Judge John C. Gastelum, Case 21-01186369 2022-08-30 Tentative Ruling

Judge: John C. Gastelum, Case: 21-01186369, Date: 2022-08-30 Tentative Ruling

(1-3) Motions to Compel Further Responses to Special Irogs

Tentative Ruling: (1) Plaintiff Adam Kidan’s Motion to Compel Further Responses to Form Interrogatories, Set No. One, as to Defendant Madison Resource Funding (“MADISON”) is DENIED, in its entirety, as follows.

Plaintiff seeks to compel MADISON to provide further responses, without objections, to Special Interrogatory Nos. 1, 2, and 5 through 8.

The Court finds these interrogatories are unrelated to the issue of personal jurisdiction as to TIERNEY and CHIPMAN. MADISON has not moved to quash service based on lack of personal jurisdiction.

Anglo Irish Bank Corp., PLC v. Superior Court (2008) 165 Cal.App.4th 969, 983 relied upon and cited by Plaintiff simply states: “In our view, reliance on state substantive law of agency and alter ego to determine the constitutional limits of specific personal jurisdiction is unnecessary and is an imprecise substitute for the appropriate jurisdictional question. The proper jurisdictional question is not whether the defendant can be liable for the acts of another person or entity under state substantive law, but whether the defendant has purposefully directed its activities at the forum state by causing a separate person or entity to engage in forum contacts. That constitutional question does not turn on the specific state law requirements of alter ego or agency, although the inquiry may be similar in some circumstances.” (Id.)

Questions regarding personal jurisdiction must be limited to TIERNEY and CHIPMAN’s activities in the state of California. Whether or not MADISON owns property in California or holds an interest in business operations in California is not relevant to whether TIERNEY and CHIPMAN have sufficient contacts in California. MADISON’s meetings; MADISON, CHARTWELL and COAST’s managers and officers, COAST’s employees, and bank accounts of MADISON, COAST, and CHARTWELL are also irrelevant to whether or not TIERNEY and CHIPMAN purposefully directed their activities to California.

The Court previously granted CHIPMAN and TIERNEY’s request for protective order and stated that any matters concerning “the general corporate affairs, finances and any other proprietary business information, and internal communications of MADISON, CHARTWELL, and COAST TO COAST” are not to be inquired into. (See 8-9-22 M.O.)

Moving Party is to give notice.

(2) Plaintiff Adam Kidan’s Motion to Compel Further Responses to Form Interrogatories, Set No. One, as to Defendant Richard Chipman (“CHIPMAN”) is DENIED, in its entirety, as follows.

Plaintiff seeks to compel CHIPMAN to provide further responses, without objections, to Special Interrogatory No. 5.

This interrogatory is overly broad as it seeks every company from 2015 to the present that he has served as a manager, officer or director. The issue of personal jurisdiction is limited to his contacts with California only and this request is not limited to California companies. Further, even if CHIPMAN serves as manager, officer, or director of California companies, this is not relevant to whether there is specific jurisdiction over CHIPMAN as the inquiry is limited to his contacts with California as to the allegations in this action only.

The specific actions that Plaintiff alleges on the part of Tierney and Chipman as to their breach of fiduciary duties as directors of CHARTWELL are as follows: (1) Tierney and Chipman seized control of, raided, and mismanaged a New York corporation with a principal place of business in Pennsylvania (i.e., Chartwell) for the benefit of a New Hampshire LLC, Madison; (2) in 2017— before Kidan moved to California—Tierney and Chipman allegedly began threatening to withdraw funding from Chartwell under the Master Purchase Agreement; (3) in 2018—before Kidan moved to California—Tierney and Chipman had a meeting with Kidan in New Hampshire where they allegedly reiterated their threats to withdraw funding from Chartwell; (4) Tierney and Chipman allegedly encouraged Codefendant W. Holmes Lilley to hold himself out as the owner of Chartwell and pursue a buyout of Chartwell; (5) after the Option Agreement was negotiated and consummated on the east coast, Chipman and Tierney joined the board of Chartwell and Chipman assumed the day-to-day operations of Chartwell; and (6) after the Option Agreement was finalized, Chipman and Tierney allegedly withdrew collateral posted by Kidan and Tracy with Chartwell’s captive insurer Archway and failed to cause Chartwell to pay debts that Kidan personally guaranteed and to make tax distributions to Kidan, causing him to incur debts. (See Am. Compl., ¶¶ 14–15, 32–33, 55, 59, 62, 72, 74, 84, 101, 103, 104–105, 110, 135, 166–167.)

There is no basis for general jurisdiction over CHIPMAN because he is a resident of Massachusetts; a director of CHARTWELL, which is a NY corporation with its ppb in Pennsylvania, and an executive of MADISON, a NH LLC affiliated with COAST, a Delaware LLC with its ppb in NH. (See Chipman Decl., ¶¶ 3-8 filed on 1/21/22.)

(3) Plaintiff Adam Kidan’s Motion to Compel Further Responses to Form Interrogatories, Set No. One, as to Defendant Leonard Tierney (“TIERNEY) is DENIED, in its entirety, as follows.

Plaintiff seeks to compel TIERNEY to provide further responses, without objections, to Special Interrogatory Nos. 5 and 7.

As to Special Interrogatory No. 5, the Court denies the Motion for the same reasons as set forth in Motion No. 2 as to CHIPMAN.

As to Special Interrogatory No. 7, again, the Motion is denied for the same reasons as No. 5. In addition, the Court previously CHIPMAN and TIERNEY’s request for protective order and stated that any matters concerning “the general corporate affairs, finances and any other proprietary business information, and internal communications of MADISON, CHARTWELL, and COAST TO COAST” are not to be inquired into. (See 8-9-22 M.O.)

Moving Party is to give notice.