Judge Gary Y. Tanaka, Case 19TRCV00370 2023-02-01 Tentative Ruling

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka Wednesday, February 1, 2023

Department B Calendar No. 4

1. ACS Logistics GMBH & Company KG’s Motion to Quash Service of Summons and Cross-Complaint

ACS Logistics GMBH & Company KG’s Motion to Quash Service of Summons and Cross-Complaint is granted.

Stevens Global Logistics, Inc. (“Stevens”) filed its Complaint, in Case Number 19TRCV00370, on April 19, 2019. Stevens alleges the following facts. Stevens is a freight forwarding company which arranges for the transportation of cargo for its customers. Texas Aviation Group, LLC (“Texas”) and Summit Sky Advisory, LLC hired Stevens to arrange for the shipment of aircraft engines from Australia to Serbia. Stevens contacted ACS Logistics GmbH & Co KG (“ACS Logistics”) to arrange for the trucking segment to Serbia. Stevens performed the contract, but Texas and Summit Sky failed to pay Stevens’ invoice of $35,936.93. Stevens alleged causes of action for: (1) Breach of Contract; (2) Open Book Account; (3) Account Stated; and (4) Quantum Meruit.

Texas and Summit Sky deny liability on the grounds that Stevens failed to perform because the cargo was damaged in transit. In addition, Texas denies that it is a party to the contract. Summit Sky filed its own Complaint, in Case No. 20TRCV00199, on February 28, 2020. Summit Sky’s operative First Amended Complaint was filed on July 17, 2020 alleging causes of action for: (1) Breach of Contract; and (2) Negligence.

Cross-Defendant ACS Logistics moves for an order quashing service of the summons and Cross-Complaint of Stevens Global Logistics, Inc. pursuant to Code of Civil Procedures section 418.10(a)(1). Cross-Defendant asserts that it is an Austrian corporation and lacks minimum contacts with California for this Court to exercise personal jurisdiction. Alternatively, Cross-Defendant moves to dismiss the action based on forum non conveniens.

Cross-Complainant has the burden to show that sufficient minimum contacts exist between Cross-Defendant and California to establish personal jurisdiction. See, Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710; See, also, Edmunds v. Superior Court (1994) 24 Cal.App.4th 221, 230-31. Cross-Complainant must meet this burden by a preponderance of the evidence. See, Ziller Elec. Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1232. Cross-Complainant has failed to meet its burden.

A non-resident defendant may be subject to the forum state’s general jurisdiction if the defendant’s contacts are substantial, continuous, and systematic. See, Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445. Plaintiffs must provide competent evidence to establish that Defendant’s connections with California are sufficiently continuous and systematic to impose general jurisdiction. See, Int’l Shoe Co. v. Wash., 326 U.S. 310, 317 (1945).

Here, Cross-Complainant has not submitted sufficient evidence to establish that the Court may exercise general jurisdiction over Cross-Defendant. Cross-Defendant’s connections with California are not sufficiently continuous and systematic to impose general jurisdiction. See, Int’l Shoe Co. v. Wash., 326 U.S. 310, 317 (1945).

Cross-Defendant submitted evidence that it is an Austrian corporation, that it is not registered to do business in California, that it has no agent for service of process in California, that it has no offices or employees in California, and that it does not advertise in California. (Decl., Ulrich Hartwig, ¶¶ 4-9.) Cross-Complainant has not provided competent evidence to demonstrate that general jurisdiction may be imposed against Cross-Defendant. Instead, Cross-Complainant’s evidence focuses on its own specific dealings with Cross-Defendant, as well as speculation that other companies may also have relationships with Cross-Defendant. (Decl., Timothy K. Hewey.) Thus, Cross-Complainant has submitted no competent evidence that Cross-Defendant had continuous and systematic connections with California to impose general jurisdiction.

“When determining whether specific jurisdiction exists, courts consider the relationship among the defendant, the forum, and the litigation. A court may exercise specific 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.” Snowney v. Harrah’s Ent., Inc. (2005) 35 Cal.4th 1054, 1062 (internal citations and quotations omitted).

Merely because a nonresident entered into a contract with a forum resident does not by itself establish “minimum contacts” between the nonresident and forum state. Nor is it enough that the forum was the place of contracting or performance, or that a breach caused financial loss in California. The place where a contract is executed “is of far less importance than where the consequences of performing that contract come to be felt.” Stone v. State of Texas (1999) 76 Cal.App.4th 1043, 1048 (stating that a non-resident who was hired to perform services outside California is not subject to jurisdiction).

Cross-Complainant has not met its burden to establish the exercise of specific jurisdiction over Cross-Defendant. Cross-Complainant has not set forth facts that demonstrate that Cross-Defendant purposefully availed itself of the forum benefits. Finally, Cross-Complainant has not provided facts to show that the exercise of jurisdiction would comport with fair play and substantial justice.

As noted above, Cross-Complainant’s evidence focuses on its transactions with Cross-Defendant allegedly beginning in 2013 which resulted in over 30 payments to Cross-Defendant. (Decl., Hewey, ¶ 10.) However, there is no evidence that these other transactions, let alone the specific transaction at issue, involved Cross-Defendant purposefully availing itself of the benefits of the California forum. The transaction involved a shipment occurring entirely in Central Europe. Merely because Cross-Defendant was contracting with a California entity and that California entity expected payment does not establish specific jurisdiction. Perhaps, in a scenario where Cross-Defendant had agreed to fully accept responsibility for a shipment in which it sold and had been tasked to deliver goods to Cross-Complainant directly to California, an argument could be made that a party had purposefully availed itself of the forum benefits. Luberski, Inc. v. Oleficio F.LLI Amato S.R.L. (2009) 171 Cal.App.4th 409, 419 (stating that by assuming responsibility for local delivery in California, the nonresident seller was deemed to have purposefully availed itself of the benefits of the forum.) However, that is not the situation here. All parties concur that Cross-Defendant was merely tasked with providing shipping services entirely within Europe.

“For a state to assert specific jurisdiction, the defendant must take some act by which [it] purposefully avails itself of the privilege of conducting activities within the forum State. [Citation.] The contacts must be the defendant's own choice and not random, isolated, or fortuitous.” LG Chem, Ltd. v. Superior Court of San Diego County (2022) 80 Cal.App.5th 348, 361 (internal citations and quotations omitted). Here, in the instant action, Cross-Complainant submitted no competent evidence to show that Cross-Defendant purposefully availed itself to the forum benefits.

Finally, Cross-Complainant argues that a specific forum selection clause mandates the imposition of jurisdiction in California. Cross-Complainant states that its quote for services directed Cross-Defendant to its terms and conditions. According to Cross-Complainant, its terms and conditions stated: “To the extent that Federal law does not govern it, this Contract and the tariffs incorporated by reference shall be construed and the performance of the transportation hereunder shall be determined in accordance with the laws of the State in which the shipment is accepted by STEVENS.” (Decl., Hawley, ¶ 9, Ex. 2.) First, the term “law of the State in which shipment is accepted by Stevens,” in the context of this transaction is vague since the shipment services of Cross-Defendant occurred entirely within Europe. Second, Cross-Defendant provides evidence that no contractual agreement was made as to the choice of law provision since its own response to Stevens’ offer incorporated its own terms and conditions which mandated that the laws of Austria would apply to the transaction. (Decl., Thomas Sticht, ¶ 5.)

Therefore, Cross-Defendant’s Motion to Quash Service of Summons and Cross-Complaint is granted.

“Forum non conveniens is an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere.”

Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751. “In determining whether to grant a motion based on forum non conveniens, a court must first determine whether the alternate forum is a “suitable” place for trial. If it is, the next step is to consider the private interests of the litigants and the interests of the public in retaining the action for trial in California. The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses. The public interest factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternate jurisdiction in the litigation.” Id. “An alternative forum is suitable if it has jurisdiction and the action in that forum will not be barred by the statute of limitations.” Guimei v. General Electric Co. (2009) 172 Cal.App.4th 689, 696.

Because the Court has granted Cross-Defendant’s Motion to Quash Service of Summons and Cross-Complaint, the Court declines to rule upon moving party’s alternative request to dismiss based on forum non conveniens.