Judge Douglas W. Stern, Case 20STCV33037 2022-08-18 Tentative Ruling

Judge: Douglas W. Stern, Case: 20STCV33037, Date: 2022-08-18 Tentative Ruling

Please contact Department 52 at SMCDEPT52@lacourt.org and send a copy of the email to all parties, to advise the courtroom staff if parties are submitting on the court’s tentative ruling.
Please provide the Case Name, Case Number, and party.

Case Number: 20STCV33037 Hearing Date: August 18, 2022 Dept: 52

Tentative Ruling:

Defendant Vandana Madkan, MD, PLLC’s Motion to Quash Service of Summons for Lack of Personal Jurisdiction

Defendant Vandana Madkan, MD, PLLC, a Texas limited liability company (VMMP) moves to quash service of summons upon it. “[O]nce a defendant files a motion to quash the burden is on the plaintiff to prove by a preponderance of the evidence the validity of the service and the court’s jurisdiction over the defendant.” (Bolkiah v. Superior Court (1999) 74 Cal.App.4th 984, 991.)

Effective Service of Summons

Plaintiff Olivia McCabe fails to meet her burden of proving valid service of process on defendant VMMP. “ ‘A summons is the process by which a court acquires personal jurisdiction over a defendant in a civil action’ [citation], and a defendant has an absolute right to demand that process be issued against him in a manner prescribed by law.” (Mannesmann DeMag, Ltd. v. Superior Court (1985) 172 Cal.App.3d 1118, 1122 (Mannesmann).)

Code of Civil Procedure section 412.30 provides, “In an action against a corporation …, the copy of the summons that is served shall contain a notice stating in substance: ‘To the person served: You are hereby served in the within action … on behalf of [the corporation] as a person upon whom a copy of the summons and of the complaint may be delivered to effect service on said party.’ ”

Here, the undisputed evidence is that no summons was served on defendant VMMP. VMMP’s agent for service, co-defendant Vandana Madkan, M.D., received the envelope plaintiff sent to effect service, but “no summons was included with the Second Amended Complaint.” (Madkan Decl., ¶ 5.)

Plaintiff does not rebut that evidence. Plaintiff did not provide a copy of the completed summons. Plaintiff’s only evidence in opposition is the declaration of her counsel, who states, “On June 13, 2022, VMMP was served with process through its registered agent, Dr. Madkan, via certified mail return receipt requested.” (Moorhead Decl., ¶ 10.) Plaintiff has no evidence that the envelope sent contained a summons.

Plaintiff therefore did not substantially comply with CCP § 412.30 to effect service on VMMP. In Mannesmann, the court found “complete failure to comply” with CCP § 412.30 (172 Cal.App.3d at at p. 1123) because “the summons was so incomplete on its face as to render it ineffective to impart notice to its recipient” (id. at p. 1124). The undisputed evidence here shows plaintiff did not serve even a partially completed summons on defendant VMMP.

Personal Jurisdiction

Though the court finds plaintiff failed to effect service of summons, the court exercises its discretion to reach the additional issue of personal jurisdiction over defendant VMMP.

“When a nonresident defendant challenges personal jurisdiction the burden shifts to the plaintiff to demonstrate by a preponderance of the evidence that all necessary jurisdictional criteria are met.” (Ziller Electronics Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1232-1233.)

Plaintiff contends the court has personal jurisdiction over VMMP because it is the successor to co-defendant Madkan Dermatology PC, a California corporation doing business as Mosaic Dermatology (MDPC). “Successor liability is a well settled concept in the area of personal jurisdiction determinations. In a case raising liability issues, a California court will have personal jurisdiction over a successor company if (1) the court would have had personal jurisdiction over the predecessor, and (2) the successor company effectively assumed the subject liabilities of the predecessor.” (CenterPoint Energy, Inc. v. Superior Court (2007) 157 Cal.App.4th 1101, 1120 (CenterPoint).) It is undisputed that the court has personal jurisdiction over the purported predecessor, MDPC.

Plaintiff fails to establish VMMP is MDPC’s successor. “[A] successor company has liability for a predecessor’s actions if: (1) the successor expressly or impliedly agrees to assume the subject liabilities … , (2) the transaction amounts to a consolidation or merger of the successor and the predecessor, (3) the successor is a mere continuation of the predecessor, or (4) the transfer of assets to the successor is for the fraudulent purpose of escaping liability for the predecessor’s debts.” (CenterPoint, supra, 157 Cal.App.4th at p. 1120.)

Plaintiff contends MDPC transferred its chief asset—the right to Dr. Madkan’s services as a dermatologist—to VMMP. That is insufficient. Assuming the right to Dr. Madkan’s labor is an asset and was transferred to VMMP, there is no evidence that was done for the fraudulent purpose of escaping MDPC’s liabilities. Rather, Vandana Madkan, M.D. states MDPC ceased operating and she created VMMP because she “made the business and personal decision to permanently move to Texas.” (Madkan Decl., ¶ 2.) Moreover, VMMP “did not purchase any assets from MDPC,” and “MDPC is still in existence to address its liabilities, but it does not conduct any ongoing business.” (Madkan Decl., ¶ 3.)

Plaintiff presents no evidence VMMP agreed to assume MDPC’s liabilities, that the two entities merged, or that VMMP is a mere continuation of the same enterprise.

Plaintiff contends VMMP is liable as a successor because Vandana Madkan is and was the sole owner and shareholder of both it and MDPC, and both are “merely conduits for Dr. Madkan to conduct her business as a dermatologist.” (Opp., p. 10.) Plaintiff relies on an overly broad notion of each entity’s enterprise. MDPC’s enterprise was to treat dermatology patients in the Los Angeles area. (Madkan Decl., ¶ 2.) VMMP “does not run a dermatology practice” and instead “provides dermatology services as an independent contractor for another dermatology practice” in Texas. (Id., ¶ 3.) VMMP “has no California patients, does not have any offices or locations in California and does not conduct any business in California, … does not see any of the MDPC’s patients, and has no affiliation with MDPC.” (Ibid.)

Even if VMMP ran its own dermatology practice, it would not be a mere continuation of the MDPC’s enterprise. Treating different patients in another state over 1,000 miles away is a new and separate enterprise. MDPC’s operation has ceased. VMMP has not continued it.

Jurisdictional Discovery

In her opposition, plaintiff requests leave to permit jurisdictional discovery before the court decides this motion. “A trial court has discretion to continue the hearing on a motion to quash service of summons for lack of personal jurisdiction to allow the plaintiff to conduct discovery on jurisdictional issues.” (Burdick v. Superior Court (2015) 233 Cal.App.4th 8, 30.) A court may deny such a request when, for example, it “could reasonably conclude further discovery would not likely lead to production of evidence establishing jurisdiction.” (Beckman v. Thompson (1992) 4 Cal.App.4th 481, 487.)

The court will consider argument regarding jurisdictional discovery. Plaintiff must explain what evidence she believes she will discover that would make VMMP liable as a successor of MDPC.

Disposition

Defendant Vandana Madkan, MD, PLLC’s motion to quash service of summons is granted. The court hereby quashes service of summons on defendant Vandana Madkan, MD, PLLC.