State of West Virginia ex rel. Steve Gorlin and the Gorlin Companies, LLC, Defendant Below, Petitioners,
The Honorable Carrie L. Webster, Judge of the Circuit Court of Kanawha County, Robert Scott Long, Stephen B. Farmer, Ralph Lewis Ballard, III, JL Dickinson Trust AAP FBO JKTP, Payne-Gallatin Company, Boone Coal and Timber Co., Spruce Boone Land Co., Andrew A. Payne, III, RL Rooke for William W. Rooke, Bruce Cameron Conway, Bryan Mcshane, and George B. Lucas, Jr., Plaintiffs Below, Respondents.
(Kanawha County No. 18-C-1204)
Steve Gorlin (sometimes referred to as "petitioner
Gorlin") and The Gorlin Companies, LLC (referred to
collectively as "petitioners"), by counsel Richard
D. Jones and Shereen Compton McDaniel, petition this Court to
invoke its original jurisdiction pursuant to Rule 16 of the
West Virginia Rules of Appellate Procedure. Petitioners seek
a writ of prohibition, against respondents, the Honorable
Carrie L. Webster, Judge of the Circuit Court of Kanawha
County, Robert Scott Long, Stephen B. Farmer, Ralph Lewis
Ballard, III, JL Dickinson Trust AAP FBO JKTP, Payne-Gallatin
Company, Boone Coal and Timber Co., Spruce Boone Land Co.,
Andrew A. Payne, III, RL Rooke for William W. Rooke, Bruce
Cameron Conway, Bryan McShane, and George B. Lucas,
Jr.,  by counsel Shawn P. George and Jennie
Ovrom Ferretti, requesting the Court vacate the circuit
court's order denying petitioners' motion to dismiss
the complaint and directing the case be remanded for entry of
an order dismissing it because under the applicable
forum-selection clause, proper venue is in the State of
thorough consideration of the petition for writ of
prohibition, respondents' brief, the parties' oral
arguments, and the appendix record, this Court concludes that
petitioners are entitled to the relief requested and grant a
writ of prohibition. Because we discern no new or substantial
question of law in connection with the petition, a memorandum
decision granting the requested writ is the appropriate
disposition pursuant to Rule 21 of the West Virginia Rules of
action before the Court arises from respondents'
investments in Nano Technology Corporation ("NTC"
or "Nano"), which is a private Samoan (or Cayman
Island) corporation and is in the business of
nanotechnology. NTC has plants and equipment in China that
were managed and operated by two Chinese nationals, who
founded the company. As respondents allege in their
complaint, each of them "purchased the common stock
of Nano as a direct result and in justifiable reliance
on the representations and solicitations by Defendants. Each
of the Plaintiffs held and maintained their investment
due to the continued representations of Defendants after
Plaintiffs' investment." (Emphasis added).
Respondents aver that they collectively invested over $1.9
million in NTC by the purchase of common stock.
to respondents, petitioner Gorlin was the managing member of
The Gorlin Companies and Chairman of the Board of NTC at the
time respondents decided to invest in NTC in 2007.
Petitioners "actively engaged in the solicitation"
of respondents and others to invest in Nano by purchasing
stock in the company. Respondents alleged that the basis for
their investments was petitioners' representations that
they would not sell any share of Nano common stock, or any
right related to it, "unless Plaintiffs had the same
right at the same time on the same terms to sell their
shares[;]" and that petitioner Gorlin "made oral
statements to the effect that Gorlin was prevented,
individually, or in any representative capacity, from selling
shares, options or any interest in any such right, without
Plaintiffs then having the same corresponding right to sell
their interests." Further, petitioner Gorlin allegedly
assured respondents that he would "remain active"
in NTC and continue to oversee and supervise its operations
"for as long as it took for the investment to reap a
return either by purchase by another entity, or by Nano
becoming a publicly traded entity yielding several times any
money invested." Respondents claim these representations
by petitioners played an integral role in respondents'
decision to invest in NTC because they were concerned about
the lack of oversight or control of NTC should they invest in
the company. Respondents, however, apparently did not reduce
all these oral "representations" made by
petitioners to writing.
to respondents' allegations of oral representations made
by petitioners upon which they relied in making their
decisions to invest in NTC, each respondent was given an
Amended and Restated Private Placement Memorandum
("PPM"), which provided information about NTC and
their potential investments. The PPM contained the following
Offers and sales of Shares will be made on our behalf by our
directors and executive officers . . . . The Gorlin
Companies, LLC, a Florida limited liability company
controlled by Steve Gorlin, a principal shareholder and a
director of . . . [NTC] . . . has an agreement with . . .
[NTC] pursuant to which it will receive (i) 5% of the
proceeds of any investment made by an investor it introduces
to . . . [NTC] in this offering, and (ii) a warrant to
purchase, at the same price as the offering price, 5% of the
number of Shares sold to an investor it introduces to . . .
[NTC] in this offering. In addition, our directors and
executive officers will be reimbursed for their reasonable
expenses incurred in this offering.
also contained the following representation:
No person has been authorized to give any information or
to make any representations other than those contained in
this Memorandum, and if given or made, such
information or representations must not be relied upon as
having been authorized by our agents or us. We will give
you the opportunity to ask questions of, and receive answers
from, our representatives concerning the terms and conditions
of this offering and to obtain additional information, to the
extent such information is possessed or can be obtained
without unreasonable effort or expense.
addition to the foregoing language, the Subscription
Agreement that was signed by each respondent provides:
The undersigned acknowledges that the undersigned has been
offered the opportunity to obtain information, to verify the
accuracy of the information received by him, her or it and to
evaluate the merits and risks of this investment and to ask
questions of and receive satisfactory answers concerning the
terms and conditions of this investment. The undersigned
has received and reviewed a copy of the Memorandum, including
all Exhibits thereto, and represents that he, she or it
understands the information set forth therein. The
undersigned has received copies of such documents and
information as he, she or it has deemed necessary in order to
make an informed investment decision with respect to the
investment being made hereby and the Company has made its
officers available to the undersigned to answer questions
concerning the Company and the investment being made hereby.
In making the decision to purchase the Common Stock, the
undersigned has relied and will rely solely upon independent
investigations made by him, her or it. . . .
. . . .
The undersigned has such knowledge and experience in
financial and business matters that he, she or it is capable
of evaluating the merits and risks of an investment in the
to determining the issue presented in the instant case, the
Subscription Agreement also contains the following
(A) THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF FLORIDA WITHOUT REGARD TO ITS CONFLICTS OF LAWS
PRINCIPLES, (B) THE UNDERSIGNED HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY FLORIDA STATE COURT OR
UNITED STATES FEDERAL COURT SITTING IN THE STATE OF FLORIDA,
OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS SUBSCRIPTION AGREEMENT OR ANY AGREEMENT CONTEMPLATED
HEREBY, AND (C) THE UNDERSIGNED HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL
BE HEARD AND DETERMINED IN SUCH FLORIDA STATE OR FEDERAL
COURT. THE UNDERSIGNED FURTHER WAIVES ANY OBJECTION TO
VENUE IN SUCH COURT AND ANY OBJECTION TO AN ACTION OR
PROCEEDING IN SUCH COURT ON THE BASIS OF A NON-CONVENIENT
FORUM. THE UNDERSIGNED FURTHER AGREES THAT ANY ACTION OR
PROCEEDING BROUGHT AGAINST THE COMPANY SHALL BE ...