Judge: David A. Hoffer, Case: 30-2019-1117449, Date: 2022-08-29 Tentative Ruling
Before the Court is (1) Motion to Compel Attendance and Production of Documents at Deposition filed by Plaintiff Avalon Funding Corporation (“Plaintiff”) and (2) Motion to Quash Service of Summons filed by Defendants, David Orphey (“Orphey”) and David Gunn (“Gunn”) (collectively, “Moving Defendants”).
Plaintiff’s Motion is MOOT. Moving Defendants’ Motion is DENIED.
Plaintiff’s Motion
Plaintiff’s motion for an order compelling Defendant, Aptim Environmental & Infrastructure, LLC’s (“Aptim”) employees, David Gunn, Mark Matten, Jonathan Hunt and Sonjay Redway, to appear and produce documents at deposition is moot as the four witnesses have appeared for deposition. (Miner Declaration in Support of Opposition, ¶ 2; Reply at 1:28-2:3.)
The Court finds that sanctions are not warranted against either party. (C.C.P. § 2025.450(g)(1).) The correspondence shows that defense counsel was engaging in meet and confer efforts to set a mutually agreeable date. Aptim also provided alternate dates for the depositions in May 2022, but Plaintiff’s counsel was unavailable the entire month. Aptim also indicated that the witnesses could be available in early June. While June dates might not have worked with the then July 18 trial date, once the trial was continued to October 2022, Plaintiff should have continued meet and confer efforts to get the depositions on calendar in June as offered by Aptim. Instead, Plaintiff filed these motions.
Aptim’s request for sanctions is also denied as the motion is not entirely unmeritorious as it did take Aptim over six months to produce the witnesses.
Accordingly, the motion is moot and both party’s requests for sanctions are denied.
Moving Defendants’ Motion
Moving Defendants move for an order quashing service of summons of Plaintiff’s Third Amended Complaint for lack of personal jurisdiction. (CCP §418.10(a)(1).)
The plaintiff bears the burden of proving that a nonresident defendant has sufficient contacts with the forum state to support personal jurisdiction. (Aquila, Inc. v. Superior Court (2007) 148 Cal.App. 4th 556, 570.) The plaintiff must demonstrate by a preponderance of the evidence that all jurisdictional criteria are met. (Ziller Electronics Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1232.) If the plaintiff establishes that the defendant has minimum contacts with the forum state, the burden shifts to the defendant to demonstrate that the exercise of jurisdiction would be unreasonable. (Stone v. Texas (1999) 76 Cal.App.4th 1043, 1048.)
A nonresident defendant may be subject to general jurisdiction if his or her contacts with the forum are substantial, continuous and systematic. (Perkins v. Benguet Mining Co. (1952) 342 U.S. 437, 445.)
A court may exercise specific personal jurisdiction over a nonresident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits; (2) the controversy is related to or arises out of the defendant’s contacts with the forum; and (3) the assertion of personal jurisdiction would comport with fair play and substantial justice. (Bombardier Recreational Products, Inc. v. Dow Chemical Canada ULC (2013) 216 Cal.App.4th 591, 598, citing Vons Companies Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 446-447.) “The United States Supreme Court has described the forum contacts necessary to establish specific jurisdiction as involving variously a nonresident who has ‘purposefully directed’ his or her activities at forum residents…or who has ‘purposefully derived benefit’ from the forum activities…or ‘purposefully avail[ed himself or herself] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” (Vons, supra, 14 Cal.4th at 446).
“‘Purposeful availment’ requires that the defendant ‘have performed some type of affirmative conduct which allows or promotes the transaction of business within the forum state.’” (Goehring v. Superior Court (Bernier) (1998) 62 Cal.App.4th 894, 907.)
As set forth below, the Court finds the evidence is insufficient to support general jurisdiction with respect to Moving Defendants. However, Plaintiff has met its burden of demonstrating that specific personal jurisdiction as to Moving Defendants is proper.
General Jurisdiction
Plaintiff failed to present sufficient evidence showing that the Moving Defendants have substantial, continuous and systematic contacts with California to support general personal jurisdiction. Plaintiff does not dispute, as represented in Moving Defendants’ declarations, that Moving Defendants (1) are not domiciled in California, (2) have not consented to jurisdiction in California, (3) have never owned real property in the state of California, (4) have not conducted business in the state of California, and (5) have never initiated a lawsuit in California.
Moving Defendants are not alleged to have engaged in any other transactions in California aside from signing the Estoppel Agreements. Plaintiff offered no evidence to demonstrate that Moving Defendants have substantial, continuous and systematic contacts with California.
Accordingly, the Court finds that Plaintiff failed to meet its burden of establishing that Moving Defendants have sufficient contacts with California to support the exercise of general jurisdiction over them.
Specific Jurisdiction
However, Plaintiff has demonstrated that Moving Defendants have minimum contacts with California sufficient to support the exercise of specific personal jurisdiction over them. The evidence shows that Moving Defendants, over the course of several months, signed 22 separate Estoppel Agreements relating to millions of dollars’ worth of invoices, which payments were to be made to Plaintiff, a California corporation. (Gunn Decl. ¶ 4; Orphey Decl. ¶ 4; Haldeman Decl. ¶ 6-9.) Moving Defendants do not dispute that they signed the Estoppel Agreements. The Estoppel Agreements contain the amount of the invoice and clearly state that payment on each invoice was to be sent to Plaintiff’s address in California. (Haldeman Decl. ¶ 7; Third Amended Complaint, Ex. B.) Thus, Moving Defendants knew, or reasonably should have expected, that signing the Estoppel Agreements would have a significant effect on a forum resident.
Jurisdiction may be invoked where the actor committed an out-of-state act intending to cause effects in California or reasonably expecting that effects in California would result. (Goehring v. Superior Court (Bernier), supra, 62 Cal.App.4th at 909.)
These agreements were signed purportedly in Moving Defendants’ capacities as employees of Aptim, although the Court notes that Moving Defendants’ declarations in this regard do not appear to be consistent with their declarations previously submitted in support of Aptim’s opposition to Plaintiff’s summary judgment motion, in which they asserted they did not have authority to bind Aptim to the Estoppel Agreements. (See ROA 228, Exs. 2 and 3, ¶ 4.)
As a result of Moving Defendants signing of the Estoppel Agreements and Aptim’s nonpayment of the invoices, Plaintiff, a California corporation, has suffered millions of dollars in loss. (Haldeman Decl. ¶ 9.) The Court finds that, by knowingly signing these 22 Estoppel Agreements, Moving Defendants purposefully directed their activities to a forum resident and performed affirmative conduct which allowed or promoted the transaction of business within the forum state. (See Vons, supra, 14 Cal.4th at 446; Goehring, supra, at 907.) Thus, purposeful availment is shown.
The Court also finds that the controversy at issue is clearly related to or arises out of Moving Defendants’ contacts with the forum. Here, Plaintiff’s claims against Moving Defendants are based solely on the allegations that Moving Defendants signed the subject Estoppel Agreements, which allegedly affirmed the amounts owing on the invoices listed therein. (Third Amended Complaint ¶¶ 14, 29, 42-43, 55.)
Moving Defendants summarily assert that the burden on them to defend themselves in California is significant, but they fail to offer any evidence or reasoned argument in support of this assertion. Thus, Moving Defendants failed to meet their burden of demonstrating that exercise of jurisdiction would be unreasonable. (Stone v. Texas (1999) 76 Cal.App.4th 1043, 1048.)
Furthermore, as noted above, defendants’ position on summary adjudication was that Aptim could not be liable on the estoppel agreements because the individual defendants signed them without authority to do so. The addition of the individual defendants to the complaint followed from the assertion of this defense. Given this defense, it seems unfair to force plaintiff to seek relief only from Aptim. Based on the foregoing, the Court concludes that the assertion of personal jurisdiction over Moving Defendants would comport with traditional notions of fair play and substantial justice.
Accordingly, the motion is denied.
Plaintiff’s and Moving Defendants’ evidentiary objections are OVERRULED.
Plaintiff is ordered to give notice of these rulings.