Judge: Douglas W. Stern, Case: 23STCV09244, Date: 2023-09-20 Tentative Ruling

Case Number: 23STCV09244    Hearing Date: September 20, 2023    Dept: 68

Motion to Quash Service of Summons

Matevosian Enterprises, Inc. vs. Islick Trading, LLC, et al., 23STCV09244

Moving Party: Defendant Islick Trading LLC

Background

            Defendant Islick Trading LLC (Defendant) filed this motion to quash service of summons on June 14, 2023, pursuant to CCP § 418.10. Defendant file the motion on the basis that this Court lacks personal jurisdiction over Defendant. Defendant is a wholesale distributor formed and headquartered in New Jersey. Defendant argues that it lacks sufficient minimum contacts with California for the Court to exercise general jurisdiction over Defendant and that Defendant has not purposefully availed itself of forum benefits for specific jurisdiction to exist.

            Plaintiff argues in its opposition that California courts would have general and specific jurisdiction over Defendant. Plaintiff argues that general jurisdiction exists because Defendant’s contacts with California have been substantial, continuous, and systematic because Defendant has been doing business with Plaintiff for over 5 years and regularly uses California companies and warehouses to move and store its products. Similarly, Plaintiff argues that specific jurisdiction exists because Defendant has purposefully availed itself of the jurisdiction of California courts because it has been doing business with Plaintiff for over 5 years. Plaintiff argues that Defendant has reached out to Plaintiff again and again to solicit sales from Plaintiff.

            Defendant argues in its reply that the contacts listed by Plaintiff in its opposition are not sufficient for jurisdiction to exist. Whether contacts in the forum are continuous and systematic depends on factors such maintenance of an office, presence of employees, use of bank accounts, and the marketing or selling of products in the forum. Defendant argues that the only California-based business that Plaintiff has shown that Defendant does business with is itself. Defendant argues that this would not be sufficient to show minimum contacts because none of the other factors are met to show continuous and systematic contacts. Defendant also argues that it has not purposefully availed itself of the forum’s benefits.

Legal Standard

            CCP § 418.10(a)(1) allows a defendant to serve and file a notice of motion to quash service of summons on the ground of lack of jurisdiction of the court.

Where a nonresident defendant challenges jurisdiction by a motion to quash, the plaintiff bears the burden of establishing by a preponderance of the evidence the factual bases justifying the exercise of jurisdiction. (Viaview, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 216.) To satisfy this burden, a plaintiff must present competent evidence showing that the defendant’s conducted related to the pleaded causes of action is such as to constitute minimum contacts with the forum to justify jurisdiction. (Id. at 217.)

Analysis

            As a preliminary matter, while the basis for Plaintiff’s complaint is a breach of contract, Plaintiff has alleged that the contract is an implied-in-fact contract or an oral contract, so there is no choice of law provision or forum selection clause for the Court to rely upon.

1.      General Jurisdiction

A nonresident defendant is subject to the forum’s general jurisdiction where the defendant’s contacts are substantial, continuous, and systematic. (DVI, Inc. v. Superior Court (2002) 104 Cal.App.4th 1080, 1090.) A court has no general jurisdiction when the company has no offices, employees, bank accounts, or real property in California. (See Cassiar Mining Corp. v. Superior Court (1998) 66 Cal.App.4th 550, 554.)

In this case, Plaintiff has provided no evidence that Defendant has offices, employees, bank accounts, or real property in California. Defendant is a New Jersey corporation headquartered in New Jersey. Other than a few sales over the years to Plaintiff, Defendant does not appear to have contacts that are substantial, continuous, and systematic.

This Court has no general jurisdiction over Defendant.

2.      Specific Jurisdiction

If a nonresident’s contacts are not substantial and systematic, a court may exercise specific jurisdiction over a nonresident defendant only if (i) the defendant has purposefully availed itself of forum benefits by purposefully and voluntarily directing its activities toward the forum, (ii) the controversy is related to or arises out of the defendant’s contacts with the forum, and (iii) the forum’s assertion of personal jurisdiction over the defendant would comport with fair play and substantial justice. (Jensen v. Jensen (2019) 31 Cal.App.5th 682, 686-87.)

In determining whether a defendant has purposefully availed itself of the benefits of the forum state, the relevant inquiry is “the degree to which a foreign corporation interjects itself into the forum state” such that the defendant can “reasonably expect to be haled into court there.” (Felix v. Bomoro Kommanditgesellschaft (1987) 196 Cal.App.3d 106, 115-17.)

A “contract with an out-of-state party does not automatically establish purposeful availment in the other party’s home forum.” (Goehring v. Superior Court (1998) 62 Cal.App.4th 894, 907 (holding that defendants’ execution of agreements were insufficient to establish that defendants purposefully availed themselves of forum benefits). “Relevant factors include prior negotiations, contemplated future consequences, the parties’ course of dealings, and the contract’s choice-of-law provision.” (Id.)

In this case, the only way in which Defendant may have interjected itself into California is by doing business with Plaintiff. Defendant and Plaintiff have maintained contact for the purpose of doing business for over 5 years. However, that is the only evidence that Plaintiff has presented of Defendant’s purposeful availment in California. Further, any contract that the parties might have would not be enough to establish purposeful availment.

There is also no indication that the action arises out of conduct in California because the contract negotiations are alleged to have taken place remotely through WhatsApp and texts. Defendant claims that it does not do any advertising in California or otherwise solicit business in California outside of its contact with Plaintiff.

This Court does not have specific jurisdiction over Defendant.

3.      Conclusion

Because this Court does not have general or specific jurisdiction over Defendant, the Court grants Defendant’s motion to quash services of summons.

Order

            Defendant’s motion to quash service of summons is GRANTED.