Judge Barbara M. Scheper, Case 22STCV32134 2023-02-01 Tentative Ruling

Judge: Barbara M. Scheper, Case: 22STCV32134, Date: 2023-02-01 Tentative Ruling

Case Number: 22STCV32134 Hearing Date: February 1, 2023 Dept: 30

Dept. 30

Calendar No.

Nelson, et. al. vs. Ozne Ventures, LLC, et. al., Case No. 22STCV32134

Tentative Ruling re: Defendant’s Motion to Quash Service of Summons

Specially Appearing Defendant Veena Jetti (Jetti) moves to quash Plaintiffs David Nelson, Tony Lin, and Charles Slack’s (Plaintiffs) service of the summons and complaint on her. The motion is granted.

California courts may exercise jurisdiction over nonresidents “on any basis not inconsistent with the Constitution of this state or of the United States.” (Code Civ. Proc., § 410.10.) Code of Civil Procedure section 410.10 “manifests an intent to exercise the broadest possible jurisdiction, limited only by constitutional considerations.” (Sibley v. Superior Court (1976) 16 Cal.3d 442, 445.) The United States Constitution permits a state to exercise jurisdiction over a nonresident defendant if the defendant has sufficient “minimum contacts” with the forum such that “maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ [Citations.]” (Internat. Shoe Co. v. Washington (1945) 326 U.S. 310, 316.) “The ‘substantial connection’ [citations], between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum state. [Citations.]” (Asahi Metal Industry Co. v. Superior Court (1987) 480 U.S. 102, 112.)

“Personal jurisdiction may be either general or specific. [Citation.] ‘When determining whether specific jurisdiction exists, courts consider the “relationship among the defendant, the forum, and the litigation.” ’ [Citations.] A court may exercise specific jurisdiction over a nonresident defendant only if: (1) “the defendant has purposefully availed himself or herself of forum benefits” [Citation]; (2) the “controversy is related to or ‘arises out of’ [the] defendant's contacts with the forum” [Citations]; and (3) the assertion of personal jurisdiction would comport with “fair play and substantial justice.” ’ ” (Szynalski v. Superior Court (2009) 172 Cal.App.4th 1, 7.)

Plaintiffs’ Complaint asserts claims against Defendant Ozne Ventures, Inc. (Ozne) based on Ozne’s alleged breach of promissory notes executed and delivered to Plaintiffs in March and April 2019. (Comp. ¶¶ 9-16.) Plaintiffs’ sole cause of action against Jetti alleges that Jetti, as President and director of Ozne, wrongfully approved distributions from Ozne to herself and other shareholders, with knowledge that Ozne was insolvent and unable to meet its liabilities. (Comp. ¶ 33.) Jetti was served with the summons and complaint by substituted service on October 26, 2022, at her home in Frisco, Texas.

“Due process permits the exercise of personal jurisdiction over a nonresident defendant in the following four situations:(1) where the defendant is domiciled in the forum state when the lawsuit is commenced [citation]; (2) where the defendant is personally served with process while he or she is physically present in the forum state [citation]; (3) where the defendant consents to jurisdiction [citations]; and (4) where the defendant has sufficient ‘minimum contacts' with the forum state, such that the exercise of jurisdiction would not offend ‘traditional notions of fair play and substantial justice.’” (Muckle v. Superior Court (2002) 102 Cal.App.4th 218, 226.)

It is undisputed here that Jetti is not domiciled in California, was not personally served while physically present in California, and has not consented to jurisdiction. The parties dispute whether Jetti has sufficient contacts with California to support specific jurisdiction.

In order to show that the exercise of specific personal jurisdiction over Jetti is proper, Plaintiffs must establish, by a preponderance of the evidence, that “(1) ‘the defendant has purposefully availed himself or herself of forum benefits’ [Citation]; (2) the ‘controversy is related to or ‘arises out of’ [the] defendant's contacts with the forum’ [Citations]; and (3) the assertion of personal jurisdiction would comport with ‘fair play and substantial justice.’ ” (Szynalski v. Superior Court (2009) 172 Cal.App.4th 1, 7.)

“An act taken by a corporate officer may subject the officer to in personam jurisdiction. The act must be one for which the officer would be personally liable, and the act must in fact create contact between the officer and the forum state. (For example, no personal contact would result from doing nothing more than ratifying an act taken by the corporation or by another corporate officer.) If both requirements are met, the act may be considered in determining if the contacts between the individual and the state are substantial enough as to permit the state to exercise personal jurisdiction over the individual, or whether the exercise of personal jurisdiction over the defendant offends ‘traditional notions of fair play and substantial justice.’ ” (Seagate Technology v. A. J. Kogyo Co. (1990) 219 Cal.App.3d 696, 704.)

“On a motion to quash service of summons, the plaintiff bears the burden of proving by a preponderance of the evidence that all jurisdictional criteria are met. [Citations.] The burden must be met by competent evidence in affidavits and authenticated documents; an unverified complaint may not be considered as supplying the necessary facts.” (Brown v. Garcia (2017) 17 Cal.App.5th 1198, 1203.) “Declarations cannot be mere vague assertions of ultimate facts, but must offer specific evidentiary facts permitting a court to form an independent conclusion on the issue of jurisdiction.” (CenterPoint Energy, Inc. v. Superior Court (2007) 157 Cal.App.4th 1101, 1118.)

Plaintiffs argue that minimum contacts exist here because Jetti served as a director of Ozne, a California corporation, at the time that Plaintiffs made their loans. Plaintiffs represent that Jetti is listed as Chief Financial Officer and as a Director in Ozne’s Statement of Information, and that her address is listed as Ozne’s corporate headquarters in Irvine, California.

Jetti appears as a signatory to Ozne’s Statement of Information filed July 26, 2017, named as Ozne’s President. (Hilton Decl. ¶ 3, Ex. 2.) That Statement of Information does not show any address for Jetti. Jetti is not named in any other filing submitted by Plaintiffs in support of this motion. Consequently, Plaintiffs have failed to present competent evidence supporting their statements that Jetti served as CFO of Ozne and that her address was listed as Ozne’s Irvine headquarters. Plaintiffs have also failed to present competent evidence of any act taken by Jetti as Ozne’s officer that could satisfy the minimum contacts requirement.