Judge: Jon R. Takasugi, Case: 20STCV40496, Date: 2022-09-19 Tentative Ruling

Case Number: 20STCV40496    Hearing Date: September 19, 2022    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

            Cross-Defendant Marc Scollar’s Motion to Quash Service of Summons is GRANTED.

            On September 14, 2022, Plaintiff Taiwan Safety Health Environment Consulting Co., LTD (“Plaintiff”) filed a Complaint asserting causes of action for (1) breach of contract and (2) recission against Defendant T.J. International Supply (“TJ”).

            The Complaint alleges in relevant part that Plaintiff and TJ executed a contract, whereby N-95 masks would be shipped to Plaintiff’s designee in Indonesia.  TJ utilized its escrow agent, Bay Cities Escrow (“BCE”), in El Segundo, California to carry out the transaction.  Plaintiff put $971,980 in escrow.  TJ received 10% from BCE of the money that had been placed in escrow.  TJ failed to deliver the masks in a timely manner. 

            On May 23, 2022, TJ filed a Cross-Complaint asserting causes of action for (1) breach of contract, (2) breach of fiduciary duty, (3) conversion, (4) equitable indemnification, (5) contribution, (6) apportionment, (7) declaratory relief against Taiwan, Charles Camp (“Camp”) and Marc Scollar (“Scollar”).    

            The Cross-Complaint alleges in relevant part that TJ executed a contract with Plaintiff regarding the purchase of masks.  Plaintiff was a reseller of products, and did not provide a “ship to” address for TJ to complete the order.  TJ through its escrow attorney, Camp, paid $41,500 to a supplier to fulfill the order.  The supplier became frustrated when no address was provided for Plaintiff.  Eventually, Plaintiff provided a “ship to” address, and TJ contracted with a second supplier to fulfill the order for a total of $25,500.  TJ later learned that Plaintiff had moved the escrow funds that had been deposited with BCE, and TJ was no longer in receipt of those funds.  Camp kept a portion of those funds, without TJ’s consent, and then remitted the balance to Scollar.

            Scollar moves the Court to Quash Service of the Summons on the grounds that the Court lacks jurisdiction over him.

Legal Standard

Even though the Defendant is the moving party, Plaintiffs bear the burden of proof to demonstrate that the Court has personal jurisdiction.  (See Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710.)  Due process permits the exercise of personal jurisdiction over a nonresident defendant where the defendant has sufficient minimum contacts with the forum state, such that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice.  (In re Marriage of Fitzgerald & King (1995) 39 Cal. App. 4th 1419, 1425-1426.).  A defendant may have sufficient minimum contacts when either of the following is shown: 

1) The nonresident defendant is subject to the general jurisdiction of the forum if his or her contacts in the forum state are substantial, continuous, and systematic.   

2) The nonresident defendant is subject to the specific jurisdiction of the forum, if the defendant has purposefully availed himself or herself of forum benefits and the controversy is related to or arises out of the defendant's contacts with the forum.  (Vons Companies, Inc. v. Seabest Foods (1996) 14 Cal. 4th 434, 445-446.) 

General jurisdiction exists when a defendant is domiciled in the forum state or his activities there are substantial, continuous, and systematic.¿ (F. Hoffman-La Roche, Inc. v. Sup. Ct.¿(2005) 130 Cal.App.4th 782, 796.)¿ “In such circumstances, it is not necessary that the specific cause of action alleged be connected with the defendant’s business relationship to the forum.”¿ (Id.)¿ “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, supra, 173 Cal.App.4th at 1315 (emphasis in original).)¿ “Factors to be taken into consideration are whether the defendant makes sales, solicits or engages in business in the state, serves the state’s markets, designates an agent for service of process, holds a license, or is incorporated there.” (Id.)¿ 

“Where general jurisdiction cannot be established, a court may assume specific jurisdiction over a defendant in a particular case if the plaintiff shows the defendant has purposefully availed himself or herself of forum benefits; [i.e..] the nonresident purposefully directed its activities at forum residents or purposefully availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of local law.¿ (Hanson v.¿Denckla¿(1958) 357 U.S. 235.)¿ Specific jurisdiction involves a 3-part test in California.¿ California courts adopt the same test as the test used by the court in¿Boschetto¿v.¿Hansing¿(9th Cir. Cal. 2008) 539 F.3d 1011,¿1016:¿“‘(1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable.’ [Citation.]”¿¿(Jewish Defense Organization, Inc. v. Sup. Ct. of Los Angeles County¿(1999) 72 Cal.App.4th 1045, 1054, citing¿Panavision International, L.P. v.¿Toeppen¿(9th Cir. 1998) 141 F.3d 1316, 1320 [applying California law].)¿ Purposeful¿availment¿as defined by¿Boschetto¿requires affirmative conduct promoting the transaction.¿ “To have purposefully availed itself of the privilege of doing business in the forum, a defendant must have ‘performed some type of affirmative conduct which allows or promotes the transaction of business within the forum state.’” (Boschetto,¿supra, 539 F.3d at 1016.)¿ 

Discussion

            Scollar contends that the Court lacks personal jurisdiction over him because he does not have any contacts with the State of California, a principal place of business in California, and/or did not purposefully avail himself to the forum, and it would be unreasonable for the Court to exercise personal jurisdiction over him.  Scollar represents that he has no connection with the subject contract between Plaintiff and TJ, and that TJ cannot present evidence to show that he had any connection with the contract.  In addition, Scollar represents that it would place a significant burden on him to try this case in California, as he is a resident of New York.  Scollar also represents that he has had not contacts with Plaintiff or entered into any agreements with Plaintiff.  (Scollar Decl., ¶¶ 29-31.)  Instead, Scollar represented Kings Men Group Partners (“Kings”), who entered into an agreement with Beacon Health Systems, Inc. (“Beacon”), where Beacon was going to purchase masks from Kings. (Scollar Decl., ¶ 12.)  Kings was acting as a broker, and entered into an agreement with TJ to have TJ supply the masks that Beacon required.  (Id. at ¶ 15.)

            In Opposition, TJ represents that Camp wired Scollar $87,507.82, as part of the down payment for the funds that Plaintiff had placed in escrow.  TJ further represents that the funds that were wired to Scollar related to the contract entered in to by Plaintiff and TJ, wherein Scollar was acting as the escrow attorney for TJ.  TJ contends that the contract between it and Plaintiff was executed in California, and given that Scollar was the escrow agent for TJ, the Court may exercise personal jurisdiction of Scollar.

            As a preliminary matter, while TJ contends that Scollar was the escrow agent for the subject contract, which was executed in California, it fails to provide any evidence that Scollar was the escrow agent for that contract, or that Scollar entered in to (or a party to) any contract executed in California. A review of the exhibits provided in support of the Motion, reveal that all of the agreements that involve Scollar involved out-of-state parties and/or were executed out-of-state.  While TJ contends that Scollar was the escrow attorney for the contract between Plaintiff and TJ, there is no evidence to support that contention.  In addition, there is no evidence that Scollar conducted any business in California, or that he engaged in “affirmative conduct which allows or promotes the transaction of business within the forum state.”  The evidence provided shows that Scollar entered into agreements and engaged in transactions with parties that were out-of-state, and do not relate to activities in California.  The court notes that TJ provides evidence that Camp wired money to Scollar, but there is no indication that this related to any transaction in California.  Accordingly, the Court finds that exercising personal jurisdiction over a person who has not engaged in affirmative conduct in California would be unreasonable.

Thus, Scollar’s Motion to Quash Service of Summons is GRANTED.           

Dated:  September    , 2022

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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