president and owned 51% of the shares, while Jackson, an Illinois citizen, was its secretary and owned the remaining shares. ( Id. ¶¶ 8-9.) Between 2007 and 2009, Jackson grew suspicious that Littlechief was misappropriating corporate funds and using them to pay personal expenses and to pay family members who were not N'Genuity employees, including her husband and defendant in this suit, Bowen. ( Id. ¶ 1; dkt. 24, Ex. 3 ¶¶ 23-24.) Jackson also suspected that Littlechief and other N'Genuity directors were attempting to dilute his shares. (Compl., Ex. 1 at 56.)
In 2009, Jackson filed case number 09 C 6010 in this court against N'Genuity, Littlechief, Bowen, and Bowen's son Dustin Bowen (an N'Genuity director), among others, for breach of fiduciary duty, violation of the Arizona Business Corporation Act, and civil conspiracy, and other claims ("the 2009 suit"). ( Id. ¶ 1.) Many of the defendants in the 2009 suit, including N'Genuity, filed for bankruptcy protection and Jackson's claims against N'Genuity were tried before a bankruptcy court in Arizona. ( Id. ¶¶ 1, 45.) The bankruptcy court awarded Jackson $500, 000 and litigation expenses. It ordered that Jackson retain 49% interest in the reorganized company and that he be given notice of all N'Genuity meetings. ( Id., Ex. 1 at 102-03.) This court retained jurisdiction over Jackson's claims in the 2009 suit during the pendency of the bankruptcy proceedings, and that suit is still ongoing in this court.
II. Events Giving Rise to Jackson's Current Claims
The Arizona bankruptcy court confirmed N'Genuity's bankruptcy plan in April 2012 and N'Genuity's pre-bankruptcy debts were discharged as provided in the confirmation order. ( Id. ¶ 44.) Jackson alleges that the reorganized N'Genuity, under Bowen's direction,  has continued to misappropriate funds and engage in other nefarious acts. For example, it has paid Bowen and his family members substantial amounts of money, both directly and through companies wholly owned by Bowen or his family members, in an attempt to render itself "equity poor." ( Id. ¶¶ 54-57, 64-66, 70-72, 76, 78-80, 82-84.) This has devalued Jackson's interest in the company. ( Id. ¶¶ 57, 81, 94.) And, to cover up its misconduct, it has refused to produce financial records to Jackson for inspection.
Based on this post-discharge misconduct, Jackson filed a second suit against Bowen and N'Genuity in this court. He asserts a claim for violation of the Arizona Business Corporation Act, § 10-1602, against N'Genuity (Count I), seeks appointment of a receiver for N'Genuity (Count II), asserts a claim for breach of fiduciary duty against Bowen (Count III), and seeks an injunction barring dilution or Jackson's ownership interest in N'Genuity, payments or loans to Bowen and his family members for personal expenses, and the transfer of N'Genuity's assets or funds to any business entity in which Bowen or his family members have an ownership interest (Count IV). Bowen now moves to dismiss the complaint against him on personal jurisdiction and venue grounds.
III. Bowen's Contacts with Illinois
According to Jackson, Bowen has maintained contacts with Illinois by daily communications with Jackson (who works out of his home in Illinois) between 2001 and 2008. (Dkt. 24, Ex. 3 ¶ 11.) He travelled to Illinois to meet with Jackson about N'Genuity in Bolingbrook on November 8, 2008, and participated in the 2009 suit, including attending a hearing on November 29, 2011. (Compl. ¶ 20.) Additionally, Jackson alleges that Bowen traveled to Illinois "on behalf of N'Genuity to attend food shows and corporate meetings." ( Id. ) More generally, Jackson alleges that Bowen has managed N'Genuity over the past few years and has alternately produced or refused to produce financial records to Jackson and has engaged in misrepresentation and misconduct to reduce Jackson's his share of profits.
I. Personal ...