TENTATIVE RULING

Specially Appearing Defendant 601 Fremont, LLC’s Motion to Quash Summons and Complaint for Lack of Jurisdiction is GRANTED.

Specially Appearing Defendant 601 Fremont, LLC to give notice.

REASONING

Code of Civil Procedure section 418.10, subdivision (a)(1), provides that a defendant may move to quash service of summons on the ground of lack of jurisdiction of the court over him or her. Specially Appearing Defendant 601 Fremont, LLC (“Defendant”) moves the Court for an order quashing service of the summons and complaint served upon it and dismissing the action against it for lack of personal jurisdiction. Defendant argues that this Court does not have jurisdiction over it because it lacks sufficient contacts with California such that the exercise of jurisdiction over Defendant would not be fair or reasonable.

California courts may exercise personal jurisdiction on any basis consistent with the Constitutions of California and the United States. (Code Civ. Proc., § 410.10.) The exercise of jurisdiction over a nonresident defendant comports with these Constitutions “if the defendant has such minimum contacts with the state that the assertion of jurisdiction does not violate traditional notions of fair play and substantial justice.” (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268 (Pavlovich), quotation marks omitted.) “A court may exercise either general or specific jurisdiction over a nonresident defendant.” (Sher v. Johnson (9th Cir. 1990) 911 F.2d 1357, 1361 (Sher); see also Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445 (Vons) [stating same].)

“A plaintiff opposing a motion to quash service of process for lack of personal jurisdiction has the initial burden to demonstrate facts establishing a basis for personal jurisdiction.” (HealthMarkets, Inc. v. Superior Court (2009) 171 Cal.App.4th 1160, 1168.) “If the plaintiff satisfies that burden, the burden shifts to the defendant to show that the exercise of jurisdiction would be unreasonable.” (Ibid.)

A court may assert general jurisdiction over a nonresident defendant when the defendant’s activities in the forum state are substantial, continuous, and systematic. (Vons, supra, 14 Cal.4th at p. 445.) Jurisdiction is specific when the defendant’s contacts with the state are not substantial, continuous, and systematic, but “the defendant has sufficient contacts with the forum state in relation to the cause of action.” (Sher, supra, 911 F.2d at p. 1361.) “Under the minimum contacts test, an essential criterion in all cases is whether the quality and nature of the defendant’s activity is such that it is reasonable and fair to require him to conduct his defense in that State.” (Pavlovich, supra, 29 Cal.4th at p. 268, quotation marks omitted.) “The defendant’s conduct and connection with the forum State must be such that the defendant should reasonably anticipate being haled into court there.” (Sher, supra, 911 F.2d at p. 1361.)

Defendant’s moving papers and evidence adequately establish that it is not a California entity, nor does it have substantial, continuous, and systematic contact with California. Defendant is a company organized and existing in the State of Nevada, it has never transacted any business in California, it is not registered to do business in California, it does not have an agent for service of process in California, it does not maintain bank accounts or any other assets in California, and it was served at its office in Nevada. (Mot., Caudill Decl. ¶¶ 2-3; Brum Decl. ¶ 2.) Defendant represents that its original members were Terry L. Caudill and RMD Designs, Inc., with each having 50% ownership, but in 2012, Caudill’s 50% ownership was transferred to TLC Ventures, Inc. (Mot., Caudill Decl. ¶ 2.) Defendant also provides evidence that from 2010 until July 31, 2019, RMD Designs, Inc. served as the managing member of Defendant pursuant to Defendant’s Operating Agreement, TLC Ventures, Inc. was appointed as the managing member on July 31, 2019, and TLC Ventures, Inc. has served in that capacity since that date. (Mot., Caudill Decl. ¶ 4, Ex. 1.) Defendant presents evidence that the Operating Agreement expressly provides that “a majority vote of the Membership Interests shall be required” for RMD Designs, Inc. to “incur indebtedness of the Company in excess of $25,000.00 in the aggregate (unless permitted by the Business Plan),” and RMD Designs, Inc. did not have authorization to execute the Payment Guaranty dated February 25, 2019, the note at issue in this case, on Defendant’s behalf, nor did RMD Designs, Inc. seek TLC Ventures, Inc.’s approval to execute the Guaranty. (Mot., Caudill Decl. ¶ 7.) Defendant provides evidence that TLC Ventures, Inc. had no knowledge of the loan agreements or the Guaranty at the time they were executed, and it did not consent to RMD Designs, Inc. signing the Guaranty on Defendant’s behalf. (Mot., Caudill Decl. ¶ 8.)

Plaintiff argues that representatives of Defendant signed the subject Promissory Note and Payment Guaranty, both of which contained consent to California jurisdiction clauses. (Opp’n, Coyne Decl. ¶¶ 2-7, Exs. A-C.) Plaintiff argues that Defendant’s arguments that RMD Designs, Inc. lacked authority to bind Defendant is merely an allegation and not yet a proven fact. Plaintiff contends that allowing Defendant to disavow the contract at this early pleading stage would rob Plaintiff of the opportunity to prove the validity and enforceability of the subject contract and payment guaranty.

It is axiomatic that “[a] plaintiff opposing a motion to quash service of process for lack of personal jurisdiction has the initial burden to demonstrate facts establishing a basis for personal jurisdiction.” (HealthMarkets, Inc. v. Superior Court, supra, 171 Cal.App.4th at p. 1168.) Here, Plaintiff provides no basis for exercising jurisdiction here, i.e., Plaintiff provides no evidence to dispute Defendant’s evidence that RMD Designs, Inc. lacked the authority to bind it in the subject agreements. Simply stating that future discovery may disprove Defendant’s account does not allow Plaintiff to meet its burden of demonstrating facts that establish a basis for personal jurisdiction. Accordingly, Specially Appearing Defendant 601 Fremont, LLC’s Motion to Quash Summons and Complaint for Lack of Jurisdiction is GRANTED. Specially Appearing Defendant 601 Fremont, LLC to give notice.