Judge: Joel L. Lofton, Case: 22AHCV00214, Date: 2022-09-19 Tentative Ruling
Case Number: 22AHCV00214 Hearing Date: September 19, 2022 Dept: X
Tentative Ruling
Judge Joel L. Lofton,
Department X
HEARING DATE: September
19, 2022 TRIAL DATE: No date set.
CASE: 1510 GLEN OAKS
LLC, a California limited liability company, v. JONATHON B. SURAK, an
individual; DAVID M. MARCH, an individual; and DOES 1 through 20, inclusive.
CASE NO.: 22AHCV00214
MOTION
TO QUASH SERVICE OF SUMMONS
MOVING PARTY: Specially Appearing
Defendant Jonathan B. Surak
RESPONDING PARTY: Plaintiff 1510 Glen Oaks LLC
SERVICE: Filed
August 5, 2022
OPPOSITION: Filed
August 12, 2022
REPLY: Filed September 12, 2022
RELIEF
REQUESTED
Defendant Jonathan B.
Surak moves to quash the service of summons based on this Court’s lack of
jurisdiction over a non-resident defendant.
BACKGROUND
This case arises out of Plaintiff
1510 Glen Oaks LLC’s (“Plaintiff”) claim that Defendants Jonathan B. Surak (“Surak”
or “Defendant”) and David M. March (“March”) failed to pay the Guaranties they
executed for the underlying loan. Plaintiff alleges that the original loan was
between Loan Funder, LLC Series 6237 (“Lender”) and Troubadours Enterprises,
Inc. (“Borrower”). Plaintiff alleges the loan was secured by a Deed of Trust
encumbering real property located at 1510 Glen Oaks Boulevard, Pasadena.
Plaintiff alleges that Surak and March executed a Guaranty for the loan.
Plaintiff alleges that Lender assigned its interest in the loan to Investor
Funding Capital, LLC, which assigned its interest to Plaintiff.
Plaintiff alleges $278,612.34 is
still due under the loan, it incurred $18,079.56 in attorney’s fees, and it
incurred $56,227.29 in other costs and fees. Plaintiff filed this complaint on
April 13, 2022, alleging one cause of action for breach of written guaranty.
TENTATIVE RULING
Defendant’s
motion to quash is granted.
LEGAL STANDARD
“A defendant, on or before the last
day of his or her time to plead or within any further time that the court may
for good cause allow, may serve and file a notice of motion for one or more of
the following purposes: [¶] (1) To
quash service of summons on the ground of lack of jurisdiction of the court
over him or her.” (Code Civ. Proc. section 418.10, subd. (a).) “[W]hen jurisdiction is challenged by a nonresident
defendant, the burden of proof is upon the plaintiff to demonstrate that
‘minimum contacts’ exist between defendant and the forum state to justify
imposition of personal jurisdiction.” (Mihlon v. Superior Court (1985)
169 Cal.App.3d 703, 710.) “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, 1232-33.)
“ ‘Jurisdictional
facts must be proved by admissible evidence. This generally requires
declarations by competent witnesses. A properly verified complaint
may be treated as a declaration for this purpose.’ ” (Buskirk
v. Buskirk (2020) 53 Cal.App.5th 523, 535.)
DISCUSSION
Jurisdiction Overview
Defendant asserts that the motion to
quash should be granted because the Court does not have jurisdiction over him. Defendant
argues that neither general nor specific jurisdiction exists for a California
court to have personal jurisdiction over him.
“A court of this
state may exercise jurisdiction on any basis not inconsistent with the
Constitution of this state or of the United States.” (Code Civ. Proc. section
410.10.) “Jurisdiction is proper if a defendant has minimum contacts with
California such that a suit here does not offend traditional notions of fair
play and substantial justice.” (Bader v. Avon Products, Inc. (2020) 55
Cal.App.5th 186, 193.) “Personal jurisdiction can be general (all-purpose) or
specific (case-linked). [citation.] A
court has general jurisdiction over defendants who are at home in the court's
forum; general jurisdiction allows a court to hear any claim against a
defendant, regardless of where the underlying events occurred. [citation.] In
contrast, specific jurisdiction allows a court to adjudicate only those
disputes relating to the defendant's contact with the forum. [citation.]” (Ibid.)
General
Jurisdiction
Defendant asserts
that Plaintiff is unable to establish general jurisdiction.
“For an
individual, the paradigm forum for the exercise of general jurisdiction is the
individual's domicile; for a corporation, it is an equivalent place, one in
which the corporation is fairly regarded as at home.” (Goodyear Dunlop
Tires Operations, S.A. v. Brown (2011) 564 U.S. 915, 924.)
“A nonresident defendant may be
subject to the general jurisdiction of the
forum if his or her contacts in the forum state are ‘substantial ... continuous
and systematic.’ [citation.]” (Vons Companies, Inc. v. Seabest Foods, Inc. (1996)
14 Cal.4th 434, 445-46.) “While minimum contacts suffice for specific personal
jurisdiction, ‘the standard for general jurisdiction is considerably more
stringent.’ ” (Boaz v. Boyle & Co. (1995) 40 Cal.App.4th 700,
717.) “The ‘standard for establishing general jurisdiction is “fairly high,”
[citation], and requires that the defendant's contacts be
of the sort that approximate physical presence.’ ” (Elkman v. National States
Ins. Co. (2009) 173 Cal.App.4th 1305, 1315.)
Defendant
provides he is a resident of the State of New Jersey and employed as a police
officer with the Moonachie Police Department. (Surak Decl. ¶
3.) He asserts that he does not own real property in California, has no bank
accounts in California, and maintains no residence or mailing address in
California. (Id. ¶ 5.) He provides he has visited California
approximately once or twice in the past five years for personal vacation. (Ibid.) Defendant concedes that he works for RCD
Capital, Inc. which is headquartered in California, but Defendant provides he
works exclusively from its New York office and deals with its east coast
clients. (Id. ¶ 8.)
Plaintiff does
not address the issue of general jurisdiction in its opposition. Thus, because Plaintiff
bears the “initial burden of demonstrating facts justifying the exercise of
jurisdiction” (Vons Companies, Inc., supra, 14 Cal.4th at p. 449) and
has failed to do so, no general jurisdiction exists.
Specific
Jurisdiction
The next issue is
whether specific jurisdiction exists to justify exercising jurisdiction over
Defendant.
“Specific jurisdiction is very different. In
order for a state court to exercise specific jurisdiction, ‘the suit ‘ must ‘aris[e] out of or relat[e] to the
defendant's contacts with the forum.’ (Bristol-Myers
Squibb Co. v. Superior Court of California, San Francisco County (2017) 137 S.Ct. 1773, 1780.) “In other words, there must be “an affiliation between
the forum and the underlying controversy, principally, [an] activity or an
occurrence that takes place in the forum State and is therefore subject to the
State's regulation.” (Ibid.)
“Specific jurisdiction exists where (1) the
defendant has purposefully availed itself of a forum's benefits; (2) the
controversy relates to or arises out of the defendant's contacts with the
forum; and (3) the exercise of jurisdiction comports with fair play and
substantial justice.” (Bader v. Avon Products, Inc., supra, 55
Cal.App.5th at p. 193.)
Plaintiff
asserts that specific jurisdiction exists in the present case based on a
variety of connections Defendant purportedly has with California. Plaintiff
asserts Defendant is the registered agent for service of process of RCD Fund, LLC,
a California limited liability company, and Lee and Surak Investments, LLC, a
California limited liability company. Plaintiff also asserts that Defendant is
the Vice President of RCD Capital, Inc., a California Corporation, and of
Troubadours Enterprises, Inc. (“Troubadours”), the borrower in the present
case.
“[P]urposeful
availment occurs where a nonresident defendant ‘ “purposefully direct[s]” [its]
activities at residents of the forum’ [citation], ‘ “purposefully derive[s]
benefit” from’ its activities in the forum [citation], ‘create[s] a
“substantial connection” with the forum’ [citation], ‘ “deliberately” has
engaged in significant activities within’ the forum [citation], or ‘has created
“continuing obligations” between [itself] and residents of the forum’ [citation].”
(Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th
543, 554.)
Defendant
asserts that prior to signing the loan document he had, and currently still has,
no ownership interest in Troubadours and no decision-making capacity for
Troubadours. (Surak Reply Decl. ¶ 8.) Defendant provides that he signed the Guaranty in New York.
(Surak Decl. ¶ 9.) He further provides that he was listed as Vice President of
Troubadours based on the original lender’s requirements. (Surak Reply Decl. ¶
15.) He states that he has never visited the subject property. (Id. ¶
9.) He states that the project was for March to renovate and sell the subject
property. (Id. ¶ 10.) Defendant provides that he was not going to
receive any profit or proceeds and was not involved in the project at all. (Ibid.)
Defendant’s
representation that he was Vice President of Troubadours, which was purportedly
made while he was in New York, is insufficient by itself to establish that
Defendant purposefully availed himself of California’s benefit. Even in the
context of Defendant’s other business associations in California, Defendant
repeatedly asserts that he works solely out of the New York offices and with
east coast clients. (Surak Reply Decl. ¶ 4-7.) The mere fact that Defendant is connected with California
entities is not enough to establish a “substantial connection” or even that he purposefully
directs his activities at residents of California. Plaintiff has not
established that Defendant has purposefully availed himself of the benefit of
doing business in California.
Further, Plaintiff has not demonstrated that
Defendant engaged in any activity relating to the subject property in California
other than signing a guaranty on the loan. “[J]urisdiction depends upon the
quality and nature of his activity in the forum in relation to the particular cause of
action. In such a situation, the cause of action must arise out of an act
done or transaction consummated in the forum”. (Vons Companies, Inc, supra, 14
Casl.4th 434, 448.) Here, while Plaintiff is able to establish that the Subject
Property is within California, it has not established any activity connecting
Defendant to California. Defendant did not sign the guaranty in California, nor
did he visit California to inspect or work on the Subject Property. Plaintiff
is unable to show that the controversy arises out of Defendant’s contact with
California.
Plaintiff has thus failed to establish that specific jurisdiction
exists in the present case.
Forum Non Conveniens
Defendant also requests that
the court invoke the doctrine of forum non conveniens and dismiss the present
action to be tried in New York.
“ ‘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.’ ” (Investors Equity Life Holding Co. v. Schmidt (2011)
195 Cal.App.4th 1519, 1528.)
However, because
Plaintiff has failed to establish personal jurisdiction over Defendant, the
issue of whether forum non conveniens applies is moot.
CONCLUSION
Defendant’s
motion to quash is granted.
Moving Party
to give notice.
Dated: September 19,
2022 ___________________________________
Joel
L. Lofton
Judge
of the Superior Court
Parties who intend to submit on this tentative must send an email to the court
indicating their
intention to submit.
Parties intending to appear are strongly encouraged to appear remotely. alhdeptx@lacourt.org