Judge: Armen Tamzarian, Case: 22STCV06022, Date: 2023-03-27 Tentative Ruling

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Case Number: 22STCV06022    Hearing Date: March 27, 2023    Dept: 52

Defendant People of the State of California’s Motion to Dismiss for Lack of Subject Matter Jurisdiction

Defendant The People of the State of California, acting by and through the Department of Transportation, move to dismiss this action by plaintiffs Scott Miller and Melissa Miller for lack of subject matter jurisdiction.

Requests for Judicial Notice

            Defendant requests judicial notice of four documents filed in a bankruptcy proceeding, In re: Melissa Mosich Miller (Case No.1:10-bk-19870-MT).  Plaintiffs request judicial notice of three more documents filed in that proceeding.  The documents are subject to judicial notice as court records.  (Evid. Code, § 452(d).)  All requests for judicial notice are granted.

Subject Matter Jurisdiction

            In this action, plaintiffs allege defendant breached a 2015 settlement agreement between the parties.  Defendant contends that, pursuant to that agreement and to orders by the bankruptcy court, this court lacks subject matter jurisdiction.  The court rejects this argument.

            The bankruptcy court’s order retaining jurisdiction is similar to an order by the superior court retaining jurisdiction to enforce a settlement pursuant to Code of Civil Procedure section 664.6.  It is not a forum selection clause.

            Even assuming the parties entered into a forum selection clause, this court does not lack subject matter jurisdiction due to the parties’ settlement agreement.  “The issues relating to a [contractual] forum selection clause are distinct from the questions of subject matter jurisdiction.  The existence of a forum selection clause does not mean that another forum lacks subject matter jurisdiction.”  (Miller-Leigh LLC v. Henson (2007) 152 Cal.App.4th 1143, 1149; accord Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1678.)  Defendant provides no authority that the parties’ contract can deprive this court of subject matter jurisdiction.  Defendant’s memorandum of points and authorities cites no authority other than cases on subject matter jurisdiction in general.  (Memo, p. 2.) 

Even a mandatory “forum selection clause does not ‘deprive’ the Los Angeles Superior Court of jurisdiction.”  (Korman v. Princess Cruise Lines, Ltd. (2019) 32 Cal.App.5th 206, 222.)  “ ‘[T]he parties may not deprive courts of their jurisdiction over causes by private agreement,’ ” but “ ‘courts possess discretion to decline to exercise jurisdiction in recognition of the parties’ free and voluntary choice of a different forum.’ ”  (Id. at p. 221, quoting Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 495.)  The Los Angeles Superior Court has subject matter jurisdiction over this action.

Defendant’s supporting memorandum does not argue the bankruptcy court has exclusive jurisdiction over this action.  In its reply, defendant does not address the authority on exclusive jurisdiction or contractual forum selection clauses.  It addresses this issue only by arguing, “[T]he bankruptcy court has ‘exclusive jurisdiction’ over the Stipulation for Dismissal” based on its order of dismissal.  (Reply, p. 3.)  The court rejects this argument.  The bankruptcy court’s order dismissing the proceeding pursuant to the stipulation for dismissal provides, “This Court shall retain exclusive jurisdiction over the subject matter of the Stipulation to resolve any dispute in connection with the claims, rights, and duties specified thereunder.”  (Plaintiffs’ RJN, Ex. C, ¶ 5.) 

This action for breach of the 2015 settlement agreement between plaintiffs and the State of California is unrelated to the stipulation to dismiss the bankruptcy proceeding.  This case is not a dispute in connection with the claims, rights, and duties specified in the stipulation.  Defendant is not a party to the stipulation.  The stipulation is between plaintiffs and their secured lender, JPMorgan Chase Bank.  (Id., pp 1-2.)  The gravamen of the stipulation was to resolve disputes between debtor Melissa Miller, JPMorgan Chase Bank, and the United States Trustee.  (Plaintiffs’ RJN, Ex. A.)  The bankruptcy court’s order stating it has exclusive jurisdiction over the stipulation does not give it exclusive jurisdiction over this action.

Disposition

Defendant The People of the State of California, acting by and through the Department of Transportation’s motion to dismiss for lack of subject matter jurisdiction is denied.